Madhya Pradesh High Court
State Of M.P. vs Anand Mohan Chhaparwal on 10 December, 2025
NEUTRAL CITATION NO. 2025:MPHC-GWL:32532
1 WP-8231-2013
IN THE HIGH COURT OF MADHYA PRADESH
AT GWALIOR
BEFORE
HON'BLE SHRI JUSTICE AMIT SETH
WRIT PETITION No. 8231 of 2013
STATE OF M.P. AND OTHERS
Versus
ANAND MOHAN CHHAPARWAL AND OTHERS
Appearance:
Shri Vijay Sundaram - Govt. Advocate for the petitioners/State.
Shri Amit Lahoti - Advocate assisted by Shri Divakar Vyas - Advocate
for respondents.
Reserved on : 03/12/2025
Delivered on : 10/12/2025
ORDER
With the consent of parties, the matter is heard finally. The instant writ petition filed under Article 226 of the Constitution of India challenges the order dated 15.01.2013 (Annexure-P/1) passed by the Board of Revenue, Madhya Pradesh, Gwalior, whereby the order dated 12.07.2012 passed by the Collector of Stamps, District Gwalior, to the extent, it imposes the penalty of Rs.9 Lacs on deficit stamp duty of Rs.51,57,442/- on the respondents has been set aside.
2. Brief facts leading to filing of the instant writ petition are as under:
2.1Certain immovable properties situated in Gwalior came to be partitioned between the respondents vide arbitration award passed in the year Signature Not Verified Signed by: ADNAN HUSAIN ANSARI Signing time: 12/12/2025 2:17:05 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:32532 2 WP-8231-2013 2009. When the award was presented by the respondents before the Sub-
Registrar for its registration, finding the stamp duty paid on the award to be insufficient, he impounded the award in terms of Section 33 of the Indian Stamp Act, 1899 (hereinafter referred to as Act of 1899 ) and referred the same to the District Registrar vide communication dated 28.06.2011 for determination of market value of the properties partitioned under the award and computation of appropriate stamp duty payable on the document, without registering the award.
2.2The Collector of Stamps, District Gwalior, on receipt of the reference under Section 33 of the Act of 1899 by the Sub-Registrar, registered the case and issued notices to the respondents for holding an enquiry for determination of the correct market value of the properties partitioned under the award and computation of the appropriate stamp duty leviable on the award, in view of the market value of the properties partitioned under the said award, after following the due process of law and affording opportunity of hearing to the respondents, the Collector found the deficit stamp duty of Rs.51,57,442/- on the award and accordingly, directed for its payment.
2.3The Collector, by exercising powers under Section 40 of the Act of 1899, also imposed penalty of Rs.9 Lacs vide order dated 12.07.2012 on the deficit stamp duty paid by the respondents. The respondents challenged the aforesaid order dated 12.07.2012 in an appeal before the Board of Revenue, M.P. under Section 56(4) of the Act of 1899, only to the extent of imposition of penalty of Rs. 9,00,000/- on the ground that when the registration officer, before whom, a document is produced for registration, finds the document to be Signature Not Verified Signed by: ADNAN HUSAIN ANSARI Signing time: 12/12/2025 2:17:05 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:32532 3 WP-8231-2013 inadequately stamped and the reference thereafter is made to the Collector of Stamps for determination of appropriate stamp duty payable, then the powers which are exercised by the Collector are under Section 47-A of the Act of 1899. The registration officer before whom the document is produced for registration does not hold authority to impound the said document in exercise the powers under Section 33 of the Act of 1899, therefore he could not have made the reference of the award to the Collector by exercising powers of impounding the document under section 33 of the Act of 1899. The power exercised by the Collector while passing the order dated 12.07.2012 is under Section 47-A of the Act of 1899 and the said provision does not empower the Collector to levy any penalty. The provision for levy of penalty under Section 40 of the Act are attracted only when the proceedings of impounding are instituted under Section 33 of the Act of 1899.
2.4The Board of Revenue allowed the appeal preferred by the respondents vide order dated 15.01.2013 on the ground that when the document is presented before the registration officer for its registration and if he is of the opinion that the document is in-sufficiently stamped and consequently the document so presented is referred by the Registration Officer to the Collector of Stamps for determination of adequate stamp duty, the registration officer is not empowered to impound the said document by invoking Section 33 of the Act of 1899, and in such situation the powers which is exercisable by the Collector of Stamps for determination of the market value of the property and deficit stamp duty are under Section 47-A of the Act of 1899, which does not empower the Collector of Stamps to impose any penalty and therefore, the Signature Not Verified Signed by: ADNAN HUSAIN ANSARI Signing time: 12/12/2025 2:17:05 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:32532 4 WP-8231-2013 order of the Collector to the extent imposition of penalty was set aside. It is this order which is under challenge in the instant writ petition.
3. Learned counsel appearing for the petitioners/State submits that the Board of Revenue has erred in law in holding that when the document was referred by the registration officer which was presented before him for the purposes of registration, the provisions of Section 33 of the Act of 1899 for impounding the document cannot be invoked by the registration officer and the powers exercisable by the Collector in such matter is available only under Section 47-A of the Act of 1899, which does not empower him to levy penalty under Section 40 of the Act of 1899. He further submits that the aforesaid reasons assigned by the Board of Revenue is in utter misreading of Section 33 of the Act of 1899. Accordingly, learned counsel submits that the petition deserves to be allowed.
4. On the other hand, learned counsel appearing for respondents supports the order dated 15.01.2013 passed by the Board of Revenue, and by taking this Court to Section 33 of the Act of 1899, submitted that the power of impounding under the said section is exercisable only by the authority who is competent to receive evidence. The registration officer since is not competent to receive evidence, he has no authority to impound the document presented before him for registration. In case the registration officer, before whom the document is presented for its registration, refers the documents to the Collector of Stamps for determination of adequate stamp duty, then the powers are to be exercised by Collector only under Section 47-A of the Act of 1899, and Section 47-A of the Act of 1899 does not provide for any penalty. He thus, Signature Not Verified Signed by: ADNAN HUSAIN ANSARI Signing time: 12/12/2025 2:17:05 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:32532 5 WP-8231-2013 submits that the imposition of penalty by the Collector by invoking section 40 of the Act of 1899 in the order dated 12.07.2012 was illegal and without jurisdiction.
5. Counsel appearing for respondents further submits that insofar as the deficit stamp duty is concerned, the same has already been paid by the respondents and the present issue is restricted only to the aspect of imposition of penalty.
6. Counsel for the respondents further submitted that the penal provision under Section 40 of the Act of 1899 can be invoked, if the provisions of Sections 33 and 38 of the Act of 1899 are applied. In the instant case, according to the respondents' counsel, though the communication dated 28.06.2011 issued by the Sub-Registrar, whereby the award was referred to the Collector of Stamps refers to Section 33 of the Act of 1899, but he submits that the same was erroneous exercise of power by the registration officer, as he was not competent to exercise the said power in the given facts and circumstances of the case, as he was not the authority competent to receive evidence. Accordingly, he submits that the petition deserves to be dismissed.
7. No other point has been pressed by the learned counsel for the parties.
8. After the matter was heard and closed for orders on 03.12.2025, the learned counsel for respondents by the leave of this Court on 04.12.2025, submitted the following judgments in support of his arguments advanced on the date of hearing of the matter.
i) Order dated 03.01.2025 passed by the Apex Court in Civil Appeal No.75-76 of 2025; Chief Revenue Controlling Officer Cum Inspector General Signature Not Verified Signed by: ADNAN HUSAIN ANSARI Signing time: 12/12/2025 2:17:05 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:32532 6 WP-8231-2013 of Registration, & Ors. Vs. P. Babu;
ii) The Division Bench judgment of this Court in the case of State of M.P. and Ors Vs. Suresh Khandelwal; ILR [2011] MP 823;
iii) The Full Bench of this Court in the case of Jaina Bai Vs. State of M.P., 1980 MPLJ 795.
9. Heard learned counsel for the parties and perused the record.
10.The bone of contention of the argument advanced by respondents' counsel is that when the document is presented before the registration officer, for its registration and in case he finds the document to be inadequately stamped, and a consequent reference is made to the Collector of Stamps for determination of the stamp duty on the document, then the registration officer does not hold jurisdiction to exercise the powers under Section 33 of the Act of 1899 and impound the document, so as to attract the penal provision of Section 40 of the Act of 1899. According to him, on such a reference by the Registration Officer, the power exercised by the Collector was restricted to Section 47-A of the Act of 1899, which does not provide for levy of penalty. In order to appreciate the arguments advanced by the counsel for the respondents, the perusal of the scheme of the relevant sections would be necessary.
11.Section 33 of the Indian Stamp Act, 1899, reads as under:
33. Examination and impounding of instruments.
(1) 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:
[Provided that nothing contained in this sub-section shall be Signature Not Verified Signed by: ADNAN HUSAIN ANSARI Signing time: 12/12/2025 2:17:05 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:32532 7 WP-8231-2013 deemed to authorise the Collector to impound any instrument which has not been executed but is brought to him under section 31 for determining the duty with which the instrument is chargeable or any instrument which he is authorised to endorse under section 32.] (2) 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:
Provided that-
(a) nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898
(b) in the case of a Judge of a High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints in this behalf (3) For the purposes of this section, in cases of doubt,-
(a) the State Government may determine what offices shall be deemed to be public offices; and
(b) the State Government may determine who shall be deemed to be persons in charge of public offices.
12.Whereas, Section 38 of the Indian Stamp Act, 1899, reads as under:
38. Instruments impounded, how dealt with .-
(1) When the person impounding an instrument under section 33 has by law or consent of parties authority to receive evidence and admits such instrument in evidence upon payment of a penalty as provided by section 35 or of duty as provided by section 37, he shall send to the Collector an authenticated copy of such instrument, together with a certificate in writing, stating the amount of duty and penalty levied in respect thereof, and shall send such amount to the Collector, or to such person as he may appoint in this behalf. (2) In every other case, the person so impounding an instrument shall send it in original to the Collector.
13.Section 40 of the Indian Stamp Act, 1899, reads as under:
Signature Not Verified Signed by: ADNAN HUSAIN ANSARI Signing time: 12/12/2025 2:17:05 PMNEUTRAL CITATION NO. 2025:MPHC-GWL:32532 8 WP-8231-2013
40.Collector's power to stamp instruments impounded.-
(1) When the Collector impounds any instrument under section 33, or receives any instrument sent to him under section 38, sub-
section (2), not being (a receipt) a bill of exchange or promissory note, he shall adopt the following procedure:-
(a) if he is of opinion that such instrument is duly stamped, or is not chargeable with duty, he shall certify by endorsement thereon that it is duly stamped, or that it is not so chargeable, as the case may be;
(b) if he is of opinion that such instrument is chargeable with duty and is not duly stamped, he shall require the payment of the proper duty or the amount required to make up the same, together with a penalty of the 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:
Provided that, when such instrument has been impounded only because it has been written in contravention of section 13 or section 14, the Collector may, if he thinks fit, remit the whole penalty prescribed by this section.
(2) Every certificate under clause (a) of sub-section (1) shall, for the purposes of this Act, be conclusive evidence of the matter stated therein.
(3) Where an instrument has been sent to the Collector under section 38, sub-section (2), the Collector shall, when he has dealt with it as provided by this section, return it to the impounding officer.
14.The very issue as to whether, when the document is presented before the registration officer for its registration, can he impound the same by exercising powers under Section 33 of the Act of 1899, initially came up for consideration before the Full Bench of this Court in the case of Komal Chand Vs. State of M.P., 1965 JLJ 656, and the majority view of the Full Bench in the case of Komal Chand has held as under:
" The answer to the first question turns on the provisions of Section 33(1) of the Act which runs as follows:
"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, stall, if it appears to him that such instrument is not Signature Not Verified Signed by: ADNAN HUSAIN ANSARI Signing time: 12/12/2025 2:17:05 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:32532 9 WP-8231-2013 duly stamped, impound the same."
It will be observed that under this provision the power to impound an instrument can be exercised only by a person having by law or consent of parties authority to receive evidence and in every person in charge of a public office, excepting a police officer, and only when the instrument is produced before them in the performance of their functions. The authorities mentioned in Section 33(1) have no power to impound an instrument if it is produced before them, or comes up before them, or is with them otherwise than in the performance of their functions. The expression "any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions" necessarily implies that the power to impound under Section 33(1) can be exercised only so long as the function is not performed or completed and not afterwards. The Sub-Registrar appointed under Section 7 of the Indian Registration Act, 1908, for registration of documents is no doubt a person in charge of a public office who has to perform the duty and function of registering a document under the Registration Act, and when a document is presented before him for registration it comes up before him in the performance of his functions . Section 35 of the Stamp Act, inter alia, says that no instrument chargeable with duty shall be registered by any public officer unless such instrument is duly stamped This provision thus casts a duty on the registering officer to examine whether an instrument presented for registration is duly stamped. If, as Section 35 says, an instrument chargeable with duty shall not be registered unless such instrument is duly stamped, then it follows that the registering officer must perform the duty of seeing whether an instrument presented for registration is or is not duly stamped before admitting it to registration and not afterwards If he finds that the document is not duly stamped, then he must impound it under Section 33 of the Act. Neither in the Registration Act nor in the Stamp Act is there any provision giving to the registering officer any power to examine whether an instrument already registered was or was not duly stamped and to impound it. As soon as the registering officer registers a document presented to him for registration, the function in the performance of which the document was produced before him is over and thereafter becomes functus officio having no power under Section 33 to impound the instrument.
Signature Not Verified Signed by: ADNAN HUSAIN ANSARI Signing time: 12/12/2025 2:17:05 PMNEUTRAL CITATION NO. 2025:MPHC-GWL:32532 10 WP-8231-2013 [emphasis supplied]
15.Subsequently, the said issue again came up for consideration before another Full Bench of this Court in the case of Jaina Bai Vs. State of M.P., 1980 MPLJ 795, and in the aforesaid case, the Full Bench has answered the reference in the following manner:
"3. Having heard learned counsel for the parties we are of the opinion that this reference must be accepted. Section 33(1) of the Act provides as follows:
"33(1). 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."
The Sub-Registrar before whom the document was produced for registration was a person in charge of a public office and had therefore the power to impound the document if in his opinion it was not duly stamped and to send the same in original to the Collector of Stamps under section 38(2) of the Act before registering the same because section 35 of the Act provides that no document shall be registered by any public officers unless the same is duly stamped. The Act does not empower the Sub-Registrar to impound the document after the same is registered by him even if it is not duly stamped. After registering an instrument the Sub-Registrar becomes functus officio and has no power to impound the same. In similar circumstances a Full Bench of this Court is Komalchand Jain and mother v. State of M.P. [1965 MPLJ 606.] held that the registering officer has to perform the duty of seeing whether an instrument presented for registration is or is not duly stamped before admitting it to registration and not afterwards. If he finds that the document is not duty stamped, then he must impound it under section 33 of the Act. Neither in the Registration Act nor in the Stamp Act is there any provision giving to the registering officer any power to examine whether an instrument already registered was or was not duly stamped and to impound it. As soon as the registering officer registers a document presented to him for registration, the function, in the performance of which the document was produced before him, is over and thereafter becomes functus officio having no power under section 33 to impound the instrument. We are in respectful agreement with the law laid down in the aforesaid Full Bench decision.
[emphasis supplied]
16.The Hon'ble Apex Court in the case of Government of U.P. Vs. Raja Mohd. Amir Ahmad Khan, AIR 1961 SC 787, in paragraphs 5 to 7, has held as under:
Signature Not Verified Signed by: ADNAN HUSAIN ANSARI Signing time: 12/12/2025 2:17:05 PMNEUTRAL CITATION NO. 2025:MPHC-GWL:32532 11 WP-8231-2013 "5. After an inordinately long delay, the Collector determined the amount of duty payable and impounded the document. Power to impound is given in Section 33 of the Act. Under that section any person who is a Judge of is in-charge of a public office before whom an instrument chargeable with duty is produced or comes in the performance of his functions is required to impound the instrument if it appears to him not to be duly stamped. The question is does this power of impounding arise in the present case? The instrument in dispute was not produced as a piece of evidence nor for its being acted upon e.g. registration, nor for endorsement as under Section 32 of the Stamp Act but was merely brought before the Collector for seeking his advise as to what the proper duty would be. The words "every person...before whom any instrument...is produced or comes in the performance of his functions" refer firstly to production before judicial or other officers performing judicial functions as evidence of any fact to be proved and secondly refer to other officers who have to perform any function in regard to those instruments when they come before them e.g. registration.
.................................................................................................................................."
[emphasis supplied]
17.Thus, it is no more res integra that the registration officer, when a document is presented before him for registration, finding the document to be insufficiently stamped, can very well exercise the powers under Section 33 of the Act for impounding the said document and thereafter send it to the Collector Stamps in terms of Section 38 (2) of the Act of 1899. The only rider is that the said power is exercisable prior to the stage of registration of the document. As per the law laid down by the Full Bench of this Court in the case o f Jaina Bai (supra) a n d Komal Chand (supra) , once, the document is registered, then the registration officer becomes functus officio. The power of the Registering officer to impound the document by exercising powers under Section 33 of the Act of 1899, in respect of document presented before him for registration is also affirmed by the Apex court in the case of Raja Mohd. Amir (supra).
18.In the instant case, the perusal of the communication dated 28.06.2011 (page 12 of the writ petition) clearly indicates that the document Signature Not Verified Signed by: ADNAN HUSAIN ANSARI Signing time: 12/12/2025 2:17:05 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:32532 12 WP-8231-2013 w a s unregistered when it was referred to the Collector of Stamps for determination of the adequate stamp duty by the Sub-Registrar.
19.This Court now proceeds to consider the applicability of case laws/judgments submitted by counsel for respondents in support of his arguments. The perusal of the judgment of the Apex Court in the case of P. Babu (supra) indicates that the same pertains to the exercise of discretionary power of the registration officer while making reference to the Collector of Stamps and the said judgments holds that if the registration officer has reasons to believe that there was a deliberate under valuation of the property, on the basis of prima facie finding of under valuation of the property, he can make a reference to the Collector of Stamps, but such power is not required to be exercised in a routine manner. It is noteworthy that no arguments whatsoever were advanced by the petitioners' counsel on the aspect that the reference made by the Sub-Registrar to the Collector of Stamps was by an unreasoned order and was lacking the satisfaction of the said authority, nor there are any pleadings to the said effect in the return filed by the respondents in the instant petition. It was not even the case of the respondents before the Board of Revenue, M.P., in their first appeal.
20.The perusal of the communication dated 28.06.2011 and Form-1, appended thereto, filed along with the writ petition, clearly indicates that reasons were recorded by the Sub-Registrar as regards under valuation of the property in question by making reference to the Collector of Stamps. Moreover, it is not open for the petitioners to raise the said ground for the simple reason that they have voluntarily accepted before the Collector of Stamps that they are Signature Not Verified Signed by: ADNAN HUSAIN ANSARI Signing time: 12/12/2025 2:17:05 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:32532 13 WP-8231-2013 ready and willing to pay the deficit stamp duty and have in fact paid the deficit stamp duty of Rs.51,57,442/- as imposed by the Collector vide the order dated 12.07.2012. The challenge of the petitioners is not to the levy of deficit stamp duty, as admittedly valuation of the property as reflected in the arbitration award was undervalued. The petitioners have only questioned the penalty aspect of Rs.9 Lacs as contained in the order dated 12.07.2012 passed by the Collector of Stamps. The said judgments, therefore, relied upon by the respondents is having no applicability in the given facts and circumstances of the case.
21.Similarly, the Division Bench judgment of this Court in the case of State of M.P. and Ors. Vs. Suresh Khandelwal (supra) also has no applicability in the given facts and circumstances of the case, as the petitioners herein have not objected to the determination of market value of the property before the Collector and have admitted that they are ready and willing to pay the deficit stamp duty and had in fact paid also. The only argument advanced by the respondent's counsel was the authority of registration officer to exercise power of impounding under Section 33 of the Act of 1899, which stands squarely answered by the above referred two Full Benches of this Court in the case of Jaina Bai (supra) and Komal Chand (supra).
22.Thus, this Court is of the considered opinion that there has been a lawful exercise of powers of impounding of the presented award under Section 33 of the Act of 1899 by the Sub-Registrar, the consequential reference of the document by him to the Collector Stamps in terms of Section 38(2) of the Act of 1899, culminating into the order dated 12.07.2012 passed by the Collector of Signature Not Verified Signed by: ADNAN HUSAIN ANSARI Signing time: 12/12/2025 2:17:05 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:32532 14 WP-8231-2013 Stamps determining the deficit stamp duty of Rs.51,57,442/-. The provisions of Section 40 of the Act of 1899, are very well attracted under which, the penalty of Rs.9 Lacs has been imposed by the Collector. The reasoning assigned by the Board of Revenue in the impugned order dated 05.01.2013 for setting aside the penalty, in view of the above considerations and discussion, being contrary to the law settled on the point, cannot be given stamp of approval.
23.Accordingly, the order dated 15.01.2013 (Annexure-P/1) passed by the Board of Revenue, Madhya Pradesh, Gwalior, is hereby set aside. The instant writ petition stands allowed.
24.Pending application(s), if any, shall also stand disposed of. No order as to costs.
(AMIT SETH) JUDGE Adnan Signature Not Verified Signed by: ADNAN HUSAIN ANSARI Signing time: 12/12/2025 2:17:05 PM