Andhra Pradesh High Court - Amravati
Bhanu Real Estates vs Penkey Venkata Satyanarayana Murthy on 17 December, 2020
Author: M.Satyanarayana Murthy
Bench: M.Satyanarayana Murthy
HON'BLE SRI JUSTICE M.SATYANARAYANA MURTHY
CIVIL REVISION PETITION No. 1999 OF 2014
ORDER:
This Civil Revision Petition is filed under Article 227 of the Constitution of India questioning the Order dated 18.03.2014 passed in IA No.146 of 2014 in OS No.486 of 2007 by the Court of the III Additional Senior Civil Judge, Kakinada, East Godavari District, referring the document - Khararnama dated 07.10.2001, to the District Registrar, for the purpose of levying stamp duty under the provisions of Indian Indian Stamp Act (for short 'the Act') and for collection of penalty.
The revision petitioner is the plaintiff and the respondents are the defendants in OS No.486 of 2007.
In the above suit, the plaintiff filed IA No.146 of 2014 with a request to forward the document No.4-unregistered agreement (Khararunama) dated 07.10.2001 between the revision petitioner and the 1st respondent. The 2nd defendant raised certain objections at the time of marking the document i.e., on the ground that it requires stamp duty and penalty and it is an insufficiently stamped document and unless stamp duty and penalty is paid, the same cannot be received in evidence. The trial Court, after hearing the argument of both the counsel, passed orders on 20.01.2010 and sent Document No.4- Khararnama to the Office and the Office inspected the same and prepared a note that the proper stamp duty on the said document payable is Rs.12,500/- and if ten times penalty is added, it comes to Rs.1,25,000/- as per the Article 6(B) of Schedule 1(A) of the Indian Stamp Act. Accordingly, the Court 2 directed the petitioner to pay the said amount for the purpose of marking the said document as exhibit in evidence.
It is further contended that the Court failed to follow the procedure as laid down in M/s.Bangalore Ice Factory Vs. B.S. Venkatram1, and the guidelines therein, the trial Court should have directed the petitioner if it finds that the instrument is insufficiently stamped as to whether he would remit the deficient portion of the stamp duty together with a penalty amounting to ten times the deficiency. If the appellant agreed 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 adjudicating on the question of deficiency of the stamp duty as per the provisions under Section 40(1)(b) of the Act. It is further stated that only if the appellant is unwilling to remit the amount the court is to forward the original of the document itself to the Collector for the purpose of adjudicating on the question of deficiency of the 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.
It is submitted that the petitioner is working as a teacher in A.P.Residential Schools and he is not in a position to pay such huge amount and that therefore, requested the Court to refer the document for levying penalty as per the procedure contemplated under the Act.
1 . AIR 2001 SC 1321 3 The respondent filed counter denying material allegations made in the affidavit and submits that when the Court levied stamp duty and penalty, it can be challenged before the appropriate authority as per the provisions of the Code of Civil Procedure. The petitioner cannot seek remedy by filing another application to refer the document to the Collector for assessing the stamp duty and penalty payable thereon. Therefore, the petition is liable to pay the stamp duty and penalty as levied by the trial court.
The trial court after hearing the arguments, passed the impugned order referring the document to the District Registrar for the purpose of levying stamp duty and penalty on the Document No.4-Khararnama under Section 40 of the Act. The same is now under challenge before this Court on various grounds.
During the course of hearing, learned counsel for the petitioner re-iterated the contentions. The main ground urged is that once the stamp duty and penalty is levied by the Court exercising its power under Section 33 of the Act, the petitioner cannot turn around and file another application under Section 40 of the Indian Stamp Act in the absence of any revision against the order initially passed by the Court and without paying the stamp duty and penalty as assessed by the office of the Court below, filed this petition to avoid payment of stamp duty and penalty. 4
Learned counsel for the respondents supported the order in the revision petition in all respects.
Admittedly, the document No.4-Khararnama dated 07.10.2001 was impounded by assessing the stamp duty and penalty by the office of the Court below and an order was passed directing the petitioner to pay stamp duty of Rs.12,500/- and penalty of Rs.1,25,000/- calculating ten times of the deficit stamp duty by order dated 20.01.2010 and the same has become final. But the petitioner could not pay the stamp duty and penalty levied by the trial court but filed application under Section 40 of the Act to refer the document to the Collector for levying the stamp duty and penalty payable on the document.
Section 40 of the Indian Stamp Act deals with the Collector's power to insufficiently stamped instruments impounded:-
When the Collector impounds any instrument under Section 33, or receives any instrument sent to him under Section 38, Sub-section (2) not being an instrument chargeable with a duty not of twenty paise only or a mortgage of a crop (Article 36(a) of Schedule I-A) chargeable under Clause (aa) or (bb) of Section 3 with a duty of forty paise or a bill of exchange or promissory note. Merely because the stamp duty and penalty was assessed by the court below, it will not preclude the petitioner to file an appropriate application under Section 40 of the Act, though no revision is preferred against the said order. When an application is filed to refer the document under Section 40 of the Act, the Court has no option except to refer the document to the District Collector under Section 40 of the Act for levying stamp duty and penalty. Therefore, the order under challenge is in accordance with law. 5
The other contention of the petitioner is that when the order passed by the court below is not challenged, the petitioner is not entitled to refer the document. It is an admitted fact that the order was passed on 20.01.2010 directing to pay stamp duty of Rs.12,500/- and penalty of Rs.1,25,000/- calculating ten times of the deficit stamp duty. Admittedly, stamp duty was not paid due to incapacity of the respondent as he is working as a teacher in residential school. Failure to prefer any revision against such order would not debar the respondent herein to file an application under Section 40 of the Act. According to the principles laid down in the decision cited supra (1), if the appellant is not willing to remit the amount, the Court has to forward the original document for the purpose of adjudicating on the question of deficit stamp duty and penalty. The collector shall take into account all the factors concerned in his capacity under Stamp Act as to what is the appropriate amount of penalty to be imposed.
Here, the petitioner is unwilling to pay the stamp duty and penalty assessed by the trial court and in such case, the option left open to the Court is to refer the original document to the Collector for the purpose of adjudicating upon the question of deficit stamp duty and penalty thereon. Therefore, the trial court by applying the ratio laid down in the decision supra (1) has rightly exercised the power conferred on it. Hence, I find no error in the order impugned in the revision petition, warranting interference of this Court and consequently, the petition is liable to be dismissed. 6
In the result, the civil revision petition is dismissed. Miscellaneous applications pending if any, shall stand closed.
_____________________________________ JUSTICE M.SATYANARAYANA MURTHY 17.12.2020 Mjl/*