Andhra Pradesh High Court - Amravati
Parchuri Sireesha vs Challapalli Jalaja on 6 August, 2019
Author: M.Satyanarayana Murthy
Bench: M.Satyanarayana Murthy
THE HON'BLE SRI JUSTICE M.SEETHARAMA MURTI
Civil Revision Petition No.1400 of 2019
ORDER:
In this revision, under Article 227 of the Constitution of India filed by the defendants, the challenge is to the order, dated 18.02.2019, of the learned III Additional District Judge, Guntur, passed in IA.no.378 of 2017 in IA.no.785 of 2016 in OS.no.291 of 2016. By the said order, the application filed by the defendants under Section 33 of the Indian Stamp Act, 1899, and Section 151 of the Code of Civil Procedure, 1908, requesting the Court to pass orders to collect deficit stamp duty from the 1st petitioner - 1st defendant by impounding the gift deed, dated 02.07.1987, was dismissed.
2. I have heard the submissions of Sri Sreenivasa Rao Velivela, learned counsel appearing for the revision petitioners- defendants ['defendants, for brevity]' and, of Ms. Nimmagadda Revathi, learned counsel appearing for the respondent-plaintiff ['plaintiff', for brevity]. I have perused the material record.
3. The introductory facts, in brief, are as follows: - 'The plaintiff instituted the suit against the defendants for declaration and consequential relief of recovery of possession of the plaint schedule property after directing the defendants to vacate and deliver the same to the plaintiff and for costs. The defendants are resisting the suit by filing a written statement. During the pendency of the said suit, the subject Interlocutory Application is filed by the defendants seeking the afore-stated relief.'
4. The case of the defendants in support of the above mentioned request, as stated by the 1st defendant, is this: - 'In the written statement, the 2 MSRM, J C.R.P.No.1400 of 2019 defendants raised a defence that the plaintiff is the junior maternal aunt of the 1st defendant and that out of love and affection the plaintiff executed an unregistered gift deed, on 02.07.1987, in her favour in respect of the plaint schedule property and handed over possession of the title deed and the property to the 1st defendant and that she is continuing in possession of the said property ever since the said date and that the revenue authorities also recognised her possession and issued pattadar passbook and title deed book to her after mutating the property in her name in the revenue records. An extent of Ac.1.50 cents out of the total extent was acquired for purpose of laying a road by National Highway Authority of India [NHAI]. An award was passed in her name. Due to the increase in the values of properties and for non payment of share in the compensation amount, which was demanded, the present suit is filed. To prove the defence of the 1st defendant, the unregistered gift deed is filed into Court. It is not duly stamped on account of close relationship between the parties; hence, it requires impounding. Further, deficit stamp duty and penalty are to be collected on the said gift deed.'
5. Per contra, the case of the plaintiff is this:
The suit is filed for declaration and consequential relief of recovery of possession. The 2nd defendant purchased about Ac.5.00 cents near National Highway, which is near the plaint schedule property. Shortly thereafter, the plaint schedule property, that is, the land abutting to the said land was put up for sale. 2nd defendant was not having money at that time. She asked the husband of the plaintiff to purchase the said land as it has good potential and is likely to get good returns in future. The plaintiff's husband purchased Ac.4.33 cents in D.No.178/A and 178/B in the name of the plaintiff for valuable consideration under three registered sale deeds, dated 15.02.1982, and possession of the same was also delivered by the vendors to the plaintiff. 3
MSRM, J C.R.P.No.1400 of 2019 Plaintiff's name was shown as the owner in the adangals. Later, 2nd defendant purchased another Ac.3.00 cent of land near the plaint schedule property. Out of the above said Ac.4,33 cents, an extent of Ac.1.50 cents was acquired by NHAI in 2013. The remaining land is the present plaint schedule property. The original title deed of the plaint schedule property was obtained possession by the 2nd defendant in the circumstances that are stated in the plaint; and, the management of the property was entrusted to the 2nd defendant. At that time, signatures of the plaintiff were obtained on empty papers. Later serious disputes arose between the plaintiff's husband and the 2nd defendant. The 2nd defendant developed an eyesore due to increase in the value of the land of the plaintiff. Plaintiff's husband demanded for return of the original documents of the plaintiff and empty signed papers. It was stated that they are missing. All the contrary allegations in the defence of the defendants are false. At the time of acquisition of part of the land, the plaintiff came to know about the deletion of her name from the adangal in respect of the plaint schedule land and insertion of name of the 1st defendant in revenue records. The compensation amount was lying with the acquisition authority. Plaintiff's husband got filed a petition before RDO, Guntur, challenging the mutation entries in the revenue records. Now the matter is pending in appeal before the Joint Collector. A writ petition is also pending. In December, 2015, this plaintiff was forcefully dispossessed from the plaint schedule land. The defendants are trying to alienate the property taking advantage of entries in the revenue records. Hence, the plaintiff is constrained to file the instant suit. The unregistered gift deed said to have been executed by the plaintiff is a compulsorily registerable document. As the alleged gift deed cannot be marked for want of registration, the impounding of the same and collection of the stamp duty & penalty on the same will not serve any purpose. Hence, the petition of the defendants is liable for dismissal.4
MSRM, J C.R.P.No.1400 of 2019
6. As noted, the trial Court dismissed the petition of the defendants, nonetheless, by accepting the contention of the plaintiff that the question of impounding and collection of deficit stamp duty & penalty on an unregistered gift deed does not arise, as when once the document is inadmissible for want of registration, no purpose would be served by mere collection of deficit stamp duty & penalty; and, accordingly held that the defendants are not entitled to make a request to collect deficit stamp duty & penalty on the unregistered gift deed.
7. At the hearing, learned counsel for both the sides advanced arguments in line with the respective cases of the parties, which are narrated supra.
8. Now, the short question is - "Whether the request of the defendants made to the trial Court to pass orders to collect deficit stamp duty and penalty on the document in question, which the defendants are admitting to be a gift deed, should have been considered by the trial Court, in the light of the legal position obtaining?"
9. As per the ratio in the decision in Ram Rattan (dead) by L.Rs. v. Bajrang Lal and others1 the trial Court before which the objection is taken about admissibility of document on the ground that it is not duly stamped, has to judicially determine the matter as soon as the document is tendered in evidence and before it is marked as an exhibit in the case. In the case on hand, the defendants, who are producing the unregistered and insufficiently stamped gift deed, are volunteering to pay the deficit stamp duty and penalty and are asking the trial Court to pass orders to collect the same. 1 (1978) 3 SCC 236 5 MSRM, J C.R.P.No.1400 of 2019
10. It is also pertinent to note the ratio in the decision in Bipin Shantilal Panchal v. State of Gujarat and Anr.2, wherein the Supreme Court held that the trial Court has to judicially determine the matter relating to deficiency of stamp duty of a document as soon as the document is tendered in evidence and before it is marked as an exhibit in the case.
11. Further, whenever a Court comes across a document, which is required to be stamped, but, which is neither stamped nor sufficiently stamped, the Court is bound to impound (seize) the document and take steps for collection of the duty/deficit duty payable and also penalty. In this regard it is profitable to refer the legal position obtaining.
12. Section 33 of the Indian Stamp Act, 1899, ('Act', for brevity) provides for examination and impounding of instruments required to be stamped and not duly stamped. It ordains that every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an officer of police, before whom any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same and that for that purpose every such person shall examine every instrument so chargeable and so produced or coming before him, in order to ascertain whether it is stamped with a stamp of the value and description required by the law in force in India when such instrument was executed or first executed. Section 35 of the said Act postulates that 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. It is provided under 2 AIR 2001 SC 1158 6 MSRM, J C.R.P.No.1400 of 2019 Section 38(1) that when a person impounding an instrument has authority to receive evidence and admits such instrument in evidence upon payment of penalty as provided by Section 35, then he shall send to the 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. It is further provided in Section 38(2) that in every other case the person impounding the instrument shall send it in original to the Collector who shall deal with it as provided under Section 40. A reading of Section 38 shows that if the party who filed the document wants it to be admitted in evidence, then only the Court shall collect the stamp duty and penalty and then admit the instrument in evidence. But, if the party instead of requiring the document to be admitted in evidence merely wants the Court to send it to the Collector to be dealt with under Section 40, the Court has no option but to send it to the Collector for the desired purpose. It is also advantageous to refer to the decision of the Supreme Court in Chilakuri Gangulappa vs. Revenue Divisional Officer, Madanpalle and Ors.3 wherein the Supreme Court while dealing with the same aspect, referred to Section 38 of the Indian Stamp Act, and held as follows:
"It is clear from the first sub-section extracted above that the court has a power to admit the document in evidence if the party producing the same would pay the stamp duty together with a penalty amounting to ten times the deficiency of the stamp duty. When the court chooses to admit the document on compliance of such condition the court need to forward only a copy of the document to the Collector, together with the amount collected from the party for taking adjudicatory steps. But, if the party refuses to pay the amount aforesaid the Court, has no other option except to impound the document and forward the same to the Collector. On receipt of the document through either of the said avenues the Collector has to adjudicate on the question of the deficiency of the stamp duty. If the Collector is of the 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 an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof."
3
(2001)4SCC19 7 MSRM, J C.R.P.No.1400 of 2019
13. In the light of the settled legal position and the duty that is cast upon the learned Judge of the trial Court, the learned Judge is obliged nay duty bound to impound (seize/take possession of) the document and collect the deficit stamp duty & penalty as per the provisions of the Act, when the document is admittedly not duly stamped, and see that no loss of revenue is caused to the exchequer of the State Government. Therefore, turning a blind eye to the statutory mandate and dismissing of the petition of the defendants by the trial Court on the ground that no purpose would be served by collection of deficit stamp duty & penalty on the gift deed as it is unregistered, though compulsorily registerable, is erroneous as any document brought before a Court should comply with the requirement of Section 35 of the Indian Stamp Act and the Court is duty bound to impound and collect deficit stamp duty & penalty, if any such document is found to be not duly stamped. In that view of the matter, this Court finds that the trial Court committed a grave error in refusing the request of the defendants to pass orders to collect stamp duty and penalty on the subject gift deed.
14. Be it now noted that the apprehension of the plaintiff is that in the event the stamp duty and penalty are collected, the defendants would make a request to receive the unregistered gift deed in evidence for collateral purpose though it cannot be relied upon to prove the alleged gift.
15. It is to be noted at this instant that in the decision in the case of Avinash Kumar Chauhan vs. Vijay Krishna Mishra [2009 (1) L S 35 (SC)], the Supreme Court referred to the following ratio in the decision in the case of T. Bhaskar Rao vs. T. Gabriel and other [AIR 1981 AP 175]::
"It is now well settled that there is no prohibition under section 49 of the Registration Act, to receive an unregistered document in evidence for collateral purpose. But the document so tendered should be duly stamped or should comply with the requirements of section 35 of the 8 MSRM, J C.R.P.No.1400 of 2019 Stamp Act, if not stamped, as a document cannot be received in evidence even for collateral purpose unless it is duly stamped or duty and penalty are paid under section 35 of the Stamp Act."
Thus, in view of the above said legal position, it follows that an unregistered instrument cannot be admitted even for collateral purpose unless the required stamp duty and penalty collectable on the instrument are paid and collected. Be that as it may.
16. In the considered view of this Court, merely on according permission to the defendants to pay the stamp duty and penalty on the gift deed in question and on collection of the same, no automatic right to have the gift deed exhibited for collateral purpose would either accrue to the defendants or be conferred on the defendants, as the trial Court would be required to consider what is a collateral purpose before receiving the gift deed in evidence for collateral purpose, in the event of payment of deficit stamp duty & penalty payable on the said instrument. The word 'collateral purpose' is explained in the decision of the Supreme Court in K.B. Saha and sons Pvt. Ltd., v. Development Consultant Limited4 wherein the Supreme Court held as follows:
"A document required by law to be registered, if unregistered, is inadmissible as evidence of a transaction affecting immovable property, but it may be admitted as evidence of collateral facts, or for any collateral purpose that is for any purpose other than that of creating, declaring, assigning, limiting or extinguishing a right to immovable property."
Further, as per Section 49 of the Indian Registration Act, 1908, a document, which is required by law to be registered, if not registered, shall not affect any immovable property comprised therein.
17. In the present case, since the matter is at the first stage of collection of deficit stamp duty and penalty on the gift deed, there is no need to go into the other aspect as to what could be the collateral purpose for which the 4 (2008) 8 SCC 56 9 MSRM, J C.R.P.No.1400 of 2019 contesting defendants would be permitted to rely upon the document in question, after paying the deficit stamp duty and penalty on the instrument, as may be determined. Suffice if it is observed that it is for the trial Court to consider the said aspect at an appropriate later stage, if the contesting defendants make a request in that regard, after they pay the deficit stamp duty and penalty as determined.
18. For the afore-stated reasons and in view of my finding that when a request of the present nature is made by a party, the Court has no option but to pass orders according permission for payment and collection of the deficit stamp duty and penalty on the instrument/document in question, it follows that the impugned order brooks interference.
19. In the result, the Civil Revision Petition is allowed and the impugned order is set aside and IA.no.378 of 2017 in IA.no.785 of 2016 in OS.no.291 of 2016 on the file of III Additional District Court, Guntur, is allowed directing the trial Court to permit the defendants to pay the deficit stamp duty & penalty on the deed of gift in question and collect the same or do the needful by following the procedure established by law. It is made clear that in the event the deficit stamp duty and penalty are paid by the defendants as determined, the trial Court shall then consider the admissibility of the said instrument for any collateral purpose, if any such request is made, however, following the precedential guidance of the Supreme Court wherein the words 'collateral purpose' are explained. There shall be no order as to costs.
Miscellaneous petitions pending, if any, shall stand closed.
____________________ M.SEETHARAMA MURTI, J 06.08.2019 Note: LR copy to be marked.
B/o Vjl