Stamp-duty funds rendered unnecessary must be distributed among parties according to their recognised shares.

The suit, instituted in 1959 for partition of the Bagree family estate, resulted in a preliminary decree in 1963 declaring the shares of Sugan Chand Bagree and his four sons.

Following subsequent deaths, the legal heirs were brought on record and the cause title was amended.

The Receiver had been directed to retain Rs.9,00,000 towards stamp duty for proposed conveyances in favour of Gopal Das Bagree, which amount was enhanced to Rs.12,00,000 in appeal.

The proposed conveyances concerned premises at 14/2, Old China Bazar Street, Kolkata, and a residential property at Holding No.277, Bikaner.

In respect of the Bikaner property, a registered deed of sale dated 23 June 2006 was traced, showing its purported transfer to Manoj Kumar Kothari.

Consequently, the proposed conveyances could no longer be implemented.

A Joint Affidavit recorded that Rs.21,95,071 was lying in fixed deposit from the stamp-duty retention and Rs.5,20,604 was lying in fixed deposit from the sale proceeds of movable assets and accretions thereto.

Whether the sum retained by the Receiver towards stamp duty could continue to remain earmarked when the proposed conveyances had become incapable of implementation.

Whether the amounts held by the Receiver, comprising the stamp-duty retention and the proceeds and accretions from sale of movable assets, should be distributed among the persons entitled according to the share chart derived from the preliminary decree and subsequent orders.

What directions should govern the encashment of the fixed deposits and distribution of the amounts, including where an entitled party has died before disbursement.

The Court applied the procedural and equitable principle that money retained by a court-appointed Receiver for a specific purpose must cease to be earmarked when that purpose has become incapable of fulfilment, and may thereafter be treated as part of the estate administered in the proceedings.

Distribution was to be made in accordance with the shares recognised under the preliminary decree, subsequent orders bringing legal heirs on record, and the accepted share chart.

The Court further applied the principle that a Receiver must preserve and properly account for estate assets, obtain necessary banking documentation, avoid premature encashment causing financial loss, and report the computation and disbursement to the Court.

The Court found that the Kolkata property could no longer be conveyed in favour of Gopal Das Bagree following the final outcome of the related litigation, while the Bikaner property had already been purportedly transferred under a registered sale deed.

Since the factual basis for retaining Rs.12,00,000 towards stamp duty had therefore disappeared, continued retention for that purpose was unjustified.

The Court accepted the Joint Affidavit showing the amounts presently held by the Receiver and noted the parties’ consent to distribution according to the share chart.

It accordingly treated the aggregate sum of Rs.27,15,675, together with accrued interest, as distributable estate funds, subject to compliance with the recognised shares and procedural safeguards concerning fixed deposits, accounting, and deceased parties.

The Court directed the Receiver to release and distribute Rs.27,15,675, together with interest accrued thereon, among the entitled parties according to the share chart in Annexure I to G.A./I.A. No.46 of 2019.

If any beneficiary had died during the distribution process, the Receiver was directed to inform the Court and not disburse the amount to the legal heirs without further orders.

The Receiver was required to obtain the necessary banking documentation, avoid premature encashment of the fixed deposits, maintain a statement of each entitlement and disbursement, and place it before the Court after completion.

The Rs.12,00,000 previously retained for stamp duty was ordered to cease being earmarked for that purpose.