Karnataka High Court
Smt. Gayathri vs Smt. Jayamma on 30 June, 2025
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NC: 2025:KHC:22825
W.P. No.3005/2019
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 30TH DAY OF JUNE, 2025
BEFORE
THE HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL
WRIT PETITION NO.3005/2019 (GM-CPC)
BETWEEN:
1. SMT. GAYATHRI
W/O SHIVANNA
AGED ABOUT 39 YEARS.
2. SHIVANNA
S/O MUNIREDDY
Digitally signed AGED ABOUT 53 YEARS.
by RUPA V
Location: High BOTH ARE RESIDING AT
Court of NO.29, SY NO.99, 7TH CROSS
karnataka SRIGANDHADA NAGAR
HEGGANAHALLI, BBMP WARD NO.70
BANGALORE-560091.
...PETITIONERS
(BY SRI. GURURAJ KULKARNI, ADV.,)
AND:
1. SMT. JAYAMMA
W/O LATE RAMAIAH
AGED ABOUT 58 YEARS
R/O NO.65, SY NO.98, 7TH CROSS
SRIGANDHADA NAGAR
HEGGANAHALLI, BBMP WARD NO.70
BANGALORE-560091.
2. DISTRICT REGISTRAR
& DEPUTY COMMISSIONER OF STAMPS
RAJAJINAGAR REGISTRATION DISTRICT
NO.3, 3RD FLOOR, LEELA ARCADE
2ND STAGE, 3RD BLOCK
BEHIND BDA COMPLEX
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NC: 2025:KHC:22825
W.P. No.3005/2019
HC-KAR
NAGARABHAVI
BANGALORE-560072.
...RESPONDENTS
(BY SRI. C.M. RAGHUNATH, ADV., FOR R1 SRI. JAYALINGAYYA MUDENOORMATE, AGA FOR R2) THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER DATED 3.10.2018 PASSED BY THE LEARNED XII ADDL. CITY CIVIL & SESSIONS JUDGE, BANGALORE, IN O.S.NO.8970/2011, AS PER ANNEXURE-H. QUASH THE ORDER DATED 31.10.2018 PASSED BY R-2 DISTRICT REGISTRAR & DEPUTY COMMISSIONER OF STAMPS, RAJAJI NAGAR REGISTRATION DISTRICT, BANGALORE, VIDE ORDER No.DRI 207/2018-19 DATED 31.10.2018 AS PER ANNEXURE-J & ETC.
THIS PETITION HAVING BEEN HEARD AND RESERVED ON 25.06.2025, COMING ON FOR PRONOUNCEMENT OF ORDER, THIS DAY, THE COURT MADE THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL CAV ORDER This writ petition is filed seeking following reliefs :
"1) Quash the order dated 3.10.2018 passed by the learned XII Addl.City Civil & Sessions Judge, Bangalore, in O.S.No.8970/2011, as per Annexure-H,
2) Quash the order dated 31.10.2018 passed by 2nd Respondent District Registrar & Deputy Commissioner of Stamps. Rajaji Nagar Registration District, Banglore, vide order No.DRI 207/2018-19 dated 31.10.2018 as per Annexure-J,
3) Direct the trial court to impound the document-GPA and impose duty and penalty of Rs.2,18,000/- as per Annexure-E".-3-
NC: 2025:KHC:22825 W.P. No.3005/2019 HC-KAR
2. Sri.Gururaj Kulkarani, learned counsel for the petitioners-defendants submits that the trial Court has committed a grave error in allowing the application filed by the respondent No.1-plaintiff under Section 37(2) of the Karnataka Stamp Act, 1957 (for short, 'The Act'). It is submitted that the trial Court has already impounded the original agreement of sale and GPA and directed the office to calculate the duty and penalty and they have calculated it at Rs.2,18,900/-. Once the duty and penalty is calculated, there cannot be any direction to respondent No.2 to recalculate the duty and penalty, which is impermissible. It is further submitted that the respondent No.2 has now calculated the duty and penalty at Rs.35,000/-, which is impermissible, as the trial Court ought not to have referred the matter to respondent No.2 for calculation of deficit stamp duty & penalty once it has carried out the said exercise. In support of his contentions, he placed reliance on the decision of the Hon'ble Supreme Court in the case of Black Pearl Hotels (Pvt) Ltd. v. M/s.Planet M.Retail Ltd.,1 and the decision of the learned Single Judge in the case of Sri.C.S.Mahesh vs. 1 2017 (3) AKR 19 -4- NC: 2025:KHC:22825 W.P. No.3005/2019 HC-KAR Sri.Nagaprasad Srinivasan and another2. He seeks to allow the petition by setting aside the impugned orders and by directing the respondent No.1 to pay Stamp duty of Rs.2,18,000/- as calculated by the trial Court.
3. Per contra, C.M.Raghunath, learned counsel for the respondent No.1-plaintiff and learned Additional Government Advocate for the respondent No.2 supports the impugned orders and submits that the respondent-plaintiff filed an application under Section 37(2) of the Act seeking to refer the sale agreement to the District Registrar to collect stamp duty on the said document as the respondent-plaintiff is a widow and it is extremely difficult for her to pay the amount calculated by the trial Court. It is submitted that now the respondent No.2 has calculated the amount and the said amount is paid. Hence, he seeks to dismiss the petition.
4. I have heard the learned counsel for the petitioners, learned counsel for respondent No.1, learned AGA for respondent No.2 and perused the material available on record.
2WP No.44078-44079/2016 disposed of on 09.10.2018 -5- NC: 2025:KHC:22825 W.P. No.3005/2019 HC-KAR I have given my anxious considerations to the submissions advanced by the learned counsel representing the parties.
5. The respondent No.1-plaintiff has filed suit in O.S.No.8970/2011 seeking declaration that petitioner No.1 has undertaken unlawful construction to an extent of 10ft X 2ft on the respondent No.1's suit schedule properties in northern set back area and other reliefs. In the said suit, the petitioners filed an application under Sections 33 and 34 of the Act seeking to impound the agreement of sale and GPA both dated 27.02.1997 for collection of stamp duty and penalty of 10 times of the duty. The trial Court allowed the said application vide order dated 24.01.2017. The trial Court impounded the aforesaid documents and office was directed to calculate the duty and penalty and the office has calculated Rs.19,900/- as a duty and Rs.1,99,000/- as a penalty, in total, Rs.2,18,900/-.
The respondent No.1 filed an application in I.A.No.6 under Section 37(2) of the Act seeking to refer the subject documents to the District Registrar, Nagarbhavi Branch, Bangalore, to collect the stamp duty. The said application was opposed by the petitioners on the ground that the duty and penalty has already -6- NC: 2025:KHC:22825 W.P. No.3005/2019 HC-KAR been calculated and respondent No.1 has failed to pay the same, hence, sought for dismissal of the application. The trial Court considering the decision of this Court, allowed I.A.No.6 by directing the office to send the documents to the District Registrar of Stamps, Nagarbhavi, Bengaluru, to collect the duty & penalty and return the documents within two months. The records indicate that respondent No.2, in compliance of the direction of the trial Court, calculated duty & penalty as per the order dated 31.10.2018. In the said order, the respondent No.2 has calculated Rs.26,900/- as duty and Rs.8,100/- as penalty, in total, Rs.35,000/- was ordered to be paid. Pursuant to the same, duty and penalty was paid by respondent No.1.
6. The contention of the petitioners is that there cannot be any direction to refer the disputed document to the District Registrar to calculate the duty and penalty once the Court has calculated the same, and such power cannot be delegated and in support of said contention, the petitioners have placed reliance on the decision of the Hon'ble Supreme Court in the case of Black Pearl Hotels (Pvt) Ltd. referred supra, and the decision of this Court in the case of -7- NC: 2025:KHC:22825 W.P. No.3005/2019 HC-KAR Sri.C.S.Mahesh referred supra, wherein it was held that the delegation by the Judge as provided in the proviso to Section 33 of the Act will not clothe the officer, the jurisdiction of determining the nature and character of the instrument. The said decision is not on the point of effect of Section 37(2) of the Act. Hence, the said decisions referred by the learned counsel for the petitioner are not helpful.
7. The issue with regard to impounding of document and procedure to be followed thereafter, has been considered in the case of United Precision Engineers Pvt. Ltd. vs. KIOCL Ltd.3. The Court considering the decision of the Hon'ble Supreme Court and the Division Bench of this Court, has elaborately held at paragraph Nos.8 to 15 as under:
"8. The Learned Senior Counsel in that regard has referred to the similar provisions contained in Sections 38 and 40 of the Indian Stamp Act, 1899, ('the Stamp Act, 1899'for short) and has relied on the consideration made on that aspect by the Hon'ble Supreme Court in the case of Peteti Subba Rao v. Anumala S. Narendra [(2002) 10 SCC 427] . In the said case, in a situation where the Trial Court had determined the stamp duty, as also the penalty and had directed the deposit of such stamp duty, as also penalty within a month, failing which it had directed dismissal of the suit and the said order had been affirmed by the High Court, the Hon'ble Supreme Court had set-aside the orders and 3 2016 SCC OnLine Kar 1077 : ILR 2016 Kar 1707 -8- NC: 2025:KHC:22825 W.P. No.3005/2019 HC-KAR directed reference to the Collector. The consideration as made by the Hon'ble Supreme Court is as hereunder:
"5. Chapter IV of the Indian Stamp Act contains provisions regarding "instruments not duly stamped It is Section 35 which falls under the said chapter which empowered the trial Court to direct the party (who wants the document to be acted upon) to pay the stamp duty (or the deficient portion) together with a penalty of rupees fifteen, or, when ten times the amount of the proper duty or deficient portion thereof exceeds fifteen rupees, of a sum equal to ten times such duty or portion. This is for the purpose of enabling the document to be admitted in evidence, in such a situation the document would be admitted only on payment of the aforesaid sum. In a case where the party is not willing or he cannot afford to pay the said sum the court has to adopt the procedure envisaged in Section 38(2) of the Act. That sub-section is with reference to the action which the trial court is perforce to adopt under Section 33(1) of the Act.
6. Mr. M.N. Rao, learned Senior Counsel submitted that the appellant cannot afford to pay the penalty now suggested as the amount is far beyond his capacity. But at the same time, he made a fervent plea that his suit cannot be allowed to be dismissed on the ground of inability to pay the huge penalty amount alone. We find some force in the said plea. In a case where the party fails to pay the penalty suggested by the court the document impounded has to be sent to the Collector for the purpose of taking further steps in respect of that documents as provided in Section 40 of the Act the Collector has the power to require the person concerned to pay the proper duty together with a penalty amount which the Collector has to fix in consideration of all aspects involved. The restriction imposed on the Collector in imposing the penalty amount is that under no circumstances the penalty amount shall go beyond ten times the duty or the deficient portion thereof. That is the farthest limit which meant only in very extreme situations the penalty need be imposed up to that limit. It is unnecessary for us to say that the Collector is not required bylaw to impose the maximum rate of penalty as a matter of course whenever an impounded document is sent to him. He has to take into account various aspects including the financial position of the person concerned.
7. xxx -9- NC: 2025:KHC:22825 W.P. No.3005/2019 HC-KAR
8. We also direct the Collector concerned to complete the proceedings envisaged in Section 40(1) of the Act within a period of one month from the date of receipt of the document. The trial court shall await the receipt of the certificate of the order passed by the Collector for proceedings further in the suit. In other words the suit will be revived only on receipt of such certificate and the copy of the order of the Collector so passed."
(emphasis supplied)
9. The Learned Senior Counsel for the petitioner has also relied on the decision of this Court in the case of K. Amarnath v. Smt. Puttamma [2000 (4) Kar. L.J. 55] wherein while adverting to the provision contained in Sections 33, 34, 35, 37 and 40 of the Karnataka Act, 1957, it is held that if the party does not pay the duty and penalty, the Court will have to pass an order 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 Karnataka Act, 1957.
10. To arrive at an appropriate conclusion, it will be useful to refer to the decision of a Hon'ble Division Bench of this Court in the case of Digambar Warty v. District Registrar, Bangalore Urban District [ILR 2013 KAR 2099] , wherein after exhaustively considering all aspects, it is held as hereunder:
37. Section 37 of the Act deals with the procedure to be followed by the authority after impounding the document under Section 33 and after passing of the orders under Section 34 or Section 36. When the person impounding an instrument under Section 33 has by law or consent of parties authority to receive evidence and admits such an instrument in evidence upon payment of a penalty as provided by Section 34 or of duty as provided by Section 36. under Sub-Section f1) 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 to such person as he may appoint in this behalf. Sub-section (2) of Section 37 provides that in every other case, the person so
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NC: 2025:KHC:22825 W.P. No.3005/2019 HC-KAR impounding an instrument shall send it in original to the Deputy Commissioner.
38. The reason is obvious. Generally, it is the Civil Court which receives the instrument in evidence. Admission of instrument in evidence is not proof of the said instrument. If the execution of the instrument is denied by the executant or the opposite party, burden is cast on the person producing the said instrument to prove that the instrument was executed in accordance with law. He may have to examine the attesting witnesses if there is any, or he may request the Court to compare the signature found on the said instrument with the admitted signatures in the case or he may request for sending the said instrument containing the signature for the opinion of the handwriting expert. Therefore the original document, after it being impounded and the party paying the duty and penalty cannot be sent to the Deputy Commissioner, the law provides for a authenticated copy of such an instrument being sent to the Deputy Commissioner. However, in all other cases, it is the original of the document impounded which is to be sent to the Deputy Commissioner. The object being, the said provision should not come in the way of speedy disposal of cases before the Court.
39. Section 38 of the Act deals with the power of the Deputy Commissioner to refund the penalty paid under Sub-section (1) of Section 37. When a copy of an instrument is sent to the Deputy Commissioner under Sub-section (1) of Section 37, he may, if he thinks fit, refund any portion of the penalty in excess of five rupees which has been paid in respect of such instrument. The reason being, when a person receiving the evidence impounds the document and collects the duty under Section 34 of the Act, which in most of the cases, is the Civil Court, the time of the Court should not be wasted in deciding, whether it is a fit case where penalty of ten times the duty is to be levied or a case is made out for imposition of lesser penalty. Therefore, the Legislature consciously has used the word, 'shall' taking away any discretion in the Civil Court in the matter of imposition of penalty equal to ten time the duty payable. However, the Civil Court after impounding the document, collecting the duty and penalty, is under a statutory obligation to send it to the Deputy Commissioner under Sub-section (1) of Section 37. Therefore, when such an instrument is so sent
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NC: 2025:KHC:22825 W.P. No.3005/2019 HC-KAR to the Deputy Commissioner, he has been conferred the power to reduce the penalty already paid before the Civil Court. One of the reasons why such a discretion is not vested with the Civil Court is it is the revenue authorities who are more concerned with the collection of revenue, and that is not the job of the Civil Courts. However, if a document which is not stamped or insufficiently stamped is tendered in evidence in Civil Court and admitted in evidence, then the very purpose of the Stamp Act itself would be defeated. Therefore, a power is vested in Civil Court to impound the document. In fact, it is an obligation cast on the Civil Court by the statute. But, the legislature does not want to burden the Civil Court to go into the question, whether a case for payment of lesser penalty is made out or not. The Civil Courts cannot be expected to be wasting their precious judicial time in deciding matters which exclusively fall within the sphere of revenue authorities and under the scheme of the Act, which has to be decided by them. Therefore, it prescribes that after determining the duty payable on such instrument, to collect the duty with ten times penalty and then transmit the document to the Deputy Commissioner with duty and penalty so collected. Thereafter, a power is conferred on the Deputy Commissioner under Section 38 of the Act to hold an enquiry after giving an opportunity to the person who has paid duty and penalty to extend the benefit of reduction of penalty. Such a reduction in penalty is available to both the documents i.e. tendered before the Civil Court or produced directly before the Deputy Commissioner under Section 33. No discrimination in law is made between these two types of documents. However, there appears to be some conflicting opinion in this regard.
(emphasis supplied)
11. From the provisions contained in Sections 33, 34, 37(1), 37(2), 38, 39 of the Karnataka Act, 1957, the view expressed by the Hon'ble Supreme Court and the Hon'ble Division Bench, the position of law is therefore clear that the obligation cast on the Civil Court in respect of an instrument not being duly stamped, is to impound the same and determine the duty and penalty payable. The Civil Court has no discretion, but to impose the penalty of ten times of the deficit and permit the party to pay the same. If the party chooses to pay the same, the effect of impounding gets
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NC: 2025:KHC:22825 W.P. No.3005/2019 HC-KAR diluted and the document will become admissible in evidence for the purpose of proving the same as per law. In such event, the Civil Court is required to despatch an authenticated copy of the instrument along with the deficit duty and penalty collected, to the Deputy Commissioner. The matter does not stop at that. Though the Civil Court as bound by law would collect the penalty at ten times, the power is still vested with the Deputy Commissioner under Section 38 of the Karnataka Act, 1957 to hold an enquiry and reduce the penalty in the manner as provided therein.
12. As observed in Digambar Warty (supra) the said procedure is prescribed with a dual purpose, firstly, to avoid overburdening the Court with the work of deciding the quantum of penalty as it would require providing opportunity and arriving at a decision. Secondly, it is also to accelerate the proceedings before the Court by giving an option to the party to pay the amount and proceed with the case and thereafter secure a decision from the Deputy Commissioner with regard to actual penalty payable and obtain refund if any. On the other hand, on determination by the Civil Court if the party does not choose to pay the amount, the impounding will continue to subsist. In such situation the instrument will not be available to be admitted in evidence and as such the original is to be sent to the Deputy Commissioner as provided under Section 37(2) of the Karnataka Act, 1957. In that case, the Deputy Commissioner shall proceed in terms of Section 39 of the Karnataka Act, 1957 and on such consideration after collecting the amount, it will be sent back to the Impounding Officer since on such collection of the amount the impounding will stand diluted and the instrument will become admissible.
13. The question therefore is as to the extent of power to be exercised by the Deputy Commissioner in the latter situation since it is the contention of the Learned Counsel for the respondent that it will amount to the Deputy Commissioner interfering with the order of the Civil Court. Such contention will not stand to reason on the face of it since the provision contained in Section 37(1) of the Karnataka Act is a situation where not only the Court would have determined the amount of penalty but would have also collected the same and will be sent to the Deputy Commissioner, yet the Deputy Commissioner is vested with
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NC: 2025:KHC:22825 W.P. No.3005/2019 HC-KAR the power to refund the penalty in the manner provided in Section 38 of the Karnataka Act, 1957 and in that regard, the Hon'ble Division Bench has explained that it is due to the reason that the collection of revenue is the duty of the Deputy Commissioner and not that of the Court. If in that light, the provision in Sections 37(2) and 39 are considered without losing sight of the provision in Section 38 of the Act, the power to consider and reduce the penalty cannot be held as not being available merely because the determined amount is not paid.
14. In that regard, the phrase 'In every other case' contained in sub-Section (2) of Section 37 of the Karnataka Act, 1957 will have to be understood to include not only an instrument which is merely impounded and referred but also an instrument impounded, relating to which the duty and penalty is determined but not paid by the party concerned. Thus if Sections 37, 38 and 39 of the Karnataka Act, 1957 are collectively considered and read in harmony, since in respect of an instrument referred under Section 37(1), Section 38 provides only for refund of the penalty, it will have to be held that in a case where the Impounding Authority has by a considered order determined the deficit duty and penalty and thereafter referred the impounded instrument under sub-Section (2) of Section 37 of the Act, the Deputy Commissioner will have the power only to consider with regard to the reduction of penalty in the manner as it would be done under Section 38 of the Act. Therefore, there is no other option for the Court impounding an Instrument but to send it to the Deputy Commissioner. In fact this is also the view of the Hon'ble Supreme while considering similar provision under the Stamp Act, 1899.
15. In view of the above conclusion, in the instant case, though the instrument was impounded by this Court in W.P. No. 44482/2013 and on direction issued therein the stamp duty and penalty was determined, it does not take away the liberty of the petitioner to seek that the impounded instrument be sent to the Deputy Commissioner in a circumstance where the Court concerned had not sent it as per the requirement under the Act. Hence, the order dated 10.03.2014 dismissing the application will not be justified. As already noticed, if the procedure contemplated in Section 37(1) of the Act is not availed and the suit is not continued,
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NC: 2025:KHC:22825 W.P. No.3005/2019 HC-KAR the proceedings before the Court will be stalled. In that regard, if the instrument concerned is the document without which the suit cannot be proceeded with as in the instant case, the course to be adopted will have to be in the manner indicated in the case of Peteti Subba Rao (supra) i.e., the Court sending it to the Deputy Commissioner will set a time frame and if it receives the certificate and the order of the Deputy Commissioner, it will proceed with the suit. If within the time frame the instrument is not received, it may thereafter dismiss the suit and revive it as and when the certificate is received subsequently."
8. The learned Single Judge of this Court in the case of Shri Anil v. Shri Babu & Another4 has taken a similar view.
Keeping in mind the enunciation of law laid down supra, I am of the considered view that the trial Court is fully justified in allowing the application filed by respondent No.1-plaintiff under Section 37 (2) of the Act and thereafter, respondent No.2 has rightly assessed the duty and penalty which does not call for any interference in the present petition.
9. For the aforementioned reasons, this petition is devoid of merits and accordingly, the same is rejected.
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(VIJAYKUMAR A. PATIL) JUDGE BSR List No.: 2 Sl No.: 1 4 W.P.No.112448/2017 decided on 15.12.2022