Stamp Duty_ ascertainment of Mortgage and performance guarantee/ security deed

There is no term namely “performance guarantee” in the stamp act. The term “security bond / mortgage deed” has been used in the stamp act to secure the due performance of a contract i.e. performance guarantee. Proper Stamp Duty payable upon mortgage deed is same duty as a Conveyance [No. 23 clause (a)] or a Bond (No. 15) for the amount secured or One hundred rupees as the case may be depending upon the nature of the mortgage deed as stipulated in the UP Stamp Act.

Below is a bird eye view on the relevant statutory provisions with regard to mortgage and stamp duty applicable to it. 

The term "mortgage", "mortgagor", "mortgagee", "mortgage-money" and "mortgage-deed" have been defined under Section 58(a) of Transfer of Property Act, 1882 read as under: 

"58. "Mortgage", "mortgagor", "mortgagee", "mortgage-money" and "mortgage-deed" defined.—

(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 s 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." 

My Submission:

Transfer of an Interest:

1 1. It means the transfer of some right belonging to the mortgagor in respect of the property.

2 2. Ownership consists of a bundle of rights, such as, right to possess, right to enjoy, sell, etc.

3 3. It is enough if one of these rights is transferred. The right transferred may vary

(i)    It may be the right to sell or

(ii)  It may be the right to enjoy or 

(iii) It may be the right to own etc

4 4. The nature of the right transferred is matter of no consequence so long as some right is transferred.

The term "mortgage deed" has been defined under UP stamp Act vide Section 2(17) reads as under: 

"2.(17) '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."

My Submission:

Immovable property can be mortgaged either for the purpose of securing

a a) money or

b b)  the performance of an engagement

Different stamp duty under different article number have been stipulated by legislature in stamp act upon aforesaid mortgage.

Article 40 is applicable only to those mortgage deeds through money has been secured. This can be ascertain from the fact that proper stamp duty under article 40  upon mortgage is either

    a) or a consideration equal to the amount secured or

    b) for the amount secured

depending upon status of possession of the mortgaged immovable property.

Article 40 is applicable only to those mortgage deeds which has been executed to secure

   a)  the due performance of a contract or

   b)  the due discharge of a liability

This can be ascertained from the description of the instrument and proper stamp duty given schedule 1-B of the stamp act.

In the light of aforesaid if mortgage has been for securing money, stamp duty would be payable under article 40 and if mortgage has been for securing the performance of an engagement, stamp duty would be payable under article 57.

SCHEDULE I-B

[See section 3]

STAMP-DUTY ON INSTRUMENTS UNDER THE INDIAN STAMP ACT, 1899 AS

AMENDED UPTO DATE IN ITS APPLICATIOIN TO UTTAR PRADESH.

NOTE- The Articles in Schedule I-B are numbered so as to correspond with similar Articles in Schedule I of Act no.2 of 1899.

Article No.	Description of instrument	Proper stamp duty
40.	MORTGAGE-DEED, not being AN AGREEMENT RELATING TO DEPOSIT OF TITLEDEEDS, PAWN OR PLEDGE (NO. 6), BOTTOMRY BOND (NO. 16), MORTGAGE OF A CROP (NO. 41), RESPONDENTIA BOND (NO. 56), OR SECURITY BOND (NO. 57) -
	(a) when possession of the property or any part of the property comprised in such deed is given by the mortgagor or agreed to be given;	The same duty as a Conveyance [No. 23 clause (a)] for a consideration equal to the amount secured by such deed.
	(b) when possession is not given or agreed to be given as aforesaid;	The same duty as a Bond (No. 15) for the amount secured by such deed.
	Explanation: A mortgagor who gives to the mortgagee a power-of- attorney to collect rents or a lease of the property mortgaged or part thereof, is deemed to give possession within the meaning of this Article.
	(c) When a collateral or auxiliary or additional or substituted security, or by way of further assurance for the above-mentioned purpose where the principal or primary security is duly stamped – for every sum secured not exceeding Rs.1,000;	Ten rupees
	and for every Rs.1,000 or part thereof secured in excess of Rs.1,000.	Ten rupees
	Exemptions  1)    Instruments, executed by persons taking advances under the Land Improvement Loans Act, 1883 (19 of 1883), or the Agriculturists' Loans Act, 1884 (12 of 1884), or by their sureties as security for the repayment of such advances.  2)    Letter of hypothecation accompanying a bill of exchange.
57.	SECURITY BOND OR MORTGAGE DEED, executed by way of security for the due execution of an office, or to account for money or other property received by virtue thereof or executed by a surety to secure the due performance of a contract or the due discharge of a liability- (a) when the amount secured does not exceed Rs.1,00	Ten rupees
	b) in any other case	One hundred rupees.
	Exemptions  Bond or other instrument, when executed- a)    by headmen nominated under rules framed in accordance with the Bengal Irrigation Act, 1876 (Bengal Act 3 of 1876), section 99, for the due performance of their duties under that Act; b)    by any person for the purpose of  guaranteeing that the local income derived from private subscriptions to a charitable dispensary or hospital or any other object of public utility shall not be less than a specified sum per mensem; c)    under No. 3A of the rules made by the State Government under section 70 of the Bombay Irrigation Act, 1879 (Bombay Act 5 of 1879); d)    executed by persons taking advances under the Land Improvement Loans Act, 1883 (19 of 1883), or the Agriculturists Loans 'Act, 1884 (12 of 1884),or by their sureties, as security for the repayment of such advances; e)    executed by officers of the Government or their sureties to secure the due execution of an office or the due accounting for money or other property received by virtue thereof.

Property - Mortgage - Transfer of Property Act, 1882 _on the basis of allotment letter and in absence of any execution and registration of sale deed

Matter on subjected issue has been referred to larger bench for consideration.

Below is relevant notes on the matter on subjected as published by Manupatra

Property - Mortgage - Transfer of Property Act, 1882 - State Government allotted land to company for setting up of industrial unit - Company paid 50 % of total cost of allotted land - State Government permitted company to mortgage half of the allotted land to secure financial assistance for the project - Company mortgaged the land in favour of appellant bank - Later respondent purported to cancel a part of land allotted to company on ground that it was disputed property - Appellant Bank intended to enforce its charge on the property which had been created - Whether in absence of any execution and registration of sale deed by the State or respondent No. 1 in favour of the company any interest in the land could be created - Matter referred to larger bench for consideration.

Below is relevant portion of the judgment:

The principal question, which, therefore, requires consideration is as to whether for satisfying the requirements of Section58(f) of the Transfer of Property Act, it was necessary to deposit documents showing complete title or good title and whether all the documents of title to the property were required to be deposited. A' fortiori the question which would arise for consideration is as to whether in all such cases, the property should have been acquired by reason of a registered document.

Para 30. There cannot be any doubt whatsoever that in absence of a registered deed of sale, the title to the land does not pass, but then what would not be conveyed is the title of the estate and not the allotment and possession itself.

Para 31. It would, therefore, appear that there is no clear authority on the question as to whether in absence of any title deed in terms whereof the mortgagee obtained title by reason of a registered deed can be a subject- matter of mortgage. Section 58 of the Transfer of Property Act does not speak of mortgage of an owner's interest. If any interest in property can be created by reason of a transaction or otherwise which does not require registration, in our opinion, it may not be necessary to have a full title before such a mortgage is created by deposit of title deeds. A person may acquire title to a property irrespective of the nature thereof by several modes e.g. a lease of land which does not require registration; (ii) by partition of a joint family property by way of family settlement, which does not require registration.

Para 32. In a case of this nature where valuable right is created which may or may not confer an assignable right, the question requires clear determination having regard to the equitable principle in mind, and would have far reaching consequences, as a large number of banks and financial institution advance a huge amount only on the basis of allotment letters. If such allotment letters are to be totally ignored, the same may deter the banks in making advances which would in effect and substance create a state of instability.

Court : Supreme Court

Civil Appeal Nos. 7824-7828 and 7833-37 of 2004

Decided On: 30.08.2007 

titled as  Syndicate Bank v/s Estate Officer and Manager, A.P.I.I.C. Ltd. and Ors.

Citation: AIR2007SC3169, 2007(6)ALD53(SC), 2007 (69) ALR 175, 2007 (4) AWC 4011 (SC), (2007)5CompLJ98(SC), (2007)8SCC361, [2007]10SCR619, 2007(2)UJ1090

Lease of immovable property for a period of less than a year is compulsory registrable unless concerned State Government notifies otherwise

Lease of immovable property for a period of less than a year is compulsory registrable unless concerned State Government notifies otherwise

Transfer of property act hereinafter referred as TP Act categorically says about lease of immovable property how made at section 107 which is being reproduced herein below:

107. Leases how made. —  

A lease of immoveable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered instrument.

All other leases of immoveable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.

Where a lease of immoveable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee:

Provided that the State Government may from time to time, by notification in the Official Gazette, direct that leases of immoveable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession.

With regards to duration of lease section 106 of TP Act “written contract” in title and “contract” in the body. Section 4 of TP Act mandates that “the Chapters and sections of this Act which relate to contracts shall be taken as part of the Indian Contract Act, 1872 (9 of 1872)”. The terms “contract” has a special meaning as given in section 10 of the Indian Contract Act under the heading of what agreements are contracts. As per the said section only those “agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. Nothing herein contained shall affect any law in force in India, and not hereby expressly repealed, by which any contract is required to be made in writing or in the presence of witnesses, or any law relating to the registration of documents”. Any provision of law which intends to stipulate a special feature of to a contract will not be affected rather that will be considered a unique feature of that contract. Registration of a documents is a source of revenue for state government. Hence object of a person; who does not get the document registered which a law intended to be registered; cannot be said lawful as he wants to evade to pay revenue for state government. Second proviso of Section 107 of TP Act by using the terms “all other leases” for Lease of immovable property for a period of less than a year provides that such lease may be either by a registered instrument or by oral agreement accompanied by deliver of possession. TP Act by this provision, in clear terms, intends that leases of immovable property if not made by an oral agreement accompanied by delivery of possession then it must be by a registered instrument. Hence any unregistered lease deed of immovable property for a period of less than a year being without lawful object will not be recognised by law and such cannot be helpful to party to such lease

.

Section 4 of TP Act mandates that “Section 54, paragraphs 2 and 3, Sections 59, 107 and 123 shall be read as supplemental to the Indian Registration Act, 1908 (16 of 1980)”. Section 49 of the Registration Act under heading of Effect of non-registration of documents required to be registered mandates “No document required by Section 17 or by any provision of the Transfer of Property Act, 1882 to be registered shall (a) affect any immovable property comprised therein…”. These provisions are with respect to issue of effect of non-registration of a documents needs to be read together. It is crystal clear that a document to be registered is stipulated in section 17 of The Registration Act or any provision of the Transfer of Property Act, 1882. As such section 17 of The Registration Act alone does not provide exhaustive list of documents to be registered. Only two options have been provided by second proviso of Section 107 of TP Act section 107 for lease of immovable property for a period of less than a year i.e.

1) either by a registered instrument or

2) by oral agreement accompanied by deliver of possession.

As such leases of immovable property if not made by an oral agreement accompanied by delivery of possession, it must be by a registered instrument and not by unregistered instruments unless concerned State Government notifies otherwise. I have not came across any such notification whereby it has been directed that direct that leases of immovable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument. In absence of such notification leases of immovable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, mandatory be made only by registered instrument.

Now still some people even some advocate(s) may deny out rightly aforesaid position saying it is my own explanation as same is against the general prevailing perception. They emphasis on judicial pronouncements on the issue in hand. Below is relevant judicial pronouncement on the issue in hand.

The Hon’ble Delhi High Court in Chemical Sales Agencies vs Smt. Naraini Newar on 17 September, 2004 Equivalent citations: AIR 2005 Delhi 76, 2005 (1) ARBLR 193 Delhi, 114 (2004) DLT 272, 2004 (77) DRJ 224 http://indiankanoon.org/doc/1028412/

 “Section 107 of the Transfer of Property Act, 1882 clearly provides that a lease of immovable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered document. It further provides that all other leases of immovable property must be either by a registered instrument or by oral agreement accompanied by deliver of possession. Thus, only if there is a registered instrument or there is an oral agreement accompanied by delivery of possession can it be said that a relationship of Lesser and lessee is created. In the present case, I find that there is no registered instrument creating any such relationship. The purported lease agreement dated 01.05.1992 is not a registered document. It is not property stamped and by virtue of Section 49 of the Registration Act, 1908, the said document shall not effect any immovable property nor be received as evidence of any transaction affecting such property.”

The Hon’ble Karnataka High Court in Abdul Rasheed S/O Meeran Sab vs Srinivas S/O Kashinathrao on 16 April, 2014  http://indiankanoon.org/doc/59543538/ 

answering the issue of whether a lease deed, where the term of lease stated therein does not exceed one year, requires to be registered under the provisions of the Registration Act, 1908 said :

“As could be seen from the above quoted provisions, all leases not covered by first para of S.107 of the T.P. Act may be made either by a oral agreement accompanied by delivery of possession, or by a registered instrument. A lease, the registration whereof is not compulsory under S.17(1)(d) of the Registration Act, becomes compulsorily registrable, if reduced into writing in view of second para of S.107 of the T.P. Act read with para 2 of S.4 thereof. A written unregistered lease of immovable property, even though the term of lease stated therein does not exceed one year, is inadmissible in evidence in view of S.49 of the Registration Act, 1908 read with second para of S.107 of the Transfer of Property Act, 1882 & second para of S.4 thereof. A lease for a period of one year falls within the expression 'All other leases' stated in para 2 of S.107 of the T.P. Act and may be made by a oral agreement accompanied by delivery of possession.”

cause of action has different meanings in different contexts

The term "cause of action" is neither defined in the Act nor in the Code of Civil Procedure, 1908 but is of wide import. It has different meanings in different contexts, that is when used in the context of territorial jurisdiction or limitation or the accrual of right to sue. JT 2009 (4) SC 191 (2003) 9 SCC 50 (2006) 1 SCC 164 Generally, it is described as "bundle of facts", which if proved or admitted entitle the plaintiff to the relief prayed for. Pithily stated, "cause of action" means the cause of action for which the suit is brought. "Cause of action" is cause of action which gives occasion for and forms the foundation of the suit. (See: Sidramappa Vs. Rajashetty & Ors.4). 

Supreme Court of India

Kandimalla Raghavaiah & Co vs National Insurance Co. & Anr on 10 July, 2009

Author: D Jain

Bench: D.K. Jain, R.M. Lodha

http://indiankanoon.org/doc/1592293/

CPA: both travel agent and airlines are jointly and severally liable to pay compensation

  In Air India Vs Harpreet Singh & Ans. reported in III (2003) CPJ 123 (NC) wherein the ticket was not reconfirmed by the passenger, the National Commission has held that there was no question of reconfirmation when travel agent had issued a ticket with confirmed status.  The relevant portion of the judgement is reproduced as under:                                                                                                     

“Both these points are without substance.  Travel agent was the accredited agent of IATA of which Air India is a Member.  An argument that Air India could not suffer for the fault of the agent is against the basic principles of law particularly against the provisions of the Contract Act.  Air India is certainly liable for the negligence of its agent.  Ticket was purchased on 23.02.1999 and Harpreet Singh, the passenger, was to take the flight on 25.02.1999, within 72 hours of purchase of the OK ticket.  There was no question of any reconfirmation when travel agent had issued a ticket with confirmed status.  Harpreet Singh was to join university in Sydney on 01.03.1999 for higher studies.  We have not been shown any condition requiring confirmation in a case like the present one.”

  The National Commission in Express Travel vs M.R. Shah III (2002) CPJ NC has held that both travel agent and airlines are jointly and severally liable to pay compensation.

NCDRC _benefit of escalation of the price Rate of interest on refund of amount

 They are asking for return of the amount. The rates of the flats have already been increased by leaps and bounds. See the law laid down in K.A. Nagamani Vs. Karnataka Housing Board, Civil Appeal Nos.6730-6731 of 2012, dated 19.09.2012 arising out of SLP (C ) No. 35226-35227 of 2011, the Hon'ble Supreme Court was pleased to hold :-

                       9. .. But in cases where monies are being simply returned then, the party is suffering a                                            loss inasmuch as he had deposited the money in the hope of getting a flat/plot. He is being                               deprived of that flat/plot. He has been deprived of the benefit of escalation of the price of that                             flat/plot. Therefore, the compensation in such cases would necessarily have to be higher ...

It was further held that :-

                   26. For the reasons aforesaid, we allow the appeals and pass the following order:-

                         i) The respondent is directed to pay the appellant complainant, interest at the rate of 18% per                               annum on Rs.2,67,750/- from the date of its respective deposit till the date of realization with                         further direction to refund the amount of Rs.3,937/-, to her, as directed by the Consumer Forum.

                        ii) The respondent is directed to pay the appellant complainant further sum of Rs.50,000/- as                                compensation for deficiency in service on their part.

                     iii) The respondent is also directed to pay the appellant complainant, a sum of Rs.20,000/-                                   towards cost of the litigation incurred by her.

Allahabad High Court:Development Authorities can't levy and demand of various fee including bank guarantee

judgment (WRIT - C No. - 56485 of 2013 Petitioner :- Smt. Rekha Rani Respondent :- State Of U.P. Thru Secy. And 3 Others) date 12.12.2013 where in a bunch of writ petitions  clubbed  together to decide common question of facts and law  with   regard   to   the   competence  of   the Development Authorities constituted under Act 1973 to levy and demand  of (a) External  development  fee  (b) Internal development   fee   (c   )Sub-division   charges   (d)   park   fee   (e) compounding   fee   in   respect   of   sub-division   charges,   (f) inspection/   supervision   charges,  (g) labour   cess,   (h)   bank guarantee   for   the   value   of   the   cost   of   the   land   before sanctioning the building plan as per the application submitted under Section 14 of the 1973. For recorded the demand under the heads of (a) permit   fees (b) malwa fee (c) water fees (d) Triveni Mahotsav fee  has not been challenged.

                                                                                                                                                                                       

Bench of Hon'ble Arun Tandon,J and Hon'ble Anjani Kumar Mishra, J. disposed  bunch of Writ petitions with following directions:

1. We hold that the development fee both external and internal as well as city development charges/impact fee cannot be levied or collected by the Development Authorities, so long as statutory rules in exercise of powers under Section 15 (2-A)/38-A  of Act, 1973 are not framed.
2. We   direct   that   henceforth   the   Development Authorities shall not levy or collect any development fee both external   and   internal   as   well   as   city   development charges/impact fee until statutory rules as required are framed.
3. We   also   hold   that   the   demand   of  sub-division charges, compounding fee for sub-division, as wholly illegal and the Building Bye-Laws framed in that regard need not be given effect   to.  The   Development  Authorities   must   insist   for   open space   being   left   in   accordance   with   the  Building   Bye-Laws instead of charging money for violation thereof.
4. Demand of permit fee,   supervision fee, inspection fee, park fee, impact fee, labour cess  is held to be illegal, as not contemplated by any of the provision of Act, 1973.
5. Petitioners, who have deposited the money under the aforesaid heads, (a), (c) and (d) under protest or under interim orders passed in these petitions, shall be entitled for refund of the same on an application being made before the Development  Authority   concerned  within   one   month   of   the making of the application. 
6. All money collected by the Development Authorities from   other   persons   under   the   aforesaid   heads   shall   be transferred to the relevant account and shall be utilized for the purposes, mentioned under Act, 1973. 
7. The demand of Bank Guarantee in advance towards the cost of land and construction of houses for E.W.S. and persons   belonging   to   lower   income   group,   as   also   for installation  of  rain water  harvesting system is  also  quashed subject to conditions mentioned in the body of the judgement.

Details of the judgment :

Case :- WRIT - C No. - 56485 of 2013 Petitioner :- Smt. Rekha Rani Respondent :- State Of U.P. Thru Secy. And 3 Others the judgment date: 12.12.2013

‘In joint a/c, liability is on person signing cheque’

http://www.thehindu.com

‘In joint a/c, liability is on person signing cheque’

Updated: July 2, 2013 01:20 IST

In case of issuance of cheque from joint accounts, only the person who signs the cheque can be prosecuted in a cheque bouncing case under Section 138 of the Negotiable Instruments Act, the Supreme Court held on Monday.

The other joint account holders cannot be prosecuted unless the cheque has been signed by them also, said a Bench of Justices P. Sathasivam and J.S. Khehar. The Bench said, “The proceedings filed under Section 138 cannot be used as an arm twisting tactics to recover the amount allegedly due from the appellant. It cannot be said that the complainant has no remedy against the appellant but certainly not under Section 138 of the N.I. Act. The culpability attached to dishonour of a cheque can in no case, except in case of Section 141 of the N.I. Act (offences by companies), be extended to those on whose behalf the cheque is issued. This Court reiterates that it is only the drawer of the cheque who can be made an accused in any proceeding under Section 138 of the Act.”

Writing the judgment, Justice Sathasivam distinguished between individuals and companies and said, “Section 141 of the N.I. Act is an instance of specific provision that in case an offence under Section 138 is committed by a company, the criminal liability for dishonour of a cheque will extend to the officers of the company …

“A company being a juristic person, all its deeds and functions are the result of acts of others. Therefore, the officers of the company, who are responsible for the acts done in the name of the company, are sought to be made personally liable for the acts which result in criminal action being taken against the company.”

In the instant case, the appellant Aparna A. Shah and her husband Ashish Shah were joint account holders and her husband issued a cheque for Rs. 25 crore from their joint account and it bounced due to insufficiency of funds. A trial court in Mumbai issued summons to the husband and wife. On appeal, the Bombay High Court had refused to quash the summons.

Source:http://www.thehindu.com/news/national/in-joint-ac-liability-is-on-person-signing-cheque/article4870405.ece

Power of Attorney holder can also file cheque bounce cases: Apex court

Power of Attorney holder can also file cheque bounce cases: Apex court
“Filing of complaint petition under Section 138 of Negotiable Instruments Act through PoA holder is perfectly legal and competent.” The PoA holder, however, cannot file the cheque bounce case under his own name and such cases can be filed by the complainants through the PoA holders.“However, the PoA holder must have witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regarding the transactions,”
Criminal Appeal No. 73 of 2007 with Criminal Appeal No. of 2013 (Arising out of S.L.P. (Crl.) No.2724
of 2008)-Decided on 13-9-2013.
A.C. NARAYANAN  VERSUS  STATE OF MAHARASHTRA & ANR.

SHRI G. KAMALAKAR  VERSUS M/S. SURANA SECURITIES LTD. & ANR. 

No recovery charges / collection charges @10% for recovery as arrears of land revenue under UP Z A & L R Act 1950

It has been seen that the concern authority invokes the provisions of UP Z A & L R Act 1950 to recover a sum recoverable as an arrear of land- revenue and charging cost of recovery @ 10% of the amount stated in the recovery certificate.

No recovery charges / collection charges @10% for recovery as arrears of land revenue under UP Z A & L R Act 1952 required to be paid henceforth.

Three judges bench (comprising Hon'ble R.K. Agrawal, J.Hon'ble S.P. Mehrotra, J. Hon'ble S.U. Khan, J.) of Hon’ble Allahabad High Court unanimously ruled on  09.01.2013 “If the recovery as arrears of land revenue is being made by invoking the provisions of 1950 Act (i.e. U.P. Zamindari Abolition and Land Reforms Act, 1950) then in that event the fee prescribed under 1952 Rules for various process for realisation of arrears of land revenue while selling moveable and immovable properties and also where properties are not sold alone is payable” instead of collection charges at the rate of 10% of the amount stated in the certificate while deciding Writ C No. 56175 of 2011 titled as Mahrajwa and others vs. State of U.P. and others.

The aforesaid bench was constituted to decide following issue

“Whether decision in Mange Ram & Anr. Vs. State of U.P. & others, 2010 (2) CRC 216 in so far as it takes the view that there is no provision under any of the Acts for levying any  collection charges  for mere issuance of citation or sale proclamation is correct; or, the decision in Chinta Mani Vs. State of U.P. & Ors., 2011 (1) AWC 637 holding that provisions   of   sub-section   (2)   of   Section   279   do   not   contain   any provision for an absolute waiver of recovery charges where the citation has   been   issued   under   sub-section   (1)   and   the   charging   section empowers the Collector to raise such demand subject to the rules and provision of Revenue Recovery Act U.P. Act No.37 of 2001, is correct.”

While deciding aforesaid issue, the bench discussed extensively following laws on cost of recovery / recovery charges / collection charges 10% for recovery as arrears of land revenue:

1.    The Revenue Recovery Act, 1890

2.    U.P. Zamindari Abolition and Land Reforms Act, 1950,

3.    U.P. Zamindari Abolition and Land Reforms Rules, 1952

4.    The Uttar Pradesh Agricultural Credit Act, 1973.

5.    The Uttar Pradesh Agricultural Credit Rules, 1975.

At Page 20-21 of the attached judgment, the Hon’ble Court observed :

“From the scheme of 1890 Act, 1950 Act and 1973 Act as also 1952 Rules and 1975 Rules one thing is amply clear that while Sections 3 and 5 of 1890 Act and Rule 29 of 1975 Rules speak of  the cost of recovery to be realised along with the arrears it is necessarily to be understood and restricted to where the arrears have been recovered by the concerned authorities. If the authorities have not   been   able   to   recover   the   amount   of   arrears   through coercive process undertaken by them, then there is no question of realising the cost of recovery from the defaulter. The issuance of recovery certificate is a ministerial job. If no concrete further steps have been taken and the arrears have not been realised by them and instead the defaulter pays the amount of arrears directly to the creditor or to the person to whom it is due then it cannot be said by any stretch of imagination that the State authorities have recovered the amount of arrears. In that event, there is no question of realising the cost of recovery/recovery charges from the defaulter either under the 1890 Act or under the 1975 Act. The provisions of Section 3 of the 1890 Act and Rule 29 of 1975 Rules have to be read accordingly”

After referring number of earlier judicial pronouncements of cost of recovery/recovery charges / collection charges 10% for recovery as arrears of land revenue, finally ruled:

“………… it is absolutely clear that it has to be seen as to under what Act the recovery has been initiated.

1.     Whether it is under 1890 Act, 1950 Act or 1973 Act.

2.     If the recovery proceedings have been initiated under 1890 Act then in that event if the recovery is being made under Section 3 of the Act then cost of recovery would be 10% of the amount stated in the certificate. However, if recovery certificate has been issued but no recovery had   been   made   by   the   State   authorities,   who   had   issued the   recovery certificate as for example the defaulter directly deposits the amount or therecovery certificate is withdrawn or cancelled for any reason whatsoever thenin that event there is no question of charging any costs of recovery. At best thefee for the  process mentioned in 1952 Rules can be levied. However, if the recovery certificate has been issued under Section 5 of 1890 Act then there is no question of any cost of recovery being realised as the State Government has not yet issued any notification specifying any rate.

                                                                                                                                   

3.    If the recovery has been issued under 1973 Act then in that case realisation of recovery charges by the State authorities can be made from the defaulter only where the entire amount had been recovered by the authorities of the State.

4.    If the recovery as arrears of land revenue is being made by invoking the provisions of 1950 Act (i.e. U.P. Zamindari Abolition and Land Reforms Act, 1950) then in that event the fee prescribed under 1952 Rules for various process for realisation of arrears of land revenue while selling moveable and immovable properties and also where properties are not sold alone is payable.

Uttar Pradesh :revenue department:issuance of recovery certificate: 10% of total amount as collection / recovery charges

.....the cost of recovery to be realised along with the arrears it is necessarily to be understood and restricted to where the arrears have been recovered by the concerned authorities. If the authorities have not been able to recover the amount of arrears through coercive process undertaken by them, then there is no question of realising the cost of recovery from the defaulter. The issuance of recovery certificate is a ministerial job. If no concrete further steps have been taken and the arrears have not been realised by them and instead the defaulter pays the amount of arrears directly to the creditor or to the person to whom it is due then it cannot be said by any stretch of imagination that the State authorities have recovered the amount of arrears. In that event, there is no question of realising the cost of recovery/recovery charges from the defaulter..............

....if recovery certificate has been issued but no recovery had been made by the State authorities, who had issued the recovery certificate as for example the defaulter directly deposits the amount or the recovery certificate is withdrawn or cancelled for any reason whatsoever then in that event there is no question of charging any costs of recovery............

specific performance of unregistered agreement to sell in UP

In State of U.P. by U.P. Civil Laws(Reforms and Amendment) Act 1976, U.P. Act No. 57 of 1976, Section 54 of Transfer of Property Act as amended in State of U.P. provides for every contract of sale of immovable property w.e.f. 1.1.77 to be made only by way of registered documents. Section 49 of Registration Act, as applicable to State of U.P. provides that no document required to be registered under Section 17 or by any provision of Transfer of property Act or of any other law in force, to be registered, shall effect any immovable property comprised therein, or be received as evidence of any transaction effecting such property or conferring such power or creating such right or relationship, unless it has been registered. Oral agreement to sell w.e.f. 01.01.77 in the State of U.P. qua sale of immovable property is not permissible and the same is not at all recognised in law. 

Civil Revision No. 22 of 2008 titled as Vasudeo Rao Getha and others Versus  Premendra Nath Singh and another 

Scope of consumer complaint

Subject: Scope of consumer complaint                                  Forum: The National Consumer Commission

Title:Poonam Chambers vs Aluplex India Ltd                      Case No.: FIRST APPEAL NO. 383 OF 2011                             Date of Decision:01-02-2013

Facts: OP was provided work contract and as OP left work without completing it, complainant terminated contract and got it completed from other agencies and filed complaint for recovery of amount due to deficiency of service.

Decision Fora below: Learned State Commission vide impugned order dismissed complaint at admission stage on the ground that contract was terminated by the complainant earlier to filing of complaint, hence, no relationship of consumer and service provider subsisted between the parties and there is no consumer dispute under Consumer Protection Act. 

National Commission said: “once the parties entered into a contract to provide service and the latter stopped work, the aggrieved party is entitled to file claim on account of deficiency of service even after termination of contract. Merely by termination of work contract it cannot be inferred that there was no relationship of consumer and service provider between the parties” at Para 6 and further at Para 7 “Merely because word ‘Commercial’ exists in the name of complainant, it cannot be inferred that work contract was given for commercial purposes”

no levying any collection charges for mere issuance of citation_WRIC(A)_56175_2011

Following question was referred to larger Bench to decide in WRIT - C No. - 56175 of 2011 titled as Mahrajwa And Others v State Of U.P. Thru Its Secy. And Others  by the Allahabad High Court:

Whether decision in Mange Ram & Anr. Vs. State of U.P. & Others, 2010 (2) CRC 216 in so far as it takes the view that there is no provision under any of the Acts for levying any collection charges for mere issuance of citation or sale proclamation is correct; or, the decision in Chinta Mani Vs. State of U.P. & Ors., 2011 (1) AWC 637 holding that provisions of sub-section (2) of Section 279 do not contain any provision for an absolute waiver of recovery charges where the citation has been issued under sub-section (1) and the charging section empowers the Collector to raise such demand subject to the rules and provision of Revenue Recovery Act U.P. Act No.37 of 2001, is correct.

Bench having three judges namely Hon'ble R.K. Agrawal, J., Hon'ble S.P. Mehrotra, J. and Hon'ble S.U. Khan, J. has said:

“The issuance of recovery certificate is a ministerial job. If no concrete further steps have been taken and the arrears have not been realised by them and instead the defaulter pays the amount of arrears directly to the creditor or to the person to whom it is due then it cannot be said by any stretch of imagination that the State authorities have recovered the amount of arrears.” At page 20-21

……………………………………………….

Referring and discussing various judgment the bench said:

“From the aforesaid decisions, it is absolutely clear that it has to be seen as to under what Act the recovery  has been initiated. Whether it is under 1890 Act, 1950 Act or 1973 Act. If the recovery proceedings have been initiated under 1890 Act then in that event if the recovery is being made under Section 3 of the Act then cost of recovery would be 10% of the amount stated in the certificate. However, if recovery certificate has been issued but no recovery had  been  made  by  the  State  authorities,  who  had  issued  the  recovery certificate as for example the defaulter directly deposits the amount or the recovery certificate is withdrawn or cancelled for any reason whatsoever then in that event there is no question of charging any costs of recovery.” At page 23

…………………………………….        

We are, therefore, in respectful agreement with the view taken by this Court in the case of Mange Ram  &  Anr.(supra)  and  hold  that  the  decision  in  the  case  of  Chinta Mani(supra) does not lay down the correct law at page 24