M/S Terai Tea Company Limited vs Kumkum Mittal

M/S TERAI TEA COMPANY LIMITED ….APPELLANT(S)

VERSUS

KUMKUM MITTAL & ORS. ….RESPONDENT(S)

JUDGMENT

Rastogi, J.

1. Leave granted.

2. These appeals are directed against the order dated 13 th

April, 2017 passed by the Division Bench of the High Court of

Calcutta directing the suit Court to impound the document (dt.

15th January, 1990) and take appropriate steps in accordance

with law for the assessment of the stamp duty, penalty and the

like thereon.

3. The brief facts of the case are that one Dhirendra Nath

Bhowmick (since deceased), as the sole proprietor and Signature Not Verified Digitally signed by GULSHAN KUMAR ARORA perpetual lessee had agreed to sell a tea estate namely, M/s. Date: 2019.10.22 16:25:14 IST Reason:

Dharanipur Tea Estate comprising of a tea garden measuring

1 about 1140.59 acres in favour of the appellant-plaintiff along

with all the liabilities on a consideration of Rs. 10,11,000/- and

he executed an agreement to sell to that effect on 15 th January,

1990 after accepting a part consideration amount of Rs.

2,11,000/-. Dhirendra Nath Bhowmick failed and/or neglected

and/or refused to fulfil his obligations under the said agreement

to sell dated 15th January, 1990, by not executing and

registering the Deed of conveyance within the time specified,

despite the appellant-plaintiff being fully ready and willing to

discharge its part of obligations including the payment of

balance consideration amount on or before 15 th March,1990.

4. The appellant-plaintiff filed the suit for specific

performance of the agreement before the High Court. In the

said suit, an application for interim injunction was refused by

the Single Judge vide Order dated 1 st April, 1991 that came to

be challenged at the instance of the appellant in letters patent

appeal before the Division Bench of the High Court. During

pendency of the appeal, both the parties entered into a

compromise and the Division Bench of the High Court vide its

order dated 2nd August, 1991 passed the consent decree in the

appeal and accordingly disposed of the Suit No. 240 of 1990

2 and observed that the verbal compromise constitute the fresh

agreement as the original agreement dated 15 th January, 1990

was modified upon enhancement of consideration from the

original amount of Rs. 10,11,000/- to Rs. 12,11,000/-. As the

defendant in the suit agreed to execute the deed of

conveyance in favour of the appellant-plaintiff, two drafts,

amounting to Rs. 9,00,000/- and Rs. 2,00,000/-, both bearing

dated 25th July, 1991, being the balance of the consideration

money of the said tea estate were paid. Accordingly, late

Bhowmick executed the conveyance deed no. 11248/1991 in

favour of the appellant. It is not disputed that the appellant

paid full stamp duty of Rs. 1,85,000/- on the deed of

conveyance dated 3rd August, 1991.

5. It may be relevant to notice that the respondent-

defendant in the suit concealed material information that the

earlier suit no. 8 of 1984 was filed by Dhirendra Nath Bhowmick

and his wife for declaration that the transfer of controlling

interest in the shares of M/s. The New Red Bank Tea Company

Private Ltd. was not valid and a declaration was sought that the

said Dhirendra Nath Bhowmick had all equitable right, title and

interest in respect of the said Dharanipur Tea Estate and for

3 restoration of possession. 6. The decree for specific

performance granted by the Court in Suit No. 240 of 1990 came

to be challenged in this Court in Civil Appeal No. 3569 of 1991

by The New Red Bank Tea Company Private Ltd. (respondent

No. 6) impleading the present appellant and the interested

parties as respondents. This Court observed that while the

decree of specific performance was granted by the Court in Suit

No. 240 of 1990 dated 2nd August, 1991, the earlier Suit No. 8

of 1984 pending in the High Court of Calcutta remain unnoticed

and both the suits ought to have been tried together, taking

note thereof, the decree of specific performance passed in Suit

No. 240 of 1990 for the aforesaid reason was set aside and the

High Court was directed to dispose of both the suits as

expeditiously as possible. Obviously in consequence thereof,

the deed of conveyance which was executed in furtherance of

the decree of specific performance also came to be cancelled.

7. It is indisputed that the present appellant with all

bonafides proceeded to pay the full consideration of the suit

property in question and pursuant to the decree of specific

performance dated 2nd August, 1991, deed of conveyance was

executed on which the required stamp duty of Rs. 1,85,000/-

4 was also paid but obviously after the decree of specific

performance dated 2nd August, 1991 been set aside by this

Court, consequent thereto, the deed of conveyance dated 3 rd

August, 1991 remain non-existent and the appellant

indisputedly was at liberty to claim refund of the stamp duty of

Rs. 1,85,000/- which was paid on the deed of conveyance dated

3rd August, 1991.

8. After Suit No. 240 of 1990 came to be restored pursuant

to the order of this Court dated 9 th September, 1991 to be

heard along with Suit No. 8 of 1984, at this stage application

was filed by the respondent for impounding the document

(agreement to sell dated 15th January, 1990) taking assistance

of Section 35 of the Indian Stamp Act, 1899. The Single Judge

of the High Court under its order dated 14th February, 2017

noticed that appellant had already paid the stamp duty of Rs.

1,85,000/- on the deed of conveyance which has been

cancelled and he was at liberty to claim the refund. In the

given circumstances, his right of specific performance of the

agreement based on the agreement to sell dated 15 th January,

1990 shall be decided as a moot question by the Court as per

the evidence to be adduced by the parties to the suit.

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9. Learned counsel for the appellant has raised submissions

questioning the maintainability of the appeal preferred against

the interim order passed by the Single Judge of the High Court

dated 14th February, 2017 in pending suit No. 240 of 1990 and

that apart submits that the appellant had paid a stamp duty of

Rs. 1,85,000/- on the deed of conveyance but after the

judgment being passed by this Court dated 9 th September,

1991, the decree of specific performance dated 2 nd August,

1991 and consequently deed of conveyance executed pursuant

thereto has been cancelled but appellant is entitled to seek

refund of the stamp duty of Rs. 1,85,000/- paid by it and

no one has disputed the same before the Division Bench of the

High Court in seeking refund of the duty paid by it. In the given

circumstances, it remains a technical plea that the agreement

to sell dated 15th January, 1990 being unstamped, it will be

harsh in the given facts to impound the document without the

matter being adjudicated and it was the direction of this Court

to consolidate both the suits to be heard on merits.

10. Learned counsel further submits that impounding of the

document at this stage during pendency of the suit indeed

frustrate the very plea which he has raised in the pending suit

6 and in the given circumstances, it will be unjust to non-suit the

claim of the appellant after the suit remain pending in the Court

for almost 29 years.

11. Per contra, learned counsel for the respondent, on the

other hand, while supporting the order passed by the Division

Bench of the High Court submits that recovery of stamp duty

which was paid on the deed of conveyance which the appellant

is indisputedly at liberty to recover by due process of law but

that will not give any benefit in reference to the agreement to

sell dated 15th January, 1990 which indisputedly was

unstamped and in the given circumstances, the High Court has

not committed any error in impounding the document.

12. We have heard learned counsel for the parties and with

their assistance perused the material available on record.

13. The indisputed facts which can easily be discernible from

the records are that in reference to the suit property, there was

an agreement to sell dated 15th January, 1990 executed by late

Dhirendra Nath Bhowmick in favour of appellant-plaintiff for the

sale of tea estate namely, M/s. Dharanipur Tea Estate for a

consideration of Rs. 10,11,000/- for which part payment of

Rs. 2,11,000/- was made and since late Dhirendra Nath

7 Bhowmick failed to fulfil his obligation, suit for specific

performance no. 240 of 1990 at the instance of the appellant

came to be instituted. In the said pending suit no. 240 of 1990,

since the interim injunction was refused, appeal came to be

preferred and during pendency of the appeal, the parties to the

proceedings entered into a compromise and the Division Bench

of the High Court vide its order dated 2 nd August, 1991 granted

consent decree on enhancement of a consideration from

original amount of Rs. 10,11,000/- to Rs. 12,11,000/-. In

sequel thereto, the deed of conveyance was executed on 3 rd

August, 1991 and stamp duty of Rs. 1,85,000/- was paid by the

appellant and full consideration of Rs. 12,11,000/- was paid by

the appellant to Dhirendra Nath Bhowmick.

14. This fact was not in the notice of the appellant that prior

to filing of the suit no. 240 of 1990, earlier suit no. 8 of 1984

was filed by Dhirendra Nath Bhowmick and his wife for

declaration that the transfer of controlling interest in the shares

of the company, namely, M/s. the New Red Bank Tea Company

Private Ltd. was not valid and a declaration was sought that he

had legal and equitable right, title and interest in respect of the

said Dharanipur Tea Estate and restoration of possession was

8 pending adjudication. The consent decree dated 2 nd August,

1991 pursuant to which the deed of conveyance was executed

on 3rd August, 1991 and stamp duty of Rs. 1,85,000/- was paid

that came to be challenged in this Court by M/s. New Red Bank

Tea Company Private Ltd. who indisputedly was not party to

the proceedings which was instituted at the instance of the

appellant (Suit No. 240 of 1990).

15. After the parties being heard, this Court allowed the civil

appeal under its order dated 9th September, 1991 and set aside

the consent decree dated 2nd August, 1991 on the premise that

suit no. 240 of 1990 and suit no. 8 of 1984 ought to have been

tried together and the suit for specific performance could not

have been decreed by consent without determining the legal

title and factum of possession of the suit property. The title

and possession could not have been decided without

impleading the respondent M/s. The New Red Bank Tea

Company Private Ltd. as a defendant to the suit. By setting

aside the consent decree dated 2nd August, 1991, in the

consequence, the deed of conveyance dated 3 rd August, 1991

also came to be cancelled and after the order of this Court in

Civil Appeal No. 3569 of 1991 dated 9th September, 1991, it

9 reveals that M/s. the New Red Bank Tea Company Private Ltd.

has been impleaded as a defendant in suit no. 240 of 1990 filed

at the instance of the appellant and under the directions of this

Court, both the suits are clubbed and to be heard together on

merits.

16. In the peculiar facts and circumstances, where the parties

to the proceedings originally in Suit No. 240 of 1990 filed at the

instance of the appellant have consented to obtain a consent

decree of specific performance dated 2nd August, 1991

pursuant to which deed of conveyance was executed on 3 rd

August, 1991 and full stamp duty of Rs. 1,85,000/- was paid by

the appellant and no objection was raised by the respondent at

any stage in reference to the agreement to sell dated 15 th

January, 1990 in the suit for specific performance and the

decree dated 2nd August, 1991 although it has been set aside

by this Court at the instance of the third party to the

proceedings, namely, M/s. the New Red Bank Tea Company

Private Ltd. and once the finding has been affirmed that the

appellant is entitled for refund of Rs. 1,85,000/- towards stamp

duty which was paid on the deed of conveyance, the appellant

who has always shown his bonafides in transfer of full

10 consideration after which deed of conveyance was executed

and stamp duty of Rs. 1,85,000/- was paid which he is

indisputedly entitled for refund, it is not open for the

respondent(s) to question as they always remained consented

to the decree passed by the Court dated 2 nd August, 1991

which although came to be set aside at the instance of the third

party, namely, M/s. the New Red Bank Tea Company Private

Ltd.

17. In the facts and circumstances, it will not give any cause

of action to the respondent to raise an objection for impounding

of the document invoking Section 35 of the Indian Stamps Act,

1899 more so when the appellant had paid the stamp duty of

Rs. 1,85,000/- and is entitled for refund which indisputedly was

never claimed. In our considered view, in the facts and

circumstances of the case, it was not open for the Division

Bench under the impugned judgment to set aside the order of

the Single Judge which was one of the possible view in the

peculiar facts and circumstances of the case.

18. Consequently, the appeals deserve to succeed and are

accordingly allowed. The judgment of the Division Bench of the

11 High Court dated 13th April, 2017 is hereby quashed and set

aside. No costs.

19. Pending application(s), if any, stand disposed of.

………………………………………..J. (MOHAN M. SHANANAGOUDAR)

………………………………………..J. (AJAY RASTOGI)

NEW DELHI OCTOBER 22, 2019

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