Karnataka High Court
Sri.R. Mahesh vs Sri.B.P.Venugopal on 26 March, 2018
Equivalent citations: AIR 2018 KARNATAKA 198, AIR 2018 KAR 198, 2018 (4) AKR 193, (2018) 3 KCCR 2394, (2018) 4 ICC 950
Author: G.Narendar
Bench: G.Narendar
1
R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 26TH DAY OF MARCH, 2018
BEFORE
THE HON'BLE MR. JUSTICE G.NARENDAR
WRIT PETITION No.49424/2017 (GM CPC)
BETWEEN
1. SRI.R. MAHESH
S/O SRI. B.M. RAMACHANDRAPPA,
AGED ABOUT 42 YEARS,
2. SRI. MUNEGOWDA
S/O SRI. B.M. RAMACHANDRAPPA,
AGED ABOUT 39 YEARS,
BOTH ARE RESIDING AT NO.769,
NEAR MAHALAKSHMI TEMPLE
BAGALGUNTE VILLAGE,
NAGASANDRA POST,
BENGALURU 560073.
... PETITIONERS
(BY SRI. T SESHAGIRI RAO, ADV.)
AND
SRI. B.P.VENUGOPAL
S/O SRI. PEDDAIAH,
AGED ABOUT 40 YEARS,
RESIDING AT NO.10/1,
'N' STREET CROSS,
SHANTHINAGAR,
BENGALURU-560027.
... RESPONDENT
(BY SRI. RAGHUNATH M D, ADV. FOR C/R)
2
THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF
THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE
IMPUGNED ORDER DTD 27.07.2017 PASSED ON I.A.NO.6 BY
THE XXVI ADDL CITY CIVIL AND SESSIONS JUDGE, MAYO HALL,
BENGALURU, IN O.S.26139/2011 VIDE ANNX-A.
THIS WRIT PETITION COMING ON FOR PRELIMINARY
HEARING THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
Heard the learned counsel for the petitioners.
2. The petitioners-defendants are before this Court being aggrieved by the order impugned at Annexure-A to the writ petition. The defendants have preferred I.A.No.6 under Sections 33 and 34 of the Karnataka Stamp Act, 1957 (hereinafter referred to as 'the Act' for short) seeking to impound Exs.P12 and 13. The Court below vide impugned order dated 27.07.2017 has been pleased to reject the same on the premise that though they are insufficiently stamped, they being already admitted in evidence and marked as Exhibits, the same cannot be impounded.
3. It is contended by the learned counsel for the petitioners that the documents are compulsorily registerable 3 documents and are to be construed as insufficiently stamped on account of the fact that possession came to be delivered under the said documents. The same came to be resisted by the respondent, who is the plaintiff in the Court below.
4. The Court below after considering the respective stand of the parties has been pleased to reject the application by placing reliance on the ruling reported in 2011 (2) KCCR 1478 rendered in the case of Smt.Vijayalakshmi vs. Sri.Nagaraju. This Court has been pleased to hold that an unregistered mortgage deed though insufficiently stamped, once marked, the order admitting cannot be recalled or reviewed. Hence, the Court below placing reliance on the same has concluded that the documents having already been marked, without there being any objections, as Exs.P12 and 13, the order admitting the documents as Exhibits cannot be reviewed or recalled and that the Court below is prohibited from re-opening the same and review its decision to admit the documents.
45. Learned counsel for the petitioners would draw the attention of this Court to the provisions of Sections 33, 34, 35 and 58 of the Act. He would contend that the Court is not powerless to call upon the plaintiff to pay the appropriate duty and penalty in view of the provisions of sub-section (2) of Section 58 of the Act. Section 58 of the Act reads as under:
"58. Revision of certain decisions of Courts regarding the sufficiency of stamps.- (1) When any Court in the exercise of its Civil or Revenue jurisdiction or any Criminal Court in any proceeding under [Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898], makes any order admitting any instrument in evidence as duly stamped or as not requiring a stamp, or upon payment of duty and a penalty under Section 34, the Court to which appeals lie from, or references are made by, such first mentioned Court may, of its own motion or on the application of the [Deputy Commissioner], take such order into consideration.
(2). If such Court, after such consideration, is of the opinion that such instrument should not have been admitted in evidence without the 5 payment of duty and penalty under Section 34, or without the payment of a higher duty and penalty then those paid, it may record a declaration to that effect, and determine the amount of duty with which such instrument is chargable, and may require any person in whose possession or power such instrument then is, to produce the same, and may impound the same when produced.
(3) When any declaration has been recorded under sub-Section (2), the Court recording the same shall send a copy thereof to the [Deputy Commissioner] and, where the instrument to which it relates has been impounded or is otherwise in the possession of such Court, shall also send him such instrument.
(4) The [Deputy Commissioner] may thereupon, notwithstanding anything contained in the order admitting such instrument in evidence, or in any certificate granted under Section 41, or in Section 42, prosecute any person for any offence against the Stamp Law which the [Deputy Commissioner] considers him to have committed in respect of such instrument:6
Provided that, -
(a) no such prosecution shall be instituted where the amount (including duty and penalty) which, according to the determination of such Court, was payable in respect of the instrument under Section 34, is paid to the [Deputy Commissioner] unless he thinks that the offence was committed with an intension of evading payment of the proper duty;
(b) except for the purpose such prosecution, no declaration made under this Section shall affect the validity of any order admitting any instrument in evidence, or of any certificate granted under Section
41."
6. Per contra, learned counsel for the respondent would reiterate the finding rendered by the trial Court and he would contend that once the document is marked and admitted in evidence as an exhibit, the Court cannot revise or review its order admitting the document in view of the bar under Section 35 of the Act, which reads as under:
7"35. Admission of instrument where not to be questioned.-Where an instrument has been admitted in evidence such admission shall not, except as provided in Section 58, be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped."
7. Once an instrument has been admitted in evidence, such admission, except as provided under Section 58, cannot be called in question at any stage of the same suit or proceedings on the ground that the instrument has not been duly stamped.
8. Learned counsel for the respondent would place reliance on the ruling rendered by this Court in the case of Cave Caterers Private limited vs. Sudha Enterprises in W.P.No.114/2011 decided on 07.01.2011 wherein, this Court at paragraph Nos.14 and 15 has been pleased to hold that the trial Court is denuded of jurisdiction to impound the document after its admission by invoking provisions of 8 Section 33 of the Act. There can be no quarrel with the interpretation by this Court.
9. Learned counsel for the respondent would also place reliance on the observations of this Court rendered in the case of N.S.Lakshmaiah Setty v. R.Govindappa and another reported in 1964 (2) Mys.Lo.J.145. Learned counsel would also place reliance on another ruling of this Court rendered in W.P.No.25556/2010 decided on 04.11.2010.
This Court has been pleased to observe as below:
"10. In the case of Javer Chand v. Pukhraj Surana, reported in MANU/SC/0036/1961 : AIR 1961 SC 1655, it has been held as follows:
Once a document has been marked as an exhibit in the case and the trial has proceeded all along on the footing that the document was an exhibit in the case and has been used by the parties in examination and cross-examination of their witnesses, Section 36 of the Stamp Act comes into operation. Once a document has been admitted in evidence, as aforesaid, it is not open either to the trial court itself or to a Court of Appeal or revision to 9 go behind that order. Such an order is not one of those judicial orders which are liable to be reviewed or revised by the same court or a court of superior jurisdiction."
10. This Court while observing as above has been pleased to place reliance on the ruling of Apex Court rendered in AIR 1961 SC 1655. There can be no quarrel with the proposition laid down by this Court while disposing of the above writ petition.
11. It is apparent that the co-ordinate Bench of this Court while disposing of the writ petition has not examined the applicability and the scope of Section 58 of the Act.
12. Learned counsel for the respondent would reiterate that the application preferred under Sections 33 and 34 of the Act requires to be rejected in view of the law laid down by this Court.10
13. On perusal of the application, it is seen that the case canvassed is not against the admission of the documents, but that they are insufficiently stamped. If that being the case, a duty was cast on the Court below to render a declaration as to whether the document is chargable to duty and if so, whether is it sufficiently stamped. This duty is cast by the provisions of Section 58 of the Act and sub-Section (2) of Section 58 provides for impounding. The scope for impounding is for the limited purpose of forwarding it to the Deputy Commissioner/Competent authority who inturn shall institute prosecution as per sub-Section (4) of Section 58 of the Act. Hence, from a reading of the provisions of Section 58 of Act, it is apparent that the trial Court is obligated and a duty cast upon it to render a finding as to whether it is a compulsorily registrable document and if so whether it is sufficiently stamped. Hence, in the considered opinion of this Court, the impugned order calls for interference. In this regard, this Court places reliance on the observations made by this Court in the ruling reported in 2015 (4) AKR 45 in 11 the case of Smt.Savithramma.R.C. vs. M/s.Vijaya Bank and another wherein this Court in similar circumstances was pleased to hold as under:
"4. Interpreting this provision, this Court, in the case of Lakshminarayanachar v. Narayan, held as under:
"11. Now, the document is described in S.33 as a document which is produced before the authority or comes before the authority in the performance of its functions. The principal function with reference to which production or reception of documents is mentioned in S.33, so far as Courts are concerned, is the function appertaining to the exercise of the authority of taking evidence. Production before a Court is a voluntary act, an act accompanied by the mental element of a desire to depend upon it as a piece of evidence in the litigation.
Where the production of document is compelled by the Court, such document will not come within the description of 'document produced' but comes within the description 12 of 'document which comes in the performance of its function' of taking evidence. In normal circumstances, parties produce documents voluntarily for the purpose of relying upon them as pieces of evidence.
14. The position therefore, according to the scheme of the statute, is that when a document chargeable to duty and produced into Court in connection with a proceeding before it is found by that Court to be either not stamped at all or is insufficiently stamped, it is bound to impound it. But the idea of impounding is to enforce collection of duty or deficient duty together with penalty. When a document has come before Court for the purpose of being used in evidence, the first jurisdiction of determining the duty and penalty is that of the Court. It is only when that stage has crossed and the document is not tendered in evidence that it ceases to be a document impounded by the Court which by law has authority to receive evidence and has admitted the same in evidence; though the 13 first part of the description applies to the document, the second part has ceased to be applicable. It is then and then only that a document comes within the description of "in every other case" contained in sub-sec. (2) of S.37.
19. The correct position therefore, in law, would be that documents which are liable to be impounded should be impounded as soon as their liability to be impounded comes to the notice of the Presiding Officer. He should retain them till the date of the trial. If they are tendered in evidence, he should act under the proviso to S.34. Sec. 37(1) imposes a duty on him to send an authenticated copy of such instrument together with a certificate stating the amount of duty and penalty levied in respect thereof to the Deputy Commissioner. If they are not admitted in evidence, he will then act under sub-sec.(2) of S.37 and send the original document to the Deputy Commissioner for assessment of duty and penalty."
145. Again, this Court in the case of K. Amarnath v. Smt. Puttamma, reported in 2000 (4) Kar LJ 55 dealing with the duty of the Court under Section 33 of the Act held as under:
9. When a document is produced and sought to be exhibited, the Court should decide whether it is admissible or not immediately, so that the parties will know whether such document could be relied on or not. If a document is not admitted, by refusing to mark it, the party may take steps to let in other relevant and permissible evidence to prove the document. On the other hand, if the document is marked in evidence, the parties may not choose to let in further evidence on that aspect. When the question of marking of the document is left open, the parties will have to proceed with the evidence with considerable uncertainty.
Therefore, Courts should consider and decide the question of admissibility of a document sought to be exhibited, before proceeding further with the evidence. If the Court has any doubt, it may hear arguments on the question.
1510. A duty is cast upon every Judge to examine every document that is sought to be marked in evidence. The nomenclature of the document is not decisive. The question of admissibility (with reference to Section 34 of Karnataka Stamp Act, or Section 35 of Indian Stamp Act and Section 49 of Registration Act) will have to be decided by reading the document and deciding its nature and classification. The tendency to mark documents without inspection and verification should be eschewed. Even while recording ex-parte evidence or while recording evidence in the absence of the Counsel for the other side, the Court should be vigilant and examine and ascertain the nature of the document proposed to be marked and ensure that it is a document which is admissible. The Court should not depend on objections of the other Counsel before considering whether the document is admissible in evidence or not. Section 33 of the Stamp Act casts a duty on the Court to examine the document to find out whether it is duly stamped or not, irrespective of the 16 fact whether an objection to its marking is raised or not. It should be borne in mind that once a document is admitted in evidence, it cannot be called in question thereafter on the ground that it was not duly stamped. Once the Court admits a document even wrongly, such admission becomes final and cannot be reopened. Hence, the need for diligence not only on the part of the opposite Counsel, but also on the part of the Court having regard to the statutory obligation under Section 33 of Karnataka Stamp Act.
11. A combined reading of Sections 33, 34, 35, 37 and 41 of the Karnataka Stamp Act requires the following procedure to be adopted by a Court while considering the question of admissibility of a document with reference to the Stamp Act: (a) when a document comes up before the Court, it has to examine and determine whether it is properly stamped. When the other side objects to it, the Court should consider such objection and hear both sides; (b) after hearing, if the Court comes to the conclusion 17 that the document has been duly stamped, it shall proceed to admit the document into evidence; (c) on the other hand, if the Court comes to the conclusion that the document is not stamped or insufficiently stamped, it shall pass an order holding that the document is not duly stamped and determine the Stamp duty/deficit stamp duty and penalty to be paid and fix a date to enable the party who produces the document to pay the Stamp duty/deficit Stamp duty plus penalty; (d) if the party pays the duty and penalty the Court shall certify that proper amount of duty and penalty has been levied and record the name and address of the person paying the said duty and penalty and then admit the document in evidence as provided under Section 41(2); and the Court shall send an authenticated copy of the instrument to the District Registrar together with a Certificate and the amount collected as duty and penalty, as provided under Section 37(1); (e) if the party does not pay the duty and penalty, the Court will have to pass an order 18 impounding the document and send the instrument in original, to the District Registrar for being dealt with in accordance with law as per Section 37(2) of the Karnataka Stamp Act.
6. From the aforesaid statutory provisions and the decisions, it is clear that a duty is cast upon every Judge to examine every document, which is produced or comes before him in the performance of his functions. On such examination, if it appears to the Judge that such instrument is not duly stamped, an obligation is cast upon him to impound the same. This duty is to be performed by the Judge irrespective of the fact whether any objection to its marking is raised or not. Hence, there is a need for diligence on the part of the Court having regard to the statutory obligation under Section 33 of the Karnataka Stamp Act. Section 34 of the Karnataka Stamp Act mandates that an instrument, which is not duly stamped shall not be admitted in evidence. If any objection is taken to the admissibility of the evidence, it shall be decided then and there. If this document is found to be insufficiently stamped, then in terms of the proviso (a) to Section 34, the Court shall call upon the person, who is tendering the said 19 document to pay duty and ten times penalty and thereafter admit the document in evidence. If duty and penalty is not paid, the document shall not be admitted in evidence. If such an objection is not taken at the time of admitting the said instrument in evidence, and the insufficiently stamped document is admitted in evidence then Section 35 of the Act provides that such admission shall not be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped. It has nothing to do with impounding the document. A duty is cast upon every Judge to examine every document that is sought to be marked in evidence. The nomenclature of the document is not decisive. The question of admissibility will have to be decided by reading the document and deciding its nature and classification. The tendency to mark documents without inspection and verification should be eschewed. Even while recording ex-parte evidence or while recording evidence in the absence of the Counsel for the other side, the Court should be vigilant and examine and ascertain the nature of the document proposed to be marked and ensure that it is a document which is admissible. The Court should not depend on objections of the other Counsel before 20 considering whether the document is admissible in evidence or not. Section 33 of the Stamp Act casts a duty on the Court to examine the document to find out whether it is duly stamped or not, irrespective of the fact whether an objection to its marking is raised or not. Section 37 of the Act provides what the Judge has to do when he has collected duty and penalty under Section 34 of the Act and what he has to do, if the case does not fall under Section 34 of the Act. Section 37 of the Karnataka Stamp Act reads thus:
37. 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 34 or of duty as provided by section 36, he shall send to the Deputy Commissioner 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 Deputy Commissioner 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 Deputy Commissioner.21
7. If the Judge has acted under Section 34 of the Act and collected duty and penalty and admitted the document in evidence, then under sub- Section (1) of Section 37, he shall send to the Deputy Commissioner 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 Deputy Commissioner or such person as he may appoint in this behalf. If the Judge does not act under Section 34 of the Act, but the document is insufficiently stamped and admitted in evidence though objection regarding admissibility cannot be raised subsequently that does not take away his obligation to impound the document under Section 33 of the Act. If the document is insufficiently stamped and if the Court has admitted such instrument in evidence without collecting duty and penalty, then the Judge shall proceed under Section 33 of the Act and impound the document. After impounding the document, he shall proceed under Section 37(2) of the Act and shall send the impounded instrument in original to the Deputy Commissioner to be dealt with under Section 39 of the Act. Therefore, impounding the document should not be confused to admission of document without objection regarding admissibility or on such objection being taken after collecting the duty and penalty."
14. It is the admitted case of the parties that no objections were raised when the documents were admitted in evidence by the Court below. It is also fairly admitted that no finding has been rendered by the Court below with regard to 22 the fact, as to whether the documents, Exs.P12 and 13, require to be stamped and if so, whether they are adequately stamped or not. In short there has been no judicial determination of the fact as to whether the Exhibits require to be stamped or not. A mere marking of the document would not suffice to escape from the rigor of the Act. It is obvious that there has been no judicial application of mind before admitting the document. The marking of a document is a ministerial act and on the contrary, the admission of a document is a judicial act. Admittedly, no objections have been raised at the time of marking the document. That by itself will not absolve the Court of its responsibility to examine the admissibility aspect of the same or the power to secure the interest of State Exchequer by calling for and impounding the document for the limited purpose of calculating and collecting the stamp duty. This view of the Court is further fortified by the scheme of the Act as set out in Section 36, 41 and 42 of the Act.
2315. There can be no dispute with regard to the proposition of law, that once a document is admitted in evidence, the order admitting the document cannot be revised or reviewed by the said Court itself. The provisions of Section 58 address a wholly different circumstance. The provisions of Section 58 read in conjunction with the provisions of Section 35 of the Act provide for instances where the Court may, after the document has been admitted, conclude that the same is chargable to duty or is insufficiently stamped.
16. From a bare and conjoint reading of Sections 33 and 34 of the Act, it is apparent that both the Court and any such Authority before whom the document is produced are empowered to and duty bound to impound the document which would result in the document being made unavailable for consideration pending payment of necessary stamp duty and penalty. In the event of such document being marked on account of inadvertence or on the Court failing to detect the same on scrutiny, the Act provides for collection of the duty 24 and penalty on such documents, which have evaded scrutiny as provided under sub-Section (2) of Section 58 of the Act.
17. A plain reading of sub-Section (2) of Section 58 of the Act makes it apparent that the Court is not rendered powerless or functus officio on account of an un-registered or insufficiently stamped document being marked and being admitted in evidence. On the contrary, the provisions of Section 58 (2) mandate the Court below to record a declaration to the effect that the document already marked is one on which the duty and penalty or higher duty and penalty is chargeable. On the Court recording such a declaration, it is thereafter required to impound the same for the purpose of forwarding it to the Deputy Commissioner, who thereafter shall notwithstanding anything contained in the order admitting such instrument prosecute the person for any offences under the Act. The proviso to sub-Section 4 of Section 58 of the Act further provides that no such 25 prosecution shall be instituted provided the amount including duty and penalty is paid to the Deputy Commissioner.
18. Thus, from the ambit of Section 58 of the Act, it is apparent that the trial Court has rendered an erroneous order. In respect of a document, which is already marked, the Court is entitled to subsequently hold it to be a document which is not stamped or insufficiently stamped and it shall also determine the amount of duty with which such instrument is chargeable. This is the only conclusion that can be drawn, keeping in view the purpose of the Act, which is to secure the revenue of the State. This Court draws sustenance for the afore stated view in the light of the observations of the Apex Court rendered in the case of Hindustan Steel Ltd., v.
Messrs Dilip Construction Company reported in 1969 (1) SCC 597, wherein the Hon'ble Apex Court in paragraph No.7 observed as follows:
"7. The Stamp Act is a fiscal measure enacted to secure revenue for the State on certain classes of instruments : It is not enacted to all a 26 litigant with a weapon of technicality to meet the case of his opponent. The stringent provisions of the Act are conceived in the interest of the revenue once that object is secured according to law, the party staking his claim on the instrument will not be defeated on the ground of the initial defect in the instrument. Viewed in that light the scheme is clear. Section 35 of the Stamp Act operates as bar to an unstamped instrument being admitted in evidence or being acted upon; Section 40 provides the procedure for instruments being impounded, sub-section (1) of Section 42 provides for certifying that an instrument is duly stamped, and sub-section (2) of Section 42 enacts the consequences resulting from such certification.
19. It is held that the Court below is entitled to impound a document already admitted in terms of Section 58 for the limited purpose of ascertaining the duty and calling upon for payment of the same and also refer it to the Deputy Commissioner for prosecution only. The order impounding the admitted document under Section 58 will in no way impinge or entrench upon the sanctity of the order admitting 27 the documents nor will it amount to a review of the order admitting the documents.
Accordingly, the order impugned is set aside. The applications are remitted back to the trial Court for re-consideration in the light of the provisions of Section 58 of the Act and the observations made herein above. The Court below shall consider the point as to whether the documents are chargeable to duty and if chargeable to duty, whether they are sufficiently stamped or not and thereafter render a finding in accordance with law.
The Writ Petition stands disposed off in the above terms.
Sd/-
JUDGE VM CT-HR