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JDC LTD. Vs RAMNATH

IN THE HONBLE SUPREME COURT OF INDIA

APPEAL NO/2016
(ARTICLE 136 OF THE CONSTITUTION)

JDC LTD. ..APPELLANT

V.
RAMNATH..RESPONDENT

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MEMORIAL ON BEHALF OF RESPONDENT

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JDC LTD. Vs RAMNATH

INDEX
1.
2.
3.
4.
5.
6.
7.

LIST OF ABBREVIATIONS
INDEX OF AUTHORITIES
STATEMENT OF FACTS
STATEMENT OF JURISDICTION
SUMMARY OF ARGUMENTS
ARGUMENTS ADVANCED
PRAYER

LIST OF ABBREVIATIONS

A.I.R--------------------------------------------------------------------------- ALL INDIA REPORTERS

Cal----------------------------------------------------------------------------------------------CALCUTTA
Co. -------------------------------------------------------------------------------------------------COMPANY
GPA----------------------------------------------------------------GENERAL POWER OF ATTORNEY
Sec------------------------------------------------------------------------------------------SECTION
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Ltd------------------------------------------------------------------------------------------LIMITED
BC----------------------------------------------------------------------------------------BANKING CASES
Proviso----------------------------------------------------------------------------PROVISION
SCC---------------------------------------------------------------------------SUPREME COURT CASES
Bom.-------------------------------------------------------------------------------------BOMBAY

INDEX OF AUTHORITIES
List of Statutes:
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.

The Constitution of India,1950

The Transfer of Property Act, 1882
The Indian Contract Act, 1872
The Specific Relief Act, 1963
The Registration Act, 1908
Rajasthan Stamp Law (Adaptation) Act,1998
Indian Stamp Act,1899
The Income Tax Act, 1961
The Power Of Attorney Act, 1882

List of Books Referred:

JAIN, M. P., INDIAN CONSTITUTIONAL LAW,( WADHWA AND COMPANY, 6

NAGPUR) (REP. 2012)

TIWARI, H.N., TRANSFER OF PROPERTY ACT, 1882
SHUKLA, TRANSFER OF PROPERTY, 1882
BANGIA, THE INDIAN CONTRACT ACT, 1872

Dictionaries

AIYAR, RAMANATHA P.: THE LAW LEXICON, WADHWA & COMPANY, 2ND EDN.

NAGPUR(2002).
BLACK, HENRY CAMPBELL: BLACKS LAW DICTIONARY, 6 1991).
CURZON. L. B: DICTIONARY OF LAW, PITMAN PUBLISHING, 4TH EDN. NEW
DELHI (1994).
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GARNER, BRYAN A.: A DICTIONARY OF MODERN LEGAL USAGE, OXFORD

UNIVERSITY PRESS
GREENBERG, DANIEL AND ALEXANDRA, MILLBROOK: STROUDS JUDICIAL
DICTIONARY OF WORD S & PHRASES, VOL. 2, 6 THEDN., CENTENNIAL ED. (1891-

ND EDN. OXFORD (1995). EDN.,

LONDON: SWEET & MAXWELL (2000).

INTERNET SITES
http://www.findlaw.com
http://www.indiankanoon.com
http://www.indlawinfo.org/
http://www.manupatra.

STATEMENT OF FACTS

JDC Ltd., the plaintiff, appellant a company incorporated under the Companies Act,2013 claim
that one Ramanath and his family sold two and half acres of land in Jagatpura village in jaipur to
them my means of an unregistered agreement of sale, General Power of Attorney (GPA) and will
executed on 01.08.2013 for a total consideration of 50 lacs. Of the total amount, 45 lacs were
paid based on which the possessory right of the property was transferred. The remaining amount
which was to be paid before 02.02.2014 was offered to be paid on 10.01.2014 but was not
accepted by Ramanath and his family. Since the agreement of sale, General Power of Attorney
(GPA) and will were unregistered and the plaintiff was not the signatory, so the property was
sold to Mr. Yadav by ramanath and his family for RS 50 lacs and was asked to possession from
JDC Ltd.
Ramanth also pleaded that he enquired about the stamp duty and registration charges and was
informed by the Registering Authority that fair market value on the date of registration and not
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the date of Sale Agreement, would be payable. Thus the stamp duty would be payable on Rs.
1.50 Crore, which should be borne by the plaintiff. The seller further claimed that on account of
Section 50C of the Income-Tax Act, 1961, the seller would be required to pay capital gain tax on
Rs. 1.50 Crore against real sale consideration of Rs. 50 Lacs, which would be additional liability
for no fault on his part.
Shri Dharamvir Yadav claims that earlier General Power of Attorney is having being cancelled
and the second GPA in his name subsists. He has the authority and competence to sell the
property and not Ramnath. Mr Yadav also claims that RS 40 lacs were paid to the plaintiff.

STATEMENT OF JURISDICTION
The honble Supreme Court has the jurisdiction to hear special appeal from decisions of the
Honble high Court of India. Under article 136 (1), the honble supreme court has the power to
take into consideration the present case. However, it is to be taken into consideration that as held
in Balwant Rai V/S Nagrasna 1that an application for special leave petition may be summarily
rejected where the court is satisfied that no substantian injustice has been done. Similar judgment

1 AIR 1960 SC 1292

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has been observed by the honble Supreme court even in the case of Pritam singh v/s state2. In
The present case both the district court and the Rajasthan High Court has dismissed since the
agreement to sale is unregistered and the remaining amt was not paid by the due date. Therefore
specific performance does not arise.

SUMMARY OF ARGUMENTS

1. WHETHER THE AGREEMENT OF SALE, GENERAL POWER OF ATTORNEY

AND THE WILL EXECUTED IN FAVOUR OF THE PLAINTIFF IS VALID?
The agreement of sale, general power of attorney and the will executed in favour of the
plaintiff is not valid for mainly two reasons- firstly the instruments ie agreement of sale,
general power of attorney and the will were not registered and secondly since there was
no transfer of absolute ownership that took place between the parties as such, therefore
the validity of the above said is nullified.

2 AIR 1950 SC 169

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2. WHETHER WHEN SUM OF RS 45 LACS HAVING BEEN PAID OUT OF RS 50

LACS AND POSSESSION GIVEN UNDER SEC-53A OF THE TRANSFER OF
PROPERTY ACT, RAMANATH AND HIS FAMILY MEMBERS HAD NO
POWERS, COMPETENCE AND AUTHORITY TO EXECUTE SECOND
GENERAL POWER OF ATTORNEY IN FAVOUR OF MR, YADAV AND
CANCEL THE EARLIER GPA IN FAVOUR OF PLAINTIFF, IS VALID?
A power of attorney is not an instrument of transfer in regards to any right, title or interest
in an immovable property. So it does not convey ownership and also it is irrevocable or
terminable at any time unless under law. Therefore, Ramanath and his family member
had full authority to cancel the previous general power of attorney and execute a second
general power of attorney

3. WHETHER THE PLAINTIFF WAS READY, WILLING AND PREPARED AND

TENDERED RS 5 LACS AFTER 02.01.2014 AND REQUESTED RAMANATH
AND HIS FAMILY MEMBERS TO EXECUTE SALE DEED AND TO GET IT
REGISTERED. WHAT IS THE EFFECT OF NON-PAYMENT OF BALANCE
AMOUNT ON 02.01.2014?
JDC ltd had offered the amount immediately 5 days after the due date , this shows that
they enough resources to pay the amount even on the due date ie. 02.01.2014. This
subsequently implies that they were neither willing to get the sale deed executed nor to
get it registered.

4. WHETHER THE STAMP DUTY REGISTERING AUTHORITY WAS RIGHT IN

DEMANDING STAMP DUTY ON THE FAIR MARKET VALUE OF RS 1 CRORE
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AND 50 LACS AS ON 01.08.2013 AND NOT AT RECORDED VALUE/FAIR
MARKET VALUE ON 01.08.2013 IE. RS 50 LACS? IF STAMP DUTY WOULD BE
PAYABLE ON ADDITIONAL 1 CRORE, WHO WOULD BEAR SUCH AMOUNT?
A proviso under Sec- 56(2) (vii) (b) (ii) of the Income Tax Act,1961 speaks that this section will
be applicable only if a part of the consideration is paid in mode other than cash. But the facts of
the case clearly show that Mr Yadav had paid the entire consideration of 50 lacs in cash.
Therefore the stamp duty registering authority was not right in demanding stamp duty on the fair
market value of rs 1 crore and 50 lacs as on 01.08.2013 and not at recorded value/fair market
value on 01.08.2013 ie. rs 50 lacs

ARGUMENTS ADVANCED
ISSUE-I
1. WHETHER THE AGREEMENT OF SALE, GENERAL POWER OF ATTORNEY
AND THE WILL EXECUTED IN FAVOUR OF THE PLAINTIFF IS VALID?
The respondent humbly submits to this Honorable Supreme Court that-there was prima facie
no registered documents of the transaction between Jdc Ltd And Ramanath and his family, so
there was so such sale that took place according to the provisions of transfer of property
act,1882.
1.1
We reproduce Section 54 of Transfer of property act,1882 as under
"Sale" defined
"Sale" is a transfer of ownership in exchange for a price paid or promised or part-paid and
part-promised.
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Sale how made: Such transfer, in the case of tangible immovable property of the value of one
hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be
made only by a registered instrument.
In the case of tangible immovable property of a value less than one hundred rupees, such
transfer may be made either by a registered instrument or by delivery of the property.
Delivery of tangible immovable property takes place when the seller places the buyer, or
such person as he directs, in possession of the property.
Contract for sale: A contract for the sale of immovable property is a contract that a sale of
such property shall take place on terms settled between the parties.
It does not, of itself, create any interest in or charge on such property.
As we can infer from the above mentioned section that for the application of Section 54 of
the transfer of property act,1882, there needs to be a registered document. An unregistered
instrument whether a

sale deed or a agreement of sale cannot be considered a valid

document under this section. In Vijaya Bank V/S Murudeswara Food and Export 3 , it was
held that an unregistered sale deed cannot be taken as a valid title deed. As sale is the transfer
of ownership from one party to another implying transfer of rights from the purchaser or the
seller to the buyer so an invalid agreement of sale would not confess any
rights upon the buyer as held in case of R. Rajagopala Ayyangar And Others V/S
Ranganatha Ayyanagar And Another4.
The plaintiff has been constantly been speaking on the validity of the agreement of sale. But they
need to get the facts clear that under Section 54 of the transfer of property act,1882, sale of
immovable property can only be done with a registered document which is completely absent in

3 (2003) BC 80
4 AIR 1933 MAD 181
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this case. Even in the case of Alaka Raghunath Nandkarni, Mumbai V/S Assessee5, it was held
that a validity of a sale of immovable property can only be done with a registered document.
1.2

Furthermore, the plaintiff has also pleaded part performance under Sec-53A of
Transfer of Property Act, 1882.

We reproduce Section 53A of Transfer of property act,1882 as under

Part performance
Where any person contracts to transfer for consideration any immovable property by writing
signed by him or on his behalf from which the terms necessary to constitute the transfer can be
ascertained with reasonable certainty,
and the transferee has, in part performance of the contract, taken possession of the property or
any part thereof, or the transferee, being already in possession, continues in possession in part
performance of the contract and has done some act in furtherance of the contract,
and the transferee has performed or is willing to perform his part of the contract,
then, notwithstanding that the contract, though required to be registered, has not been registered,
or, where there is an instrument of transfer, that the transfer has not been completed in the
manner prescribed therefor by the law for the time being in force, the transferor or any person
claiming under him shall be debarred from enforcing against the transferee and persons claiming
under him any right in respect of the property of which the transferee has taken or continued in
possession, other than a right expressly provided by the terms of the contract:
PROVIDED that nothing in this section shall affect the rights of a transferee for consideration
who has no notice of the contract or of the part performance thereof.
Part performance under this section is applicable only if there is a valid contract. In other words a
prerequisite limb of Sec 53A is a valid contract as it was held in Sitaram V/S Corporation Of
5 ITA No. 4465/MUM./2009
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Calcutta6that where a law provides that a contract with a corporation must be according to the
provision of law, but if it was not abide by, then the contract is not binding upon parties though
there was part- performance. Again in judgements given in Ama Sultan V/S Seydu Zohra
Beevi7and Nanjegowda V/S Gangamma8it was held that where the property was not proved to
be acquired under a contract, then the party cannot claim benefit under sec-53a of transfer of
property act,1882. Thus a valid contract is a must for this section.
Interpretation of this section by various precedents show that the section only gives the right to
holder of the property to only defend the property and not to carry out any legal action against
the property. But again this can be done only in case of a registered document. Thus the pleading
under the following section is completely forbidden. In the case of Gurbachanchan Singh V/S
Raghubir Singh9, it was held that suit for specific performance based upon an unregistered
agreement is not maintainable.
1.3
Registration
Even the amendment act (48 of 2011) which has amended sec-17 of the registration act speaks
that for the application of sec-53a of transfer of property act, 1882, the written document of the
said transfer must be registered. Since in this case, the document was not registered so the sale or
the agreement for sale was void-ab-initio.
We reproduce Section 17 of the registration act as under:
Documents of which registration is compulsory
(1) The following documents shall be registered, if the property to which they relate is situate in
a district in which, and if they have been executed on or after the date on which, Act No. XVI of
6 AIR 1956 cal 18
7 Air 1990 Ker 187
8 Air 2011 Sc 3774
9 1980 AIR 1362
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1864, or the Indian Registration Act, 1866, or the Indian Registration Act, 1871, or the Indian
Registration Act, 1877 or this Act came or comes into force, namely:(a) instruments of gift of immovable property;
(b) other non-testamentary instruments which purport or operate to create, declare, assign, limit
or extinguish, whether in present or in future, any right, title or interest, whether vested or
contingent, of the value of one hundred rupees, and upwards, to or in immovable property;
(c) non-testamentary instruments which acknowledge the receipt or payment of any
consideration on account of the creation, declaration, assignment, limitation or extinction of any
such right, title or interest; and
(d) leases of immovable property from year to year, or for any term exceeding one year, or
reserving a yearly rent;
12[(e) non-testamentary instruments transferring or assigning any decree or order of a court or
any award when such decree or order or award purports or operates to create, declare, assign,
limit or extinguish, whether in present or in future, any right, title or interest, whether vested or
contingent, of the value of one hundred rupees and upwards, to or in immovable property:]
PROVIDED that the State Government may, by order published in the Official Gazette, exempt
from the operation of this sub-section any leases executed in any district, or part of a district, the
terms granted by which do not exceed five years and the annual rent reserved by which do not
exceed fifty rupees.
(2) Nothing in clauses (b) and (c) of sub-section (1) applies to(i) any composition-deed; or
(ii) any instrument relating to shares in a joint Stock Company, notwithstanding that the assets of
such company consist in whole or in part of immovable property; or

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(iii) any debenture issued by any such company and not creating, declaring, assigning, limiting
or extinguishing any right, title or interest, to or in immovable property except insofar as it
entitles the holder to the security afforded by a registered instrument whereby the company has
mortgaged, conveyed or otherwise transferred the whole or part of its immovable property or any
interest therein to trustees upon trust for the benefit of the holders of such debentures; or
(iv) any endorsement upon or transfer of any debenture issued by any such company; or
(v) any document not itself creating, declaring, assigning, limiting or extinguishing any right,
title or interest of the value of one hundred rupees and upwards to or in immovable property, but
merely creating a right to obtain another document which will, when executed, create, declare,
assign, limit or extinguish any such right, title or interest; or
(vi) any decree or order of a court 13[except a decree or order expressed to be made on a
compromise and comprising immovable property other than that which is the subject-matter of
the suit or proceeding;] or
(vii) any grant of immovable property by government; or
(viii) any instrument of partition made by a revenue-officer; or
(ix) any order granting a loan or instrument of collateral security granted under the Land
Improvement Act, 1871, or the Land Improvement Loans Act, 1883; or
(x) any order granting a loan under the Agriculturists Loans Act, 1884, or instrument for securing
the repayment of a loan made under that Act; or
14[(xa) any order made under the Charitable Endowments Act, 1890, (6 of 1890) vesting any
property in a Treasurer of Charitable Endowments or divesting any such treasurer of any
property; or]

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(xi) any endorsement on a mortgage-deed acknowledging the payment of the whole or any part
of the mortgage-money, and any other receipt for payment of money due under a mortgage when
the receipt does not purport to extinguish the mortgage; or
(xii) any certificate of sale granted to the purchaser of any property sold by public auction by a
civil or revenue-officer.
15[Explanation: A document purporting or operating to effect a contract for the sale of
immovable property shall not be deemed to require or ever to have required registration by
reason only of the fact that such document contains a recital of the payment of any earnest
money or of the whole or any part of the purchase money.]
(3) Authorities to adopt a son, executed after the 1st day of January, 1872, and not conferred by a
will, shall also be registered.
In Stoneware Pipe And Sanitary V/S State Of Punjab 10, registration of document is necessary
under sec-17 of registration act for the enforcement of sale of property whose value is more than
rs 100. Even this section provides that registration is a must.
Registration is a process precisely in a designated place certain information in the public records
as is mandated by statute, it is a formal process.a non-registered document does not have any
legal bearing and any deal made on the basis of it is considered void. Even in Som Dev And Ors
V/S Rati Ram And Ans11, it was held that any document which purports to create, declare, assign
right title or interest in immovable property above rs 100 must be registered under sec-17 of
registration act.
Even the will that was executed was not valid. Reproducing sec- sec-2(h) of indian succession
act,1925 as under:
Will means the legal declaration of the intention of a testator with respect to his property which
he desires to be carried into effect after his death.
10 AIR 1972 RAJ 83
11 (2006) 142 PLR 609
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Thus, a will can be executed only after the death of the testator who in this case is still alive thus
making the will absolutetly invalid. In other words, will cannot be used in cases where the
transfer is intervivos ie transfer between living persons.Even in the case R Vasanthi v/s Janaki
Devi and others12, the court held that a will is carried on only after the death of the testator and
its registration may not be required.
Thus to sum up, Agreement Of Sale, General Power Of Attorney And The Will executed in
favour of the plaintiff is totally null and void.

ISSUE-II
WHETHER WHEN SUM OF RS 45 LACS HAVING BEEN PAID OUT OF RS 50 LACS
AND POSSESSION GIVEN UNDER SEC-53A OF THE TRANSFER OF PROPERTY
12 2005 (1) CTC 11
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ACT, RAMANATH AND HIS FAMILY MEMBERS HAD NO POWERS, COMPETENCE
AND AUTHORITY TO EXECUTE SECOND GENERAL POWER OF ATTORNEY IN
FAVOUR OF MR, YADAV AND CANCEL THE EARLIER GPA IN FAVOUR OF
PLAINTIFF, IS VALID?

That Sec 1A of the power of attorney act,1882 speaks that "Power-of-Attorney" includes any
instruments empowering a specified person to act for and in the name of the person executing it.
Thus it confers upon a principal- agency relation. Power of attorney are of two types-special
power of attorney and general power of attorney (GPA)
GPA authorizes the holder to do whatever is necessary. For example, in property 'sales'
using this instrument, the buyer gets a GPA from the seller not only for his own use of the
property, but for further 'sale' to someone else if he so desires. In 2004, the Delhi government
made it mandatory for GPAs to be registered at 90% of the stamp duty rate applicable to sale
deeds. It made it clear the GPAs that are not registered will have no legal validity. as there was
no registered instrument or document in the public office as the facts of the case suggests, so
there was no transfer of ownership as such my client could cancel the general power of attoney
and execute a fresh new general power of attorney.
In Satyawam Vs Govt Of Nct Of Delhi13, it was held that power of attorney needs to be
registered as an instrument
Again, there was no sale of property with jdc pvt ltd , therefore the canceling of the gpa should
not be a topic of any issue and the execution of it would come into place only if there was
transfer of ownership which in this case is not conducted. In the historical judgement of Suraj
Lamp And Industries Pvt. Ltd V/S State Of Haryana,14 honble supreme court of india has
declared that there cannot be transfer of title by gpa/sa/wills transactions. Only registered sale
deed /conveyance is a valid mode of transfer of title in immovable property. So the validity of the
GPA cannot be challenged by the plaintiff.

13 115 (2004) DLT 424

14 2009 (7) SCC 363
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A power of attorney is not an instrument of transfer in regards to any right, title or interest in an
immovable property. So it does not convey ownership and also it is irrevocable or terminable at
any time unless under law. Therefore, my client had full authority to cancel the previous gpa and
execute a second GPA.

ISSUE III
III. WHETHER THE PLAINTIFF WAS READY, WILLING AND PREPARED AND
TENDERED RS 5 LACS AFTER 02.01.2014 AND REQUESTED RAMANATH AND HIS
FAMILY MEMBERS TO EXECUTE SALE DEED AND TO GET IT REGISTERED.
WHAT IS THE EFFECT OF NON-PAYMENT OF BALANCE AMOUNT ON 02.01.2014?
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The issue as stated by the High Court of Rajasthan is quite academic. jdc ltd who was supposed
to pay the remaining amount of Rs 5 lacs before 02.01.2014 , offered to pay the amount on
10.01.2014. This proves that they were very casual towards the deal of property. This proves that
they were not willing to execute the sale deed and execute it.
The company had offered the amount immediately 5 days after the due date. This shows that they
enough resources to pay the amount. Subsequently implying that they were not bothered about
the registration as well as disinterested in paying the remaining amount.
The plaintiff has been constantly telling about breach of contract. But it has already been told
that there was no such contract or sale of property. Thus sec 73 of Indian contact act, 1872 will
not be applicable.
Thus reproducing sec-73 of Indian contract act of 1872,
73. Compensation of loss or damage caused by breach of contract
When a contract has been broken, the party who suffers by such breach is entitled to receive,
from the party who has broken the contract, compensation for any loss or damage caused to him
thereby, which naturally arose in the usual course of things from such breach, or which the
parties knew, when they made the contract, to be likely to result from the breach of it.
Such compensation is not to be given for any remote and indirect loss or damage sustained by
reason of the breach.
Compensation for failure to discharge obligation resembling those created by contract: When an
obligation resembling those created by contract has been incurred and has not been discharged,
any person injured by the failure to discharge it is entitled to receive the same compensation
from the party in default, as if such person had contracted to discharge it and had broken his
contract.

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Explanation: In estimating the loss or damage arising from a breach of contract, the means
which existed of remedying the inconvenience caused by non-performance of the contract must
be taken into account.
Illustrations
(c) A contracts to buy of B, at a stated price, 50 maunds of rice, no time being fixed for delivery.
A afterwards informs B that he will not accept the rice if tendered to him. B is entitled to receive
from A, by way of compensation, the amount, if any, by which the contract price exceeds that
which B can obtain for the rice at the time when A informs B that he will not accept it.
(d) A contracts to buy B's ship for 60,000 rupees, but breaks the promise. A must pay to B, by
way of compensation, the excess, if any, of the contract price over the price which B can obtain
for the ship at the time of breach of promise.
(e) A, the owner of a boat, contracts with B to take a cargo of jute to Mirzapur, for sale at that
place, starting on a specified day. The boat, owing to some unavoidable cause, does not start at
the time appointed, whereby the arrival of the cargo at Mirzapur is delayed beyond the time
when it would have arrived if the boat had sailed according to the contract. After that date, and
before the arrival of the cargo, the price of jute falls. The measure of the compensation payable
to B by A is the difference between the price which B could have obtained for the cargo at
Mirzapur at the time when it would have arrived if forwarded in due course, and its market price
at the time when it actually arrived.
(f) A contracts to repair B's house in a certain manner, and receives payment in advance. A
repairs the house, but not according to contract. B is entitled to recover from A the cost of
making the repairs conforming to the contract.
(g) A contracts to let his ship to B for a year, from first of January, for a certain price. Freights
rise, and, on the first of January, the hire obtainable for the ship is higher than the contract price.
A breaks his promise. He must pay to B, by way of compensation, a sum equal to the difference

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between the contract price and the price for which B could hire a similar ship for a year on and
from the first of January.
(l) A, a builder, contracts to erect and finish a house by the first of January, in order that B may
give possession of it at that time to C, to whom B has contracted to let it. A is informed of the
contract between B and C. A builds the house so badly that, before the first of January, it falls
down and has to be rebuilt by B, who in consequence, loses the rent which he was to have
received from C, and is obliged to make compensation to C for the breach of his contract. A must
make compensation to B for the cost of rebuilding of the house, for the rent lost, and for the
compensation made to C.
(m) A sells certain merchandise to B, warranting it to be of a particular quality, and B, in reliance
upon this warranty, sells it to C with a similar warranty. The goods prove to be not according to
the warranty, and B becomes liable to pay C a sum of money by way of compensation. B is
entitled to be reimbursed this sum by A.
(n) A contracts to pay a sum of money to B on a day specified. A does not pay the money on that
day. B, in consequence of not receiving the money on that day, is unable to pay his debts, and is
totally ruined. A is not liable to make good to B anything except the principal sum he contracted
to pay together with interest up to the day of payment.
(o) A contracts to deliver 50 maunds of saltpetre to B on the first of January, at a certain price. B,
afterwards, before the first of January, contracts to sell the saltpetre to C at a price higher than the
market price of the first of January. A breaks his promise. In estimating the compensation
payable by A to B, the market price of the first of January, and not the profit which would have
arisen to B from the sale to C, is to be taken into account.
(p) A contracts to sell and deliver 500 bales of cotton to B on a fixed day. A knows nothing of B's
mode of conducting his business. A breaks his promise, and B, having no cotton, is obliged to
close his mill. A is not responsible to B for the loss caused to B by closing of the mill.

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(q) A contracts to sell and deliver to B, on the first of January, certain cloth which B intends to
manufacture into caps of a particular kind, for which there is no demand, except at that season.
The cloth is not delivered till after the appointed time, and too late to be used that year in making
caps. B is entitled to receive from A, by way of compensation, the difference between the
contract price of the cloth and its market price at the time of delivery, but not the profits which he
expected to obtain by making caps, nor the expenses which he has been put to in making
preparation for the manufacture.
Normally, a sale becomes effective on registration from the date of its execution. Execution
means signing of the deed of sale by the parties concerned and attested by witnesses. However,
mere registration of the document does not mean simultaneous transfer of ownership of the
property. Transfer of full ownership happens only after due compliance of all formalities and the
payment of price.
Unless and until the full sale price is paid and other legal formalities complied with, the sale is
ineffective, even though the deed of sale is registered before the registering authority concerned
and in presence of witnesses. If the price is not paid in full by the date stipulated, the seller is at
liberty to cancel the registered deed of sale. Thus, Ramanath could cancel the agreement at any
time.

ISSUE IV
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1. WHETHER THE STAMP DUTY REGISTERING AUTHORITY WAS RIGHT IN
DEMANDING STAMP DUTY ON THE FAIR MARKET VALUE OF RS 1 CRORE
AND 50 LACS AS ON 01.08.2013 AND NOT AT RECORDED VALUE/FAIR
MARKET VALUE ON 01.08.2013 IE. RS 50 LACS? IF STAMP DUTY WOULD BE
PAYABLE ON ADDITIONAL 1 CRORE, WHO WOULD BEAR SUCH AMOUNT?
No, the Stamp Duty Registering authority was not right on demanding stamp duty on the fair
market value of 1crore and 50 lacs under Sec- 56(2) (vii) (b) (ii) of the Income Tax Act,1961
Reproducing Sec- Sec- 56(2) (vii) of the Income Tax Act,1961
(vii) where an individual or a Hindu undivided family receives, in any previous year, from
any person or persons on or after the 1st day of October, 2009,
(a) any sum of money, without consideration, the aggregate value of which exceeds fifty
thousand rupees, the whole of the aggregate value of such sum;
8

[(b) any immovable property,

(i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the
stamp duty value of such property;
(ii) for a consideration which is less than the stamp duty value of the property by an amount
exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such
consideration:
Provided that where the date of the agreement fixing the amount of consideration for the
transfer of immovable property and the date of registration are not the same, the stamp duty
value on the date of the agreement may be taken for the purposes of this sub-clause:
Provided further that the said proviso shall apply only in a case where the amount of
consideration referred to therein, or a part thereof, has been paid by any mode other than
cash on or before the date of the agreement for the transfer of such immovable property;]
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(c) any property, other than immovable property,
(i) without consideration, the aggregate fair market value of which exceeds fifty thousand
rupees, the whole of the aggregate fair market value of such property;
(ii) for a consideration which is less than the aggregate fair market value of the property by
an amount exceeding fifty thousand rupees, the aggregate fair market value of such property
as exceeds such consideration :
Provided that where the stamp duty value of immovable property as referred to in sub-clause
(b) is disputed by the assessee on grounds mentioned in sub-section (2) of section 50C, the
Assessing Officer may refer the valuation of such property to a Valuation Officer, and the
provisions of section 50C and sub-section (15) of section 155 shall, as far as may be, apply in
relation to the stamp duty value of such property for the purpose of sub-clause (b) as they
apply for valuation of capital asset under those sections :
Provided further that this clause shall not apply to any sum of money or any property
received
(a) from any relative; or
(b) on the occasion of the marriage of the individual; or
(c) under a will or by way of inheritance; or
(d) in contemplation of death of the payer or donor, as the case may be; or
(e) from any local authority as defined in the Explanation to clause (20) of section 10; or
(f) from any fund or foundation or university or other educational institution or hospital or
other medical institution or any trust or institution referred to in clause (23C) of section 10;
or
(g) from any trust or institution registered under section 12AA.
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Explanation.For the purposes of this clause,
(a) assessable shall have the meaning assigned to it in the Explanation 2 to sub-section (2)
of section 50C;
(b) fair market value of a property, other than an immovable property, means the value
determined in accordance with the method as may be prescribed9;
(c) jewellery shall have the meaning assigned to it in the Explanation to sub-clause (ii) of
clause (14) of section 2;
(d) property 10[means the following capital asset of the assessee, namely:]
(i) immovable property being land or building or both;
(ii) shares and securities;
(iii) jewellery;
(iv) archaeological collections;
(v) drawings;
(vi) paintings;
(vii) sculptures; 11[***]
(viii) any work of art; 12[or]
12

[(ix) bullion;]

13

[(e) relative means,

(i) in case of an individual

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(A) spouse of the individual;
(B) brother or sister of the individual;
(C) brother or sister of the spouse of the individual;
(D) brother or sister of either of the parents of the individual;
(E) any lineal ascendant or descendant of the individual;
(F) any lineal ascendant or descendant of the spouse of the individual;
(G) spouse of the person referred to in items (B) to (F); and
(ii) in case of a Hindu undivided family, any member thereof;]
(f) stamp duty value means the value adopted or assessed or assessable by any authority of
the Central Government or a State Government for the purpose of payment of stamp duty in
respect of an immovable property;]
14

[(viia) where a firm or a company not being a company in which the public are substantially

interested, receives, in any previous year, from any person or persons, on or after the 1st day
of June, 2010, any property, being shares of a company not being a company in which the
public are substantially interested,
(i) without consideration, the aggregate fair market value of which exceeds fifty thousand
rupees, the whole of the aggregate fair market value of such property;
(ii) for a consideration which is less than the aggregate fair market value of the property by
an amount exceeding fifty thousand rupees, the aggregate fair market value of such property
as exceeds such consideration :

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Provided that this clause shall not apply to any such property received by way of a
transaction not regarded as transfer under clause (via) or clause (vic) or clause (vicb) or
clause (vid) or clause (vii) ofsection 47.
Explanation.For the purposes of this clause, fair market value of a property, being shares
of a company not being a company in which the public are substantially interested, shall have
the meaning assigned to it in the Explanation to clause (vii);]
15

[(viib) where a company, not being a company in which the public are substantially

interested, receives, in any previous year, from any person being a resident, any consideration
for issue of shares that exceeds the face value of such shares, the aggregate consideration
received for such shares as exceeds the fair market value of the shares:
Provided that this clause shall not apply where the consideration for issue of shares is
received
(i) by a venture capital undertaking from a venture capital company or a venture capital fund;
or
(ii) by a company from a class or classes of persons as may be notified by the Central
Government in this behalf.
Explanation.For the purposes of this clause,
(a) the fair market value of the shares shall be the value
(i) as may be determined in accordance with such method as may be prescribed16; or
(ii) as may be substantiated by the company to the satisfaction of the Assessing Officer, based
on the value, on the date of issue of shares, of its assets, including intangible assets being
goodwill, know-how, patents, copyrights, trademarks, licences, franchises or any other
business or commercial rights of similar nature,

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whichever is higher;
(b) venture capital company, venture capital fund and venture capital undertaking shall
have the meanings respectively assigned to them in clause (a), clause (b) and clause (c)
of 17[Explanation] to clause (23FB) of section 10;]

A proviso under Sec- 56(2) (vii) (b) (ii) of the Income Tax Act,1961 speaks that this section
will be applicable only if a part of the consideration is paid in mode other than cash. But the
facts of the case clearly show that Mr Yadav had paid the entire consideration of 50 lacs in
cash. Thus this section will not at all be applicable.
Moreover, the fact sheet is completetly silent as to date when the
instrument was stamped. So under Sec-17 of the Rajasthan Stamp Act, 1998 and also under
sec-17 of the Indian Stamp Act,1899, the authorities cannot demand stamp duty on 1 crore
and 50 lacs.
Reproducing sec-17 of the Rajasthan Stamp Act, 1998
17 - Instruments executed in the State
All instruments chargeable with duty and executed by any person in the State shall be
stamped before or at the time of execution or immediately thereafter on the next working day
following the day of execution.
Reproducing sec-17 of the Indian Stamp Act,1899
All instruments chargeable with duty and executed by any person in India shall be stamped
before or at the time of execution.
The above two sections says that the instrument which are executed
should be stamped before or after the date of execution. But there is nowhere mentioned
when the documents were stamped. So no proof lies whether the documents were stamped or
not under sec-27 of Indian Stamp Act,1899
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Sec 27 of Indian Stamp Act,1899 speaks
Facts affecting duty to be set forth in instrument
The consideration (if any) and all other facts and circumstances affecting the chargeability of any
instrument with duty, or the amount of the duty with which it is chargeable, shall be fully and
truly set forth therein.

Thus, the Stamp Duty Registering authority was not right on demanding stamp
duty on the fair market value of 1crore and 50 lacs.
Moreover, if the stamp duty is to be paid on the additional 1
crore, then it should be borne by the plaintiff because otherwise the seller would be required to
pay the additional capital gain tax for no fault on his part thus affecting the doctrine of Justice,
Equity and Good Conscience.

PRAYER

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In light of the issues raised, arguments advanced, cases cited in front of this Honorable Supreme
Court of India, the Respondents, on behalf of the Bar Association of India requests this
Honorable Court to summarily dismiss the case.
And may grant any other reliefs as Honble Court may deem fit in light of Justice, Equity and
Good Conscience.
For which the Counsels on behalf of the Respondents will be forever duty-bound and obliged.

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