Re conveyance or cancellation of sale deed, required stamp duty
G.Nagarajeshwar Rao
(Querist) 31 August 2011
This query is : Resolved
Dear friends & seniors!
I would like to know that..... Once a person "X" is executed sale deed in favour of "Y". The "X" is intending to cancell the same with the consent of "Y". Then whether the "X" can execute a cancellation deed of the sale deed with the support of "Y" without paying stamp duty on the property? or is there any requirement to pay the stamp duty on the property value as if the cancellation deed is treated as "Reconveyance of sale"? Thank you one and all.
n.k.sarin
(Expert) 31 August 2011
(i) A deed of cancellation of a sale unilaterally executed by the transferor does not create, assign, limit or extinguish any right, title or interest in the property and is of no effect. Such a document does not create any encumbrance in the property already transferred. Hence such a deed of cancellation cannot be accepted for registration. (ii) Once title to the property is vested in the transferee by the sale of the property, it cannot be divested unto the transferor by execution and registration of a deed of cancellation even with the consent of the parties. The proper course would be to re-convey the property by a deed of conveyance by the transferee in favour of the transferor. (iii) Where a transfer is effected by way of sale with the condition that title will pass on payment of consideration, and such intention is clear from the recital in the deed, then such instrument or sale can be cancelled by a deed of cancellation with the consent of both the parties on the ground of non-payment of consideration. The reason is that in such a sale deed, admittedly, the title remained with the transferor. (iv) In other cases, a complete and absolute sale can be cancelled at the instance of the transferor only by taking recourse to the Civil Court by obtaining a decree of cancellation of sale deed on the ground inter alia of fraud or any other valid reasons.
M/s. Y-not legal services
(Expert) 31 August 2011
There is no need to stamp duty for cancelation.. If accepted by the vendor mean oral cancellation itself enough. Even though for the safety to both side if its written cancellation mean its will be better. But no need stamp duty.
Advocate Bhartesh goyal
(Expert) 01 September 2011
Mr n.k sarin has replied the query in detail.Nothing required to add.
G.Nagarajeshwar Rao
(Querist) 01 September 2011
Thak you Mr.n.k. Sarin and Bhartesh goyal...and also Mr.Tom. for attending my query..
Mr.n.k. Sarin answered clearly..
Mr.Tom version is not correct.
I am also an advocate... and
My opinion is that, when the sale is made and conveyed through a document, the title is transferred to the purchaser. When they are intending to cancel the sale, the title shall be transferred to the vendor again..
then it will be treated as re-conveyance. therefore in my opinion stamp duty shall be paid on the value of the property. But some sub registrars and registrars in registration office they are registering the cancellation deed without stamp duty it will be loss to the state..
M/s. Y-not legal services
(Expert) 01 September 2011
Thanks for your comment on me.. Now also am saying that, for cancellation there is no need stamp duty.. Also its need not to be registered.. You can challenge with Unregistered cancellation document also.
Raj Kumar Makkad
(Expert) 01 September 2011
I do agree with sarin supported with the positive advice of G. Nageshwar Rao.
R.Ramachandran
(Expert) 01 September 2011
I completely agree with the views of Mr. Sarin. He has explained the matter in a very cogent and succinct manner.
girish shringi
(Expert) 01 September 2011
I do agree with Mr. Sarin.
However,confusion is whether was it executed and/or registered.
Because Mr.Rao has repeated execution,hence it is not registered,no legal transfer took place in the case,therefore it can be cancelled without any stamp.Just for the safety of both the parties can make cancellation agreement on stamp paper.
On the contrary one can demand the refund of the stamp used in the execution deed from the treasury.
Am I right?
Can contact me : girishshringi@gmail.com
prabhakar singh
(Expert) 01 September 2011
Even if it is registered and a cancellation of it is desired and agreed between parties x and y, x may file a suit for cancellation on voidable grounds of a deed in court and can got it cancelled by a consent decree without paying any fresh duty of sale.
And in case it was only executed just follow as advised by Mr.Girish Shringi or tear it off.
girish shringi
(Expert) 01 September 2011
I do agree with Mr. Sarin.
However,confusion is whether was it executed and/or registered.
Because Mr.Rao has repeated execution,hence it is not registered,no legal transfer took place in the case,therefore it can be cancelled without any stamp.Just for the safety of both the parties can make cancellation agreement on stamp paper.
On the contrary one can demand the refund of the stamp used in the execution deed from the treasury.
Am I right?
Can contact me : girishshringi@gmail.com
Refer Transfer of Property Act,Registration Act.
