HARDUTTA RAI JHUNJHUNWALA Vs. STATE OF BIHAR

JUDGEMENT

(1.) In this writ application under Articles 226 and 227 of the Constitution of India the petitioner has challenged the validity of (i) a letter, dated the 28th June, 1968, addressed by the Sub-Registrar, Giridih, to the Stamp Deputy Collector, Hazaribagh (Annexure '2'), requesting the latter for realisation of the deficit stamp duty - and penalty from the petitioner in respect of a deed of dissolution of partnership; (ii) the note of the Stamp Deputy Collector, dated the 15/ 18th October, 1968, addressed to the Deputy Commissioner, Hazaribagh, with the order of the Deputy Commissioner thereon dated the 29th October, 1968 (Annexure '3'), agreeing with the Stamp Deputy Collector and directing recovery of the deficit stamp duty and penalty and (iii) the notice of demand dated the 17th December, 1968 (Annexure '4') issued by the Stamp Deputy Collector calling upon the petitioner to deposit the amount of deficit stamp duty and penalty in the local treasury at Giridih, and has prayed for the quashing thereof. A further prayer has been made for a direction to the Deputy Commissioner to register the said deed, a copy whereof is annexure '1' to the writ application.

(2.) The material facts for the disposal of this application may be briefly stated as follows: petitioner Hardutta Rai Jhunjhunwala had been carrying on a partnership business with his brother Lalchand Jhunjhunwala, in the name and style of "Messrs. Rameshwar Das Hardutt Rai" under a registered deed of partnership dated the 17th of August, 1959. On account of some differences between the partners with regard to the method of carrying on the said business, the partners decided to close the partnership business with effect from the 15th of April, 1968. Accordingly, a deed purporting to be a deed of dissolution of the partnership was drawn up on the 26th of April, 1968 on a non-judicial stamp of Rs. 16/- and was presented for registration before the Sub-Registrar at Giridih. The respondent Sub-Registrar, taking the view that the document in question was a 'conveyance' for Rs. 14,885-75 paise, so far as the assets of the partnership business were concerned, and also a sale of the goodwill for Rs. 2,000/- and, as such, it ought to have been drawn up on a stamp of Rs. 408/-, impounded the document. By his letter, dated the 28th of June, 1968, (Annexure '2') the Sub-Registrar sent the impounded document to the respondent Stamp Deputy Collector requesting him to recover the deficit stamp duty and penalty and thereafter to send the document for needful. It appears that the Stamp Deputy Collector placed the impounded document with his notes before the respondent Deputy Commissioner on the 18th of October, 1968; and the Deputy Commissioner, by his order, dated the 29th of October, 1968, agreed with the views of the Sub-Registrar and the Stamp Deputy Collector that the document in question had not been duly stamped. Accordingly, he passed an order that ten times of the amount of the proper duty should be realised from the petitioner. A copy of the order of the Deputy Commissioner with notes of the Stamp Deputy Collector is annexure '3' to the writ application. Thereafter, by memo No. 3297, dated the 17th of December, 1968, the petitioner was asked by the respondent Stamp Deputy Collector to deposit a sum of Rs. 392/- as stamp duty and Rs. 3,920 as penalty in the local treasury at Giridih. A copy of this notice is Annexure '4' to the writ application.

(3.) Mr. Hari Lall Agrawal, learned counsel appearing for the petitioner, contended before us that the document in question is a deed of dissolution of partnership simpliciter and it cannot be said to be a deed of conveyance. In order to decide the question, it will be necessary to examine the document in question in some detail. The document is described as a "Deed of dissolution of partnership". The preamble to the document recites that some differences arose with regard to the method of carrying on the partnership business and the partners decided to close the partnership business on and from the 15th of April, 1968. There is also a recital in the preamble that the accounts of the partnership had been made up to the 15th of April, 1968 and the balance sheet had been drawn up. Then, there are three important paragraphs in the preamble which read as follows:--