Madras High Court
Krishnamoorthy vs Vaithiyalingam Chettiyar on 5 February, 2018
C.R.P.(MD).No.1198 of 2018
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Reserved on : 18.10.2023 Delivered on: 01.12.2023
CORAM:
THE HONOURABLE MR.JUSTICE P.B.BALAJI
C.R.P.(MD)No.1198 of 2018
and
C.M.P.(MD)No.5049 of 2018
Krishnamoorthy ... Petitioner / Plaintiff
Vs.
1.Vaithiyalingam Chettiyar
2.Muthaian
3.Subramanian ... Respondents / Defendants
Prayer:-Civil Revision Petitions filed under Article 227 of the Constitution
of India, against the order made in O.S.No.385 of 1996, on the file of the
District Munsif, Musiri, dated 05.02.2018.
For Petitioner : Mr.R.Singaravelan, Senior Counsel
for Mr.D.Selvanayagam
For Respondents : No appearance for R2 & R3
: R1 Died
ORDER
The plaintiff, in O.S.No.385 of 1996 is the revision petitioner. The plaintiff, aggrieved by the order passed by the District Munsif, Musiri, 1/20 https://www.mhc.tn.gov.in/judis C.R.P.(MD).No.1198 of 2018 directing the stamping authority to revisit its earlier report and levy penalty under Section 35 of the Indian Stamp Act, has filed the present revision.
2. The case of the plaintiff / revision petitioner is that there was a Family Arrangement dated 31.03.1983 under which the suit property was allotted to the plaintiff / revision petitioner. As the defendants / respondents were interfering with the plaintiff's peaceful possession and enjoyment of the suit property, the plaintiff was constrained to file the suit, seeking the relief of permanent injunction to protect his possession. Pending the suit, the plaintiff sought permission to mark the memorandum of family arrangement dated 31.03.1983. Marking of the said document was objected to by the defendants / respondents on the ground that it was unstamped and unregistered. The trial Court rejected the said document.
3. Aggrieved by the same, the plaintiff filed a revision in C.R.P(MD).No.2062 of 2009, before this Court. On 03.11.2010, this Court disposed of the revision in the manner following:
“19. In this case, the document has been typed on stamp papers of the value of Rs.5/- only. In other words, these are not “duly stamped” in terms of Section 35 of the 2/20 https://www.mhc.tn.gov.in/judis C.R.P.(MD).No.1198 of 2018 Indian Stamp Act. Therefore, as per the decision, in A.C.Lakshmipathi, the documents cannot be looked into for any purpose, though it is a family arrangement recording only a past transaction. However, the proviso (a) to Section 35 provides a gateway. It reads as follows:-
35. Instruments not duly stamped inadmissible in evidence, etc.—No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped:
Provided that—
(a) any such instrument shall be admitted in evidence on payment of the duty with which the same is chargeable, or, in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion;3/20
https://www.mhc.tn.gov.in/judis C.R.P.(MD).No.1198 of 2018 It is up to the petitioner to take advantage of the said proviso. Though the same would not cure the defect of non registration, it would cure the defect of deficit stamp duty. Once this is done, the documents can be looked into at least for collateral purposes, as held in clause (VII) of the summing up portion of the decision of the Division Bench in A.C.Lakshmipathy.
20. Therefore, in the light of what is stated above, the order of the Court below, dismissing the application cannot be assailed. Hence, this Civil Revision Petition is dismissed. However, it will be open to the petitioner to take recourse to the remedy indicated as above. ...”
4. Pursuant to the said order in the revision, the Memorandum of Family Arrangement dated 31.03.1983 was sent to the Special Deputy Collector (Stamps) to ascertain the duty payable on the said Family Arrangement. The Special Deputy Collector (Stamps) ascertained the amount payable as Rs.13,500/-. However, the defendants filed an objection stating that while arriving at the amount, the Special Deputy Collector (Stamps) had not ascertained the correct amount and ought to have imposed 10 times penalty in terms of Section 35 of Stamp Act. 4/20 https://www.mhc.tn.gov.in/judis C.R.P.(MD).No.1198 of 2018
5. In view of the said objections taken by the defendants, the trial Court enquired into the matter and in and by an order dated 05.12.2018, found that the Special Deputy Collector (Stamps) had not imposed any penalty as contemplated under Section 35 and directed the said authority to revisit the calculation and ascertain the correct amount payable on the said instrument.
6. Aggrieved by the said order of the trial Court, the plaintiff has filed the present Civil Revision Petition on the grounds that the trial Court had no jurisdiction to direct the Special Deputy Collector (Stamps) to levy any penalty and that when the Special Deputy Collector (stamps) had already ascertained the amount and indicated the same, it is not open to the trial Court to once again direct the authority to levy penalty and re-fix the amount payable by the petitioner and that once the document had been marked without any objection, the other parties are forbidden to challenge the admissibility.
7. I have heard Mr.R.Singaravelan, learned Senior Counsel for 5/20 https://www.mhc.tn.gov.in/judis C.R.P.(MD).No.1198 of 2018 the revision petitioner. Despite service of notice, none appears for the contesting respondents. I have perused the records placed before me and I have also paid my anxious and careful consideration to the arguments advanced by the learned Senior Counsel for the revision petitioner / plaintiff.
8. It is really unfortunate that a suit for bare injunction filed in the year 1989 is still pending in 2023. The plaintiff in the said suit, bases his claim on an unregistered family arrangement under which the suit property was allotted to him. Though it was the specific case of the plaintiff that the family arrangement did not require registration, since it only recorded an oral transaction, in view of the findings of this Court in C.R.P.(MD)No.2062 of 2009, the said ground is not available to be contended by the revision petitioner. However, this Court in the said C.R.P(MD)No.2062 of 2009 had given an option to take advantage of the proviso to Section 35 and work out his remedy thereunder. Section 35 of the Stamp Act is extracted for ready reference:
“35. Instruments not duly stamped inadmissible in evidence, etc.— No instrument chargeable with duty shall be admitted in evidence 6/20 https://www.mhc.tn.gov.in/judis C.R.P.(MD).No.1198 of 2018 for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped: Provided that—
(a) any such instrument shall, be admitted in evidence on payment of the duty with which the same is chargeable, or, in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion;
(b) where any person from whom a stamped receipt could have been demanded, has given an unstamped receipt and such receipt, if stamped, would be admissible in evidence against him, then such receipt shall be admitted in evidence against him, then such receipt shall be admitted in evidence against him on payment of a penalty of one rupee by the person tendering it;
(c) where a contract or agreement of any kind is effected by correspondence consisting of two or more letters and any one of the letters bears the proper stamp, the contract or agreement shall be deemed to be duly stamped;
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(d) nothing herein contained shall prevent the admission of any instrument in evidence in any proceeding in a Criminal Court, other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898 (5 of 1898);
(e) nothing herein contained shall prevent the admission of any instrument in any Court when such instrument has been executed by or on behalf of the Government, or where it bears the certificate of the Collector as provided by section 32 or any other provision of this Act.”
9. Though it is contended by the learned Senior Counsel that once the document is marked without objection, its validity cannot be questioned thereafter, I am unable to see in the first place that the said document has already been marked. It is only at the stage of marking of the document, when the matter was referred to Special Deputy Collector (Stamps) to ascertain the stamp payable. At that time, the earlier revision came to be filed and this Court had rendered a categorical finding that the document could not be admitted, unless and until the plaintiff takes recourse to proviso (a) to Section 35 of the Indian Stamp Act, 1899. 8/20 https://www.mhc.tn.gov.in/judis C.R.P.(MD).No.1198 of 2018
10. The trial Court agreed with the objections of the defendants and came to the conclusion that along with deficit stamp, 10 times penalty would have to be levied and therefore, without doing so, the stamping authority fell in error in arriving at the correct amount payable by the plaintiff.
11. On a careful reading of Section 35 in its entirety, I would lay the following principles:
(i) Any document which is chargeable with duty cannot be admitted in evidence, for any purpose, unless such instrument is duly stamped;
(ii) “any purpose” employed in Section 35 would include even a collateral purpose. Therefore, even when the document is sought to be used for collateral purposes, even then, unless the requisite stamp duty is paid on the said instrument or document, the same cannot be looked into;
(iii) the proviso, however, carves out exceptions to the general rule enunciated in the main Section, which are as follows:-
(i) the instrument shall be admitted in evidence on payment of duty with which the same is 9/20 https://www.mhc.tn.gov.in/judis C.R.P.(MD).No.1198 of 2018 chargeable;
or
(ii) Where the instrument is insufficiently stamped on payment of the amount required to make up such duty, together with a penalty of five rupees;
or
(iii) When the proper duty or deficient portion of the proper duty exceeds five rupees, then on payment of ten times the amount of such proper duty or deficient portion in excess of five rupees .
12. Sections 38 and 40 of the Indian Stamp Act deals with the power of the Collector to stamp instruments that are impounded. The same is extracted for easy reference:
38. Instruments impounded how dealt with. — (1) When the person impounding an instrument under section 33 has by law or consent of parties authority to receive evidence and admits such instrument in evidence upon payment of a penalty as provided by section 35 or of duty as provided by section 37, he shall send to the 10/20 https://www.mhc.tn.gov.in/judis C.R.P.(MD).No.1198 of 2018 Collector an authenticated copy of such instrument, together with a certificate in writing, stating the amount of duty and penalty levied in respect thereof, and shall send such amount to the Collector, or to such person as he may appoint in this behalf.
(2) In every other case, the person so impounding an instrument shall send it in original to the Collector.
40. Collector's power to stamp instruments impounded. — (1) 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 exceeding ten naye paise only or a bill of exchange or promissory note, he shall adopt the following procedure: —
(a) if he is of opinion that such instrument is duly stampeded or is not chargeable with duty, he shall certify by endorsement thereon that it is duly stamped, or that it is not so chargeable, as the case may be;
(b) if he is of opinion that such instrument is chargeable with duty and is not duly stamped, he shall require the payment of the proper duty or the amount required to make up the same, together with a penalty of five rupees; or, if he thinks fit, an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof, whether such amount exceeds or falls short 11/20 https://www.mhc.tn.gov.in/judis C.R.P.(MD).No.1198 of 2018 of five rupees:
Provided that, when such instrument has been impounded only because it has been written in contravention of section 13 or section 14, the Collector may, if he thinks fit, remit the whole penalty prescribed by this section.
(2) Every certificate under clause (a) of sub-section (1) shall, for the purposes of this Act, be conclusive evidence of the matters stated therein.
(3) Where an instrument has been sent to the Collector under section 38, sub-section (2), the Collector shall, when he has dealt with it as provided by this section, return it to the impounding officer.
Thus, it can be seen from the foregoing Sections that when instrument is received in evidence and it has been found that it contravenes Section 35 of the Indian Stamp Act, then the matter is referred to the Collector. The Collector or the person appointed for this purpose by the Collector, is vested with the discretion to certify that the document sent to him is either one that is duly stamped or that it is not chargeable with duty. Where he finds that the instruments is chargeable with duty, but, it is not duly stamped, then he is called upon to require payment of proper duty or the amount required to make up the deficit, together with a penalty of rupees 12/20 https://www.mhc.tn.gov.in/judis C.R.P.(MD).No.1198 of 2018 five; or if he thinks fit an amount not exceeding ten times the amount of the proper duty or of the deficient portion there of.
14. Here, admittedly, the document, viz. Memorandum of Family Arrangement was referred to the Special Deputy Collector (Stamps) for deciding the actual amount payable on account of deficit Stamp duty. It is seen that pursuant to such reference, the Special Deputy Collector (Stamps) informed the Court the prevailing guideline value and the stamp duty to be collected from the plaintiff, as deficit stamp duty, which admittedly works out to Rs.13,502/- which includes the penalty of Rs.5/-. The trial Court has accepted the objection of the defendant that the stamping authority has to necessarily levy 10 times penalty and since the same has not been done, the trial Court has, in and by the impugned order, sent the matter back to the stamping authority to determine the penalty amount to be paid by the revision petitioner.
15. After hearing the learned Senior Counsel for the revision petitioner and going through the records, orders were reserved. However, on going through the records, I found that the original communication sent 13/20 https://www.mhc.tn.gov.in/judis C.R.P.(MD).No.1198 of 2018 by the Stamping Authority was not available either in the typed set of papers or in the records produced by the trial Court. Hence in and by order dated 10.11.2023, I directed the trial Court to produce the relevant communications received from the Stamping Authority. In compliance of the said order, in and by proceedings in D.No.890/23, dated 22.11.2023, the relevant documents have been sent to this Court. The Additional District Munsif, Musiri has forwarded the following documents:
(i) proceedings in Na.Ka./A2/1312/2012, dated 22.12.2015, on the file of the Special Deputy Collector (Stamps), Tiruchirappalli;
(ii) proceedings in Na.Ka.No.260/2015, dated 09.11.2015, from the Sub Registrar, Musiri, to the District Registrar (Administration);
(iii) proceedings in Na.Ka.No.14411/A1/2015, dated 23.11.2015, from the District Registrar (Administration) to the Special District Collector, Tiruchirappalli.
16. On going through the communications and after rehearing the learned Senior counsel for the revision petitioner, I reserved the matter for orders. Even today, there was no representation for the respondents. 14/20 https://www.mhc.tn.gov.in/judis C.R.P.(MD).No.1198 of 2018
17. The Special District Collector (Stamps), Tiruchirappalli, after ascertaining the relevant dates/ particulars from the Sub Registrar as well as the District Registrar (Administration), has reported to the District Munsif Court that the guideline value prevailing during the relevant year 1983 was Rs.25,000/- per Acre and the Stamp duty was 4%, if within the family and 12%, if it was amongst non family members. The Special Deputy Collector (Stamps) has not indicated that the documents should be received only subject to the payment of penalty.
18. I have already discussed the relevant Sections, namely Sections 35, 38 and 40 of the Indian Stamp Act. The trial Court failed to see that the very purpose of sending the instrument to the Stamping Authority under Section 38 of the Act was to invite a finding from the authorities, exercising power under Section 40 of the Indian Stamp Act. A discretion is clearly vested with the Stamping Authority exercising power under Section 40 to levy a penalty up to ten times on the actual duty payable or deficient duty, as the case may be. The communication that has been received by the Court from the Special Deputy Collector (Stamps) is nothing but the proceedings under Section 40 of the Stamp Act. Though Section 40 (1)(b) clearly enables the Collector to require payment of actual 15/20 https://www.mhc.tn.gov.in/judis C.R.P.(MD).No.1198 of 2018 duty or the amount required to make up the actual duty, together with a penalty of rupees five or if the Collector thinks to fit an amount not exceeding ten times the proper duty or of the deficient portion there of, whether such amount of duty or deficient duty exceeds or falls short of rupees five, the word used in Section 40 (1)(b) is “or” and by employing the further words “if he thinks fit” clearly points to the fact that it is not necessary for the Collector to levy penalty in all cases and wherever he chooses to levy penalty, it cannot exceed ten times, the amount of actual duty payable or the actual deficient portion of the duty payable. The requirement mandated is only collection of the actual duty or actual deficient duty together with a penalty of rupees five. This Court, in Avinash Kumar Chauhan V. Vijay Krishna Mishra reported in 2009-3- MLJ-409(SC), has also held that it is not mandatory to levy the maximum penalty of ten times in all cases.
19. Thus, when the communication sent by the Special Deputy Collector (Stamps), the competent authority to the District Munsif Court not indicating any penalty amount, the trial Court ought not to have passed the impugned order, once again sending the matter back to the authority for 16/20 https://www.mhc.tn.gov.in/judis C.R.P.(MD).No.1198 of 2018 the purposes of levying a penalty. Further, it is also contended by the learned Senior Counsel for the revision petitioner that the properties allotted to the defendants under the very same family arrangement were being enjoyed by them and some of the properties have also been dealt with already. However, with an ulterior motive, the defendants have taken such technical objections only with a view to cause serious prejudice and loss to the plaintiffs. Though this argument may not directly impact the issue on hand, at the same time, it cannot be totally ignored for the simple reason that despite the suit for a bare injunction being filed in the year 1989, the said litigation has not seen the light of the day. On two occasions, this matter has reached the corridors of this Court for merely deciding the admissibility of the Memorandum of Family Arrangement. The conduct of the respondents by taking an objection regarding the Family Arrangement after enjoying its fruits and also not choosing to appear before this Court only seems to probablise the argument of the learned Senior Counsel. The trial Court was not justified in sending the matter back to the stamp authority to fix the penalty amount payable under Section 35 of the Stamp Act. The stamping authority has already reported to the Court and on that basis the deficit amount payable is only Rs. 17/20 https://www.mhc.tn.gov.in/judis C.R.P.(MD).No.1198 of 2018 13,502/-. This amount includes the penalty of rupees five payable under Section 40 of the Indian Stamp Act. Thus, the trial Court is directed to mark the said Memorandum of Family Arrangement, dated 31.03.1993, subject to the plaintiff paying the deficit court fee of Rs.13,502/-, if not already paid, and on admission of the said document as an exhibit, the trial Court shall look into the same only for collateral purposes, as the said document is an unregistered instrument and the Court in C.R.P(MD)No. 2062 of 2009 has also rendered a finding that for want of registration and stamp duty, the said document is inadmissible, with a rider that the plaintiff can work out his remedy under proviso to Section 35 of the Indian Stamps Act, to enable him to extent use the document for collateral purpose.
20. In view of the above, the instant Civil Revision Petition is allowed and the order of the trial Court, in O.S.No.385 of 1996 dated 05.02.2018 is set aside and the trial Court is directed to receive and mark the memorandum family arrangement, dated 31.03.1993 as an exhibit, subject to payment of Rs.13,502/- as deficit stamp duty and thereafter look into the said exhibit only for collateral purposes and proceed to decide the suit, in accordance with law.
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21. Considering that the suit is of the year 1989, I direct the trial Court to conduct the trial of the suit as expeditiously as possible and in any event, dispose of the same on or before 30.04.2024. There shall be no order as to costs. Consequently, connected miscellaneous petition is closed.
Internet : Yes 01.12.2023
Index:Yes/No
Neutral Citation:Yes/No
Ls
To
1. The District Munsif,
Musiri.
2. The Section Officer,
VR Section,
Madurai Bench of Madras High Court,
Madurai.
19/20
https://www.mhc.tn.gov.in/judis
C.R.P.(MD).No.1198 of 2018
P.B.BALAJI,J.
Ls
order in
C.R.P.(MD)No.1198 of 2018
01.12.2023
20/20
https://www.mhc.tn.gov.in/judis