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The division bench of Kerala High Court comprising Justice Antony Dominic and Justice Dama Seshadri Naidu has held in the case of Dr. Abdul Rasheed v. State of Kerala that a registering authority cannot impound insufficiently-stamped instruments/documents presented only for registration.
In the abovesaid case, a company had executed a settlement deed in favor of three children of its managing director (MD) but the sub-registrar had impounded them since the instruments were insufficiently stamped and the MD’s request to take the deed back was also not entertained. This order impounding the deeds was affirmed by the District Registrar and Land Revenue Commissioner and subsequently, the single bench of the high court had refused all the writ petitions filed by him. As a result, the matter then reached the Hon’ble bench via the means of intra-court appeals where two major issues were raised before the court. The first issue concerned the domain of artificial person’s power to execute a settlement deed while the second issue was regarding the executant’s right to ask the registering authorities for the return of the document if he does not desire to complete the transaction or face the consequences of impounding due to the presentation of incomplete documents for registration.
While commenting on the first issue, the court observed that corporate entities can execute settlement deeds. The Registration Department had contended that a settlement deed must have been executed in favor of the members of a family while a company can execute a gift. The court relying on the relevant articles of the Stamp Act rejected the argument remarking that the expression in the article permits both the settlement and gift to be a device for inter-vivos transfer beyond the family covering even artificial personalities, such as corporate entities. While examining the second issue, the court concluded that the registration authority cannot compound and a person can opt out of a transaction any time before the transaction is completed and his acts become irrevocable. The court further observed that the authorities cannot destroy a person’s contractual freedom, and his decisional independence.
It was finally concluded by the bench that mere producing a document for registration does not amount to the producer using an insufficiently-stamped document for a purpose not attainable without sufficient stamp on the instrument. The writ petitions were allowed and the Sub-Registrar and Director Registrar (General) were directed to return the insufficiently stamped documents to the petitioner.
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