Whether the agreement to sell should be treated as a conveyance for the purpose of stamp duty? SC

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    • Summary of Key Points from the Judgment (Civil Appeal No. 2549 of 2025):

      • Case Title: Ramesh Mishrimal Jain vs. Avinash Vishwanath Patne & Anr.

      • Court: Supreme Court of India

      • Judgment Date: 14th February 2025

      • Background:

    • The dispute arose from an agreement to sell dated 03.09.2003 related to a property in Paiki Village, Khed Taluk.
    • Appellant (Ramesh Jain) filed a suit for specific performance of the agreement.
    • Respondents claimed deficit stamp duty and penalty on the agreement.
    • The Trial Court impounded the document and directed it to the Registrar of Stamps for recovery of stamp duty and penalty.
    • The Bombay High Court upheld this decision in Writ Petition No. 3246 of 2016.

  • Key Legal Issues:

    • Whether the agreement to sell should be treated as a conveyance for the purpose of stamp duty.
    • Applicability of Explanation I to Article 25 of the Bombay Stamp Act, 1958.
    • Whether possession of the property was transferred or agreed to be transferred before execution of the sale deed.

  • Appellant’s Arguments:

    • Possession remained with the appellant in his capacity as a tenant, distinct from ownership.
    • No immediate or agreed transfer of ownership possession until execution of the sale deed.
    • Therefore, the agreement to sell was not a conveyance and did not attract stamp duty as a conveyance.

  • Respondents’ Arguments:

    • The agreement constituted a "deemed conveyance" under Explanation I to Article 25.
    • Possession was agreed to be transferred within 11 months of the agreement.
    • Supported by precedents: Veena Hasmukh Jain vs. State of Maharashtra (1999) and Shyamsundar Radheshyam Agrawal vs. Pushpabai Nilkanth Patil (2024).

  • Supreme Court’s Ruling:

    • The agreement evidenced delivery of possession, satisfying the definition of "conveyance" under the Bombay Stamp Act.
    • Stamp duty is levied on the instrument, not the transaction.
    • Confirmed the lower courts’ decision to impound the document and recover deficit stamp duty and penalty.
    • Clarified that any stamp duty already paid would be adjusted against the total duty on execution of the sale deed, with penalties calculated from the date of the agreement.

  • Final Outcome:

    • Appeal dismissed with no costs.
    • Directions given for deduction of already paid stamp duty when the final conveyance is executed.

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