CHIEF CONTROLLING REVENUE AUTHORITY STAMP ACT AND INSPECTOR GENERAL OF REGISTRATION Vs. COIMBATORE ALCOHOL AND CHEMICALS PVT LTD

JUDGEMENT

(1.) THIS is a reference under S.57 of the Indian Stamp , 2 of 1899, hereinafter referred to as the Act. The question referred to for our consideration and answer runs as follows -"Whether the document No.P.531/77 of Registrar Office, South Madras is a mortgage deed or a trust deed?" *The document, as per the copy disclosed in the typed set, is separately annexed to this order as Annexure-A. As we could see from the contents of the document, the executants are stated to be Murugesan and Coimbatore Alcohol and Chemicals (P.) Ltd. The document is in favour of Ramlinga Gounder. It refers to an agreement dt. 25-10-1977 amongst Muthukumaraswami, Lakshmanasami, Rathanasami, Coimbatore Alcohol and Chemicals (P.) Ltd. and others. There is a reference to the properties, set out in the Third Schedule to the said agreement, and it is further said that until the debts of Rs. 5,28,000 referred to in paragraph 5 of the said agreement are discharged by the sale of these properties, the said properties shall be in the possession of Ramalinga Gounder, and at the time of the discharge of the said debts, possession shall be handed over by Ramalinga Gounder to the purchasers, and he shall not hand over possession to any one without the discharge of the said debts. The Revenue wanted to maintain that this document will fall within the definition of a mortgage deed under S.2(17) of the Act, attracting Art.40 of the Act. The respondents, on the other hand, presented the document without tendering any stamp duty, and on objections being raised that the document has got to be stamped as a mortgage deed, the respondents would say that it may, if at all to be stamped, have the character of a declaration of trust and certainly not that of a mortgage deed as defined under S.2(17) of the Act.

(2.) SECTION 2(17) of the Act defines mortgage deed in the following terms:-"Mortgage deed: 'Mortgage deed' includes every instrument whereby, for the purpose of securing money advanced, or to be advanced, by way of loan, or an existing or future debt, or the performance of an engagement, one person transfers, or creates, to, or in favour of, another, a right over or in respect of specified property." *As we could see from the above definition, it is an inclusive one. Mortgage, as such, stands defined under S.58(a) of the Transfer of Property Act, as follows -"58(a). A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt or the performance of an engagement which may give rise to a pecuniary liability.The transferor is called a mortgagor, the transferee a mortgagee the principal money and interest of which payment is secured for the time being are called the mortgage money and the instrument (if any) by which the transfer is effected is called a mortgage deed." *Looking into the language of S.58(a) of the T. P. Act, we find that there has got to be transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, or an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. The definition of mortgage deed under S.2(17) of the Act includes every instrument whereby, for the purpose of securing money, advanced or to be advanced, by way of loan, or an existing or a future debt, or the performance of an engagement, there is a transfer or creation by one person to and in favour of another, a right over or in respect of specified property. Sec. 58(a) of the Transfer of Property Act, referes to mortgages as relating to immovable property only, while the inclusive definition in S.2(17) of the Act applies it to transfers both of movable and immovable property. With this salient exception, the definitions in both the statutes are practically identical.