Deed Transferring Part Of Compensation Not 'Conveyance Deed' Unless It Specifically Records Transfer Of Rights In Recitals: Allahabad High Court

The Allahabad High Court has held that for being a conveyance deed, the recital of the deed transferring the immovable property must convey the same otherwise no right over the land is vested in the tenure holder. It has been held that a dee transferring part of enhanced compensation is not a 'conveyance deed' unless it specifically records transfer of rights in its recital.

“So as to form a deed of transfer of conveyance, whether it is a notional or effective one, a deed of transfer must convey in its recital that the immovable property is being transferred to fall within the definition of conveyance, otherwise any interest of transfer arising out of a property which does not vest any right in the tenure holder such case would not fall within the definition of conveyance and will certainly go out of the mischief of Entry 23 of the Schedule-I of the Stamp Act,” held Justice Ajit Kumar.

Case Background

Government acquired the land from its original owner and compensated him for the same. Possession of the land had been taken by the Collector invoking his power vide Section 6 of the Erstwhile Land Acquisition Act, 1898. Since the owner was not satisfied with the compensation, he made a reference for higher compensation.

While the reference was pending, petitioners signed a deed with land owner wherein it was stated that the petitioner's will get a part of the increased amount of compensation which will be awarded to the original land owner in the reference.

The State alleged that there was deficiency in payment of stamp duty on the said compensation deed on grounds that rights over the land had been transferred to the petitioners by this deed. Petitioners challenged the notices issued by the Collector/Collector Stamp, Agra under the Indian Stamp Act, 1899 on grounds that no interest/right in property was transferred to them as land already acquired and stood vested with Government.

It was argued that the compensation deed is not a conveyance deed and, thus, there was no deficiency in payment of stamp duty as only part of compensation rights were transferred on which stamp duty was already paid.

High Court Verdict

The Court observed that the transfer deed clearly transferred the rights of the land and vested them in the State Government. It was observed that the recital clearly stated that only 35% of the enhanced compensation was to be transferred to the petitioners and not the rights or title to the land.

“Upon bare reading of the aforesaid recitals, it is clearly deducible that what was transferred was only the interest of 35% of enhanced compensation. Neither any transfer of the immovable property was effected upon, nor could have been, nor there has been any acknowledgement of any rights and title vested with the tenure holders in respect of the immovable property which was liable to be transferred under the deed of transfer.”

The Court held that once the land stood vested in the Government, there was no question of any further transfer of land or interest or rights by the original land owners. Elucidating on the definition of conveyance deed, the Court held that transfer of rights and interest in land can only be seen from the recital of the deed to make it fall within the definition of a conveyance deed.

The Court observed that in Vikas Jain v. State of UP & ors, the Allahabad High Court had held that for being a conveyance deed, actual transfer of property must be recorded in writing in such deed.

Accordingly, the Court held that the transfer of interest in compensation by way of a transfer deed was not transfer of rights over the land which vested only in the State. The notice issued by the Collector/Collector Stamp, Agra and proceedings pursuant to the same were quashed.

Case Title: Yogendra Kumar Kushwaha v. Collector And 2 Others [WRIT - C No. - 4772 of 2022]

Counsel for Petitioner: Vedant Agarwal, Rahul Agarwal

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