MOOT PROPOSITION

STATEMENT OF FACTS, PLEADINGS, FINDINGS & ORDER

Case of the Plaintiff / Appellant

JDC Ltd., the plaintiff, appellant a company incorporated under the Companies
Act, 2013, claim that one Ramanath and his family members sold two and half acres
of land in Jagatpura village, Jaipur to them by means of an agreement of sale, General
Power of Attorney (for short "GPA") and a Will executed on 01.08.2013 for a
consideration of Rs.50.00 lacs. A sum of Rs. 45 lacs was paid in cash against
possession u/s 53-A. Balance of Rs. 5 lac was payable before 02.01.2014. Amount
was offered on 10.1.2014 but not accepted by the seller.
The agreement is
unregistered but signed and executed by the vendor. It is unilateral. The petitioner
verbally agreed to sell a part of the said property measuring one acre to one Shri
Yadav for Rs.40.00 lacs on 15.10.2013. Shri Yadav got in touch with Ramnanath and
his family members and on 16.10.2013 got a GPA in favour of Dharamvir Yadav, and
Sale Agreement in regard to the entire two and half acres executed and registered.
Additional Rs. 50 lacs were paid. The earlier GPA in favour of the plaintiff / appellant
Company was cancelled illegally. It was mentioned in the agreement that possession
to be taken by Mr. Yadav from JDC Ltd. Suit for specific performance was filed by the
Company on 01.04.2014.
The plaintiff also claimed that the purchaser may be liable to tax on the
differential value, u/s. 56(2) (vii) (b) (ii) of the I.T. Act, 1961.

Claim of the Respondent Ramnath

Agreement of sale, General Power of Attorney and Will were duly executed and a
consideration of Rs.45.00 lacs was paid and possession was transferred u/s. 53-A.
Possession is with the Company. The agreement is unregistered and unilateral. The
plaintiff is not the signatory and hence claim is unsustainable in law. Balance of
Rs.5.00 lacs was not received by the stipulated date 02.01.2014, through tendered
later. The property was sold to Mr. Yadav and he was advised to take possession from
the plaintiff. Suit is bad. The facts as narrated by the plaintiff are disputed and
unproved. The plaintiff is not entitled to any relief and the suit deserves to be
summarily dismissed with costs and damages.
The respondent also pleaded that he enquired about the stamp duty and
registration charges and was informed by the Registering Authority that fair market

value on the date of registration and not the date of Sale Agreement, would be payable.
Thus the stamp duty would be payable on Rs. 1.50 Crore, which should be borne by
the plaintiff. The seller further claimed that on account of Section 50C of the IncomeTax Act, 1961, the seller would be required to pay capital gain tax on Rs. 1.50 Crore
against real sale consideration of Rs. 50 Lacs, which would be additional liability for
no fault on his part.
Shri Dharamvir Yadav claims that earlier General Power of Attorney is having
been cancelled and General Power of Attorney in his favour being registered subsists.
He has authority and competence to sell and not Ramnath. Rs. 50 lacs have been
paid to Ramnath, owners apart from Rs. 40 lacs to the plaintiff.

Issues Framed:
1.
Whether the Agreement of sale, General Power of Attorney and the Will executed
in favour of the plaintiff is valid?
2.
Whether when a sum of Rs.45 lacs having been paid out of Rs.50.00 lacs and
possession given u/s.53A of the Transfer of Property Act, Ramanath and his family
members had no power, competence and authority to execute second General Power of
Attorney in favour of Mr. Yadav and cancel the earlier GPA in favour of the plaintiff, is
valid?
3.
Whether the plaintiff was ready, willing and prepared and tendered Rs.5.00 lacs
after 02.01.2014 and requested Ramanath and his family members to execute sale
deed and to get it registered. What was the effect of non-payment of balance amount
on 02.01.2014?
4.
Whether the Stamp Duty Registering Authority was right in demanding stamp
duty on the fair market value of Rs. 1 Crore and 50 lacs as on 01.08.2014 and not at
recorded value / fair market value on 01.08.2013 i.e. Rs. 50 lacs? If the stamp duty
would be payable on additional 1 crore, who would bear such amount?
Order of the District Judge:
The suit is liable to be dismissed as the agreement to sell with possession is
unregistered; the balance consideration of Rs. 5 lacs was not paid and tendered before
02.01.2014; the agreement/GPA was cancelled and the plaintiff is entitled to refund
for Rs. 45 lacs on handing over possession to the owners. Suit for specific performance
is dismissed. If the plaintiff succeeds, the differential stamp duty of the recorded
value and fair market value on the actual date of registration would have to be paid by
the plaintiff apart from the capital gain on the differential amount.

Order of the Rajasthan High Court:

The appellant Purchaser plaintiff is not entitled to any relief as the sale Agreement is
not registered,: GPA has been cancelled: the appellant failed to pay the balance of
Rs.5 lacs by 02.01.2014: is liable to return possession on payment of Rs.45 lacs by the
respondent-owner . The respondent owner is directed to pay within 15 days of this
order and the appellant is directed to handover vacant possession simultaneously. As
the sale is not fructified question of income tax would not arise and so the stamp duty.
Both issues are academic.
Appeal /SLP before the Supreme Court :
The appellant plaintiff wants to file an appeal/SLP before the Honble
Supreme Court. Kindly draw the appeal/SLP along with reply by the respondent and
brief arguments on behalf of the parties. The memorial to reach by 15.02.2016.
Appeal to be heard by the Supreme Court on 27.02.2016.
Relevant Sections

1.

Sections 5, 53, 53-A, 54 of the Transfer of Property Act, 1882

2.

Section 1A & 2 of the Power of Attorney Act, 1882

3.

Indian Succession Act, 1925

4.

Section 2(12), 3, 17, 27, 47A of Stamp Act (2 of 1899) & Rajasthan Stamp Law
(Adaptation) Act

5.

Section 17 & 49 of the Registration Act, 1908

6.

Contract Act, 1872

7.

Specific Relief Act, 1963

8.

Civil Procedure Code, 1908

9.

Section 50C and 56(2) (vii) of the Income-Tax, 1961;

10.

Any other relevant Act and rules.