Order on Review Petition for Document No. P2/2020
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, issued D.Dis. No. 7039/P1/2021, dated 9 June 2022, dismissing the petition concerning Settlement Deed No. P2/2020 at the Mylapore Sub Registrar Office. The authority treated the property as belonging to a partnership firm, classified the transfer to the settlor's wife and daughters as a settlement in favour of non-family members, and upheld deficit stamp duty of Rs.1,66,70,462/- and a penalty of Rs.2,000/-.
What the proceedings cover
D.Dis. No. 7039/P1/2021 of the Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, concerns a settlement deed executed by Mr. M.M.Sika, also known as Manmohan Sikka, in favour of his wife and three daughters. The deed was presented as Document No. P2/2020 at the Mylapore Sub Registrar Office.
The document records:
- Date of execution: 7 January 2020.
- Property value: Rs.7,50,00,000/-.
- Stamp duty borne by the deed: Rs.25,000/-.
- Claimants: Mrs. Swaran Prabha Sikka, Mrs. Kavita Dua, Mrs. Vasudha Sikka and Mrs. Divya Sikka.
- Deficit stamp duty determined by the District Registrar: Rs.1,66,70,462/-.
- Penalty determined by the District Registrar: Rs.2,000/-.
Why the higher stamp duty was imposed
The property had originally been purchased in the name of the partnership firm International Packers and Movers. Mr. M.M.Sika claimed that the firm was dissolved and that he became the absolute owner under an unregistered dissolution deed dated 1 January 1980.
The Chief Controlling Revenue Authority found that the dissolution deed appeared to be insufficiently stamped and could not be taken as evidence under section 35 of the Indian Stamp Act, 1899. The authority also relied on section 48 of the Indian Partnership Act, 1932, when concluding that the property remained an asset of the partnership firm for settlement of the firm's accounts and allocation of its residual property.
Because the property was treated as belonging to the firm rather than as the settlor's absolute personal property, the transfer was classified as a settlement by a firm in favour of individuals. It was therefore treated as a settlement in favour of non-family members under Article 58(a)(ii) of the Indian Stamp Act, 1899.
Decision and practical effect
The Chief Controlling Revenue Authority dismissed Mr. M.M.Sika's petition and upheld the District Registrar, Chennai (Central), proceedings dated 26 March 2021. The assessment of Rs.1,66,70,462/- as deficit stamp duty and Rs.2,000/- as penalty therefore remained in place.
The decision is relevant to owners and professionals handling property once held by a partnership firm. It shows that family relationships between the person signing a settlement and the recipients did not determine the classification where the authority found that the property belonged to the firm.
This summary is generated from the source document to help you find what is relevant. The PDF above is authoritative. For advice on your own property, use LandLens One or speak to a qualified professional.
Common questions
Why were transfers to the settlor's wife and daughters treated as non-family settlements?
The authority found that the property belonged to the partnership firm, not absolutely to Mr. M.M.Sika. It therefore treated the transaction as a settlement by the firm in favour of individuals under Article 58(a)(ii) of the Indian Stamp Act, 1899.
Did the Chief Controlling Revenue Authority reduce the stamp duty or penalty?
No. The petition was dismissed, and the deficit stamp duty of Rs.1,66,70,462/- and penalty of Rs.2,000/- determined by the District Registrar were upheld.
Why was the partnership dissolution deed not accepted as proof of ownership?
The authority found that the unregistered dissolution deed dated 1 January 1980 appeared to be insufficiently stamped. It concluded that the deed could not be taken as evidence under section 35 of the Indian Stamp Act, 1899.
Did the decision cancel Settlement Deed No. P2/2020?
The source does not state that the deed was cancelled. It states that the petition was dismissed and the District Registrar's classification, deficit stamp duty and penalty were upheld.
