Whether there can be valid relinquishment deed in favour of only one co-owner?

It is a settled legal proposition that one of the co-owners can relinquish his share in a co-owned property in favour of one or more of the co-owners. The document executed by him in this regard would continue to be a Relinquishment Deed irrespective of whether the relinquishment is in favour of one or all the remaining co-owners of the property. There is no basis in law for the proposition that if the Relinquishment Deed is executed in favour of one of the co-owners, it would be treated as a Gift Deed. The law of stamp duty as applicable in Delhi treats Relinquishment Deed and Gift Deed as separate documents, chargeable with different stamp duties. It is not necessary that in order to qualify as a Relinquishment Deed the document must purport to relinquish the share of the relinquisher in favour of all the remaining co- owners of the property. Even if the relinquishment is in favour of one of the co-owners it would qualify as a Relinquishment Deed.
Delhi High Court

Srichand Badlani vs Govt. Of N.C.T. Of Delhi & Ors. on 18 December, 2013

Author: V. K. Jain

Citation;AIR 2014(NOC)539 Delhi

 Property No.21/9, West Patel Nagar, New Delhi which was initially a leasehold property and stands converted into a freehold property, was owned by Late Smt. Ishwari Bai. On her death, the aforesaid property was mutated in the name of her two sons, namely, petitioner Srichand Badlani, his brother Sh. Sukhu Badlani and his nephew Sh. Ajay Badlani, who was the grandson of Smt. Ishwari Bai, being the son of her pre-deceased son.

The aforesaid property was converted from leasehold to freehold in April, 2000 and the mutation in the name of petitioner-Srichand Badlani, Sh. Sukhu Badlani and Sh. Ajay Badlani had been carried out earlier.

2. Vide relinquishment deed dated 30.06.2009, the legal heirs of Late Sh. Sukhu Badlani relinquished their shares in the aforesaid property in favour of the petitioner. When the aforesaid document was presented for registration, it was treated as a Gift Deed. The document was impounded and forwarded to Director of Stamps.

3. Vide order dated 21.01.2011, the Collector of Stamps took a view that the document executed by the legal heirs of Sh. Sukhu Badlani was not a Relinquishment Deed but a Gift Deed and, therefore, the stamp duty payable on a Gift Deed was required to be paid on the said document.

Being aggrieved from the order passed by the Collector of Stamps the petitioner preferred an appeal before the Chief Revenue Controller Authority which came to be dismissed vide order dated 25.10.2011. Being aggrieved, the petitioner is before this Court by way of this writ petition.

4. It is not in dispute that on the death of Smt. Ishwari Bai the property in question was mutated in the name of petitioner, his brother Late Sh. Sukhu Badlani and his nephew- Sh. Ajay Badlani. It is also not in dispute that Sh. Sukhu Badlani has since expired and his share in the aforesaid property devolved upon his widow and children, who executed the Relinquishment Deed in favour of the petitioner. The contention of the learned Standing Counsel for the Government of NCT is that had the legal heirs of Late Sh. Sukhu Badlani relinquished their shares in the property in question in favour of both the remaining co-owners, the petitioner and Sh. Ajay Badlani, only then the document in question could have been treated as Relinquishment Deed. In other words, the contention is that in order to qualify as a Relinquishment Deed, thedocument must purport to relinquish share of the relinquishor in favour of all the other co-owners of the property and, if the relinquishment is in favour of only one of the two co-owners, it has to be treated as a Gift Deed, the property having been inherited from a common ancestor.

5. It is a settled legal proposition that one of the co-owners can relinquish his share in a co-owned property in favour of one or more of the co-owners. The document executed by him in this regard would continue to be a Relinquishment Deed irrespective of whether the relinquishment is in favour of one or all the remaining co-owners of the property. There is no basis in law for the proposition that if the Relinquishment Deed is executed in favour of one of the co-owners, it would be treated as a Gift Deed. The law of stamp duty as applicable in Delhi treats Relinquishment Deed and Gift Deed as separate documents, chargeable with different stamp duties. It is not necessary that in order to qualify as a Relinquishment Deed the document must purport to relinquish the share of the relinquisher in favour of all the remaining co- owners of the property. Even if the relinquishment is in favour of one of the co-owners it would qualify as a Relinquishment Deed.

6. The learned Standing Counsel submits that the relinquishers are not blood relations of the relinquishee and, therefore, the document would amount to a Gift Deed. The contention is wholly mis-conceived in law. It is immaterial as to what the relationship between the co- owners of the property. So long as relinquishment is in favour of one of the co-owners, the relationship between the relinquisher and the relinquishee is wholly immaterial and of no consequence at all. The law permits one of the co-owners even if they are not related to each other to relinquish his share in favour of other co-owner(s).

7. For the reasons stated above, impugned order dated 25.10.2011 is quashed and the respondent is directed to treat the document in question as a Relinquishment Deed. It is however made clear that the aforesaid order does not come in the way of the concerned Income Tax Officer/Gift Tax Officer recovering the tax, if payable, on account of the relinquishment in favour of the petitioner.

V.K. JAIN, J DECEMBER 18, 2013 rb

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