V. S. DESHPANDE, J.

( 1 ) SHRI Satya Pal Behal held certain land on perpetual lease from the Delhi

Development Authority. The lessee could not transfer the lease except with the

previous consent in writing of the lessor. In granting such consent, the lessor could

impose terms and conditions and was to be entitled to claim and recover 75 per cent

of the "unearned increase in the value",. e. , the difference between the premium

paid and the market value, of the land at the time of the transfer from the existing

lessee to the new lessee. This amount was to be a first charge on the land. Satya

Pal Behal transferred the lease to Dayal Singh on 23-8-1969. The Delhi Development

Authority granted permission to the transfer "subject to a deposit of Rs. 52,401. 95

as non-earned increase and further Rs. 271. 85 as non-construction penalty which

the vendee has agreed to pay after the completion of the lease deed". The transfer

deed further says that "the vendor hereby sells, transfers, conveys all his lease-hold

rights" in consideration of a sum of Rs. 29,700 paid to the vendor on 29-7-1961 by

the vendee.

( 2 ) THE question referred to us for opinion under section 57 (2) of the Indian

Stamp Act, 1899 are:- (1) Whether under section 24 of the Act Rs. 52,401. 95 and

Rs. 271. 85 agreed to be paid by the vendee to the vendor can be treated as a part

of the consideration for the transfer deed dated 23-8-1969 and (2) Whether the

transfer duty leviable under section 147 of the Delhi Municipal Corporation Act, 1957

on the above mentioned transaction in the form of a surcharge on the duty imposed

by the Indian Stamp Act, 1899 is further subject to the provisions of sections 33 and

40 of the Stamp Act which authorises the impounding of the transfer deed and the

levy of a penalty on the same

( 3 ) QUESTION No. 1 There is no dispute that the amount of Rs. 29,700. 00 paid by

the vendee to the vendor was a consideration for the sale deed dated 23-8-1969. It

is, however, disputed by the vendee that the other two sums of Rs. 52,401. 95 and

Rs. 271. 85 to be deposited by the vendee for payment to the Delhi Development

Authority are a part of the consideration for the sale deed. The consideration for a

transfer on which stamp duty is chargeable has to be found out in accordance with

section 24 of the Stamp Act which runs as follows:-"24. Where any property is

transferred to any person in consideration, wholly or in part, of any debt due to him,

or subject either certainly or contingently to the payment or transfer of any money

or stock, whether being or constituting a charge or incumbrance upon the property

or not, such debt, money or stock is to be deemed the whole or part, as the case

may be, of the consideration in respect whereof the transfer is chargeable with ad

valorem duty. Provided that nothing in this section shall apply to any such certificate

of sale as is mentioned in Article No 18 of schedule 1. EXPLANATION.-In the case of

a sale of property subject to a mortgage or other incumbrance, any unpaid

mortgage money or money charged, together with the interest (if any) due on the

same, shall be deemed to be part of the consideration for the sale: Provided that,

where property subject to a mortgage is transferred to the mortgagee, he shall be

entitled to deduct from the duty payable on the transfer the amount of any duty

already paid in respect of the mortgage. ILLUSTRATIONS (1) A owes B Rs. 1000.

00. A sells a property to B, the consideration being Rs. 500. 00 and the release of

the previous debt of Rs. 1000. Stamp-duty is payable on Rs. 1500. 00. (2) A sells a

property to B for Rs. 500. 00 which is subject to a mortgage to C for Rs. 1000. 00

and unpaid interest Rs. 200. 00. Stamp-duty is payable on Rs. 1700. 00. (3) A

mortgages a house of the value of Rs. 10,000. 00 to B for Rs. 5,000. B afterwards

buys the house from A. Stamp duty is payable on Rs. 10,000. 00 less the amount of

stamp duty already paid for the mortgage. "we may also consider the definition of

"consideration" in section 2 (d) of the Indian Contract Act, 1872 which is as follows:-

" (D) When, at the desire of the promiser, the promisee or any other person has

done or abstained from doing, or does or abstains from doing, or promises to do or

to abstain from doing, something, such act or abstinence or promise is called a

consideration for the promise. "

( 4 ) FOR, according to section 4 of the Transfer of Property Act, 1882, the chapters

and sections of the said Act which relate to contracts shall be taken as part of the

Indian Contract Act, 1872.

( 5 ) IN the sense in which the word "consideration" is used in section 2 (d) of the

Contract Act, it is clear that the consideration for the sale deed was constituted by

all the three sums payable by the vendee, namely, Rs. 29,700. 00 to the vendor and

Rs. 52,401. 95 and Rs. 271. 85 to the Delhi Development Authority.

( 6 ) SHRI G. L. Sanghi learned counsel for Dayal Singh however argues that the

consideration for the transfer is to be determined exclusively under section 24 of the

Stamp Act. According to him, only such transfers of property are covered by the

principal part of section 2 "where any property is transferred to any person in

consideration. . . . . subject either certainly or contingently to the payment or

transfer of any money". According to the learned counsel, the expression "subject

to" means that there is no sale unless and until the money is paid. Ordinarily the

payment of price is not a condition precedent to the passage of title in a sale under

section 54 of the Transfer of Property Act. This is why "sale" is defined thereunder

as a "transfer of ownership in exchange for a price paid or promised or part-paid

and part-promised". The sale deed in question is, therefore, a sale within the

meaning of section 54 of the Transfer of Property Act. The sale deed is, however,

already completed prior to the payment of Rs. 52,401. 95 and Rs. 271. 85 by the

vendee to the Delhi Development Authority. These payments are to be made by the

vendee after the completion of the lease deed by the Delhi Development Authority

in favour of the vendee. Learned counsel says that the title to the property has

passed to him even prior to these payments. The sale was not, therefore, "subject

to" payment of these sums. They cannot, therefore, be consideration or a part of

the consideration for the sale deed.

( 7 ) THIS contention is unacceptable for more than one reasons. Firstly, section 24

of the Stamp Act is not to be construed as modifying or repealing section 54 of the

Transfer of Property Act unless there is any irreconcilable repugnancy between the

two. We do not find any conflict between the two. Section 24 cannot, therefore, be

construed to mean that only such transfers are covered by it as are conditional on

the payment of price. Secondly the meaning of the expression "subject to" in section

24 is not to make the transfer conditional. It simply means that the sale is in

consideration of payment of money. The consideration can assume three forms,

namely, (a) debt, or (b) money or (c) stock. A sale in consideration of payment of

money is said to be subject to the payment of money. Thirdly, the same expression

"subject to" is used in the Explanation to Section 24 and unless there is any

indication to the contrary, it is to be presumed to be used in the same sense therein

in which it is used in the principal part of the section. The meaning of that

expression had to be considered by the Supreme Court in Board of Revenue v. Rai

Saheb Sidhnath Mehrotra. (1965) 2 S. C. R. 269 (1 ). The Court was of the view that

the expression "subject to" qualified the word "sale" and not the word "property".

That is to say, the sale was subject to the liability imposed on the vendee for

payment of the mortgage debt due from the vendor. Fourthly, the Explanation fully

covers the present case inasmuch as it makes it clear that the money payable by the

vendee towards the satisfaction of an unpaid mortgage or other incumbrance forms

a part of the consideration for the sale. In the present case, the claim of the Delhi

Development Authority for the unearned increase is a charge on the land. The

payment towards the satisfaction of this charge is a part of the consideration for the

sale under the Explanation to section 24. Lastly, the Illustrations to section 24 place

it beyond doubt that the payment of the unpaid amount charged on the property is

a part of the consideration for the sale.

( 8 ) WE may further point out that the vendee has expressly undertaken the liability

to pay the Delhi Development Authority. This under- taking is given solely because

the vendee is purchasing this property. There is no other reason for it. The payment

to the Delhi Development Authority is, therefore, a part of the consideration for the

sale. We therefore, answer the first question referred to us in the affirmative.

( 9 ) QUESTION No. 2 Under section 99 (1) (e) of the Delhi Municipal Corporation

Act, 1957 (hereinafter called the Corporation Act) the municipal fund is. constituted,

inter alia by all moneys raised by any tax. rate or cess levied for the purposes of the

Act. Chapter VIII of the Corporation Act deals with the levy of various kinds of taxes.

Section 113 (1) (e) authorises the Corporation to levy a duty on the transfer of

property. Sections 147 and 148 of the Corporation Act deal with the duty on transfer

of property. The relevant part of section 147 (2) is as follows:" (2) The said duty

shall be levied- (a) in the form of a surcharge on the duty imposed by the Indian

Stamp Act, 1899, as in force for the time being in the Union territory of Delhi, on

every instrument of the description, specified below, and (b) at such rate as may be

determined by the Corporation; not exceeding five per cent on the amount specified

below against such instruments:- Description of Instrument (i) Sale of immovable

property. Section 148 is as follow: Amount on which duty should be levied. The

amount or value of the consideration for the sale, as set forth in the instrument. . ".

"on the introduction of the duty on transfers of property- (a) section 27 of the

Indian Stamp Act, 1899, as in force in Delhi shall be read as if it specifically required

the particulars. to be set forth separately in respect of property situated within and

without Delhi : (b) section 64 of the said Act shall be read as if it referred to the

Corporation as well as the Government. "

( 10 ) THERE is no reference at all to any duty on transfer of property in the Stamp

Act.

( 11 ) THE first question is whether the duty on transfer of property is levied under

the Corporation Act or is it levied under the Stamp Act The answer cannot be in

doubt. The only provisions which authorise levy of this duty are those contained in

the Corporation Act. The duty must be said to be levied, therefore, thereunder.

What is the effect of the provision of section 147 (2) that the duty shall be levied "in

the form of a surcharge on the duty imposed by the Indian Stamp Act, 1899" The

words "in the form of" are significant. They show that the reference to the Stamp

Act is only to borrow the form in which the stamp duty is imposed and collected.

Just as the stamp duty is levied and collected by the sale and affixation of stamps to

an instrument the duty on transfer of property is also to be levied by the sale and

affixation of stamps on an instrument. Why is the transfer duty levied in the form of

a "surcharge" on stamp duty The answer simply is that the transfer duty is levied

and collected over and above the stamp duty. This is why it is a surcharge on the

stamp duty. It is to be noted that the use of the word "surcharge" does not mean

that the transfer duty is levied and recovered as a part of the stamp duty. Any such

suggestion would be negatived. by the following reasons: Firstly, the transfer duty is

levied under the Corporation Act while the stamp duty is levied under the Stamp

Act. Secondly, the transfer duty is payable to the Delhi Municipal Corporation and

goes into the municipal fund while the stamp duty is payable to the Government and

goes into the Consolidated Fund of India or of the State concerned. Lastly, the

transfer duty is not a percentage of the stamp duty. On the other hand, it is a

percentage of the amount or value of the consideration for the sale as set forth in

the instrument. The transfer duty is thus assessed independently of the stamp duty

on the amount of the consideration for the sale. It is not assessed on the amount of

the stamp duty as a percentage thereof. It is thus an independent duty and is not a

part of the stamp duty.

( 12 ) SECTION 2 (6) of the Stamp Act defines "chargeable" to mean " chargeable

under this Act". Section 2 (11) of the Stamp Act defines "duly stamped" to mean

"that such stamp has been affixed or used in accordance with the law for the time

being in force in India". Under section 33 it is only when an instrument is

"chargeable with duty" and is "not duly stamped" that it can be impounded. Can the

sale deed in question be impounded under section 33 because the transfer duty is

either not paid or is insufficiently paid The answer must be "no". For, the meaning

of the expression "any instrument chargeable" or the expression "instrument not

duly stamped" used in section 33 of the Stamp Act is to be understood in the light of

the definitions in sections 2 (6) and 2 (11 ). "chargeable" means chargeable under

the Stamp Act only and not under any other Act. The Stamp Act authorises the levy

of stamp duty only and not of the duty on transfer of property. The latter is

authorised by the Corporation Act alone. The sale deed in question is not, therefore,

"chargeable" to transfer duty under the Stamp Act atall. It is not, therefore, an

instrument chargeable to duty within the meaning of section 33 of the Stamp Act.

( 13 ) IT is true that the words "stamp has been affixed or used in accordance with

the law for the time being in force in India" in section 2 (11) of the Stamp Act are

capable of being misunderstood if not read in the context of the other provisions of

the Stamp Act. The words "the law for the time being in force in India" can mean

only the law governing the imposition of stamp duty such as the various

amendments to the Stamp Act and the Schedule thereof made by the various State

Legislatures inasmuch as the subject of stamps is covered by all the three Lists in

the Seventh Schedule to the Constitution. The reason is that the expression "duly

stamped" is dependent on the expression "chargeable". Unless an instrument is

chargeable to duty, the question of it being duly stamped does not arise. It is only

the stamps for the payment of stamp duty which are to be affixed under the Stamp

Act to an instrument. The Stamp Act does not deal with the affixation of stamps to

an instrument for any purpose other than the levy of stamp duty. It is not

concerned, therefore, with the affixation of stamps on an instrument for the levy of

transfer duty. It is only the Corporation Act which is concerned with the levy and

recovery of stamp duty. It is also concerned with the affixation of stamps for the

payment of transfer duty. This is why it is section 147 (2) and not any provision of

the Stamp Act which provides that the transfer duty is to be levied in the form of a

surcharge on the stamp duty. It is clear, therefore, that a sale deed being neither

chargeable nor being stamped for the purpose of transfer duty under the Stamp Act,

it cannot be impounded under section 33 of the Stamp Act, if the transfer duty is

either not paid or is deficient.

( 14 ) SECTION 148 of the Corporation Act applies only sections 27 and 64 of the

Stamp Act to the recovery of duty on transfer of property, If the duty on transfer of

property were to be a part of the stamp duty then like the stamp duty the duty on

transfer of property would also be governed by all the provisions of the Stamp Act.

It would have been needless, therefore, for the Legislature to apply only sections 27

and 64 of the Stamp Act to the duty on transfer of property. The reason is that only

sections 27 and 64 can be relevant to the transfer duty. Under section 27 of the

Stamp Act it is necessary to state clearly all the facts and circumstances affecting

the chargeability of any instrument with duty and the amount of the duty with which

it is chargeable. It, is because section 27 has been made applicable that it has

become necessary for the executant of every transfer deed to state therein the facts

relating to the payment of duty on transfer of property and the amount of such duty

payable on the particular transfer. Had section 27 not been applied, there would

have been no duty on the executant to state these facts. The provisions of section

147 of the Corporation Act that the transfer duty shall be levied in the form of a

surcharge of stamp duty would then have become unworkable. It would have been

impossible to assess the transfer. duty unless the necessary facts were stated.

Section 64 is a corollary to section 27. It provides a penalty for non-compliance with

section 27 with intent to defraud the Government. Thereby the provisions of section

27 have become enforceable.

( 15 ) SECTIONS 147 and 148 of the Corporation Act in a sense incorporate only the

manner of the levy and recovery of the stamp duty and sections 27 and 64 from the

Stamp Act into the Delhi Municipal Corporation Act, 1957. This incorporation is

affected by the reference to these provisions in sections 147 and 148. Therefore,

even if the Stamp Act of 1899 were to be repealed, the provisions of the Stamp Act

which have been so incorporated in the Corporation Act would continue to be a part

of the latter Act. It is the Corporation Act, therefore, which is a complete code in

itself for the purpose of the levy and recovery of the duty on transfer of property.

( 16 ) SECTION 40 of the Stamp Act applies only when an instrument is impounded

under section 33 or it is sent to the Collector under section 38 of the Stamp Act.

Neither section 33 nor section 38 applies to the duty on transfer of property. They

apply only to stamp duty. It would follow, therefore, that section 40 also does not

apply to the duty on transfer of property.

( 17 ) IN answer to question No. 2, therefore, we are of the view that an instrument

cannot be either impounded under section 33 or can be subjected to the imposition

of a penalty under section 40 of the Stamp Act on the ground that the duty on

transfer of property levied under the Delhi Municipal Corporation Act, 1957 is either

not paid or is insufficiently paid.

( 18 ) THE reference is answered accordingly without any order as to costs.