' SYED JAMSHED ALI, J.--- This regular first appeal calls in question the judgment and decree, dated 16-11-1994 whereby the suit filed by respondent No,1 for recovery of an amount of Rs,26,52,000 has beers decreed.
2. According to the case set up in the plaint, the plaintiff-respondent No,1, purchased Multan Cotton Industries owned by Colony Textile Mills Ltd. For a total consideration of Rs,5.40,00,000, which included Rs,101 as lease money (since the factory in question falls in the industrial estate and is owned by Industries Department of the Government of the Punjab) Rs,4,07,99,899 as cost of the machinery and Rs,1,32,00,000 as the cost of the building. The sale-deed was drawn on a stamp paper of the value of Rs,7,26,055, covering the cost of the building only. On presentation before the Sub-Registrar, an objection was raised that it was under-stamped and an additional amount of Rs,22,44,000 as stamp duty and Rs,4,08,000 as registration fee, total amounting to Rs,26,52,000 was demanded by registration authorities. According to the averments of the plaint, the respondent made up the deficiency in the stamp duty and also paid the registration fee under protest because they had to fulfil their commitments towards the banks. The sale-deed was then registered on 30- 6-1992.
3. The plaintiff filed suit for recovery of Rs,26,52,000, which, according to him, had been wrongly charged on the aforesaid sale-deed. The case of the plaintiff was that machinery was not immovable property and, therefore, stamp duty and registration fee was required to be paid only on the cost of the building.
4. The suit was contested. The case of the appellant was that the stamp duty and registration fee had correctly been charged. On the pleadings of the parties, following issues were framed:-- Issues:
(1) Whether the defendants charged a sum of Rs,26,52,000 illegally and excessively from the plaintiff? OPP.
(2) If issue above is proved in affirmative, whether the plaintiff is entitled to recover the suit amount from the defendant if so to, what extent? OPP.
(3) Relief.
5. Relying on the definition of the "immovable property" as given in section 2(6) of the Registration Act and placing reliance on Meghraj and others v, Krishna Chandra Bhattacharji and others AIR 1924 All, 365, Khan Chand Creditor v. Nur Muhammad and others AIR 1936. Lah. 242, the learned trial Court reached the conclusion that the said amount of Rs,26,52,000 had illegally been charged by the appellant and, accordingly, the suit was decreed on 16-11-1994.
6. Placing reliance on the definition of "immovable property" as given In section 2(6) of the Registration Act, learned counsel for the appellant submits that machinery when not dealt with separately is immovable property and, therefore, liable to be stamped under section 3 of the Stamp Act read with Article 23(b) of Schedule I to the said Act. In the alternative, he submits that "conveyance" as defined in subsection (10) of section 2 of the Stamp Act includes every instrument by which property whether movable or immovable is transferred and according to Article 23(c) of the First Schedule (as substituted for Province of Punjab), the instrument was liable to ad valoram stamp duty. He next contended that the stamp duty having been paid, the suit filed by the respondent was not maintainable. In support of his submissions he placed reliance on Muhammad Bashir v. Haji Muhammad Siddique and 5 others 1997 CLC 466, Sh. Allah Rakha (deceased) through Legal Heirs v. U.P. Church and others 1993 M LD 2126, Muhammad Aslam v. Sub-Registrar and others 1995 CLC 674, Province of Punjab through District Collector, Vehari v. Rana son of Sardar 1989 M LD 1009, Musai Kurmi v. Sub Karan Kurmi and others AIR 1914 All 176(2), Kuppanna Chetty Ambati Ramayya Cheeti & Co. v. Collector of Anuntapui and others AIR 1965 Andh. Pra. 457, Zafar v. Mrs. Azra Malik PLD 1991 Kar. 377, Muhammad Din v. Muhammad Sadiq and 2 others 1990 M LD 2104, Ran Ranbijaya Prasad Singh v. Chamaru Prasad and others AIR 1951 Pat.
625.
7. On the other hand the learned counsel for the respondent has supported the impugned judgment and decree. According to him, the machinery did not constitute immovable property and, therefore, since compulsory registration was not required to convey the machinery, it was not liable to stamp duty and registration fee. According to him the instrument was not chargable to stamp duty, either under Article 23(b) or 23(c) of the First Schedule. In support of his submission he placed reliance on Khan Chand Creditor v. Nur Muhammad and others AIR 1936 Lah. 242 and Lukshan Jainudyong Mandir Ltd. v. Kalroram and others AIR 1965 Raj.
15.
8. We have considered the submissions made by the learned counsel. The relevant provisions of the Stamp Act and the Registration Act are reproduced hereunder:-- ' Section 2(6) of the Registration Act--- " 'Immovable property' includes land, buildings benefits to arise out of land and things attached to the earth, or permanently fastened to anything attached to earth, hereditary allowances, rights to ways, lights, ferries and fisheries but does not include--
(a) standing timber, growing crops or grass immediate severance thereof is intended or not;
(b) fruit upon and juice in trees whether in existence or to grow in future; and
(c) machinery embedded in or attached to the earth, when dealt with apart from the land; ' Section 3 of the Stamp Act--- "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) every instrument mentioned in that Schedule which, not having been previously executed by any person, is executed in (Pakistan) on or after the first day of July, 1899;
(b) every bill of exchange (payable otherwise than on demand) or promissory note drawn or made out of (Pakistan) on or after that day and accepted or paid, or presented for acceptance or payment or endorsed, transferred or otherwise negotiated, in (Pakistan); and
(c) every instrument (other than a bill of exchange of promissory note) mentioned in that Schedule, which, .Not having been previously executed by any person, is executed out of (Pakistan) on or after that day, relates to any property situate, or to any matter or thing done or to be done, in (Pakistan) and is received in Pakistan, ' Provided that no duty shall be chargeable in respect of
(1) any instrument executed by, or on behalf of, or in favour of, the Government in cases where, but for this exemption, the Government would be liable to pay the duty chargeable in respect of such instrument;
(2) any instrument for the sale, transfer or other disposition either absolutely or by way of mortgage or otherwise, of any ship or vessel or any part, interest, share or property of or in any ship or vessel registered under the Merchant Shipping Act, 1894, or under Act XIX of 1938, or the Registration of the Ships Act, 1841, as amended by subsequent Acts.
' Article 23 of the First Schedule to the Stamp Act.
"Conveyance as defined by section 2(10) not being a transfer charged or exempted under No,62---
(a) In case of agricultural land Rupees five for every rupees one hundred or part thereof of the value of the land.
(b) In case of immovable property in an urban area:Rupees eight and a half for every rupees one hundred or part thereof if the total value of the property does not exceed rupees three hundred thousand and rupees ten for every rupees one hundred or part thereof if the total value of the property exceeds that amount.
(c) In any other case: Rupees six for every rupees one hundred or part thereof of the value of the property.
9. Apart from the Registration Act immovable property has been defined in section 3 of the Transfer of Property Act as follows:-- " 'Immovable property' does not include standing timber, growing crops or grass."
10. The definition of immovable property as given in section 3(25) of the General Clauses Act No,X of 1897 and section 2(31) of the West Pakistan General Clauses Act, 1956 is as under:-- " ' Immovable property' shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth."
11. The question whether machinery could be said to be immovable property for the purpose of Registration Act, there appears to be a conflict of opinion in various High Courts. In case of Khan Chand (supra); a flour mill was held not to be an immovable property within the meaning of section 2(6) of the Registration Act. In the case of Lukshan Jainudyong Mandir (supra), Printing Press was held not to be immovable property. However, in Official Liquidator, v. Sri Krishna Deo and others AIR 1959 All. 246, it was held that machinery fixed to their base with bolts and nuts although easily removable are not movable property when they had been set up with the definite object of running an oil mill and not with the intention of being removed after temporary use. In the case of Musai Kurmi (supra); a Kohlu (Iron Sugarcane Press) fastened to the ground was held to be immovable property for the purpose of section 3 of the Transfer of Property Act. In the case of Kupanna Chetty (supra); a Boiler Engine and Decorticator which are fixed and embedded in the Factory building were held to be immovable property.
12. The undisputed fact is that Messrs Colony Textile Mills Ltd. The vendor, were heavily indebted to Messrs Pakistan Industrial Credit and Investment Corporation (PICIC) and other commercial banks and it was at the desire of PICIC that the Multan Cotton Industry was sold in favour of the respondent. This is borne out from the recitals of the sale-deed (Exh.P.1). It also shows that Multan Cotton Industry, alongwith machinery, was transferred to the respondent as a single unit. The learned trial Court while taking the view that the machinery was not immovable property appears to have been pursuaded by the report of the Local Commissioner that when he inspected the premises (on 12-6-1994), he found that out of six halls, dismentaled machinery was lying only in the one hall while other five halls had no machinery. The inference from these facts is that on the date the Local Commissioner inspected the factory (12-6-1994) machinery from five out of six halls had already been removed.
13. The definition of "immovable property" as given in the Transfer of Property Act and the General Clauses Act does not embody the Explanation as given in clause (C) of subsection (6) of section 2 of the Registration Act (No,XVI) of 1908. There have been cases under section 3 of the Transfer of Property Act and test which had been applied to determine the status of the property (as movable or immovable) was the mode and object of annexation. To find out the object of annexation, the test has been whether annexation was with the object of permanent beneficial enjoyment of the land and building. It appears that while enacting Explanation "C" to subsection (6) of section 2 of the Registration Act, the Legislature intended to remove doubts as according to the definition of immovable property as given in the Registration Act, machinery embedded in or attached to the earth when dealt with apart from the land (emphasis applied) is not immovable property. Plain meaning of this clause, in our view, is that machinery which is separately dealt with will not be immovable property. If, therefore, one consolidated conveyance evinces transfer of land, building and machinery it cannot be said the machinery is being dealt with apart from the land so as to attract the provisions of section 2(6) of the Registration Act, even if the cost of the machinery is separately identified in the conveyance deed. In this case, the entire property including lease hold rights was sold through one conveyance as a single unit.
14. Even if, test under section 3 of the Transfer of Property Act was applied, the object of annexation in this case clearly was permanent beneficial enjoyment of the land and building. The consideration which appears to have weighed with the learned trial Court that on the date of inspection by the Local Commissioner there was no machinery in the five halls out of the six and in one hall it was lying dismantled, was not relevant because a vendee may like to deal with the property purchased by him in the manner best suited to him. There is no evidence on record that on the date of conveyance the machinery had already been dismanetled and was intended to be separately dealt with. Except the cases of Musai Kurmi and Kuppanna Chetty (supra), the other judgments relied upon by the learned counsel for the appellant are not relevant to the controversy.
In the case of Khan Chand (supra) explanation "C" of section 2(6) of the Registration Act was not considered.
15. In this case, the vendor i,e, Colony Textile Mills Limited had constructed building and installed machinery on the land which was on lease for 99 years. We are not pursuaded to believe that the construction of the building and installation of machinery was meant for temporary use. Needless to state that it is an industrial unit situated in industrial state owned by Government of Punjab. We are accordingly, of the view that the instrument in dispute was liable to be stamped under clause
(b) of Article 23 of Schedule Ito the Stamp Act.
16. We are, however, not persuaded to accept the contention of the learned counsel for the appellant that after having paid the stamp duty, the suit was not maintainable. It has come on record through evidence of D.W.1, the Sub-Registrar, Multan City, that the respondent had paid the deficit stamp duty under protest. Therefore, suit filed by the respondent was maintainable.
18. Other submission of the learned counsel for the appellant is that apart from the conveyance of agricultural land, liable to be stamped under clause (a) of Article 23 of the Schedule I and conveyance of immovable property in urban area liable to be stamped under clause (b) of the said Article, any other conveyance of immovable or movable property is liable to be stamped under clause (c) of the said Article. We are not expressing final opinion and reserve it for some other more appropriate occasions on account of the conclusion reached by us. However, tentatively we are of the view that clause (c) of Article 23 of Schedule I to the Stamp Act, viewed in the overall context of the said Article, refers to immovable property not covered under clauses (a) and (b) of the said Article.
19. This appeal is, accordingly, allowed. The impugned judgment and decree of the learned trial Court is set aside. The suit brought by the respondent is dismissed. However, in circumstances, there will be no order as to costs.