Karnataka High Court
Shri P Bachegowda vs State Of Karnataka on 15 July, 2022
R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 15TH DAY OF JULY, 2022
BEFORE
THE HON'BLE MR. JUSTICE C.M. POONACHA
W.P.No.10535 OF 2012(GM-ST/RN)
C/W
W.P.No.1497 OF 2012 (GM-ST/RN)
IN W.P. NO.10535/2012
BETWEEN:
DODBALLAPUR SPINNING MILLS PVT LTD
A COMPANY REGISTERED UNDER
THE COMPANIES ACT,1956 AND
HAVING ITS REGD. OFFICE
AT NO.14, SRILAKSHMI PRIYA,
8TH B MAIN, RMV EXTENSION,
SADASHIVANAGAR, BANGALORE 560080
REP.BY ITS MANAGING DIRECTOR
SMT NIVEDITA
...PETITIONER
(BY SRI K V SATISH, ADVOCATE)
AND
1. THE CHIEF CONTROLLING REVENUE AUTHORITY
AND THE INSPECTOR GENERAL OF REGISTRATION
& STAMPS, SHIMSHA BHAVAN
8TH BLOCK, JAYANAGAR
BANGALORE.
2. THE DISTRICT REGISTRAR AND DEPUTY
COMMISSIONER(STAMPS)
BANGALORE RURAL DISTRICT
SATYA COMPLEX, III FLOOR IST MAIN,
INDUSTRIAL TOWN, WEST OF CHORD ROAD,
BANGALORE.
2
3. SRI P BACHEGOWDA
SINCE DEAD BY L.R.s
3(a) SUDHA
W/O LATE P. BACHE GOWDA,
AGED ABOUT 34 YEARS
3(b) NAVEEN GOWDA
W/O LATE P. BACHE GOWDA,
AGED ABOUT 34 YEARS
3(c) VIDYA
W/O LATE P. BACHE GOWDA,
AGED ABOUT 34 YEARS
L.R.s NO.3(b) & 3(c) ARE MINORS,
REP BY THEIR MOTHER
SUDHA, L.R.No.3(a)
ALL RESIDING AT:
BAGALUR (POST)
JALA HOBLI,
BANGALORE NORTH TALUK
...RESPONDENTS
(BY SRI SHIVANAND D S, AGA FOR R1 & R2
SRI BALARAM M L, ADVOCATE FOR R3(A-C))
THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
IMPUGNED ORDERS DTD.31.10.11 PASSED BY THE R1 IN SAP
1/11-12 VIDE ANNEX-G AND THE IMPUGNED ORDER
DTD.8.6.11 IN STP 2/11-12 VIDE ANNEX-E AND CORRIGENDUM
DTD.3.12.11 VIDE ANNEX-H PASSED BY THE R2 IN STP 2/11-12
OR ANY OTHER APPROPRIATE WRIT THAT MAY BE APPLICABLE
IN THE CIRCUMSTANCES OF THE CASE AND ETC.
3
IN W.P. NO. 1497/2012
BETWEEN
SHRI P BACHEGOWDA
SINCE DEAD BY L.R.s
1(a) SUDHA
W/O LATE P. BACHE GOWDA,
AGED ABOUT 34 YEARS
1(b) NAVEEN GOWDA
W/O LATE P. BACHE GOWDA,
AGED ABOUT 34 YEARS
1(c) VIDYA
W/O LATE P. BACHE GOWDA,
AGED ABOUT 34 YEARS
L.R.s NO.1(b) & 1(c) ARE MINORS,
REP BY THEIR MOTHER
SUDHA, L.R.No.1(a)
ALL ARE RESIDING AT:
BAGALUR VILLAGE AND POST
JALA HOBLI,
BANGALORE NORTH TALUK
BANGALORE DISTRICT - 562149.
...PETITIONERS
(BY SRI M L BALARAM, ADVOCATE FOR LR'S)
AND
1. STATE OF KARNATAKA
BY ITS SECRETARY
REVENUE DEPARTMENT
M S BUILIDNG, VIDHANA VEEDI,
BANGALORE 560 001
4
2. THE CHIEF CONTROLLING REVENUE AUTHORITY
(CCRA & INSPECTOR GENERAL OF REGISTRATION
AND COMMISSIONER OF STAMPS),
NO.720,"SHIMSHA BHAVAN",
SANGAM CIRCLE, 46TH CROSS,
8TH BLOCK, JAYANAGAR,
BANGALORE
3. DISTRICT REGISTRAR
AND DEPUTY COMMISSIONER OF STAMPS
BANGALORE RURAL DISTRICT,
III FLOOR, "SATYA COMPLEX",
IST MAIN,INDUSTRIAL TOWN,
WEST OF CHORD ROAD,
BANGALORE.
4. M/S.DODDABALLAPUR SPINNING MILLS PVT.LTD.,
A COMPANY REGISTERED UNDER
THE COMPANIES ACT,1956 AND
HAVING ITS REGD. OFFICE
AT BASETTIHALLI VILLAGE
DODDABALLAPUR TALUK,
BAMGA;PRE DISTRICT 561203.
...RESPONDENTS
(BY SRI SHIVANAND D S, AGA FOR R1 TO R3
SRI K V SATISH, ADVOCATE FOR R4)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH
THE THIRD RESPONDENT'S ORDER DATED 08.06.2011 PASSED
VIDE ANNEXURE A AND ETC.
THESE PETITIONS HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 08.07.2022, COMING ON FOR
'PRONOUNCEMENT OF ORDER' THIS DAY, THE COURT MADE
THE FOLLOWING:-
5
ORDER
W.P.No.10535/2012 has been filed seeking for the following reliefs:
i. Issue a Writ of Certiorari quashing the impugned Orders dated 31.10.2011 passed by the Respondent No.1 in SAP 1/2011-12 (Annexure-G) and the impugned order dated 8.6.2011 in STP 2/2011-12 (Annexure-E) and Corrigendum dated 3.12.2011 (Annexure-H) passed by the Respondent No.2 in STP 2/2011- 12 or any other appropriate writ that may be applicable in the circumstances of the case;
ii. Issue a Writ of Mandamus directing the Civil Judge (Senior Division), Doddaballapura to impound the Agreement of Sale dated 29.12.2009 as per Annexure-A which is produced in O.S.82/2010 pending before him; iii. Issue a Writ of Mandamus directing the Civil Judge (Senior Division), Doddaballapura to levy penalty equivalent to ten times the stamp duty in respect of the Agreement of Sale dated 29.12.2009 as per Annexure-'a' which is produced in O.S.82/2010 pending before him; and iv. Pass such other order/s as this Hon'ble Court may deem fit under the facts and circumstances of the case in the interests of justice and equity.
2. W.P.No.1497/2012 has been filed seeking for the following reliefs:
6
a) the third Respondent's Order dated 08.06.2011 passed in No.STP/02/2010-11, vide ANNEXURE-'A',
b) the second Respondent's subsequent Order dated 31.10.2011 passed in No.SAP/01/2011-12, vide ANNEXURE-'B',
c) the third Respondent's Corrigendum dated 03.12.2011 passed in No.STP/02/2010-
11, vide ANNEXURE-'C', and consequently,
d) direct the Respondents 1 to 3 to refund the entire sum of Rs.99,00,000/- paid by the Petitioner pursuant to third Respondent's Order dated 08.06.2011, vide ANNEXURE-'A',
3. In both the Writ Petitions the primary reliefs sought for are, to impugn the orders dated 08.06.2011, 31.10.2011 and 03.12.2011. Hence, both the Writ Petitions are being disposed off by this Common Order.
4. Brief facts of the case are as follows:
The Petitioner in W.P.No.10535/2012 (hereinafter referred to as the 'Vendor') entered into an Agreement of Sale dated 29.12.2009 for sale of certain properties owned by it in favour of the Petitioner in W.P.No.1497/2012 (hereinafter referred to as the 'Purchaser'). Due to various 7 disputes that arose, the Purchaser filed a suit for injunction in OS.No.113/2010 before the Civil Judge (Jr.Dn), Doddaballapur. In the said suit, question regarding sufficiency of stamp duty paid on the Agreement of Sale arose. However, since the original agreement of sale was not produced in the said suit, the document was not impounded.
5. Subsequently, the Purchaser filed a suit in OS.No.82/2010 before the Civil Judge (Sr.Dn), Doddaballapur, for specific performance. In the said suit, the Vendor, after entering appearance, filed an application under Section 34 of the Karnataka Stamp Act, 1957 (hereinafter referred to as the 'Stamp Act' for short) for impounding the Agreement of Sale on the ground of insufficiency of stamp duty. The Trial Court, vide its order dated 04.10.2010, directed that the stamp duty on the agreement as per conveyance was liable to be paid as also penalty at the rate of 10 times of the stamp duty as provided under Section 34 of the Stamp Act. The said 8 order dated 04.10.2010 was challenged by the Purchaser in W.P.No.33390/2010, which was disposed of by this Court, vide order dated 16.12.2010. The relevant portion of the said order dated 16.12.2010, which is necessary for adjudication of the present Writ Petitions is extracted herein below for ready reference:
"10. ..................... It is apparent that, the instrument has not been drawn on the value of the stipulated stamp paper. The instrument having been drawn on insufficiently stamped paper, the Court in exercise of the power under Section 33 of the Act was justified in passing the order for impounding of the document.
11. However, the document having not been sought to be admitted in evidence i.e., the applicability of the provision under Section 34 of the Act, the Trial Court was not justified in determining the penalty payable in the matter. By exercising the power under Section 33 of the Act, the Court ought to have referred the document to the Deputy Commissioner in terms of Section 37(1) of the Act, so that the Deputy Commissioner can decide about the duty and penalty payable on the instrument in question. To the said extent, the Trial Court has committed error and illegality.
In the result, the writ petition stands disposed of. The order to the extent of determining the stamp duty and penalty payable stands set aside. The Trial Court is directed to impound the document and make reference tothe Deputy Commissioner under Section 37(1) of the Act. After receipt of the communication from the Deputy Commissioner with regard to the remittance of the duty 9 and penalty, the Trial Court to proceed further with the suit. Till the decision of the Deputy Commissioner with regard to the remittance or otherwise of the duty and penalty is received, the proceedings in the suit stand stayed. The Trial Court to make a reference within two weeks from the date a copy of this order is supplied and the Deputy Commissioner shall take decision within four weeks from the date the reference is received from the Trial Court. If the Deputy Commissioner holds that, there is need for payment of deficit, stamp duty and penalty, the petitioner/plaintiff shall remit the same within four weeks from the date of determination.
6. Consequent to the order passed in W.P.No.33390/2010, the District Registrar and Deputy Commissioner of Stamps, Bengaluru Rural District, notified both the Vendor and Purchaser, enquired into the matter and vide letter dated 17.03.2011, after opining that the document in question falls under Article 5(e)(i) of the Schedule to the Stamp Act, referred the matter to the Chief Controlling Revenue Authority and the Inspector General of Registration and Commissioner of Stamps under Section 53(2) of the Stamp Act for opinion. In response, to the letter dated 17.03.2011, the Commissioner of Stamps, vide Memo dated 12.05.2011 referred to two judgments of this Court to facilitate the Deputy 10 Commissioner to consider the matter after issuing further directions.
7. Consequent to the said Memo dated 12.05.2011, the Deputy Commissioner, vide order dated 08.06.2011 determined that the duty has to be paid under Article 5(e)(i) of the Schedule to the Stamp Act, and directed the Purchaser to pay duty of Rs.49,50,000/- and penalty of Rs.49,50,000/- at the rate of one time under Section 39(1)(b) of the Stamp Act and worked out the total amount payable in a sum of Rs.98,99,800/-. The Purchaser paid the said amount determined by the Deputy Commissioner. However, the Vendor filed Review Petition under Section 53(1) of the Stamp Act before the Commissioner challenging the order dated 08.06.2011. The Commissioner, after hearing both the parties, vide order dated 31.10.2011 confirmed the finding that the said Agreement attracted the stamp duty payable under Article 5(e)(i) of the Schedule to the Stamp Act. However, with regard to the aspect of levy of penalty, the Commissioner 11 set aside the order dated 08.06.2011, remanded the matter to the Deputy Commissioner and directed him to levy penalty of not less than 5 times the duty. Thereafter, the Deputy Commissioner passed the order dated 03.12.2011 by way of Corrigendum to the order dated 08.06.2011 imposing duty and penalty at the rate of 5 times and requiring the Purchaser to pay a sum of Rs.1,98,00,000/- being the balance amount of 4 times of the penalty imposed.
8. Being aggrieved by the orders dated 08.06.2011 and 31.10.2011 and 03.12.2011, the Vendor has filed W.P.No.10535/2012 for levy of penalty equivalent to 10 times of the stamp duty in respect of the agreement of sale; whereas being aggrieved by the orders dated 08.06.2011 and 31.10.2011 and 03.12.2011 the Purchaser has filed W.P.No.1497/2012, inter alia seeking for refund of the entire sum of Rs.99.00 lakhs paid by the Purchaser pursuant to the order dated 08.06.2011 passed by the Deputy Commissioner.
12
9. It is relevant to mention at this juncture that this Court, vide interim order dated 24.01.2012 passed in W.P.No.1497/2012 granted interim stay of orders dated 31.10.2011 and 03.12.2011.
10. During the pendency of W.P.No.1497/2012, the Petitioner, who was also arrayed as Respondent No.3 in W.P.No.10535/2012 having died, his legal representatives have come on record in both the Writ Petitions. The Petitioner in W.P.No.10535/2012 is arrayed as the Respondent No.4 in W.P.No.1497/2012.
11. Learned Counsel for the Vendor (Petitioner in W.P.No.10535/2012) has contended that the authorities have no discretion in the matter of imposition of penalty and are required to impose 10 times the penalty paid; this Court in W.P.No.33390/2010 having impounded the agreement of sale and directed the authorities to adjudicate the duty and penalty payable, the authorities have rightly adjudicated the duty payable. However, with 13 regard to imposition of penalty, they ought to have imposed the duty and penalty at the rate of 10 times the duty payable.
12. In support of his contentions, the learned counsel for the vendor relied on the following judgments:
i) Avinash Kumar Chauhan v. Vijay Krishna Mishra1 ;
ii) J.S.Paramesh Siddegowda v.
Smt.Indramma V.Murthy2;
iii) Kapoor Constructions v. Leela Nagaraj and
Another3;
iv) J.Prakash v. Smt.M.T.Kamalamma and
Another4;
v) Mahadeva v. The Commissioner, Mysore
City Corporation and other5; and
vi) Leelamma Samuel v. Francis6
13. By putting forth the aforementioned
contentions and placing reliance on the judgments, the 1 (2009) 2 SCC 532 2 2008 SCC OnLine Kar 262 3 2005 SCC OnLine Kar 152 4 2007 SCC Online Kar 490 5 2003(1) Kar.LJ 518 6 ILR 1994 KAR 3143 14 learned Counsel for the Vendor prayed for grant of the reliefs as sought in the said Writ Petition.
14. The learned Counsel for the Purchaser (Petitioner in W.P.No.1497/2012), in response, has submitted that the agreement of sale is not liable for payment of duty and penalty as possession of the property has not been handed over; the Purchaser under the agreement of sale has been relegated to a situation where the transaction as contemplated under the agreement of sale has not fructified and he is saddled with a liability to pay duty and penalty on the transaction, which has not been completed; the authorities erred in misinterpreting the documents as well as the legal position by imposing duty and penalty as per the orders impugned in the Writ Petition.
15. The learned Counsel for the Purchaser placed reliance on the following decisions: 15
i) Trustees of H.C Dhanda Trust v. State of Madhya Pradesh and others7;
ii) Gangappa and another v. Fakirappa8;
iii) Dharati Developers and another v.9
Madhukumar Atmaram Patil ;
iv) Narendra Janarada Pathak and others v.
Collector of Stamps10; and
v) Mr.N.Srinivasa v. Sri Murulesh and others11
16. By putting forth the aforementioned contentions and placing reliance on the judgments supra, the learned Counsel for the Purchaser prays for granting the reliefs sought in the Writ Petition.
17. Having regard to the contentions put forth by the learned Counsel for both the parties, the question that falls for consideration is, "Whether the orders impugned dated 08.06.2011 and 31.10.2011 and 03.12.2011 are liable to be interfered with?"
7
(2020) 9 SCC 510 8 (2019) 3 SCC 788 9 2017 SCC Online Bom 9810 10 2019 SCC OnLine Bom 1364 11 ILR 2014 KAR 4350 16
18. This Court, vide its order dated 16.12.2010 passed in W.P.No.33390/2010 has, after recording a categorical finding that the agreement of sale in question has not been drawn on the value of the stipulated stamp paper, impounded the document and referred the same to the Deputy Commissioner under Section 37(1) of the Stamp Act. The Deputy Commissioner has held that Article 5(e)(i) of the Schedule to the Stamp Act would be attracted and accordingly, proceeded to calculate the stamp duty, which is called in question in the present Writ Petitions.
19. For the purpose of adjudicating the issue, it is necessary to notice the relevant clauses of the Agreement of Sale dated 29.12.2009, which reads as under:
"06. .........
(a) ..........
(b) After obtaining the legal opinion further a sum of Rs.1,50,00,000/- (Rupees One Crore fifty lakhs only) is payable by the purchaser to the seller on 20.01.2010 as Second instalment of advance on 17 Registration of the Sale agreement and the Seller has to handover the schedule property possession.
.........
07. The Seller covenant with the purchaser that they will convey the schedule properties to the purchaser/purchasers/their nominee/nominees, at the option of the purchaser either in one sale deed or number of sale deeds.
10. the Seller agrees to hand over possession of the schedule property to the purchaser on receipt of second instalment of advance on 20.01.2010."
20. Hence, it is clear that, under the terms of the agreement of sale, possession is contemplated to be handed over before execution of the Sale Deed. Article 5(e)(i) as on the date of the agreement reads as follows:
"5(e)If relating to sale of immovable property wherein part performance of the contract,
(i) possession of the Same duty as a conveyance property is delivered or is (No.20) on the market value agreed to be delivered without of the property:"
executing the conveyance 18
21. It is forthcoming from a perusal of the aforementioned that, Article 5(e)(i) is attracted since possession under the agreement of sale was contemplated to be handed over before executing the conveyance. Hence, the assessment made by the authorities of the duty payable on the Agreement of Sale is proper and is required to be upheld.
22. With regard to the quantum of duty and penalty payable, the following provisions and case laws are relevant. The proviso to Section 34 of the Stamp Act provides for admitting in evidence an instrument not duly stamped on payment of duty and penalty. With regard to penalty the statute provides:
"34. (a) ... 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;"19
23. Section 39(1)(b) of the Stamp Act reads as under:
39. Deputy Commissioner's power to stamp instruments impounded.- (1) When the Deputy Commissioner impounds any instrument under Section 33, or receives any instrument sent to him under sub-section (2) of Section 37, not being an instrument chargeable with a duty not exceeding fifteen naye paise .............. , he shall adopt the following procedure:
(a) .............
(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 of five rupees:"
24. The interpretation of Sections 34 and 39 of the Stamp Act fell for consideration before Hon'ble Supreme Court in the case of Gangappa (supra), wherein it has been held as follows:
"14. The above provision indicated that if the Deputy Commissioner is of opinion that such 20 instrument is chargeable with duty and is not duly stamped shall require the payment of the proper duty with a penalty of five rupees. The latter part of the provision states "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 of five rupees:".
Thus, discretion has been conferred on the Deputy Commissioner which is apparent from the words "if he thinks fit". The Deputy Commissioner has discretion of imposing penalty of 10 times or lesser of the amount of duty or portion thereof. There is clear contradistinction between the power under Sections 33 and 39. The object and purpose for such contradistinction in the provision and power is not far to seek. Section 33 applies to every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office. Thus, Section 33 covers a host of authorities, persons before whom instruments are filed. The legislative scheme does not indicate any distinction between a court receiving an insufficiently stamped instrument in evidence and other authorities. All have to impose penalty of 10 times of the duty or deficit portion, if it exceeds rupees five. This provision is for purpose of maintaining a uniformity in imposing a fixed penalty of 10 times without adverting to any adjudicatory process regarding quantifying the quantum of penalty. ........"
(emphasis supplied)
25. The Hon'ble Supreme Court in the case of Gangappa (supra) has also referred to the Division Bench 21 judgment of this Court in the case of Digambar Warty v. Bangalore Urban District12 and has held as follows:
"17. In the Division Bench judgment of the Karnataka High Court relied on by the High Court in Digambar Warty [Digambar Warty v. Bangalore Urban District, 2012 SCC OnLine Kar 8776 : ILR 2013 KAR 2099] , after noticing the provisions of Sections 33 and 34 the Division Bench laid down the following in para 36: (SCC OnLine Kar) "36. This provision refers to the power of the civil court which admits the documents in evidence. The main section is couched in the negative. Unless the instrument is duly stamped, it is inadmissible in evidence. As an exception, the proviso provides for payment of duty and penalty. In the matter of collection of duty and penalty no discretion is vested with the authority admitting such an instrument in evidence. The duty payable on the instrument is prescribed by statute. Therefore, there is no question of any discretion being vested with the authority impounding the document in the matter of collecting the duty. Once the duty payable is ascertained from the statute, no discretion is vested with the authority admitting the document in evidence, in the matter of imposition of duty and penalty. The word used in the said proviso is "shall".
It is mandatory. ..............."
"18. The above view of the Karnataka High Court that there is no discretion vested with the authority impounding the document in the matter of collecting duty under Section 33, is correct. The 12 2012 SCC OnLine Kar 8776 22 word used in the said proviso is "shall". Sections 33 and 34 clearly indicate that penalty imposed has to be 10 times. The Division Bench of the Karnataka High Court in Digambar Warty [Digambar Warty v. Bangalore Urban District, 2012 SCC OnLine Kar 8776 : ILR 2013 KAR 2099] has rightly interpreted the provisions of Sections 33 and 34 of the Act. We, thus, are of the view that the High Court in the impugned judgment [Fakkirappa v. Gangappa, 2014 SCC OnLine Kar 12775] did not commit any error in relying on the judgment of the Division Bench in Digambar Warty [Digambar Warty v. Bangalore Urban District, 2012 SCC OnLine Kar 8776 : ILR 2013 KAR 2099] . We thus have to uphold the above view expressed in the impugned judgment [Fakkirappa v. Gangappa, 2014 SCC OnLine Kar 12775] ."
26. Hence, it is settled law that the view expressed by the Division Bench of this Court in Digambar Warty (supra) as relied upon by another Division Bench of this Court in Fakirappa v. Gangappa13 is affirmed by the Hon'ble Supreme Court in the case of Gangappa (supra) that no discretion is vested with the authority (either of Court receiving any insufficiently stamped instrument under evidence or other authorities) impounding the document in the matter of collecting of the duty and 13 2014 SCC OnLine Kar 12775 23 penalty. Once, the duty payable is ascertained from the statute, the penalty imposed has to be 10 times.
27. At this juncture, it is apposite to refer to Section 38 of the Stamp Act, which contemplates the refund of penalty and the same reads as under:
"38. Deputy Commissioner's power to refund penalty paid under sub-section (1) of Section
37.--
(1) 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.
(2) When such instrument has been impounded only because it has been written in contravention of Section 13 or Section 14, the Deputy Commissioner may refund the whole penalty so paid."
28. The scope and interpretation of Section 38(1) of the Stamp Act fell for consideration of the Hon'ble Supreme Court in the case of Gangappa (supra), wherein it has held as follows:
"16. The Deputy Commissioner under Section 38 is empowered to refund any portion of the penalty in excess of five rupees which has been paid in respect 24 of such instrument. Section 38 sub-section (1) again uses the expression "if he thinks fit". Thus, in cases where penalty of 10 times has been imposed, the Deputy Commissioner has discretion to direct the refund of the penalty in facts of a particular case. The power to refund the penalty under Section 38 clearly indicates that the legislature has never contemplated that in all cases penalty to the extent of 10 times should be ultimately realised. Although the procedural part which provides for impounding and realisation of duty and penalty does not give any discretion under Section 33 for imposing any lesser penalty than 10 times, however, when provision of Section 38 is read, the discretion given to the Deputy Commissioner to refund the penalty is akin to exercise of the jurisdiction under Section 39 where while determining the penalty he can impose the penalty lesser than 10 times."
29. Hence, it is clear from the above that, no discretion lies in the matter of imposing duty and penalty at the time of impounding the insufficiently stamped instrument and the penalty imposed has to be 10 times of the duty paid. However, subsequent to the payment of duty and penalty, as per the Stamp Act, it is open to the Deputy Commissioner, if an application is made, to exercise power under Section 38 of the Stamp Act and exercise his discretion to decide as to whether any portion of the penalty can be refunded.
25
30. Another aspect that is required to be noted is that, the Hon'ble Supreme Court in the case of Gangappa (supra) after deciding on the position of law, applying the same to the facts of the said case, has held as follows:
"20. The order of the trial court was passed as early as on 22-4-2013, that is, more than five years ago. In view of impounding the documents and imposition of penalty, we are sure that the suit must not have been proceeded further, and it must be at the threshold stage; asking the appellant to deposit 10 times of penalty and thereafter to invoke the jurisdiction of the Deputy Collector under Section 38 to refund penalty shall be a proceeding again taking considerable time. In the facts of the present case, we are of the view that ends of justice will be served in closing the matter by confirming the payment of deficit duty with the double penalty as imposed by the trial court which shall obviate the proceeding of approaching the Deputy Commissioner for reduction of penalty under Section 38, which in the facts of the present case and for the reasons noted by the trial court was a relevant consideration for refund/reduction of the penalty."
31. In view of the same, having regard to the position of law as indicated above and applying the same to the facts of the present case as has been done in the case of Gangappa (supra) as noticed above, since the Agreement of Sale is of the year 2009, the suit in 26 OS.No.82/2010 has been pending for more than 12 years without any progress having been made due to the question of sufficiency of stamp duty of the Agreement of Sale being pending in this Petition and having regard to the fact that the Commissioner in his order dated 31.10.2011 has in detail appreciated the factual matrix of the matter for the purpose of assessing the amount of penalty payable, which reasoning could be construed for the present case as being the reasoning of the competent authority under Section 38 of the Stamp Act, in the interest of justice, with a view of ensuring that the litigation between the parties is proceeded, without any further delay and with a view that the ends of justice would be served by brining finality to the issue regarding duty and penalty in the peculiar facts of the present case, the order for payment of deficit duty with penalty of 5 times in terms of the order dated 31.10.2011 of the Commissioner, which has been suitably incorporated in the original order dated 08.06.2011 of the Deputy 27 Commissioner with the Corrigendum dated 03.12.2011 is affirmed.
32. Accordingly, Writ Petitions are disposed off in the above terms.
No costs.
SD/-
JUDGE nd