TUPURANI VODAVALLI TAYARU Vs. OFFICIAL RECEIVER

JUDGEMENT

(1.) This revision is directed against the judgment of the learned District Judge, West Godavari in A. S. No. 29/65 by which he confirmed the order passed by the Subordinate Judge, Eluru in I. A. 323/64 in I. P. 2/60 on his file.

(2.) One Kayala Rajayya was adjudged insolvent in I. P. 2/60 on the file of the Subordinate Judge, Eluru. The Official Receiver, West Godavari in whom the properties of the insolvent vested, sold 62 cents of land comprised in R. S. No. 28/6 of Kothalaparru to the petitioner herein for Rs. 103. The petitioner paid the price and also furnished the non-judicial stamp paper to enable the Official Receiver to execute a conveyance and requested him for the same. The Official Receiver thereafter solicited instructions from the Insolvency Court as to whether he should ask the purchaser to furnish non-judicial stamp paper to cover the value of encumbrances, if any, to be ascertained from the purchaser. There is no knowing as to what instructions the Insolvency Court gave. The Petitioner-purchaser thereafter moved the Insolvency Court in I. A. 323/64 to direct the Official Receiver to execute a conveyance for the property purchased by her without reference to any encumbrances thereon or alternatively to direct a refund of the purchase money to her. The learned Subordinate Judge granted the alternative prayer and directed the Official Receiver to refund the purchase money having negatived the petitioner's stand that she is not bound to value the encumbrances if any on the property for the purpose of furnishing non-judicial stamp paper to the Official Receiver. The petitioner carried the matter in appeal to the District Judge, West Godavari who, as already stated, confirmed the order of the Subordinate Judge. Hence this revision.

(3.) The learned counsel for the petitioner argued and rightly too, that both the Courts below were influenced by the erroneous impression that the property in question was sold by the Official Receiver subject to the encumbrances when in fact that was not the case. The proclamations relating to the sale were called for from the Official Receiver and they disclose that the property was sold without making mention of any encumbrances thereon. The learned counsel for the petitioner, therefore, contends that Section 24 of the Stamp Act has no application to the facts of this case. A reading of Section 24 of the Stamp Act seems to lend support to the contention urged for the petitioner that the encumbrances have to be valued for the purpose of ascertaining the ad valorem duty if only the transfer is made subject to encumbrances and not otherwise. This view receives support from a Full Bench decision of the Allahabad High Court reported in Sidhnath v. Board of Revenue, A.I.R. 1959 Allahabad 655 in which it was held that where immovable property, which is encumbered by a charge or mortgage, is sold but not subject to the encumbrance, then the amount of money constituting the charge or mortgage need not be added to the consideration mentioned, in the conveyance as the value of the property sold. It will be useful to extract the relevant passages occurring at page 657 of this decision :