K UMA SHANKAR Vs. INSPECTOR GENERAL OF REGISTRATION

JUDGEMENT

(1.) THE case of the petitioner is that the petitioner's maternal uncle Mr.C.R.Manickavelu, in terms of a trust deed dated 12.06.1967, registered as document No.416 of 1967 in the office of the Registrar of Madras-Chengleput, created a private family trust as GUB Trust with a Corpus of a sum of Rs.50,000/-. THE primary object of the said trust is to provide education, maintenance and marriage expenses of the said C.R.Manickavelu's nephews, namely, K.Gowri Shankar, who is the petitioner's elder brother, a minor then aged about 14 years, K.Uma Shankar/the petitioner herein, then aged about 12 years and K.Bhavani Shankar, who is the petitioner's younger brother and was then aged about 10 years. All of them are sons of Late Kasi Viswanathan and Late Ambika Kasi Viswanathan. THE author of the trust also appointed himself and his Late Ambika Kasi Viswanathan as the first trustee to the said trust. In terms of Clause 3 of the said trust, the trustees were at liberty to invest funds and properties or any part thereof of the said trust in the form of investments as permitted under the Indian Trust Act including acquisition of immovable properties. Clause 7 of the aforementioned trust deed also says that each of the beneficiaries are entitled for his/her maintenance, education including education in foreign countries, advancement, medical expenses and marriage expenses out of the income coming to his/her share till the happening of death or attainment of age of 25 years, whichever is earlier and not after and on the youngest beneficiary completing the age of 25 years, the entire corpus will be divided equally among the three beneficiaries and accumulations in their accounts will be paid to them and the trust will be dissolved. Only in terms of Clause 7 of the said trust deed, on the youngest beneficiary, namely, K.Bhavani Shankar, who is the petitioner's younger brother, completing the age of 25 of years, since the trust will stand dissolved, the trustees on 07.07.1967, executed a supplemental deed, which was also registered as document No.511 of 1967 in the office of the Registrar of Madras-Chengaleput. Subsequently, on the demise of C.R.Manickavelu, since the affairs of the said trust could not be managed solely by the surviving trustee Smt.Ambika Kasiviswanathan, she has co-opted her eldest son, namely, K.Gowri Shankar, who had by then became a major, as a trustee in the year 1972 and thereafter, in the year 1975, both the trustees, namely, Ambika Kasiviswanathan and K.Gowri Shankar, co-opted K.Uma Shankar/the petitioner herein, who had by then attained majority, as a third trustee. Subsequently, since the next beneficiary, namely, K.Bhavani Shankar, completed the age of 25 years on 29.11.1982, as per the provisions contained in Clause 7 of the said trust deed, the trust stood dissolved, whereupon the ownership in the said property will accordingly vest with equally in favour of the said beneficiaries. On that basis, each of the said beneficiaries will hold a 1/3rd of the share in the said property. In view of that, a release deed presented for registration in the office of the Sub Registrar, Thousand Lights / the 3rd respondent herein on 20.02.2008, because the petitioner's younger brother K.Bhavani Shankar, on 20.02.2008, executed a release deed releasing his half share of the said property in favour of the petitioner and the petitioner was also paid the requisite maximum stamp duty of Rs.10,000/- as per the Article 55(A) of the Schedule to the Indian Stamp Act. THEreafter, the 3rd respondent instead of duly registering the said release deed, retained the said release deed pending registration and numbered the same as document No.P-14 of 2008. Subsequently, the 2nd respondent has also impounded the said release deed bearing document No.P-14 of 2008 on the ground that adequate stamp duty has not been paid on the said document at the time of registration vide his letter dated 19.02.2009 bearing No.1546/A1/2009. THE petitioner, after receiving the said letter dated 19.02.2009, has sent a reply on 23.03.2009 to the 2nd respondent stating that in terms of Clause 7 of the trust deed, the said trust itself got dissolved, therefore, the said release deed executed by his brother in favour of the petitioner, is required to be stamped only in terms of Article 55(A). On that basis, further request was made to the 2nd respondent to direct the 3rd respondent to register the document and release the same without demanding any additional sum towards stamp duty. THEreafter, the 2nd respondent rejected the said request under Section 33 of the said Act by passing an order dated 28.05.2009 and again, given a direction to the petitioner to pay a stamp duty of Rs.10,02,600/- along with a penalty of Rs.1,000/-. THE said order is under challenge now.

(2.) LEARNED counsel appearing for the petitioner submitted that the 1st respondent ought to have considered the fact that in terms of Clause 7 of the Trust Deed, after 1982, when K.Bhavani Shankar, had completed 25 years of age, the trust stood dissolved and therefore, the properties vested by it stood vested in favour of the beneficiaries. Secondly, it was contended that when the trust itself has been formed with a corpus of Rs.50,000/-, on dissolution of the trust, the trustees have decided to divide the properties only in terms of Clause 3 of the said Trust, therefore, passing an order directing the petitioner to pay a stamp duty of Rs.10,02,600/- along with a penalty of Rs.1,000/-, is completely contrary to Article 62(e) of the Indian Stamp Act and on that basis prayed for setting aside the impugned order.

(3.) IN this context, it is useful to refer to Article 62(e) of Schedule-I of the INdian Stamp Act:- 62(e): Transfer whether with or without consideration of any trust property from one trustee to another trustee or from a trustee to a beneficiary. A mere reading of Article 62(e) of the said Act will clearly suggest in a given case where the trustees belong to the very same family, the question of consideration will not arise as the trust property is transferred from one trustee to another or to a beneficiary. Further, it is relevant to keep it in mind that the 1st respondent failed to consider the fact that in terms of Clause 7 of the Trust Deed, after 1982, when K.Bhavani Shankar, had completed 25 years of age, the trust having stood dissolved, resultantly the properties vested on the trust automatically stood vested in favour of all the beneficiaries equally. Secondly, when the trust itself has been formed with a corpus of Rs.50,000/-, on dissolution of the trust, the trustees have decided to divide the properties only in terms of Clause 3 of the said Trust. Therefore, I do not know why the respondent failed to look into these aspects while passing the order directing the petitioner to pay a stamp duty of Rs.10,02,600/- along with a penalty of Rs.1,000/-, which is not only unsustainable, but also contrary to Article 62(e) of the INdian Stamp Act. Therefore, the impugned order directing the petitioner to pay a stamp duty of Rs.10,02,600/- along with a penalty of Rs.1,000/- is liable to be quashed and the same is accordingly quashed with a direction to the respondents to register and release the release deed dated 20.02.2008 bearing document No.P-14 of 2008 on the file of the 3rd respondent herein without insisting upon payment of any deficit stamp duty or penalty and handover the same to the petitioner within a period of three weeks from the date of receipt of a copy of this order.