Delhi HC Says Sisters’ Release To Co-Owner Brother Was Not A Gift In One Family Transaction, Sets Aside ₹68.26-Lakh Stamp Demand

In brief

The question

Whether the sisters’ relinquishment deed could be treated as a gift deed because it was executed in favour of the petitioner alone, rather than in favour of all the co-heirs.

The court held

The Court held that the sisters’ relinquishment deed could not be treated as a gift deed merely because they released their shares in favour of the petitioner through a separate instrument and the brother executed his deed later.

It also directed

It allowed the petition, set aside the impugned order, and directed the Sub-Registrar to release the impounded document.

01Facts

After the petitioner’s father died intestate, the petitioner and his three siblings became co-sharers in a property in Greater Kailash, New Delhi.

pp. 1–2 · ¶ 2

The petitioner’s two sisters executed a registered relinquishment deed in his favour on 29 November 2012; his brother executed a separate registered relinquishment deed in his favour on 2 January 2013.

pp. 1–2 · ¶ 2, 8

The Sub-Registrar impounded the sisters’ deed under Section 33 of the Indian Stamp Act, treating it as a gift deed. The Collector imposed stamp duty and penalty on that basis, and the Chief Controlling Revenue Authority upheld the decision. The petitioner’s challenge to the dismissal of his review petition followed.

p. 2, 4 · ¶ 3–5

02Issues

i.Whether the sisters’ relinquishment deed could be treated as a gift deed because it was executed in favour of the petitioner alone, rather than in favour of all the co-heirs.

pp. 2–3 · ¶ 6–7

ii.Whether the sisters’ deed and the brother’s subsequently executed deed should be considered parts of a single transaction releasing the siblings’ interests in favour of the petitioner.

pp. 3–4 · ¶ 8–11

03Law Applied

Under Section 33 of the Indian Stamp Act, an instrument may be impounded where it is not duly stamped; the dispute here concerned the instrument’s proper characterization.

The Court applied the principle that a release or relinquishment deed can feed or enlarge an existing title, but cannot transfer title to a person who had no pre-existing interest in the property.

pp. 4–5 · ¶ 10–11

It relied on the Delhi High Court Division Bench decision in Anita Kumar v. Ajay Kumar Since Deceased through LRs & Ors., FAO(OS) 130/2024, which held that a release in favour of one co-sharer is not necessarily a gift merely because other co-sharers are excluded; the relevant consideration is whether the recipient already has title that the release enlarges.

pp. 4–5 · ¶ 10–11

Provisions in the judgment · 1 · Linked ones open on LawLens

Indian Stamp Act, 1899 Section 33

04Reasoning

The petitioner already held a co-ownership interest in the property following his father’s death. The deeds’ recitals were identical, and the Court considered them together, finding that all siblings had ultimately released their interests in favour of the petitioner.

pp. 3–4 · ¶ 8–9

Because the petitioner had pre-existing title, the sisters’ deed enlarged that title rather than transferring property to a person with no interest. The fact that the sisters executed a separate deed before the brother did not, by itself, convert their deed into a gift; the subsequent deed supported the view that the releases formed part of a single transaction among family members without economic consideration.

pp. 4–5 · ¶ 9–11