Brother A executed in favour of brother B a gift of all his property. By another deed, brother B made provision for the living expenses of brother A and hypothecating in favour of brother A, a part of the property includ

Provisions of the Indian Stamp Act, 1899 (the Act) regarding Instruments Relating to Same Transaction: Section 4 of the Indian Stamp Act, 1899, deals with instruments that relate to the same transaction. It provides for the stamping of instruments where several instruments are employed for completing a single transaction, such as a sale, mortgage, or settlement. Section 4 states: Where, in the case of any sale, mortgage or settlement, several instruments are employed for completing the transaction, the principal instrument only shall be chargeable with the duty prescribed for the conveyance, mortgage or settlement, and each of the other instruments shall be chargeable with a duty of one rupee (instead of the duty, if any, prescribed for the other instruments). Proviso to Section 4: Provided that the duty chargeable on the instrument so determined shall be the highest duty which would be chargeable in respect of any of the said instruments employed. This section aims to prevent the evasion of stamp duty by splitting a single transaction into multiple documents. If multiple documents are part of the same transaction, only the principal instrument (which carries the highest duty) is charged the full ad valorem duty, while the other instruments are charged a nominal duty of ₹1. In the given situation: Brother A executed a gift deed of all his property in favour of brother B. By another deed, brother B made provision for A's living expenses and hypothecated a part of the gifted property to A to secure these payments. These two documents, though separate, are intrinsically linked and form part of a single, composite transaction. The second deed (provision for living expenses and hypothecation) is a direct consequence and a condition related to the first deed (gift of property). They are not independent transactions but rather components of a larger arrangement for the transfer of property and the subsequent maintenance of the donor. Reference to Case Law: In a similar situation, as decided in cases like Maharaj Someshar Dutt, ILR 37 All 264 , where multiple documents are executed to complete a single settlement or arrangement, they are treated as part of the same transaction for stamp duty purposes. Conclusion: In view of the above provisions, it can be said that the two documents (gift deed and the deed for living expenses/hypothecation) are part of the same transaction, constituting a settlement. Therefore, Section 4 of the Indian Stamp Act, 1899, will apply. The instrument attracting the highest stamp duty (likely the gift deed) would be considered the principal instrument and charged accordingly, while the other instrument would attract a nominal duty of ₹1.