Transfer of Property Act, 1882: Movable and Immovable Property (Duncans Industries Ltd. v. State of U.P.)

-

Facts:

A deed of conveyance dated 9-6-1994 was executed by a company named ICI India Ltd. in favour of M/s Duncans Industries Limited, wherein it agreed to transfer on an “as is where is” basis and “as a going concern” its fertilizers business of manufacturing, marketing, distribution and sale of urea fertilizer in favour of Ducans. The deed included sale of complete fertilizer business and included land and plant and machinery in the deed. While computation of Stamp Duty for registration at the registrar, the Registrar stated non-compliance of the Stamp Act because the valuation of plant and machinery was not taken into account (considered an immovable property) and asked the collector for proper valuation to be made and to collect the stamp duty and penalty payable on the registration  document. The Collector after inquiry levied a stamp duty of Rs 37 Crore and a penalty of Rs 30 lakh.  This order was challenged before the High Court in Civil Miscellaneous which came to be dismissed. The appeal went to Supreme court.



Issue: 

Whether for computation of Stamp Duty the Machinery and Equipment being transferred shall be considered an immovable property? 

Contention: 

Appellant: 

The council appearing for the appellant urged that the plant and machinery which were transferred by the vendor to the appellant, were movable properties.  Therefore, the value of the said plant and machinery could not have been taken into consideration for the purpose of arriving at the correct and true value of the property conveyed under the deed of conveyance.

Ratio Decidendi: 

The Supreme Court upheld the verdict of High Court and stated, whether a machinery which is embedded in the earth is moveable property or an immovable property, depends upon the facts and circumstances of each case. Primarily, the court will have to take into consideration the intention of the parties when it decided to embed the machinery, whether such embedment was intended to be temporary or permanent. Additionally, the High Court came to the conclusion that the machineries which formed the fertilizer plant, were permanently embedded in the earth with an intention of running the fertilizer factory and while embedding these machineries the intention of the party was not to remove the same for the purpose of any sale of the same either as a part of a machinery or scrap and in the very nature of the user of these machineries, it was necessary that these machineries be permanently fixed to the ground. Therefore, it came to the conclusion that these machineries were immovable property which were permanently attached to the land in question. 

Judgement: 

For the reasons stated above, this appeal fails and the same is dismissed with costs.

Reference: Court Oder 

Comments

Post a Comment

Popular posts from this blog

Criminal Procedure Code, 1973: Section 319, Power to proceed against other persons appearing to be guilty of offence (Leading Case law: Hardeep Singh v. State of Punjab )

-
Image
Facts: On June 24, 2004, Hardeep Singh was ploughing the land. The accused persons went there with deadly weapons and caused injuries to Hardeep Singh as well as other prosecution witnesses. First Information Report (FIR) was lodged against many of the accused for commission of offences punishable under Sections 307, 326, 336 and 427 read with Sections 120B, 148 and 149 of the Indian Penal Code, 1860 (IPC) as also for offences punishable under Sections 25, 27, 54 and 59 of the Arms Act, 1959. Accused were arrested. Vijay Preet Singh (respondent No. 2) was one of them but the father of Vijay Singh interfered in investigation. Hence, he was discharged before framing of the charges. Moreover, Jagtar Singh (respondent No.3) whose name was not mentioned in the FIR, but as per witnesses also involved. The appeal is brought before the constitutional bench of Supreme Court because the division bench came onto differing opinion as to the additions of the respondent 2 and 3 to the case using sec...
Read more

Constitutionalism- Explained

-
Image
In simple words, Constitutionalism is a doctrine that a government’s authority is determined by a body of laws or constitution. More generally constitutionalism refers to efforts to prevent arbitrary government.   [1]    Constitutionalism is based on the idea of political theories of John Locke and the founders of the American republic, that government can and should be legally limited in its powers, and that its authority or legitimacy depends on its observing these limitations. The central point of Constitutionalism is a “Limited Government”. Constitutionalism recognises the need for a government but at the same time also insists upon restraining its (government’s) power.  [2]   Epitome of Constitutionalism is Magna Carta issued in 1215 that limited the power of England’s King John. Constitutionalism places limits upon the arbitrary    powers of the three government power: legislative power (making new laws), executive power (implementing laws) and j...
Read more

Criminal Procedure Code, 1973: Section 235 (Leading Case law: Ajay Pandit @ Jagdish Dayabhai Patel & Anr Appellant (s) Versus State of Maharashtra)

-
Image
Facts: Death sentence has been awarded by the High Court of Bombay to Ajay Pandit @ Jagdish Dayabhai Patel for double murder. The Bombay High Court confirming the order of conviction and enhancing the sentence of life imprisonment to death and ordered to be hanged till death against which this appeal has been preferred. The High Court heard the arguments of the advocate for the accused as well as the prosecutor on the point as to whether the High Court could enhance the sentence of the accused from life to death. Having noticed that the High Court has the power to enhance the sentence from life imprisonment to death, the High Court issued a notice on 1.12.2005 to the accused to show cause why the sentence of life imprisonment be not enhanced to death sentence. The operative portion of the order reads as follows: The accused was produced before the Court on but the advocate representing the accused was absent. Consequently, he Court on 13.12.2005 recorded the following statement of the ...
Read more