Case Citation
Supreme Court of India
Mukesh v. The State of Madhya Pradesh & Anr.
Civil Appeal No. 14808 of 2024 (Arising out of SLP (C) No. 4293 of 2021)
Judgment Date: December 20, 2024
Bench: Justice J.B. Pardiwala and Justice R. Mahadevan
Facts of the Case
Mukesh, the appellant, filed a civil suit for declaration and permanent injunction claiming ownership and possession of land in Survey Nos. 2087, 2088/9/1/1 in Village Kheda, Madhya Pradesh. The dispute arose when the adjacent landowner, Abhay Kumar (Respondent No. 2), attempted to sell the land to third parties. The suit was settled through a compromise decree in a Lok Adalat, granting Mukesh possession and the right to have his name entered in revenue records. Subsequently, the Tehsildar referred the matter to the Collector of Stamps, who imposed a stamp duty of ₹6,67,500 under the Indian Stamp Act, 1899. This was upheld by the Board of Revenue and the High Court of Madhya Pradesh. Mukesh appealed to the Supreme Court, challenging the imposition of stamp duty and the requirement of registration for the compromise decree.
Contentions of the Appellant
The appellant argued that the compromise decree only reaffirmed his pre-existing rights and did not create any new rights or interests in the land. He asserted that such decrees are exempt from registration under Section 17(2)(vi) of the Registration Act, 1908, and do not attract stamp duty under the Indian Stamp Act, 1899. He also highlighted that no evidence of collusion was provided, and the compromise decree had attained finality without challenge.
Contentions of the Respondent
The State contended that the compromise decree created new rights and required registration, making it subject to stamp duty. It argued that the civil suit and the compromise were likely collusive to evade payment of stamp duty. The respondent maintained that the appellant’s claim of exemption under the Registration Act was inapplicable due to the absence of title in revenue records.
Issues on this Judgment
- Whether the compromise decree required registration under Section 17 of the Registration Act, 1908.
- Whether the compromise decree attracted stamp duty under the Indian Stamp Act, 1899.
- Whether the compromise decree created new rights or merely reaffirmed pre-existing rights.
Observations/Findings of the Supreme Court
The Court observed that a compromise decree reaffirming pre-existing rights does not require registration under Section 17(2)(vi) of the Registration Act, 1908. It distinguished between decrees that declare pre-existing rights and those creating new rights. The Court noted that the appellant’s possession and ownership were long-standing and that the compromise decree did not transfer any new rights. Additionally, the Court rejected allegations of collusion, emphasizing the lack of evidence. The Court held that stamp duty is not chargeable as the decree was not a conveyance under the Indian Stamp Act.
Principles Laid Down by the Court
- A compromise decree that reaffirms pre-existing rights does not require registration under Section 17(2)(vi) of the Registration Act, 1908.
- Such decrees are not subject to stamp duty under the Indian Stamp Act, 1899, unless they create new rights or interests.
- The mere absence of title in revenue records does not negate ownership or possession.
Final Order
The Supreme Court allowed the appeal, set aside the orders of the High Court, the Board of Revenue, and the Collector of Stamps. It directed the mutation of the subject land in favour of the appellant without the imposition of stamp duty.
Importance of This Judgment to Society
This judgment reinforces the principle that compromise decrees reaffirming pre-existing rights should not be burdened with unnecessary registration or stamp duty requirements. It safeguards individuals from unwarranted fiscal obligations and ensures that revenue records do not override substantive ownership. The decision promotes clarity in the application of registration and stamp duty laws, preventing misuse by authorities.
