Karnataka High Court
M/S Samrudhi Groups Hubli vs Sri Anand S/O Holebasappa Angadi on 9 August, 2024
Author: H.P.Sandesh
Bench: H.P.Sandesh
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WP No. 102296 of 2022
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 9TH DAY OF AUGUST, 2024
BEFORE R
THE HON'BLE MR. JUSTICE H.P.SANDESH
WRIT PETITION NO. 102296 OF 2022 (GM-CPC)
BETWEEN:
M/S. SAMRUDHI GROUPS, HUBLI,
A REGISTERED PARTNERSHIP FIRM,
HAVING ITS OFFICE AT NO.334 TO 335,
BHAVANI ARCADE, NEAR BASAVA VANA,
HUBBALLI,
REPRESENTED BY ITS MANAGING PARTNER,
SRI. SHASHIDHAR S/O. DANAPPA UJJANI,
AGE: ABOUT 55 YEARS, OCC: BUSINESS,
R/O. NO.97, SHARADHA COLONY,
7TH CROSS, DHARWAD-580001.
...PETITIONER
(BY SRI. KINI N.S., ADVOCATE)
AND:
1. SRI. ANAND S/O. HOLEBASAPPA ANGADI,
AGE: ABOUT 40 YEARS, OCC: BUSINESS,
R/O. "HOLEBASAWESHWAR NILAYA",
LINGARAJ NAGAR, HUBBALLI-580020.
GIRIJA A 2. SRI. HOLEBASAPPA S/O. IRAPPA ANGADI,
BYAHATTI AGE: ABOUT 70 YEARS, OCC: RETIRED,
Location: HIGH
R/O. "HOLEBASAWESHWAR NILAYA",
COURT OF
KARANTAKA
LINGARAJ NAGAR, HUBBALLI-580020.
DHARWAD ...RESPONDENTS
BENCH
(BY SRI. S.S. HEGDE, ADV. FOR R1;
SRI. V.S. KOUJALAGI, ADV. FOR R2)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO
ISSUE A WRIT IN NATURE OF CERTIORARI OR DIRECTION OR
ORDER QUASHING THE ORDER DATED 10.01.2022 ON IA NO.5 IN
O.S.NO.281/2017 PASSED BY THE COURT OF III ADDITIONAL
SENIOR CIVIL JUDGE AND JMFC, HUBBALLI MARKED AT ANNEXURE-
H.
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THIS PETITION HAVING BEEN HEARD AND RESERVED FOR
ORDERS ON 02.08.2024, COMING ON FOR PRONOUNCEMENT OF
ORDERS THIS DAY, THE COURT MADE THE FOLLOWING:
CAV ORDER
(PER: THE HON'BLE MR. JUSTICE H.P.SANDESH)
1. Heard the learned counsel for the petitioner and also
the learned counsel for the respondents.
2. This petition is filed by the petitioner invoking
Articles 226 and 227 of the Constitution of India and
praying this Court to issue writ of certiorari or
direction or order quashing the order dated
10.01.2022 passed on I.A.No.5 in O.S.No.281/2017,
by the Court of III Additional Senior Civil Judge and
JMFC, Hubballi, marked at Annexure-H and grant
such other and further reliefs as deemed just and
appropriate in the circumstances of the case.
3. The factual matrix of the case of the petitioner is
that;
3.1. The petitioner is a partnership Firm constituted
to carry on business of construction, real
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estate, land development etc. Respondent
No.1 is one of the partners. The petitioner
firm entered into registered agreement of sale
with one Sri.Siddappa S/o. Bharamappa
Donkannavar to purchase immovable
agricultural land on 17.02.2014 and the said
agreement of sale is cancelled on 06.08.2014.
3.2. Respondent No.1 as a partner of the petitioner
firm executed an acknowledgement/consent
deed, affirming the fact that, since agriculture
land cannot be purchased by the petitioner
firm, the same is brought in the name of his
grandfather by using the firms' funds and the
same shall be transferred in accordance with
law on 09.04.2015.
3.3. The said agricultural land is purchased in the
name of one Sri.Irappa Shivalingappa Angadi -
the grandfather of the respondent No.1, on
22.06.2015. On 16.02.2016, respondent No.1
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executes an agreement that he has accepted
and used the funds raised in the name of
petitioner firm for his personal gains and he
shall indemnify the petitioner firm.
3.4. The said Sri.Irappa Shivalingappa Angadi
expired on 06.12.2016 leaving behind the
present respondent No.2 as his legal heir, in
whose name the revenue record of the
immovable property is mutated.
3.5. The petitioner firm filed a suit in
O.S.No.281/2017 before the Court of III Addl.
Senior Civil Judge and JMFC, Hubballi, seeking
a decree of declaration and injunction against
the respondents herein in respect of the
immovable agricultural property, on
29.11.2017. The respondent No.2 filed his
written statement in the said suit on
06.02.2018 and respondent No.2 filed his
written statement on 23.07.2018.
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3.6. On 28.08.2019, an interim application in
I.A.No.V under the provisions of Sections 33,
34, 37 of the Karnataka Stamp Act, 1957 read
with Section 151 of CPC is filed on behalf of
respondent No.2, to impound the consent deed
dated 09.04.2015 and agreement dated
16.02.2016 and the said application is resisted
on behalf of the petitioner by filing statement of
objections.
3.7. The Trial Court having considered the pleadings
of both the parties, passed the impugned order
on 10.01.2022. On 21.01.2022, the
respondent No.2 also filed memo of calculation
sheet. Challenging the said order dated
10.01.2022 at Annexure-H, the petitioner filed
this petition.
4. The main contention of the petitioner's counsel in
this writ petition is that;
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4.1. The Trial Court without any application of the
provisions of the Karnataka Stamp Act, 1957
(hereinafter referred to as 'the Stamp Act', for
short) and also without determining the nature
of the document and the stamp duty
chargeable on such documents, the impugned
order is passed and the same is not
sustainable. The learned Trial Judge has erred
is passing the impugned order without there
being any deliberation about the provisions of
the Stamp Act, which is applicable to the said
documents sought to be impounded. Without
there being any application of the provisions of
the Stamp Act in impounding the documents
styled as Consent/acknowledgment Deed dated
09.04.2015 and the Agreement dated
16.02.2016, the impugned order is non-est and
the same deserves to be set aside.
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4.2. The impugned order is also cryptic and does not
clarify what is the rate at which the documents
have to charged and the non-determination of
the same itself vitiates the impugned order and
hence same is liable to be set aside. The Trial
Court ought to have determined the nature of
the documents and the duty it attracts under
the provisions of the Stamp Act and the same is
not done. The said document is not
conveyance as per the recitals of the same and
it does not attract any duty and the Trial Court
ought not to have passed the impugned order.
On these grounds he prayed for setting aside
the impugned order.
5. Per contra, learned counsel appearing for the
respondents would vehemently contend that, the
plaintiff relies upon the document at Annexure-A
Consent Deed and also the Agreement at Annexure-B
and no stamp duty is paid on the said documents.
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Hence the Trial Court taking note of the nature of the
documents and also when the stamp duty is not paid,
rightly invoked Section 33 of the Stamp Act while
passing the impugned order and not committed any
error. The counsel would also contend that the suit
is also filed for the relief of declaration in respect of
the Sale Deed dated 22.06.2015 executed by
defendant No.1 in favour of his deceased grandfather
and contend that the same is nominal and the same
is on behalf of the plaintiff firm and defendant No.2
do not have any legal, valid heritable transferable
and marketable ownership right, title and interest in
respect of the suit property, when the suit is filed for
the relief of declaration. In the written statement
specific defence is also taken and hence the Trial
Court not committed any error in allowing the
application and hence it does not require any
interference.
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6. Having heard the petitioner's counsel and also the
counsel appearing for the respondents, the point that
would arise for the consideration of this Court is;
"Whether the Trial Court committed any
error in allowing the application filed under
Sections 33, 34 and 37 of the Karnataka
Stamp Act R/w. Section 151 CPC and
whether it requires to be quashed as
contended in the petition?"
7. Before considering the question involved in the
matter and determining the point for consideration, it
is appropriate to extract Sections 33, 34 and 37 of
the Karnataka Stamp Act, for consideration:
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.
(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
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value and description required by the law in force in
the State of Karnataka 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 the 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, the Government may determine,--
(a) what offices shall be deemed to be
public offices; and
(b) who shall be deemed to be persons in
charge of public offices
34. Instruments not duly stamped
inadmissible in evidence, etc.- 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:
Provided that,--
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(a) any such instrument not being an
instrument chargeable with a duty not
exceeding fifteen paise only, or a
mortgage of crop Article 35 (a) of the
Schedule chargeable under clauses (a)
and (b) of section 3 with a duty of
twenty-five paise shall, subject to all
just exceptions, be admitted in
evidence on payment of the duty with
which the same is chargeable, or, in
the case of an instrument
insufficiently stamped, or 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;
(b) where a contract or agreement of any
kind is effected by correspondence
consisting of two or more letters and
any one of the letters bears the
proper stamp, the contract or
agreement shall be deemed to be duly
stamped;
(c) nothing herein contained shall prevent
the admission of any instrument in
evidence in any proceeding in a
Criminal Court, other than a
proceeding under Chapter XII or
Chapter XXXVI of the Code of Criminal
Procedure, 1898;
(d) nothing herein contained shall prevent
the admission of any instrument in
any Court when such instrument has
been executed by or on behalf of the
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Government, or where it bears the
certificate of the Deputy
Commissioner as provided by section
32 or any other provision of this Act
and such certificate has not been
revised in exercise of the powers
conferred by the provisions of Chapter
VI.
37. Instruments impounded how dealt with.- (1)
When the person impounding an instrument under
section 33 has by law or consent of parties
authority to receive evidence and admits such
instrument in evidence upon payment of a penalty
as provided by section 34 or of duty as provided by
section 36, he shall send to the Deputy
Commissioner an authenticated copy of such
instrument, together with a certificate in writing,
stating the amount of duty and penalty levied in
respect thereof, and shall send such amount to the
Deputy Commissioner or to such person as he may
appoint in this behalf.
(2) In every other case, the person so impounding an
instrument shall send it in original to the Deputy
Commissioner
8. On perusal of the documents at Annexure-A -
Consent Deed dated 09.04.2015 and so also
Annexure-B - Agreement of Sale dated 17.02.2016,
these documents are unregistered documents and
hence no stamp duty is paid on these documents. I
have already pointed out the nature of the suit. The
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suit is for declaration to declare that the Sale Deed
dated 22.06.2015 is on behalf of the plaintiff and
defendant No.2 did not have any legal, valid
heritable, transferable and marketable ownership
right and the Court has to declare the documents as
the same is in favour of the plaintiff. When the suit
is filed based on these two documents and an
application is filed before the Trial Court to impound
the documents, the impugned order is passed.
9. The main contention in the application filed by
defendant No.2 is that, the said documents are in the
nature of acknowledgement and receipt of the
amount and admitting the liability under the said
documents. The plaintiff intended to rely on these
two documents and hence prayed to impound the
said insufficiently stamped documents. However, the
plaintiff by filing the objection resisted the
application contending that the said application is
beyond the ambit and scope of the provisions of the
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Stamp Act and even beyond the ambit and scope of
the Indian Stamp Act i.e., the Central enactment.
10. As already pointed out, both the documents are not
the registered documents. The deficit stamp duty for
the nomenclature of the documents and admissibility
of those documents is disputed, as the plaintiff is
relying upon those two documents. It is also
important to note that, there is bar under Section 34
of the Stamp Act for a document being received in
evidence and the same is absolute unless deficit duty
and penalty is paid. If the document is not duly
stamped, it is inadmissible in evidence. The Trial
Court also having taken note of the combined
reading of Sections 33, 34, 37 and 41 of the Stamp
Act, discussed the procedural aspect in page No.14
and 15. Section 33 of the Stamp Act is very clear
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
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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. It is also important to note that,
as per Section 34 of the Stamp Act, the instruments
which are not duly stamped are inadmissible in
evidence, unless such instruments are duly stamped.
11. This Court also would like to rely upon Section 37 of
the Stamp Act, if the document is impounded how to
dealt with the same. Sub-clause(2) of Section 37 is
very clear that, in every other case, other than
Section 37(1), the persons, so impounding an
instrument shall send it in original to the Deputy
Commissioner.
12. This Court also would like to rely upon the judgment
of this Court reported in the case of Dr.Vidhya Vs.
R. S. Venkata Reddy reported in 2011 (4) Kar.LJ
92, wherein discussion was made in Sections 33(1)
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and 37(2) of the Stamp Act. The documents said to
be insufficiently stamped not produced in evidence,
but produced subsequent to settlement of issues, at
the time of filing interlocutory application for
temporary injunction, the jurisdiction of the Trial
Court to calculate the deficit stamp duty and penalty
and direct the party to pay the same, in respect of
Temporary Injunction, in suit for specific
performance of contract for sale, sought on the
basis of document evidencing delivery of possession
of suit property to party in part performance of
contract; As said document was not produced in
evidence in suit, the Trial Court held, erred in
directing the party to pay deficit stamp duty and
penalty, and order of Trial Court is, therefore, liable
to be quashed. It is further observed that, it is
however open to the Trial Court to send the
document to the Deputy Commissioner for
determination of the stamp duty and proceed with
suit on receipt of the Deputy Commissioner's order
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regarding the document, and stamp duty payable
thereon. But an observation is made that, however,
the Trial Court is directed to impound the sale
agreements as indicated in Section 33(1) of the Act.
If the plaintiff seeks the determination of the deficit
stamp duty and penalty, the same be determined
and he may be permitted to remit the same. In case
the plaintiff is not willing, the Trial Court to forward
the sale agreements to the Deputy Commissioner
concerned, as envisaged in Section 37(2) of the Act.
The Trial Court shall await the receipt of the
certificate or the order passed by the Deputy
Commissioner for proceeding further in the suit. The
suit be revived only on receipt of such certificate and
the copy of the order of the Deputy Commissioner so
passed.
13. Having taken note of the principles laid down in
Dr.S. Vidya's case (supra), it is very clear that, if
plaintiff makes an application to determine the stamp
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duty, then the Court has to determine. But in the
case on hand, no such application is filed and plaintiff
even resisted the very application filed by defendant
No.2. When such being the case, it is very clear that
under Section 37(2) of the Stamp Act, the sale
agreement and consent deed to be forwarded to the
concerned Deputy Commissioner.
14. This Court also would like to rely upon the judgment
of this Court in the case of Suman Vs. Vinayak and
Others reported in 2014(1) Kar.L.J.575, wherein
while discussing Section 33 of the Stamp Act, it is
held that, options of the Deputy Commissioner, when
an document is to be impounded or received such
instrument for impounding, he may either impound
and collect the stamp duty and penalty or certify that
it is duly stamped or declare that the said instrument
is not so chargeable to any stamp duty and hence it
is held that the Deputy Commissioner may exercise
any of the three options, when an instrument was
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placed before him for impounding. It is held that,
then the course open to the Court would be to refer
such document to the Deputy Commissioner for
being adjudicated for collection of chargeable duty
and penalty thereof by invoking sub-section(2) of
Section 37 of the Stamp Act.
15. In the case on hand, it is to be noted that, when the
Consent Deed and Agreement of Sale are the basis
for claiming the relief of declaration and an
application is filed to pay the duty and penalty when
the document is insufficiently stamped, the Trial
Court rightly invoked Section 33 of the Stamp Act,
since the Court is empowered to impound the
document. The very contention of the petitioner's
counsel that the nature of the documents ought to
have been determined by the Court and without
determining the nature of the documents, the
impugned order is not sustainable, cannot be
accepted. The nomenclature of the documents is
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very clear that one is Consent Deed and another one
is Agreement of Sale. Hence, without determining
the nature of the documents, the Trial Court ought
not to have impounded the documents, cannot be
accepted. The very contention that, without there
being any determination about the provisions of the
Stamp Act, which is applicable to the said documents
sought to be impounded also cannot be accepted.
The Trial Court while passing the order elaborately
discussed the same and even taken note of Sections
33, 34, 35, 37 and 47 of the Karnataka Stamp Act,
which requires the procedure to be adopted by the
Court, while considering the question of admissibility
of the document with reference to the Stamp Act and
it is the duty of the Court also to examine and
determine whether it is properly stamped. Hence the
very contention that, without deliberation about the
provisions of the Stamp Act, which is applicable to
the said documents sought to be impounded, the
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impugned order has been passed cannot be
accepted.
16. This Court also would like to rely upon the judgment
of the Hon'ble Apex Court in Shakeel Pasha and
Ors. Vs. M/s. City Max Hotels India Pvt. Ltd., in
Civil Appeal Nos.2139-2140 of 2024 dated
12.02.2024. The Hon'ble Apex Court also in this
judgment discussed with regard to Section 33 and 34
of the Karnataka Stamp Act and directed penalty to
be paid on account of non-payment of stamp duty on
the Arbitral Award. It is held that, under the
Karnataka Stamp Act, there is no power conferred on
the Courts to direct payment of penalty and it is the
power of the appropriate authorities under the
Karnataka Stamp Act to impose penalty. In the case
on hand also, it has to be noted that, when the
document is placed before the Court and those
documents are termed as Consent Deed as well as
Agreement of Sale, when the Court found that the
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documents are not sufficiently stamped, in terms of
Section 33 of the Stamp Act, the documents are
impounded. After impounding the documents, as
envisaged under Section 37(2) of the Stamp Act, the
Court has to send the documents to the concerned
authority and accordingly, the document is sent to
the Registrar to collect the duty and penalty.
17. When such being the case, I do not find any error
committed by the Trial Court and the contention that
the court itself has to determine the nature of
documents and calculate the stamp duty cannot be
accepted, unless the very plaintiff himself makes an
application to determine the deficit stamp duty and
no such circumstance is warranted since the plaintiff
resisted the application. Hence I do not find any
force in the contention of the petitioner's counsel to
quash the order of the Trial Judge at Annexure-H, as
contended in the petition. The petition is devoid of
any merits. Hence I answer point in the negative.
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18. In view of the discussion made above, I pass the
following:
ORDER
The petition is dismissed.
Sd/-
(H.P. SANDESH) JUDGE gab ct-mck