Appeal on settlement deed by a son given in adoption

What the proceedings decide

The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, considered an appeal against the District Registrar, Tiruchirappalli. The appeal concerned Settlement Deed Document No.294/2008, executed on 1 February 2008 and registered at the Joint III Sub Registrar Office, Tiruchirappalli.

The authority dismissed the appeal and upheld the District Registrar's order dated 18 February 2014. The settlement was classified as one made in favour of a person who was not a family member under Article 58(a)(ii) of the Indian Stamp Act, 1899.

Background of the settlement

The registered documents described the following sequence:

• Mr. J. Vinoth was the biological son of Mr. D. Jagannathan.
• His biological parents gave him in adoption to Mrs. K. V. Vanaja through registered Document No.127/1997/BkIV.
• Mrs. K. V. Vanaja later settled her property on her adopted son, Mr. J. Vinoth, through registered Document No.139/2008.
• Mr. J. Vinoth then settled that property on his biological father through Document No.294/2008.
• The property was valued at Rs.30,67,601, and the document bore stamp duty of Rs.10,000.

An audit raised the issue that the settlement had been stamped as a transfer to a family member. The Sub Registrar referred the matter to the District Registrar, who determined deficit stamp duty of Rs.2,35,408.

Reason for dismissing the appeal

The appellant argued that adoption did not remove the blood relationship with his biological father. The Chief Controlling Revenue Authority relied on section 12 of the Hindu Adoptions and Maintenance Act, 1956, which states that an adopted child becomes the child of the adoptive parent and that ties with the family of birth are treated as severed and replaced by ties in the adoptive family, subject to the listed exceptions.

Based on that provision, the authority found that Mr. J. Vinoth could not be treated as the claimant's son for classification of the settlement deed.

Who may be affected

The proceedings are directly about Document No.294/2008 and the parties to it. They are also relevant to adopted persons, biological parents and registration professionals assessing whether a settlement between them qualifies as a settlement in favour of a family member for stamp duty classification.