MEMBER, BOARD OF REVENUE V. ARTHUR PAUL BENTHALL (1955) 2 SCR 842 : AIR 1956 SC 35
FACT
The respondent held various positions in companies, including Managing Director of Messrs Bird and Co. Ltd., and Messrs F. W. Heilgers and Co. Ltd., which acted as Managing Agents for several companies under the Indian Companies Act.
Additionally, the respondent served as a director in multiple other companies.
At times, the respondent also acted as a liquidator for certain companies, as well as an executor or administrator for estates of deceased individuals, and as a trustee for various estates.
On July 4, 1949, the respondent applied to the Collector of Calcutta under Section 31 of the Stamp Act for the adjudication of stamp duty payable on a power of attorney, referred to as Exhibit A.
Exhibit A empowered Messrs Douglas Chisholm Fairbairn and John James Brims Sutherland, jointly and severally, to act on behalf of the respondent in his individual capacity and in various other capacities, including as executor, administrator, trustee, managing agent, liquidator, and any other capacities.
The Collector referred the matter under Section 56(2) of the Act to the Chief Controlling Revenue Authority, who subsequently referred it under Section 57 to the High Court of Calcutta.
The Chief Justice, along with Das, J., and S. R. Das Gupta, J., constituted the bench for hearing the reference.
The disagreement centered on whether the various capacities mentioned in the power of attorney constituted distinct matters under Section 5 of the Indian Stamp Act. The Chief Justice and Das, J. argued that they didn't, while S. R. Das Gupta, J. contended they did. Ultimately, majority decided in favour of respondent.
Hence, the present appeal before the court.
ISSUE
The issue was whether the power of attorney, executed for various capacities by the respondent, constituted distinct matters under Section 5 of the Indian Stamp Act.
RULE
Section 5 of the Stamp Act stipulates that an instrument covering several distinct matters is chargeable with the aggregate duty applicable to separate instruments for each matter.
The term "distinct matters" in Section 5 is not interchangeable with "descriptions" in Section 6. It signifies different transactions or functions, not just different categories.
HELD
T.L. VENKATARAMA AYYAR, J. (Majority) -
The court rejected the contention that "distinct matters" referred solely to different categories within the Schedule.
It emphasized that transactions could be of the same description but still be distinct matters if separate in nature.
If a number of persons join in executing one instrument, and there is community of interest between them in the subject matter comprised therein, it will be chargeable with a single duty. This was held in Davis v. Williams [104 E.R. 358], Bowen v. Ashley [127 E.R. 467, 469], Goodson v. Forbes [128 E.R. 999 at 1000-1001] and other cases.
Even if an executant holds properties in various capacities, the legal title may not be the sole criterion for determining distinct matters. Trustee, executor, or administrator roles may represent distinct matters
The court held that the power of attorney executed by the respondent, covering various capacities, constituted distinct matters.
Each capacity held by the respondent represented a separate matter, warranting separate stamp duties.
The view taken by the revenue authorities and S. R. Das Gupta; J. was deemed correct.
The appeal was allowed, and the respondent was ordered to bear the costs of both the appellant and the court below.
Justice Bhagwati (Dissenting) -
Disagrees with the argument that executing the instrument in different capacities constitutes distinct matters.
The transaction involves the donor constituting the donees as attorneys to act for him in various capacities, but it remains a single transaction. Different capacities of the donor do not make him different individuals; he remains the same individual dealing with various affairs in different capacities.
Given the nature of a general power of attorney, all acts the donor can perform, whether in his individual capacity or as a representative, are comprised within the instrument. These acts are not distinct matters to be dealt with separately under Section 5.
Justice Bhagwati supports the conclusion reached by the majority judges in the High Court of Judicature at Calcutta.
BY THE COURT
In accordance with the opinion of the majority the Appeal is allowed with costs here and in the Court below.