Report No. 67
5.11. Section 2(15)-"Instrument of partition".-
"Instrument of partition" is defined in section 2(15), as meaning any instrument, whereby co-owners of any property divide or agree to divide such property in severally and as including also a final order for effecting a partition passed by any revenue-authority or any Civil Court, and an award by an arbitrator directing a partition. There are, thus, four types of instruments with which the definition concerns itself:-
(a) any instrument whereby co-owners of any property divide such property in severalty;
(b) any instrument whereby co-owners agree to divide the property in severalty;
(c) a final order for effecting a partition, passed by any revenue authority or any civil court; and
(d) an award by an arbitrator directing a partition.
5.12. Instruments dividing property in severalty.-
Instruments between co-owners dividing property in severalty, present few problems
5.12A. Memorandum of partition.-
The familiar question whether a particular document merely records a partition already orally effected, or itself divides the property-so often arising under the Registration Act-has arisen under the Stamp Act also. The question is one of construction of a particular document. The abstract rule is clear, namely, that a document recording a past partition is not chargeable with duty.1
The Legislature, no doubt, can levy duty on such documents also, and it appears that by a State amendment, Rajasthan2 has added a provision3 whereunder "instrument of partition" includes-
"(ii) when any partition is effected without executing any such instrument, any instrument or instruments signed by the co-owners and recording, whether by way of declaration of such partition or otherwise, the terms of such partition amongst the co-owners."
There seems, however, some possibility of harshness resulting from such a wide amendment which might take in even incidental reference to past partitions.
1. Tirathraj (in re:), AIR 1942 All 220 (SB).
2. Rajasthan Stamp Amendment Act, 1966 (16 of 1966).
3. Only the relevant portion is quoted.
5.13. Agreement to divide.-
It should be noted that under the general law, to constitute a "partition", there need not be an actual partition by metes and bounds. An agreement to divide in equal share is sufficient to constitute partition.1In fact, even an intimation is enough, if unequivocal. Whether the same principles apply for the Stamp Act, is not very clear. The words "agree to divide" in the clause seem to refer to an agreement to divide on some future date which does not operate to create any right in the property. Thus, it has been held2 that a partition list, which does not itself effect division but is merely an agreement for effecting a future partition on terms agreed, is not an instrument of partition, and is liable to stamp duty only as an agreement.
1. Anantha Bhattacharya v. Damodar Makund, ILR 13 Born 25.
2. Gangaiya v. Chinnna Lingaiyya, AIR 1933 Mad 162.
5.14. Final order for effecting a partition passed by a revenue authority or civil court.-
The third category of instruments of partition comprises orders effecting a partition passed by a revenue authority or civil court. Some controversy seems to exist as to the consequences of non-stamping of a decree of a civil court for partition. The matter, however, pertains more appropriately to section 35, which deals with the consequences of failure to stamp.
5.15. Awards by arbitrators directing partition.-
Awards by arbitrators directing partition, constitute the fourth category of "instrument of partition". No changes are needed in this part of the definition.
5.16. In the definition, the words used in connection with an award of arbitrators are-"directing a partition", and not "effecting a partition"-which is the wording used in the definition in connection with a final order of a Revenue authority or Civil Court. The reason is, that arbitrators have no power to do more than to direct a partition. Therefore, even if the arbitrators go further and define the manner in which the partition should be made, it has no more binding force,1 and for the purposes of Stamp, it remains an instrument of partition.2
1. Kalidas v. Tribhuwandas, 1907 ILR 31 Born 68 (71)
2. See also Emperor v. Butto Lal, 73 IC 336 (Oudh).
5.17. Section 2(16)-"Lease".-
Section 2(16) provides that "lease" means a lease of immovable property and includes also-
(a) a patta;
(b) a kabuliyat, or other undertaking in writing, not being a counterpart of a lease to cultivate, occupy or pay or deliver rent for, immovable property;
(c) any instrument by which tolls of any description are let;
(d) any writing on an application for a lease intended to signify that the application is granted.
In the Transfer of Property Act,1 a lease of immovable property is defined as a transfer of a right to enjoy such property, made for a certain time expressed or implied, or in perpetuity, in consideration of a price paid or promised or of money, a share of crops, service or any other thing of value to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. The English Act does not contain any definition of a "lease", and it is to be assumed that it has the same meaning as under the general law.2
1. Section 105, Transfer of Property Act, 1882.
2. See Jones v. I.R.C.; Sweetmeat Automatic Delivery Co. v. I.R.C., (1895) 1 QB 484, where an agreement licensing the installation of automatic machinery on railway platforms was held not to be a lease for stamp duty purposes.
5.18. Two Parts.-
The definition in the Indian Stamp Act can be divided into two parts. First, it says that "lease" means a lease of immovable property. While confining the scope of the expression to "immovable property", this part of the definition does not indicate what is intended by lease". Secondly, certain instruments are, by the second part of the definition which is inclusive, brought within its scope.
5.19. Recommendation regarding first part of the definition.-
As regards the first part, it is pertinent to point out that courts have, in deciding particular cases,1 referred to the definition of "lease" in the Transfer of Property Act. A question to be considered is, whether we should now provide that "lease" means a lease as defined in the Transfer of Property Act. While that Act does not apply to the whole of India, and the provisions as to leases do not, in their entirety, apply to agricultural leases, it seems useful to adopt the definition in that Act by reference, so as to have precision. We recommend that it should be adopted. The replies to our Questionnaire2 have also, in general, agreed with this.
1. Eg., Ag. Secy., Board of Railway v. South India Railway, AIR 1925 Mad 434 (438) (FB) (Krishnan, J.).
1. Question 9 of the Questionnaire.
5.20. "Immovable Property" not defined-Recommendation.-
Both under the Stamp Act and under the Transfer of Property Act, the term, "lease" is restricted to lease of immovable property; but nowhere in either of these Acts is the expression "immovable property" defined. Section 3 of the Transfer of Property Act simply says that "immovable property does not include standing timber, growing crops, or grass. As the Stamp Act is silent about the expression "immovable property", the definition of that expression in the General Clauses Act can be used. That definition1 includes "land, benefits to arise out of land and things attached to the earth, or permanently fastened to anything attached "to the earth"-"a definition large enough to include growing grass."2
The more restrictive provision in the Transfer of Property Act and the. Registration Act, should not, it has been observed, be imported into the Stamp Act.3 We are of the view that the definition of "immovable property" in the General Clauses Act should be adopted, by repeating it in the Stamp Act.
1. Section 2(26), General Clauses Act, 1897.
2. Hormusji Irani (in re:), 1886 ILR 13 Born 87 (89).
3. Hormusji Irani (in re:), 1886 ILR 13 Born 87 (89), per Nanabhai Haridas, J. (The majority view in this case was, however, that the rent note in question, by which a person agreed to take certain pasture ground for grazing a particular number of she buffaloes at a certain rate per head, was not a lease, because possession had not been parted with).