Andhra HC (Pre-Telangana)
Malla Satyanarayana vs Lanka Venkata Ramanamma And Ors. on 24 June, 2003
Equivalent citations: AIR2003AP461, 2003(4)ALD891, 2004(1)ALT316
ORDER V. Eswaraiah, J.
1. This Civil Revision Petition is filed challenging the action of the 7th respondent-District Registrar-cum-Collector, Visakhapatnam, in declining to exercise his power to impound a document after collecting the stamp duty and penalty, payable thereon in his discretion, pursuant to the order of the Civil Court and on such refusal to exercise the statutory duty of the District Registrar-cum-Collector for impounding the document after collecting the stamp duty and penalty, the Court levied the penalty of ten times of the stamp duty as compulsory penalty.
2. The petitioner is the plaintiff and respondents 1 to 6 are the defendants and respondent No. 7 is the District Registrar. The suit is filed for specific performance of an agreement of sale, dated 18-11-1988.
3. For the sake of convenience, the parties will be referred to as arrayed in the suit.
4. The plaintiff originally filed O.S. No. 559 of 1991 on the file of III Additional Subordinate Judge, Visakhapatnam, which was re-numbered as O.S.No. 44 of 2000 on the file of Senior Civil Judge, Gajuwaka, against the respondents for specific performance of an agreement of sale, dated 18-11-1988, alleged to have been executed by their late father Venkateswarlu in his favour. The defendants resisted the said suit by filing their written statement inter alia denying the execution of the agreement of sale by their late father.
5. During the examination-in-chief, the plaintiff who was examined as PW-1 sought to mark the said agreement of sale, dated 18-11-1988. Then the Counsel appearing for the defendants took objection with regard to admissibility of the said document in evidence. At that stage, the plaintiff filed I.A.No. 26 of 1998, under Section 40 of the Indian Stamp Act read with Section 151 of the Code of Civil Procedure, to send the said document to the District Registrar-cum-Collector for the purpose of imposing necessary penalty as per the Indian Stamp Act (hereinafter referred as 'the Act'). The lower Court by order, dated 14-8-1998, held that the document in question has to be sent to the District Registrar. Aggrieved by the said order, respondent 1 to 6 filed Civil Revision Petition No. 4264 of 1998 before this Court and the said revision was dismissed holding that the order of the Trial Court cannot be interfered with. In spite of the dismissal of the said revision, the District Registrar-cum-Collector who is vested with powers under Sections 30 and 31 read with Section 38 of the Act, and so he failed to discharge his duties and therefore, the Trial Court in I.A.No. 26 of 1998 directed the office to send the agreement of sale dated 18-11-1988 to the District Registrar-cum-Collector for collection of stamp duty and penalty. The respondents 1 to 6 filed I.A.No. 530 of 1998 requesting the Court below to defer sending of the document as per the said order dated 14-8-1998 made in I.A.No. 20 of 1998, but the said objection, raised by the respondents, was dismissed and accordingly, the Court below made the reference to the District Registrar-cum-Collector sending the document for impounding, but, the District Registrar returned the said document. Thereupon, the petitioner filed an application in I.A.No. 95 of 2000 in O.S.No. 44 of 2000, requesting the Court to refer the document, dated 18-11-1988, under Section-38(2) of the Act to the District Registrar for collecting the stamp duty and penalty as per the provisions of the Act. Accordingly, the Court below by order, dated 7-4-2000, referred the document in question for impounding and for collection of necessary stamp duty and penalty, to the District Registrar, Stamps and Registration and for return of the document on complying the statutory requirements. The District Registrar was directed to complete the enquiry and collect the stamp duty within 15 days from the date of the said order. The 7th respondent did not comply with the said order of the Trial Court, but on the other hand addressed a letter bearing No. 974/Gl/2000, dated 16-4-2000, to the Senior Civil Judge, Gajuwaka, Visakhapatnam, with reference to the order passed by the Trial Court for impounding the document and stated that deficit stamp duty of Rs. 22,488/- and penalty as decided by the Court thereunder may be collected from the party and the same may be remitted to the relevant account of the Government and the office may be provided with the details of payment and stamp papers in original. The stamp papers would then be resubmitted to the Court after duly impounded. On the said letter, refusing to collect the stamp duty and penally by the District Registrar, the Court below passed an order dated 28-4-2000 stating that the District Registrar-cum-Collector, Stamps and Registration, strangely refused to exercise his statutory duty in impounding the document and collecting the stamp duty and penalty and therefore, the Court became helpless in compelling the plaintiff to pay the penalty of Rs. 2,47,368/-, which is ten times more than the actual stamp duty for impounding the document by the Court. Questioning the said order, dated 28-11-2000, the present Civil Revision Petition is filed.
6. Admittedly, the plaintiff filed a petition before the Court below, under Section 38(2) of the Act read with Section 151 of the Code of Civil Procedure, requesting the Court to send the instrument i.e., the agreement of sale dated 18-11-1998 to the District Registrar, for collecting the stamp duty and penalty as per the provisions of the Act. The District Registrar has determined the stamp duty that is payable as Rs. 22,488/- and stated that the Court may collect the same and penalty and send the document back for endorsement. If the Court collects the stamp duty and penalty, the Court has no option except to impose penalty of ten times of the stamp duty. If the Court collects the stamp duty and penalty, there is no need for sending the document for endorsement, but as the party requested to refer the document for impounding to the District Registrar under Section 38(2) of the Act and an order was passed for sending the document for impounding to the District Registrar to send the document after collecting necessary stamp duty and penalty, but the District Registrar refused to exercise his statutory duty, for determining the quantum of penalty in his discretion and referred the matter back to the Court to collect the stamp duty and penalty. If the penalty is to be collected by the Court, there is no discretion vested with the Court for collecting lesser penalty than ten times of the stamp duty. If the penalty is to be imposed and collected by the District Registrar, discretion is vested in him to levy the quantum of penalty determining on various circumstances.
7. The question that arises for consideration in this case is as to whether the District Registrar-cum-Collector can refuse to exercise his power under Section 40 of the Act in levying the penalty, on a reference made by the Court for impounding the document, after collecting necessary stamp duty and penalty.
8. There is no dispute with regard to the quantum of deficit stamp duty payable on the said document under Schedule-1A, Article 4-A of the Act, i.e., Rs. 22,488/-. Chapter-Ill of the Act, deals with adjudication as to stamps. Under Section 31 of the Act, it is stated that when any instrument, whether executed or not and whether previously stamped or not, is brought to the notice of the District Registrar and the District Collector shall make an inquiry with regard to the stamp duty payable on the instrument and thereupon the District Collector shall issue a certificate under Section-32 of the Act with regard to the stamp duty payable thereon.
9. In the instant case, there is no dispute with regard to the stamp duty payable by the plaintiff and the deficit stamp duty payable thereon is Rs. 22,488/-. Admittedly, the instrument was not duly stamped and therefore, the stamp duty was determined. Chapter-IV of the Act deals with the instruments not duly stamped. Therefore, the said instrument was not admissible as it was improperly stamped. Unless the said document is impounded, it cannot be received in evidence. Therefore, the plaintiff filed an application under Section 38(2) of the Act to impound the said document. On an application filed by the plaintiff, the Court shall sent the document to the District Collector for impounding the instrument and on such requisition made under Section 38(2) of the Act, the District Collector shall impound the same after following necessary procedure and if he is of the opinion that such instrument is chargeable with the duty and the said instrument is not duly stamped, he shall require the payment of the proper duty by way of amount required to make up the same together with a penalty not exceeding ten times of the amount of proper duty or of the deficient portion thereof. After impounding the document, he shall issue a certificate, which will be conclusive evidence of fact that the document is duly stamped. When an instrument has been sent to the District Collector under Section 38(2) of the Act, the District Collector shall deal with collection of proper stamp duty and penalty as provided under Section 40 of the Act and return it to the impounding officer. Section 40 of the Act makes it clear that if the District Collector is of the opinion that the instrument is duly stamped, or is npt chargeable with duty, he shall certify the game by an endorsement thereon after collecting the necessary stamp duty and penalty thereon. If the District Collector comes to the conclusion that such instrument is chargeable with duty and is not duly stamped, then he shall require the payment of proper duty and penalty decided by him and after collecting the duty and penalty, he shall certify the same by an endorsement and the instrument shall thereupon be admissible in evidence.
10. In the instant case, the District Collector refused to collect the stamp duty and penalty, but, on the other hand, he requested the Court below to collect the stamp duty and penalty as desired by the Court. Though a statutory duty is cast upon the District Collector to decide the quantum of penalty when a matter is referred by the Court, at request of the party, the impounding authority cannot refuse to exercise its statutory duty in determining the quantum of penalty.
11. In the case of B.V.R.Reddy v. The Adoni Co-operative Central Stores Ltd and another, , while dealing with Sections 38(2) and 40 of the Act, this Court held that if the party fites a document and wants it to be admitted in evidence, then the Court shall collect stamp duty and penalty and then admit the instrument in evidence. But, if the party instead of requiring the document to be admitted in evidence by the Court, merely wants the Court to send it to the District Collector, to be dealt with under Section 40 of the Act, the Court have no option but to send it to the District Collector as provided under Section 38(2) of the Act. The Court cannot compel the party to pay the stamp duty and penalty and have it admitted in evidence. It is for the party to have the document admitted in evidence by paying the stamp duty and penalty or leave the Court to take a decision as provided under Section 38(2) of the Act.
12. In the instant case also, the petitioner wanted the document to be admitted in evidence after referring it to the District Collector and therefore, requested the Court to send the document to the District Collector as provided under Section 38(2) of the Act and accordingly, the said document was sent to the District Collector to take a decision under Section 40 of the Act. But, the District Collector failed to exercise his power under Section 40 of the Act and returned the document to the Court below for collecting the necessary penalty as decided by it.
13. In a later judgment in case of Y. Peda Venkayya, v. R.D.O. Gunlur and Anr., , this Court held that once the original document is sent to the District Collector under Section 38(2) of the Act, the District Collector has to follow the procedure prescribed under Section 40 of the Act, and the District Collector shall decide the duty payable for the instrument and also the quantum of penalty leviable thereon. It is further held by this Court that where a document is sent to the District Collector under Section 38(2) of the Act, the District Collector has a final say with regard to the adjudication of payment of proper deficit stamp duty and penalty under Section 40 of the Act. Once the document is sent to the District Collector under Section 38(2) of the Act, the District Collector has to deal with it under Section 40 of the Act and after collecting the necessary deficit stamp duty and penalty, he shall send back the document under Sub-section (3) of Section 40 of the Act, to the Court.
14. The Supreme Court in the case of Chilakuri Gangulappa v. Revenue Divisional Officer, Madanapalli, , held that if the Trial Court finds that the instrument is insufficiently stamped, it should have asked the appellant as to whether he would remit the deficient portion of the stamp duty together with penalty amounting to ten times of the deficiency. If the appellant agrees to remit the said amount, the Court has to proceed with the trial after admitting the document in evidence. In the meanwhile, the Court has to forward a copy of the document to the Collector for the purpose of adjudication on the question of deficiency of stamp duty as provided under Section 40(a)(b) of the Act. If the appellant is unwilling to remit the amount, the Court has to forward the original of the document itself to the Collector for the purpose of adjudication on the question of deficiency of stamp duty. The penalty of ten times indicated therein is the upper limit and the Collector shall take into account all factors concerned in deciding as to what should be the proper amount of penalty to be imposed.
15. This Court in the case of L. Rama Sethamma v. Telugu Solipuram Narasimha, , after referring several decisions of this Court and the Apex Court, held that a duty is cast upon the Court to see as to the admissibility of the document in evidence under the provisions of Section 33 of the Act and at the same time, it is also an obligation on the part of the party who produces the document not duly stamped, for admission in evidence, to pay the stamp duty and penalty and unless and until the party pays the same, such a document cannot be admitted in evidence. In such a situation, if the party requires the Court to refer the document to the Revenue Authorities for final assessment of the stamp duty and penalty, there is no other go to the Court except to forward the same and at this stage, the party cannot be compelled to pay the stamp duty and penalty as imposed by the Court.
16. In the instant case, though the Court below referred the matter to the District Collector for impounding the document after collecting the deficit stamp duty and penalty under Section 38(2) of the Act, the Collector refused to exercise his power vested in him under Section 40 of the Act for deciding the necessary quantum of penalty payable on the deficient payment of the stamp duty, which is illegal and against law. On such refusal by the District Collector in determining the quantum of penalty, the action of the Court in imposing a penalty often times compulsorily payable by the party is also illegal and unsustainable.
17. For the aforesaid reasons, I am of the opinion that the order of the 7th respondent, dated 16-4-2000, and the consequential impugned order of the Court below, dated 28-4-2000, are liable to be set aside.
18. Accordingly, order of the 7th respondent made in his letter bearing No. 974/ G1/2000, dated 16-4-2000, and the consequential impugned order of the Court below, dated 28-4-2000, made in I.A.No. 95 of 2000 in O.S.No. 44 of 2000, are set aside and the Court below is directed to send the original document to the 7th respondent for impounding the same. On such sending of the document, the 7th respondent-District Registrar and District Collector, Visakhapatnam, shall adapt the procedure contemplated under Section 40 of the Act and after collecting the necessary deficit stamp duty and penalty imposed thereon, shall make necessary certification on the document impounding the same, which has been sent to him under Section 38(2) of the Act and shall return the same to the Court below within two months from the date of receipt of a copy of this order.
19. With the above directions, the Civil Revision Petition is allowed. However, there shall be no order as to costs.