In a notable judgment on property and stamp duty disputes, the Delhi High Court has ruled that relinquishment deeds executed by sisters in favour of their brother cannot be treated as gift deeds. The division bench comprising Justice Anil Kshetrapal and Justice Harish Vaidyanathan Shankar delivered the verdict on October 8, 2025, setting aside a 2020 single-judge order that upheld the impounding of five such deeds.
The case, Ramesh Sharma v. Government of NCT of Delhi, revolved around whether relinquishment of rights by co-owners in a family property amounts to a transfer - or simply a release of claim within the family.
Background
The dispute arose from a South Delhi property at Greater Kailash, co-owned by the late Jagdish Prasad Sharma and his wife Shanti Devi. After the father's death in 2003, the property devolved upon the mother, son (Ramesh Sharma), and five daughters.
In 2012, while their mother was still alive, the five sisters executed separate Relinquishment Deeds (RDs) in favour of their brother. When the documents were presented before the Sub-Registrar, Mehrauli, they were impounded for deficient stamp duty - the authorities treating them as Gift Deeds instead of Release Deeds.
Later, the Sub-Divisional Magistrate (SDM) of Kalkaji imposed a stamp duty of ₹6.6 lakh and a ₹1 lakh penalty, forcing the appellant to pay under protest to prevent attachment of the property. His plea before the single bench was dismissed in 2020, leading to this appeal.
Court's Observations
Justice Kshetrapal, writing for the bench, made a sharp distinction between a gift and a relinquishment under the Indian Stamp Act, 1899. The Court examined precedents from the Madras and Andhra Pradesh High Courts, observing that a relinquishment merely extinguishes the executant’s interest and does not amount to alienation or transfer of ownership.
"The relinquishment of rights by co-owners in favour of another co-owner cannot be treated as a gift," the bench noted.
The Court further remarked that the purpose of the Stamp Act is to collect revenue, not to reinterpret family arrangements as commercial transactions. It criticised the single judge's reliance on earlier Madras rulings, clarifying that those observations did not form binding principles in the present factual context.
The judges also highlighted that all five RDs were executed within 14 days, carried identical wording, and were executed purely within a family setting. Hence, there was no indication of an economic transaction.
"On a plain reading of the deeds, it becomes evident that the sisters only released their shares in favour of their brother, acknowledging what was already bequeathed under their father’s will," the Court observed.
Decision
After analysing case law and statutory provisions, the division bench held that the relinquishment deeds did not attract the same stamp duty as gift deeds. The impounding of documents was, therefore, unjustified.
The Court concluded that the single-judge order was erroneous and liable to be set aside. It directed the Collector of Stamps, Hauz Khas, Mehrauli, to release the impounded deeds forthwith.
"Declaring the RDs as Gift Deeds for the purpose of stamp duty without permitting the parties to lead evidence would not be appropriate," the judgment stated.
The bench also hinted that, depending on future evidence, the arrangement might well be treated as a family settlement, further supporting the appellant's case.
With this verdict, the Delhi High Court reaffirmed that family property arrangements cannot be mechanically equated with gifts for stamp duty purposes. The decision is expected to impact several similar disputes where co-owners, especially within families, execute release or relinquishment deeds to settle property titles.
The Court's direction to release the documents marks closure for Ramesh Sharma, ending a long-drawn battle over the nature of his sisters’ deeds.
Case Title: Ramesh Sharma v. Government of NCT of Delhi & Ors.
Case Number: LPA 346/2020
Appellant's Counsel: Mr. D.N. Goburdhun, Senior Advocate with Mr. Archit Chauhan, Mr. Attin Shankar Rastogi, Mr. Shivkant Arora, Mr. Adil Vasudeva, and Ms. Saloni, Advocates
Respondents Counsel: Mr. Abhinav Sharma, Advocate