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The essence of sale is the transfer of the property in a thing from one person to another for a price. As per Section 4, the contract of sale includes an agreement to sell. It is not necessary that contract of sale must be absolute. It may be conditional as well. The essential feature that distinguishes the contract of sale from an agreement to sell is that in a contract of sale the property in the goods is transferred from the seller to the buyer immediately whereas in an agreement to sell property is transferred on a future date/dates. An agreement to sell becomes a sale on fulfillment of the conditions or when the time provided in the agreement elapses.

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 REPORTABLE

 IN THE SUPREME COURT OF INDIA

 CIVIL APPELLATE JURISDICTION

 CIVIL APPEAL NO. 5876 OF 2009

State of Uttaranchal
(now known as State of Uttarakhand) & Ors. ...... Appellants

 Vs.

M/s. Khurana Brothers ...... Respondent

 WITH

 CIVIL APPEAL NO. 5878 OF 2009
 CIVIL APPEAL NO. 5879 OF 2009
 CIVIL APPEAL NO. 5880 OF 2009

 JUDGMENT

R.M. LODHA, J.

 These four appeals at the instance of the State of

Uttaranchal and the Officers of its Forest Department are directed

 1
against the judgment dated December 27, 2007 passed by the High

Court of Uttarakhand whereby the Division Bench allowed the review

petitions filed by present respondents (writ petitioners) and reviewed

its earlier judgment dated April 13, 2004 and thereby allowed the writ

petitions filed by the writ petitioners holding that they were not liable

to pay stamp duty on the documents pertaining to contract of sale for

crude resin. Since the facts and documents involved in this group of

appeals are identical, for convenience, we shall refer to the facts and

documents in Civil Appeal No. 5876 of 2009. The controversy arises

in this way.

2. The Divisional Forest Officer, Nainital Forest Range,

Nainital notified public auction of resin at Bhuwali Forest Rest House

on March 24, 2001. The writ petitioner (Khurana Brothers)

participated in that public auction. Its bid in the sum of Rs. 3,90,000/-

being the highest bid was accepted by the Divisional Forest Officer,

Nainital and the formal contract of sale for crude resin was entered

into between the competent authority of the State Government in the

name of the Governor and the writ petitioner on March 24, 2001.

Subsequently a letter was issued on April 7, 2001 asking the writ

petitioner to lift the contracted resin within 60 days therefrom.

 2
3. The contract of sale for crude resin between the parties

reads as follows :

 "FORM OF CONTRACT OF CRUDE RESIN

 Lot No. 7 to 10/2001

 Value of the Deed Rs. 3,90,000.00 (Rupees Three
 Lakh, Ninety Thousand Only)

 This indenture made this 24th day of March 2001
 between the Governor of the Uttaranchal (hereinafter
 called "Seller" of the one part and Shri Khurana
 Brothers, Rishikesh (hereinafter called the "Buyer"
 which expression includes its executors, administrators,
 successors and assigns) of the other part witnessed as
 follows :

 The seller in considerations of payment to be made by
 the buyer as hereinafter provided at the rate of 1950.00
 (Rupees One Thousand Nine Hundred Fifty Only) per
 quintal calculated at per quintal naked (without
 container) and in addition the buyer shall have to pay
 sale tax on the total sale value of the resin 79% or the
 rate applicable at the time of sale subject to the
 following terms and conditions :

 (A) Approximately 1160 (One Thousand One
 Hundred Sixty) tins 200 (two Hundred) quintals of crude
 resin (net weight) will be delivered at resin depot Sultan
 Nagri. The quantity may increase or decrease by 10% &
 the buyer will have to accept the quantity made
 available by the seller. The weight of resin will be the
 same as has been recorded in the books of the seller.
 The seller reserves the right to reject the claim of the
 purchaser for weighment at the time of taking delivery.

 (B) The resin sold will remain at purchaser's risk from
 date of acceptance of his bid and the seller will not be

 3
responsible for any loss and damage which may occur
thereto from any cause whatsoever.

(C) All the resin will have to be removed by the
purchaser within 60 days of the date of approval of the
sale. It will be removed in not more than 60 installments
as follows :

 1. Within Days of approval of sale.
 2. Within Days of approval of sale.
 3. Within Days of approval of sale.
 4. Within Days of approval of sale.

The purchaser can remove resin only with the written
permission of the Divisional Forest Officer, Nainital
Forest Division, Nainital and on payment is advance of
the full cost and sale tax of resin.

The seller does not take any responsibility for the quality
of resin contained in the tins and will not give any resin
in exchange.

2. The amount of sale price of the lot calculated on the
basis of per quintal bid at the time of auction shall be
payable by the buyer irrespective of the fact whether he
lifts the material or not.

3. Any resin or tin left within the depot after the last
date of lifting shall vest in the Govt. and shall be
confiscated and refund in lieu of such resin or tins shall
be due to the buyer.

4. No crude resin will be exported by the buyer from
the resin depot specified in clause I accept by such
routes and via such chaukies as may be decided upon
and recorded in written by the Forest Office. The resin
tins may be counted and weighted by any Forest Officer
at any time during transit.

 4
5. The buyer shall furnish the Forest Officer in
writing with the names of all the agents and servants it
proposes employ for it before they are employed and
the Forest Officer shall be at liberty to forbid the
employment of any person whom he may consider
undesirable.

6. The buyer shall not drag the resin tins from the
Sultan Nagri Depot.

7. In the event of a breach of any of the conditions
of this indenture by the buyer or by agents or servants
the M/s. Khurana Brothers, Rishikesh shall be liable to
pay of fine which may extend to fifty rupees at the
discretion of the Forest Officer for each such breach.

8. In the event of breach of this agreement or of any
forest law or rules the export of the buyer may be
stopped under the orders of the Forest Office, pending
any investigation and decision of the case.

9. Nothing in this indenture shall be held to exempt
the buyer or its agents or servants from liability to
criminal proceedings for breach of the forest laws and
rules committed by it or them.

10. In the event of dispute concerning any of the
terms of this indenture the same shall be referred to the
sole arbitrator appointed by the Chief Conservator of
Forest, Uttaranchal whose decision shall be final and
binding the parties.

11. The seller has received from the buyer the sum of
(Rupees 39,000.00 Thirty Nine thousand) only receipt of
which is hereby acknowledged as security for the due
fulfillment of all the covenants herein before contained.
The Forest Officer in empowered to deduct from such
security money any sum, which may be due from the
buyer whether in respect of any of the price payable by
it or any fine or liability incurred by it under the provision
of this indenture. The security money or such balance

 5
 thereof as may be after making the deductions
 aforementioned will be returned to the buyer on the
 expiration or sooner determination of this agreement as
 after the Forest Officer shall have satisfied himself that
 all the terms of this indenture have been duly and
 faithfully carried out by the buyer.

 12. The stamp duty payable on this deed and the fee
 for registration of this deed shall be borne by the buyer.

 13. Any tax imposed by any law on the present sale
 shall be payable by the buyer.

 14. Any sum of money, either of sale consideration or
 fine or other kind of due, payable by the buyer under
 this deed to the seller shall be recoverable as arrears of
 land revenue.

 In witness where of the Conservator of Forest, Southern
 Kumaon Circle, Uttaranchal on behalf of the Governor
 of the Uttaranchal and the M/s. Khurana Brothers,
 Gopal Mandir, Rishikesh aforesaid have there to set the
 in signature.

 Sd/-
 BUYER : CONSERVATOR OF FOREST
 Khurana Brothers"

4. The letter issued by the Divisional Forest Officer to

the writ petitioner on April 7, 2001 is as follows :

 "Office of Divisional Forest Officer
 Nainital Forest Division Nainital
 Letter No. 4566/39-8.9 Dated Nainital 7-4-2001

To,
 Khurana Brothers Rishikesh

 6
 Gopal Mandir Rishikesh

Subject : Acceptance of Lisa lots purchased on 24-3-2001 in the
public auction held at Bhuwali Forest Rest House.

Ref : Letter No. 2955/39-8 Dated 31-0-2001 of forest conservator,
southern Kumaun circle, Uttaranchal Nainital.

Sir,

 The Bid given by you in the public auction held at Bhuwali
Forest Rest House on 24-3-2001 for the following resin lot is
accepted in your name.

Name Lot No. Resin BID Total Name
of PURCHASED Accepted price in of
Division Tin No. Quantity Per QTL. rupees Depot
 In rupees from
 In
 where
 Quintal is to be
 lifted
1 2 3 4 5 6 7
East 314 to 1740 295 1956/- 586800 Sultan
Alimorah
 319/2001 300 Nagri

 You are therefore to arrange for lifting of aforesaid resin within
60 days of the date of issuance of the letter after having the
following conditions of auction notice completed by depositing in
advance with the Depot, Sultan Nagri Kathgodam.

1. Submitting challan of the total amount of purchased resin in
favour of concerned Divisional Forest officer.

2. Submitting certified the photocopy of certificate of registration
with department as required for registration in accordance with
section 10 of Uttar Pradesh Rosin and other Forest produce (Trade
Regulation) Act, 1976.

 7
 3. Payment of total price of Rosin & Trade tax at the prevailing
 rates at the date of auction shall be compulsory prior to lifting the
 resin.

 4. The details of resin obtained from all sources along with
 details concerning utilization fuel and further details of payment of
 Trade tax on the products manufactured from previously obtained
 rosin prior to lifting the rosin be submitted with Depot officer Rosin
 Depot.

 5. Stamp Duty shall be payable on such purchase as per rules
 and Government order.

 6. The contribution for District Board at the rate of Rs. 5/- per
 quintal on the purchased rosin shall be payable.

 7. Prescribed Income tax and surcharge according to rules shall
 be paid.
 Sd/-
 Divisional Forest Officer
 Nainital Forest Division"

5. The short question that arises for consideration is whether

the above contract of sale for crude resin amounts to `conveyance'

as defined under Section 2(10) of the Indian Stamp Act, 1899 (for

short, `the Stamp Act') and, if answer is in the affirmative, whether

stamp duty is chargeable thereon. In order to answer the aforesaid

question, the true and real meaning of the document needs to be

ascertained. When we look at the contract, it would be seen that in

consideration of the price stated in the contract, the State

Government agreed to deliver the specified quantity of the crude

 8
resin to the writ petitioner (`purchaser'). The parties agreed that

quantity may increase or decrease by 10% and the resin will have to

be removed by the purchaser within 60 days from the date of

approval of sale and it will not be removed in more than 60

installments. As per the terms of the contract, the purchaser was

required to pay the amount of sale price irrespective of the fact

whether the contracted quantity of resin was lifted by it or not. By a

subsequent communication dated April 7, 2001, the purchaser was

informed of the acceptance of the bid for the stated resin lot/s in its

favour and it was asked to arrange for lifting of the same within 60

days of the issuance of that letter.

6. Section 4 of the Sale of Goods Act, 1930 reads as

follows:

 "S.4. Sale and agreement to sell. - (1) A contract of
 sale of goods is a contract whereby the seller transfers
 or agrees to transfer the property in goods to the buyer
 for a price. There may be a contract of sale between
 one part-owner and another.

 (2) A contract of sale may be absolute or conditional.

 (3) Where under a contract of sale the property in the
 goods is transferred from the seller to the buyer, the
 contract is called a sale, but where the transfer of the
 property in the goods is to take place at a future time or
 subject to some condition thereafter to be fulfilled, the
 contract is called an agreement to sell.

 9
 (4) An agreement to sell becomes a sale when the time
 elapses or the conditions are fulfilled subject to which
 the property in the goods is to be transferred."

7. The essence of sale is the transfer of the property in a

thing from one person to another for a price. As per Section 4, the

contract of sale includes an agreement to sell. It is not necessary

that contract of sale must be absolute. It may be conditional as well.

The essential feature that distinguishes the contract of sale from an

agreement to sell is that in a contract of sale the property in the

goods is transferred from the seller to the buyer immediately whereas

in an agreement to sell property is transferred on a future date/dates.

An agreement to sell becomes a sale on fulfillment of the conditions

or when the time provided in the agreement elapses.

8. Section 2(10) of the Stamp Act defines `conveyance' as

follows :

 "S.2(10). - `Conveyance'.--`Conveyance' includes a
 conveyance on sale and every instrument by which
 property, whether movable or immovable, is transferred
 inter vivos, and which is not otherwise specifically
 provided for by Schedule I, Schedule I-A or Schedule I-
 B, as the case may be;

 Explanation .......".

 10
9. Section 2(14) as was existing at the relevant time prior to

amendment vide U.P. Act 38 of 2001 reads as follows:

 "S. 2(14). -- "instrument" includes every document by
 which any right or liability is, or purports to be, created,
 transferred, limited, extended, extinguished or
 recorded."

10. Section 3 is the charging Section. To the extent it is

relevant, it reads as follows:

 "S.3. Instruments chargeable with duty. - Subject to
 the provisions of this Act and the exemptions contained
 in Schedule I, the following instruments shall be
 chargeable with duty of the amount indicated in that
 Schedule as the proper duty therefor, respectively, that
 is to say--

 (a) ............

 (b) . . . . . . . . . . ..

 (c) ............

 Provided that, except as otherwise expressly
 provided in this Act, and notwithstanding anything
 contained in Clause (a), (b) or (c ) of this section, or in
 Schedule I or I-A, the following instruments shall,
 subject to the exemptions contained in Schedule I-A or
 I-B, be chargeable with duty of the amount indicated in
 Schedule I-A or I-B or as the proper duty therefore,
 respectively, that is to say-

 (aa) every instrument mentioned in Schedule I-A or I-
 B, which, not having been previously executed
 by any person, was executed in Uttar Pradesh :

 11
 (i) ...........

 (ii) in the case of instruments mentioned in
 Schedule I-B, on or after the date on
 which the U.P. Stamp (Amendment) act,
 1952 comes into force:

(bb) every instrument mentioned in Schedule I-A or I-
 B, which, not having been previously executed by
 any person, was executed out of Uttar Pradesh :

 (i) .............

 (ii) in the case of instruments mentioned in
 Schedule I-B, on or after the date on
 which the U.P. Stamp (Amendment) Act,
 1952 comes into force and relates to any
 property situated, or any matter or
 thing done or to be done in Uttar Pradesh, and
 is received in Uttar Pradesh :

 Provided also that no duty shall be chargeable in
 respect of :

 (i) ..............

 (ii) ..............

 Explanation.--Where the amount of duty
prescribed in Schedule I-B contains any fraction of a
rupee, below twenty five paise, or above twenty five
paise but below fifty paise, or above fifty paise but
below seventy five paise, or above seventy five paise
but below one rupee, the proper duty shall be an
amount rounded off to the next higher quarter of a
rupee, as hereinafter appearing in the said Schedule."

 12
11. Schedule I -B appended to the Stamp Act provides for

the rates of stamp duty in respect of instruments described

thereunder. Article 23 thereof provides for rate of stamp duty on the

`conveyance' as defined by Section 2(10) which are not exempted

under Article 62.

 Description of instrument Proper stamp duty
 23. Conveyance - as defined by
 Section 2(10) not being a Transfer
 charged or exempted under No.
 62 -

 (a) . . . . . . . .

 (b) If relating to moveable
 property -
 [See item 136 Appendix II]
 where the amount or value
 of the consideration of such Twenty rupees
 conveyance, as set forth
 therein, does not exceed
 Rs.1000

 and for every Rs.1000 or
 part thereof in excess of Twenty rupees
 Rs.1,000

 Exemption
 Assignment of a copy-right for
 musical works by resident of or
 first published in India

 Explanation :
 For the purposes of this Article, in
 the case of an agreement to sell
 an immovable property, where
 possession is delivered before the
 execution, or at the time of

 13
 execution, or is agreed to be
 delivered without executing the
 conveyance, the agreement shall
 be deemed to be a conveyance
 and stamp duty thereon shall be
 payable accordingly:

 Provided that the provisions of
 Section 47-A shall, mutatis
 mutandis, apply to such
 agreement:

 Provided further that when
 conveyance in pursuance of such
 agreement is executed, the stamp
 duty paid on the agreement shall
 be adjusted towards the total duty
 payable on the conveyance.

_______________________________________________________

12. The expression `document' is not defined in the Stamp

Act. However, the General Clauses Act, 1897 defines `document' as

under:-

 "S.3(18). - `document' shall include any matter
 written, expressed or described upon any substance
 by means of letters, figures or marks, or by more
 than one of those means which is intended to be
 used, or which may be used, for the purpose of
 recording that matter."

13. Under Section 2(10), inter alia, every document by which

movable property is transferred is `conveyance'. Does the contract

of sale for crude resin entered into between the parties amount to

transfer of movable property? In our opinion, it does. In the contract

 14
under consideration, all essential conditions of transfer of movable

property are satisfied. By this document right in auctioned lot of

crude resin has been created in favour of the writ petitioner.

Correspondingly, the State Government is under obligation to

deliver the quantity of crude resin specified in the document.

Pertinently, clause 1(B) provides that resin sold will remain at

purchaser's risk from the date of acceptance of its bid and seller will

not be responsible for any loss and damage which may occur thereto

from any cause whatsoever. The document read as a whole leaves

no manner of doubt that property in the auctioned lot of crude resin

vested in the purchaser as a result of the subject contract and, thus

amounts to transfer of movable property. Even if the document dated

March 24, 2001 is treated as an agreement to sell, in view of the

acceptance letter dated April 7, 2001 whereby the writ petitioner has

been informed that public auction is accepted in its name and that it

must arrange for lifting of the auctioned resin within 60 days from the

issuance of this letter, it is very clear that the contract of sale dated

March 24, 2001 read with the letter dated April 7, 2001 amounts to

`conveyance' within the meaning of Section 2(10) and is chargeable

to stamp duty under Article 23, Schedule I-B as admittedly there is

 15
no exemption from payment of stamp duty in respect of such

conveyance under Article 62.

14. It is true that the contract document dated March 24, 2001

records the receipt of Rs. 39,000/- as security from the purchaser for

due fulfillment of all the covenants but a clause like this does not

make it a `Security Document' as held by the Division Bench in the

impugned order.

15. The Division Bench travelled beyond scope of review in

reviewing the judgment dated April 13, 2004. In our view, the view

taken in the judgment dated April 13, 2004 did not suffer from any

error apparent on the face of the record justifying its review.

16. The appeals are, accordingly, allowed and the impugned

judgment dated December 27, 2007 is set aside. The parties shall

bear their own costs.

 .................... J.
 (P. Sathasivam)

 .................... J.
 (R.M. Lodha)
NEW DELHI,
OCTOBER 27, 2010.

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