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CS Professional · Drafting, Pleadings and Appearances · Laws relating to Drafting and Conveyancing

Kiran Realty and Deshmukh execute a sale using a conveyance and a separate confirmation deed. Their advocate says the parties may choose which one is principal. Which statement correctly reflects the central Act?

The parties may decide for themselves which instrument is the principal one, but the duty on it must be the highest duty chargeable on any of the instruments used. Their freedom of choice therefore does not allow them to reduce the stamp duty payable.

  1. AThe parties cannot choose; the Collector always decides which instrument is principal
  2. BThe parties may determine which instrument is principal, subject to the duty being the highest chargeable on any of the instrumentsCorrect
  3. CThe parties may choose freely and pay the lowest duty among the instruments on it
  4. DThe principal instrument is always the one with the later date

Explanation

Section 4(2) lets the parties determine which instrument is principal. The proviso requires that the duty on that instrument be the highest duty chargeable on any of the instruments employed. The choice is therefore free but cannot reduce the duty payable.

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