In a landmark judgment, the Allahabad High Court quashed the proceedings initiated under Section 47-A of the Indian Stamp Act, 1899, related to the imposition of stamp duty on an oral gift deed made under Muslim Personal Law. The case, involving Sahas Degree College and Sarvari Educational Society, raised significant legal questions about the applicability of stamp duty to oral gifts under the Muslim Personal Law.
Case Background:
The case stems from a dispute involving Sahas Degree College, represented by its Secretary, Nadeem Hasan, and Sarvari Educational Society, represented by its President, Mohd. Aslam. On December 22, 2005, Ale Hasan made an oral gift of his Bhumidhari land to Sarvari Educational Society, which was accepted, and possession was handed over. Subsequently, on February 6, 2006, the society made an oral gift of the same land to Sahas Degree College, accepted by Nadeem Hasan. A memorandum (Yaddast) was created to document these gifts, although no formal registration was undertaken as per the provisions of Muslim Personal Law.
Legal Issues:
The primary legal issue revolved around whether the oral gift deed, which was unregistered, could be subjected to stamp duty under Section 47-A of the Indian Stamp Act, 1899. The petitioners argued that, under Muslim Personal Law, oral gifts do not require registration, and hence the initiation of stamp duty proceedings was improper.
Court’s Decision:
Justice Piyush Agrawal, presiding over the case, ruled in favor of the petitioners. The court emphasized that under Muslim Personal Law, an oral gift, when accompanied by the essential elements of declaration, acceptance, and delivery of possession, is valid without the need for registration. The court referenced the Supreme Court’s decision in Hafeeza Bibi & Ors. vs. Shaikh Farid (Dead) by LRs. & Ors., which underscored that the absence of a formal written deed does not invalidate an oral gift under Muslim Law.
The court observed:
“The three essentials of a gift under Mohammadan Law are: (i) declaration of the gift by the donor; (ii) acceptance of the gift by the donee; and (iii) delivery of possession. These essentials, when fulfilled, render the gift complete and irrevocable.”
The court further clarified that Section 47-A of the Indian Stamp Act applies only when an instrument is presented for registration. Since the oral gift deed was never registered, the initiation of stamp duty proceedings under this section was deemed unlawful. The court noted:
“Once this fact is admitted by respondents that the gift deed/hiba was not presented for registration, then proceedings under Section 47(A) of Indian Stamp Act cannot be pressed to service.”
The court allowed the writ petitions, ordering that any amount deposited by the petitioners pursuant to the impugned orders be refunded within two months of the order’s certified copy being produced.
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Case Details:
– Case Number: Writ-C No. 41137 of 2010 (with connected cases)
– Bench: Justice Piyush Agrawal
– Petitionerโs Counsel: Senior Advocate Sri Atul Dayal, assisted by Ankit Kumar Rai
– Respondentโs Counsel: Additional Chief Standing Counsel
