M/S GODWIN CONSTRUCTION PVT. LTD. v. COMMISSIONER, MEERUT DIVISION
Supreme Court of India
2025 INSC 1207
Elucidates principles for interpreting instruments, determining stamp duty, and understanding surety contracts.
Legal Discussion:
- The Indian Stamp Act, 1899: The judgment extensively discusses the applicability of the Indian Stamp Act, 1899, specifically concerning the chargeability of stamp duty on instruments described as "Security Bond cum Mortgage Deed". The core issue revolves around whether such instruments should be charged under Article 40 or Article 57 of Schedule 1-B. The court emphasizes that the substance of the instrument, rather than its nomenclature, is the decisive factor in determining stamp duty. Section 2(17), defining "Mortgage-deed", is analyzed to determine if the instruments fulfill the characteristics of a mortgage deed. The court concludes that the instruments in question do satisfy these characteristics. Article 40 of Schedule 1-B, pertaining to "Mortgage-Deed", is considered applicable. Article 57 of Schedule 1-B, concerning "SECURITY-BOND OR MORTGAGE-DEED", is analyzed in detail. The court notes that Article 57 operates in two limbs: the first covers security bonds or mortgage deeds executed for the due execution of an office, and the second applies to instruments executed by a surety to secure the obligations of another. The court finds that Article 57 is inapplicable in the present cases because the deeds were not executed by a surety but by the principal debtor itself. Section 33(4) is mentioned in the context of initiating recovery proceedings for deficit stamp duty. Section 56(1)(b) is mentioned as the section under which the appellant filed a Stamp Appeal.
- The Indian Contract Act, 1872: Section 126 of the Indian Contract Act, 1872, defining "Contract of guarantee", "surety", "principal debtor" and "creditor", is reproduced and analyzed. The court emphasizes that the term "surety" must be strictly understood in accordance with this section. The court states that a contract of guarantee is inherently tripartite, requiring the presence of a surety distinct from the principal debtor.
List of Laws: The Indian Stamp Act, 1899; The Indian Contract Act, 1872