The Hindu : HC ruling on joint family property

Online edition of India's National Newspaper
Tuesday, Jul 01, 2003

Southern States

Southern States - Tamil Nadu-Chennai

HC ruling on joint family property

By A. Subramani

CHENNAI JUNE 30. The division of a property among members of a joint family by partition would not amount to transfer or conveyance of the property warranting levy of stamp duty as per its market value, the Madras High Court has ruled.

The petitioners, all members of a Hindu undivided joint family, effected partition of the jointly held property in June 2001. The T.Nagar District Registrar issued a notice in February stating that they were liable to pay Rs. 4.85 lakhs towards the `differential stamp duty' and another Rs. 2.43 lakhs towards `registration charges'.

Challenging the notice, the petitioners said for the levy of stamp duty the value as set out in the document alone should be adopted, and it should not be calculated on the basis of market value. They assailed the sum demanded as well as the manner of assessment of the partition deed.

"Such an instrument of partition will not fall under Section 47A of the Stamp Act, and therefore, the registration official had neither jurisdiction to demand deficit stamp duty nor arrive at the market value... Being a partition among the members of the joint family, it is not a transfer or conveyance, but is only a severance or division".

Countering the argument, the Advocate-General submitted that it was open to the registration official to call upon the persons concerned to pay the deficit stamp duty if he came to the conclusion that the divided property had been undervalued and if there was substantial difference between the value of consideration and the market value.

Upholding the contention of the petitioners, Justice E. Padmanabhan said: "An instrument of partition not being a conveyance or exchange or gift or release of benami right or settlement, it is rightly contended that Section 47A cannot be invoked during registration... The official has no authority to refer an instrument of partition to the Collector for determination of market value or for levy of stamp duty".

The judge pointed out that the legislature had `purposely omitted' the expression `market value' in respect of partition, and said, "it is the recited value of the instrument which has to be accepted by the Registrar for the purpose of levy of stamp duty in case of an instrument of partition.

"Therefore, levy on the basis of market value by placing reliance on Section 47A is a misconception and it cannot be relied upon. Even assuming that the instrument is under-valued, the Registering officer has no authority to assess the value, much less the market value, in terms of Stamp Act and the Rules".

The judge directed the respondent-official to complete the deed registration of the petitioners within three weeks without insisting on payment of further stamp duty, and release the document of partition forthwith.

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