G. Dayanand S/o Late Venkaiah vs. District Registrar, Hyderabad & Anr AIR 2012 AP 129
The mother of the petitioner owned property, with cellar, ground and first floors, constructed over 513 sq. yards. It is stated that after the death of the mother, the petitioner himself and his two brothers – G. Subhash and G. Satyanarayana, succeeded to it. The two brothers of the petitioner also died and the property was owned jointly by the petitioner and the legal representatives of his brothers. The widow of one of his brothers, by name G. Rajasree, released 1/3rd share, in the property, and she was paid Rs. 20 lakhs. Accordingly, a release deed was executed by the said Rajasree, in favour of the petitioner. The document was presented before the Sub-Registrar, the respondent, for registration. Stamp duty of 1% was paid. The respondent, however, took the view that 3% of stamp duty was payable. Accordingly, he kept the document pending for registration. He issued a notice requiring the petitioner to pay the deficit stamp duty of Rs. 3,25,678/- treating the document as a sale deed. Through a final order dated 07-07-2009, the respondent took the view that the stamp duty was payable, as provided for under Article 47-A of Schedule 1-A to the Indian Stamp Act, 1899. The petitioner challenged the said order.
The case of the Petitioner was that the transaction that had taken place through the document in question was one of release of the joint ownership of one co-owner in favour of another co-owner, and that no element of sale was involved. He contended that mere payment of consideration for such release, does not amount to sale.
The Hon’ble Court observed the distinction between the transactions of ‘sale’ and ‘release’. It is too well-known that ‘sale’ as defined under Section 54 of the Transfer of Property Act, takes place, when a person holding title in an item of immovable property, conveys his title to another, for consideration. It is also permissible for a co-owner of an immovable property, to transfer the same for consideration in favour of third party. In such a case also, the transaction would be one of sale. Delivery of the possession of tangible property, is an essential part of the transaction.
The word ‘release’ is not defined either under the Transfer of Property Act or under any other enactment, including the Stamp Act. However, its connotation is that, one of the owners of an item of property, releases himself of the legal rights and obligations in favour of the rest of the co-owners, or some of them, such release can be with or without any consideration. Though a sale and release resemble each other in the context of loss of title of the transferor or rights in favour of others, what differentiates the one for the other is that, the transferee under a sale is an altogether stranger, whereas in the case of release, he happens to be an existing co-owner. It would be a fresh and new acquisition of property by a purchaser under a sale, whereas in the case of release, it would only result in the change of the extent of shares, held by the co-owners or joint owners.
Another aspect is that delivery of possession, which is sine qua non in a sale, does not take place in the case of release, since each co-owner is in possession of every bit of the entire property.
To a large extent, release resembles a partition, wherein the shares of the existing co-owners or joint owners are determined with an element of clarity, notwithstanding the fact that the release by itself may not bring about partition. If one takes into account the fact that one of the steps in the partition is determination of the shares of respective parties, an act of release would promote such a step.
Thus, even if the release of the share in a property by a co-owner is for a consideration, its character does not change. Similarly, it is not necessary that the release must be in favour of the rest of the co-owners. As long as the undivided share in a property is not in favour of a stranger, but is in favour of another co-owner, transaction would remain one of “release’ and not a ‘sale’.
