Karnataka High Court
Ningappa Bharamappa Sogi vs Government Of Karnataka on 19 March, 2010
Equivalent citations: AIR 2011 KARNATAKA 115, 2011 AIR CC 1178 (KAR), 2011 (2) AIR KANT HCR 1, (2011) 1 KCCR 744
Author: Subhash B.Adi
Bench: Subhash B.Adi
IN THE HIGH COURT OF KARNATAKA
CIRCUIT BENCH AT DHARWAD
DATED THIS THE 19TH DAY OF MARCH, 2010C T' ~
BEFORE * '
THE HON'BLE IvIR.JUsTIc6 SUBHASH "Ii-.v'.AfiI4 if ~ 77' '
WRIT PETITIONS No.6087'4/2o1'0 C/w_ ._ _ g_
67011/2009 c/w 64743/42009*-{GM--sT{R--N1. f 1
cm 9023/2008. {GM-CPC) _ .
A/W M1sC.w.6052'5../j.g_g10 AND --
MIscA.w.6o47.4 /j2.o1*0_ L " *
IN W.P.NO.60874/2010
BETWEEN:
NINGAPPA BHAR,AM§A?_--PAv sj0<3I_ 1;;
Age:6O I I A
occ AGRID
R/ AT AMARGDDL - '-
TQ HUBL£_-- 53002-5,-«V.__»"'~I -- I ...PE'I'ITI()NER
(BY SR1.G.I%;ANDANIMATH';ADi})
AND: <5 "
" «.(§OVf§RNMENT 01§1I<ARNATAKA
A' M
I BY. ITS SECRETARY
. DEPT. jog? STAMPS AND REGISTRATION
'.BANGALOjRE -- 560001
_ NINGAPPA BASAPPA SOGI
AA Age: 55?"
V. OCC AGRIL
' * R,/AT AMARGOL
TQ HUBLI -- 580025
3. CHANNAMMA W / O NINGAPPA SOGI
AGE ABOUT 35 YEARS,
OCCUPATION : AGRICULTURE
RESIDING AT AMARGOL, HUBLI
4. MANJULA W / O SIDDAPPA MUGA
Age: 25
OCC H /W
R/AT SHIVALLI ~ 580001
TQ DHARWAD
5. SUNANDA w/O VEERANNA Iv1U_GAD
Age: 25 OCC H/W
R/AT SHIVALLI - 580901 _ _ _
TQ DHARWAD. ~ \_ .2 L.-RESPONDENTS
THIS PE$'FI'£'I4ON___I_S'~FiLB3D IINDERARTICLES 226 AND
227 OF THE CONSTITUTION;-.IO'F.V1ND.1A=PRAYING TO STRIKE
DOWN THE.__PF<OvISIONS,_"OF ARTICLE 5(3) OF' THE STAMP
ACT AS :UNCONSTITT;fl'IOf~JA'L, ARBITRARY AND VIOLATIVE
OF ARTICLE--_ I4,'A1~I-D, '19"OFv...fI'HE CONSTITUTION OF INDIA
. AND E'I'C.,7. .
IN wp NO 670"1AI1./v2.oV097--.
----------
VEEI§ABH~AD!§A§YA GANGAYYA JADIMATH
AC'E"AB.O'UT«.§3 YEARS, 0CC:BUSINESS 85 AGRI
R /AT ADARGLSNCHI, TALUKA HUBLI
I ., PETITIONER
" " 5 Sri. ANDANIMATI-I, ADV)
AND
1. STATE OF KARNATAKA
BY ITS SECRETARY
DEPARTMENT OF STAMPS
AND REGISTRATION, BANGALORE
2. RAMANGOUDA SHANKARGOUDA
NEELAPPAGOUDAR
AGE ABOUT 37 YEARS OCC:AGRICUI,TUVI2-E -:
R / AT ADARGUNCHI TALUK I-IUBLIA I A '
3. SHANKARAGOUDA RAMAN'A_G'Q.UDA'v- A I
NEELAPPAGOUDAR
AGE ABOUT 17 YARS, OCC:STUD_ENT,
R / AT ADARGUNCHI, TALUKA HUSLI" " . ._
MINOR BY HIS GUARDIAN I?AT;jN,AWWA~A _
W / O RAMANAGOUDA NEELAPPAG.OU.DAR_
AGE ABOUT 3 1- YEARS," 0CC:A_GRI, 'R/ O AADARGU
' I ...7F<ESPONDENTS
THIS___W_P 'U1NDSERf1ARTIC'LES 226 AND 227 OF
THE COrV'ISTITU'1§ION'I";;')'12'TNDIA PRAYING TO STRUCK DOWN
THE PROVISIONS'OF'AR'T1CvLE* 5(a) OF THE STAMP ACT AS
UNCONSTITUTIONAL,j_'j;._AEI3ITI=:ARY AND VIOLATIVE OF
ARTICLE I4"AND 19 OF CONSTITUTION OF INDIA AND
ETC-2 'V ..
IN WP NO"6474S OF 2009
1. ' ._SwATlVSHI:
S /O: LATE GANAPATHSA MEHARWAD
AGE {'36 YEARS, OcC:BUSINES,
A ~ :._R/AT AMBIKANAGAR, KESHWAPUR
A. H;UBLI--23, DHARWAD DIST
2. GOPAL S/O LATE GURNATHSA KHODE,
Agm54
OCC:BUSINES, R/AT PINTO ROAD, DESAI CROSS _ ._
HUBLI, DHARWAD DIST. PETITIONER23
(By Sri. : F' v PATIL, ADV)
AND
1. STATE OF' KARNATAKA 1, * T
REP BY THE SECRETARY DEPARTMENT 01?» * _
STAMPS 85 REGISTRATION VEANGALQRE "
2. RUDRAPPA S /0 HONNAPPA HQTAG1
Age: 64
0cc:AGRIL, R/AT SAI RAGAR, _uII.I;AL
AREA, HUBLI, DHARWAD-DIST; ; 'I
3. SMT. ANASUYAW/O R"UDR1APPA*.H0'i'AG'i"
Age: 59 'I
occ :1-I /W,' Rv,(AT_ ,_S:A1~ NAGAR,.._U1\fp'KAL "
AREA, HUBL;i,"'DH'ARWAfDA DI.S:T - -
4. SID1T)APA"S,/f0_ RLIDRARPA HQTAGI
occ:AGR_IL, R /PIT SAL N-AQAR, UNKAL
AREA, HUI-3L1, *DHARw'Ap' DIST
_ 5. ASHOK S /ORIJDRAPPA HOTAGI
V «,Qcc:AjC~RI~I,, R/AT SAI NAGAR, UNKAL
AREA, HUBLI, DHARWAD DIST
6. ' AH'ONNA'?PA5'S/ O RUDRAPPA HOTAGI
Age: ,
g OCCZAGRIL, R/AT SAI NAGAR, UNKAL
_ IAREI'\.,"HUBLI, DHARWAD DIST
-BASAVA S /0 RUDRAPPA HOTAGI
Age: 26
11.
OCC:AGRIL, R/ AT SAI NAGAR, UNKAL
AREA, HUBLI, DI-IARWAD DIST
SMT BASAVVA W / O UMESI-I UANAGI
Age: 26
OCC:H/W, R/AT BELAWADI VILLAGE
DI-IARWAD DIST
HASMUKH S/O RANAcHoUDA.6sHETH, k V' '
Age: 64
OCCBUSINESS, R/AT FLAT NO.B'r5(}_'_2,"
SILVER SPRING APRTMENTT' _ '
LOKHANDAWALA COMPLEX-,,_A~NDHE'RI_ 'w1::{s§qf
MUMBAI-53
HITESH S/O HAsMui_<H_sH«ETH _
Age: 44 " . 3;- }
OCC:BUSINES, R/AT FLAT No.3-5.02'; V
SILVER SPRING APAR'IwiENT" 1 .V "
L0xHANDA:wA;LA- CO=MP;LF~X, 'AN'D_H.E___R_lf' WEST
MUMBAI_-.53'»V44 ~
RAJESHT S'fO"HA_SMIJKH"S}{ETH
Age::'42
OCC:VBUS1NEE1,*'VR/AT'«FLAT No.3-502,
SILVER sPRiNG«APARTM,E;'.:T
LOKHANDAWAI.A"CO. "FLEX, ANDHERI WEST
MU_MBAI¥53" _ '
z4fMA;1§sHU SA/'OVHASMUKH SHETH
V «Age: _
OC_C'iBUS iNES, R/AT FLAT NO.B~502,
A . 'sILv'ER--«.sP12I.NG APARTMENT
'ALOKHANNDAWALA COMPLEX, ANDHERI WEST
M.UM.sAI,--53
RAJMDRA S /0 MURARSA HABEB
Age: 57 OCOBUSINES, R/AT TRAVELLERS
Q' 'BUNGALA ROAD, DESHPANDENAGAR
HUBLI-29, DHARWAD DIST
14. SURYAKANTH S / O MURARSA HABIB
Age: 55 OCC:BUSINESS, R / AT TRAVELLERS
BUNGALA ROAD, DESI-IPANDENAGAR
HUBLI--29, DI-IARWAD DIST
15. MANOHAR S/O MURARSA HABIB
Age: 53 0CC:BUSINESS, R/AT TR_AVE_LLE_RS * = > '
BUNGALA ROAD, DESHPANDENAGAR" ._ ~ "
HUBLl--29, DHARWAD DIST.
(By Sri. R P UGARAGOL AND I ~, '-
SR1. M D PATIL FOR C/R--13 TO'*I.5,
SMT.K.VIDYAVA'1'I-11, AGA FOR___4-1, " 3
SRI.S.B.I-IAVALDAR, ADV FOR R2_'TO-5 AND 'S-TO 12,
R7 DELETED) " " 2 «
THIS WP IS,'I1'1L._ED AR:TICI.ES"'2'26 AND 227 OF
THE CONSTITU'1'IOE~'OF 'INDIA PRAYI'NGWTO STRIKE DOWN
STAMP ON INSTRUMjE{'.N'{'S--.._ARTICLE 5(e) IF RELATING TO
SALE OF I.MMGvAELE IpROrI=-E'RTY WI-IEREIN PART
PERFORbxi}XNCE"jOF"T;'£~IE "CON'FRACT,'i) POSSESSION OF THE
PREOPERTY ,ISW_gDELIVERED_ OR IS AGREED TO BE
DELIVERED'WITHO~UT.EXECUTING THE CONVEYANCE, THE
SAME DUTY AS A, C-ONVE_YANCE(NO.20) ON THE MARKET
VALUE OF THE PvROP_ERf1'YA..A'ND ETc.,
' IN WI? '}IOA..§)023 /2Oo~e-- ..... .. -
1. I SMT MAB ESWARJ
"W/Qv'L.A,XMAN GOLYALKAR
AGE 36 YEARS OCC AGRIL 81; HOUSEHOLD WORK
_ I R/OARAVATAGI VILLAGE
' DIST DHARWAD. PETITIONERS
: F V PATIL)
1 . BASALINGAPPA
S/O BASATTEPPA I-IUMBERI
AGE 61 YEARS OCC AGRIL
R/ O NARENDRA TQ 85 DIST DHARWAD
2. MALLAPPA, S /O RANGAPPA GANIGER
AGE MAJOR OCC AGRIL
R/O KUMBARKOPPA, TQ 85 DISTjI.)HAR1F{A«]_) . In
3. SHIVANAND, S /O RANGAPPAGANIGER
AGE MAJOR OCC AGRIL ' . .
R /O KUMBARKOPPA, TQ 81. D'IST»DHARwAD
4. ADARSHAPPA _ ; , I
S/O RANGAPPA GANIGAR ;
AGE MAJOR OCC AGR1L- I
R /O KUMBAR_K'O_PPA;"' ~
TQ &sDIS'I' DHARWAD I
5. THE STATE CFxI{.A'RNA'I'.A'I{;'I_ '
DEPTOF STAMRSAV STRATIOVN
BANGALORE: RESPONDENTS
(By Sri. /SEA;I.SHRIHARS'H:A-.NEELOPANT, FOR C/R1 To R4,
SR1.A.N:--HARSH-.A,"ADA/ROR R1 TO R4,
SMT.K.V1'DYAVATHI,_, AGA FOR R5 )
PETITIACINV-I--S« 'FILED UNDER ATICLES 226 AND 227
HQOE THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
'ORDER_ ANNEXURE--D D'I'.27.05.2008 PASSED BY THE 1ST
ADDITIoNAL,,_cI[\_rIL JUDGE (SR.DN.) AND CJM, DHARWAD IN
O.S; _1-75/200? AND ETc.,
THESEV PETITIONS COMING ON FOR PRELIMINARY
HEARING'--- 'AND THE SAME HAVING BEEN HEARD AND
"RESERVED FOR PRONOUNCEMENT OF ORDERS, THIS DAY,
_ A._T'I-IEGOURT MADE THE FOLLOWING:
lV1_V8/11'/260:9 passed on I.A.No.5 in
ORDER
1. Writ Petition No.9023/2008 is directed against the dated 27/ 05/ 2008 passed by the learned I Judge(Senior Division) violative of Articles 14, 19(l)(g) of the of has also questioned the constitutional validity of Article 5(e) of the Schedule 'Act, 1957(hereinafter referred Q S
2. In Writ Petition has called in question the passed on I.A.No.12 in lcajned Principal Civil Judge(Sei1_ior_ [also constitutional validity of Section 34 clause ta)-- !llrt§cle.l.5(e) of the Act. Petitiovn.....6"70l1/2009 petitioner has called in of Article 5(e) and Section 34 C1ause(a) proviso' of ithej_ Pict as unconstitutional and also order dated O.S.NO.214/2004 on the Vofthe learned Principal Civil Judge(Senior Division), I-Iubli. «BE ( Dharwad in o.s.No...1.?:S~~,I.2oo'7 as _ V'
4. In Writ Petition 60874/2010 petitioner has called in question the order dated 02/02/2010 passed on I.A.Nol.'6. in O.S.NO.19/2007 on the file of the learned First Addi.ti.oyi_iat_lh' em Judge[senior Division], Hubli and validity of pp , Section 34 clause (a] proviso of the
5. The facts leading to filing.'of.._these'writ peiiticqnvs_V_Vin are that, the petitioners have a if lfor} specific performance of contract of shale wherein the l3eUU0I1€I'S Claim that Aintpart the contract, they have been: they have also paid the suit, the petitioners sought tci: :VTagreer_nelnt of sale marked in the evidence. lAln__this were raised for production of the said doclum.entv,v"on.l't.he ground that the said document is i,.5tan:.ped. llliefendants filed an application under seeking impounding of agreement of sale and f0.rllrecVox}eiry'of duty and penalty. The learned trial Judge, T3"-«.._consideri'i1gA'1~the nature of the transaction and the document. 'that the document is not duly stamped and called upon lépetitioner to pay the deficit stamp duty and penalty in E0 terms of the provisions of Section 34 of the Act. Since the stamp duty was not paid, the document was impounded. At that stage, appiications were filed by the petitioners seeking the Court to send the original agreement of sale to the«Ii_)iis<tiii..ct Registrar for impounding and collection of . penalty. The said applications wererejected"'i3y trial Judge. Hence these, writ petitions are~filedlqiiestioning_ thee' validity of the provisions of the At;-t__andll'the" schc-diileias stated above.
6. Heard learned llco_t.1nse_1 V . "'FT.V.PatiE, Sri. G.R.Andanimath fo.rl'th_e Ri'P:,lUlgargol, Sri. Arun L. Neelopanth lthe;,3leaI"*ned lAddivtional Government Advocate for responlderlits. '
7. Sri.» }'*p'.V.i5atiVl, that, the agreement of sale does notpamolunte to" conveyance and it is not conveyance within the clause (d) of the Act nor it amounts to an instrument.asi'd.eiined under Section 20') of the Act. He referred ll"-4.._to-.chargii1g_A'section and submitted that only the instrument as cit-§t3.ned4"'A_*.1nder Section 2 clause (j) is chargeable with a duty. f"~..y__Sfecti'on 39 sub section .1 clause(b), Instrument referred to in Article 5 C1ause[e) of the schedule does not come within the meaning of definition of instifiuinent and as such agreement of sale referred to under .*ti--cie.'_S'{e}_._i's. not chargeable document as Section 3 of the an instrument. within the meaning of Clause (j). A A A A A A Section 54 of the Transfer of Property Act that definition of sale does not._.includ'e sale or contract, they are not c0nc1ud__ed 'c0n't;rac_t," do not part take the character of sate and does; iiot"~arn_ouni: to conveyance. If it is not c0nve§,'an'ce isfno__t ti*ari*sfeif,' provisions of Section 3 are not at1_i.ra_cStetd'as:;S.ect.i_on_v3 fb'ei--ng*charging section, duty is ciiargeabie only Aydcciirnentfwhich part take the character of conveyance and amount.s.to= transfer. in-rt1'ier subrni't'ted that. Section 34 of the Act is ultra y'ires*ari'd_it'»confers"unguided power on the Court to impose the . penaityiiiefqiiaito times of the duty whereas if the document Vt*~.._héisiyimpourided under Section 33 of the Act and referred to the :Dwi_strict:"«Registrar under Section 37 of the Act in terms of penalty is payable not In this regard he also referred toypz'ovisi0ii_gt...pf <%3% exceeding 10 times of the duty. If the documentis otherwise and if the penalty is to be paid, exceeding 10 times of the duty .vis--»a+Visf4 the if' conferred on the District Registrar times and not beyond, wherea_s"~..the power _co'nfe'rre'ci" on the court to impose penalty; is equalmt'o.__teng' timeisin respect of a document chargeable vvithliidiitygh _ One in the case of Court and another the charging section of each other. If the penalty if of stamp duty, there it disc'rirni.nation between two similarly placed documents of imposing penalty. As such if the document ._is'referred "under section 39, it would not be xi'charge.able'ei.wi'th penalty equal to ten times of the duty but it iirnzay A up tirnes.
9. Alternatitfely he also submitted that, the document R'"':1".i"i.nipounded--' can be referred to the District Registrar for the of determination of stamp duty as well as penalty. K ---.'Ii-lovyever the Court below without referring the document to the Registrar for the purpose of determination of stamp «Saw/'.
15 submitted that reading of Section 53A and Sectio1i.l:'jl.7(~1A) makes it clear that if the agreement of sale is inadmissible only to the extent of =-isi"
concerned and court could have igno;:ed;fth-it slame could have admitted the docu.ment'-..in evide'iicc...Hfor§ remaining part. He relied on thddecision reported (1993)4 SCC 380and submitted considering the penalty has held that the market value of the subject tliei--.a55€issmlcIlt§i'xlHeiijalso submitted that non--complia1'lce lthelllndian Registration Act would performance and to this extent there' the Court below to impose the duty on. the documenht.
VlR.Pv:"--..1Jgargol learned counsel appearing for the that, the trial Court has determined the V dd lasiyvell as penalty and against the determination of as well as the penalty, I.A.12 was filed in the aCour'1: below and the same was rejected and has become final. it .:l_"As----ilregards the contention, as to whether the transaction it " " amounts to conveyance or not, he relied on the decision of the «$2?
16 Apex Court reported in AIR 1999 SC 807 and submviitte-d_i'that agreement of sale part takes the character of this aspect has been considered by theHApex Court:'andi.furtner"' " . he relied on the another decision of:t1his;_-Co3t1rt.re'po'1'ted:"in 'ELK 2002 KAR 5163 wherein this-.'_.Court.V_ has question as to whether the agreement to sale' ~coupled}vvith part performance is chargeable-ator 5 clause (e) and (1) of the schedule and has held that it is an instrumerit{a'r.1d is; as such issue as regards to is instrument of conveyaniceflor resi..iinitegra and has been settled by the decisio.niof well as the Apex Court. He furthervreliedlon va11other"vdeicision reported in 2009(4) KCCR 54 "'a.r_1d submi.ttedAthatflhardship to pay the duty is not a relevant 'factor' to validity of legislation and as such the poxiferiiiconferréidseizon the Court to impose penalty cannot be _ pg 'questioned 'onthe ground of hardship.
also submitted that the procedure contemplated for it 'impounding of a document produced in the Court and the document impounding by the persons of the incharge of public . 94.3"' Articles 14 and 19 and 21 of the Constitution of India. He also submitted that Section 39 does not include determi.nation_ of duty and penalty. As far as determination by the__ Section 34 is concerned and as such reliance» placed .. on Section 39. it 3 it it 3 it
15. In the light of the rival cor1te_ntion's_,:ithe \' for consideration is: 3 V H 2
1. Whether Section 34(1j4"e1au=§¢lll§ip' is vires and unconstitutional?
2. Whether.5i:'c1au.se-,[e).is ultra vires, unconstitutional as violative of and 21 of the constitution of Ind.ia~ _ the Couiritiiis required to refer the impounding iVte.g:i,1.District Registrar under Section 39 for red_etermiriation of the stamp duty and penalty? it 3' 1.6} s isflnot in dispute that in all these cases petitioners have to produce agreement of sale coupled with delivery of 'viupoissession in part performance of the contract and the said V document was sought to be marked in evidence. At that stage (9%;
19 an objection was raised as regards to its admissibllity,"vo.n._the ground that the said document is not duly stan1p_e'c!.. ' Court after hearing both sides determined the well as penalty by invoking the provisions'"of:'Sectio~n:'3«4ll Act and called upon the petitioners tollpaly 2 l' Document was impounded as the st'aJ_np.VVduty'and 'penalty was not paid. At that stage. an application,lw--as., for sending the document to District Registrarfor 'redeter"r11ina';tion of the same duty as well as that 'matter has come up before
17. Principle argurz1_ent " the learned counsel for the petitionegrlsll is. that,l"in_Vthe light of provisions of Section 54 of the ofllllflroperty Act, agreement of sale does not part take the" .c1'1"arac'ter.v,,_offljonxreyance as defined under Section 2 lll'clause(d;l of..__the. liarnataka Stamp Act, 1957. For the reference * «., extracted as under:
l :.Vl'2{d)' Conveyance i11cludes:--
?(i) a conveyance on sale:
(ii) every instrument;
20
(iii) every order made by the High Court,,..1,1_ri_dier:f Section 394 of the Companies Act, respect of amalgamation ofycompanies-ii , V' by which property, whether moiveablge for ;_ T or any estate is transferred to,t__or_vested_~_,Ain,~ other person, and is." not, specifically provided for by theschedule. .. , I By reading of definition,' ilc'ocriveyance it includes instrument other than the"'s'ale', d-eg;~¢_¢ order. Instrument is also clause reads as under Section 2 clause[j) of the Kamatalia reads as under _2(j) liilinstnirneizt includes every document( and ___crepatediior....ma_inta_ined in or by an electronic .' :st.Qragew.a;:icl"*~.retrieva1 device or medial) by which any I is, or purports to be, created, transferred, limited extended, extinguished or recorded; V A V in this case Article 5 clause (e) of the Stamp Act refers to sale of immovable property wherein in part performance of lukthe contract, possession of the property is delivered or is agreed to be delivered without executing the conveyance, the said 'I »%% L i:.i'5(e) of the schedule to the Act has observed:
document requires stamp duty to be paid on the market value and the said duty is adjustable when actual deed of transfervor conveyance is registered.
19. Section 53A of Transfer of Propefiy Ac_t,"x performance of the contract, in case contract, if the possession is"d_ei--iyered,*- the vendo._r~--vhas* onlyf' option to seek for the performancev_o£_»_the hrernainivrig part of contract, the provision "reierS--_ptci_V'.',pé1?t~performance of the contract and by.V.virtue~~e~f_iwhich ithevéiiipossession of the agreement hvo_1de]ij_.,is&V In this regard, the legislation in its wisdorlt-'V thought' "levy duty as large number of transactions 'by,_rI1eans"'-of"i agreement of sale, possession is "deiiveredfgand the dutjffivas avoided and in order prevent the Astraonsaction , the legislation has amended the provisions, .
p Thiswcourt in a decision reported in 2003(5) Kamataka 263 in the matter of Jayalakshmi Reddy V. and Others, considering the provisions of Article 1* 23 did not therefore suffer from any error of warrant interference."
21. The tax statute have to be interpreted zstrrictlyd. All-t be' borne in mind that the Rule Vofgstrict'A.constructionapplied primarily to charging section construed strictly whereas the be construed liberally. Reading it clear that, it refers eveiirigitit Reading of Section 20) oil; of the Transfer of Property 'V the Registration Act indicates the been partly performed, rights are created under the 'agr.S:en~1ent and such document requires 'co_mpuVlS5ary'_gregistratio'n--,~----lf the instrument is understood in the ligghtyof thesVe"p;ro\ifi's;i._ons and further delivery of possession and V the 'ven'dorV'ii--a;Iilng no other option except to seek part perfo1'rnance,of the remaining contract, it leaves no option Ve3{cept'lto.ptreat the document as conveyance.
Apex Court in the matter of Veena Hasmukh Jain aitd another Vs. State of Maharashtra and others reported in AIR 1999 SC 807, while considering the provision of Article r%=9c.°"'/.
24 25, Explanation 1 of Schedule 1 of the Bombay Stamp Act and Section 4 of Maharashtra Ownership Flats [Regulationepipofp the Promotion of Construction, Sale, Management Act, 1963, had considered identical issue" K V' constitutes conveyance. It is, thus, ob'serve'd:_-
" The duty in respect of an agreement,.ctovered by the Explanation is ievia,ble as 'if._pit it conveyance. The condition_s__Rta,__be_» fu1fil'ied_aré if there is an agreeme.nt«-- to sell. immoveable property and possession of such vAA.t'l75t1'lg'3fCfT6d to the,purchaser:':i5¢eforel,Vthe execution or at the time of execution.io'r.,subsequently -'without executing any conveyance "in:lreespec-tithereof such, an agreement to sell de'eme'V-Li "conveyance". In the event ' conveyance .is____e::ecuted in pursuance of such subsequently, the stamp duty already on the agreement of sale which is deernediei' to be a conveyance shall be adjusted towards "the total duty leviable on the conveyance. V _In.. the instant case the agreement entered into in . _ clearly provides for sale of an irnmoveable property there is also a specific time within which possession has to be delivered. Therefore, the document in question clearly falls within the scope of the Explanation 1. It is open tot he legislature to 993% 25 levy duty on different kinds of agreement in different rates. If the legislature though that it would be appropriate to collect duty at the stage of___ agreement itself if it fulfils certain conditions-.,,_:if~.,_ instead of postponing the collection of till the completion of the transaction by if of a conveyance deed inasmuc_h..as__'al1 conditions of a conveyance :have..,fai:ready,' fulfilled such as by~passing_ of a4'con--siderati'on delivery of possession of Rifhat remained to be done is____i:a-..:_me,re of execution of a sale deed, to collect duty at a later stageiitiself __th0ugh'_right, title interest. passed as such. Still by reason' of the ,--under the terms of the agreement . intention of sale and pposse,ssion"'of_,the property has also been delivered, i§-.,,¢c'rtain1yfopen to the state to charge such ' at a particular rate which is akin to a ._ that is exactly what has been done 'in the present case. Therefore, it cannot be said that of duty is not upon the instrument but on if I the transaction."
ii i«if.'2:}';'"l'hus, from the observations made by the Apex Court, it is clear ' ".v.*..l1at, it is open to the legislature to levy duty on different kinds of agreement at different rates. If the Legislature thought that, Qua':
26
it would be appropriate to collect duty at the stage of 'agreement itself if it fulfills certain conditions instead of the collection of such duty till the completion ofthle.,transacti.oIi execution of a conveyance deed, where'possession'--i,s._d'elivered'.__ and substantial contract is complete 'and onj\3rA"1"ormatlitiesI"of execution of conveyance deed remains. Legiyslatukre is empowered to legislate law for imposing du.tyL"
24. The Apex Court in AIR 2008 SC 1640 in the Pradesh 8:. Ors.
Vs. Smt. the provisions of Section of has observed that the legislation. It ~ii'npounding of the document insufficiently"stamped lav.-"1dl"imposing of duty and penalty is not '~ Qf:ArticleslHI4"'orV 19 of the Constitution of India. novaillegality in the levy of duty, levy of duty is not I deper14den,t'L1pon the benefit that the party derives, even that the suit filed based on the said document I yiultiinately fails. It does not empower the party either to seek» refilnd or would amount to unjust enrichment. Article 265 of " .. Lethe Constitution of India prohibits levy of tax except authority of law. If the legislation is valid, it empowers the authority to levy duty. It cannot be said that, the party could be absolved or %W' 67 :Pr_operty'A 'wclolnltract, coupled with the stamp duty that is levied, 2'! exempted from payment. of duty on the basis of his success or failure in the suit. The question of hardship caused is not a consideration in the matter of levy S" is ~..
compulsorily leviable. It is neither-'fee"nor'l..it the T. capacity of the party or on the success Afailureyof »thellparty'to get the benefit from out of the saiVd"~t.rans.action,g does not amount to unjust en1ji.chment;«--
26. None of the petitioners'h_av.e__lt1uestioned..the competency in f a.°eo.n.tract is substantially the Legislature Etolegnact Either performed eonvteyance deed and all other formalities opinion, the legislature is within its such transaction as conveyance to avoid evadingv No doubt, Section 54 of the ctywhich defines the sale does not include l"«tlie;,agregement"vofsale. However, a reading of Section 53A of the Transfer of Act. and provisions of Section l7(lA} of the 'Registration .llAct making such agreement compulsorily lijegiscterable and further delivery of possession, the receipt of
--..c«on'sideration amounts to performance of substantial part of the is adjustable with the duty that would be leviable when a conveyance deed is registered. All that the legislature has done «$3,?
3?
penalty even after the Court having detennined the sanze under Section 34.
28. Issue as regards the conflict between S_ec.tio'n.sV and ":39 is not germane for the purpose of this case; Sectio'1i._39.'operates C in a different field and Section 34«'ope'ratesgV.»cI11]:v document is presented before the cases. the penalty is leviable, invalidated on the ground that there is two provisions.
Provisions have be context and the purpose.
29. Iivisofsufhas-'th.ev"interpretation of provisions of Section 33, 34, 37 and is conVC'er'neud--,. Court in a decision reported in 2000 {4} the matter of K.Amarnath Vs. Smt. ojbservedwthiat, on combined reading of Section 33, 41 of the Karnataka Stamp Act, what it emerges vvhen a document comes up before the Court, it to exainine and determine whether it is properly stamped; the other side objects to it. the Court should consider objection and hear both sides; after hearing, if the Court ~ .:.comes to the conclusion that the document has been duly stamped, it shall proceed to admit the document into evidence; 3b on the other hand, if the Court comes to the conclusion that the document is not duly stamped or insufficiently stamped, it shall pass an order holding that the document is not duly 'stamped and determine the Stamp duty/ deficit stamp dut_y~~and to be paid and fix a date to enable the party document to pay the Stamp duty/deificit it penalty; if the party pays the duty and penalty the "Couit'"shal1p certify that proper amount of peiialty levied and record the name and a_ddre'ss ofloiperson "paying the said duty and penalty and then in evidence as provided under. Section and thereafter, the Court shall ai.1tl'ientica_ted copy of the instrument to the District Rtgist,rar a certificate and the amount collected as dutyaand penalty, as provided under Section 37(1). Silt the partymdoes not pay the duty and penalty, the pass an order of impounding the document and ws_ent_.thel'j..nstrument in the original to the District Registrar beingdealt with in accordance with law as per Section 87(2) " 'thel:Act. It is not contemplated that the District Registrar can sit? in appeal as against the determination of the duty as well as the penalty. It is, in this context, only for the purpose of further action, their document is referred under Section 37(2) of the Act. la' (.
and. as such. the contention of the petitioners that even after determination of the duty and penalty by the Court. the District Registrar has power to redetermine the same under Section 39 is not acceptable.
30. Insofar as the contention of the learned petitioner as regards the hardship that levying penalty is concerned. the 'cajinot the provisions on the basis of hardship thatmay party. and no tax statute could beistruck lg',/round hardship or difficulty. 'l1ie.__1§ipex'Court the judgment reported in AIR 2G08~S:C.: .obse1;veu-as under: duty hardship is not relevant in COnSf1'L_1lI'1g ifstatutes which are to be ;c'ovnstrued~.,strictly.) often said. there is no equity tax. If the""rv'ords used in a taxing statute are ..ciear.~y cannot try to find out the intention and the the statute."
'V Thus: it clear that it is not the discretion of the Court to lijinterpretlltax statute liberally to find out its aims and objects or
-- equity.
Considering the provisions of Section 53A of the Transfer of Property Act and 17(lA] of the Registration Act, I am of _the 31» opinion that Section 34 of the Stamp Act and clause [e] of Article 5 of the Schedule to the Act does not suffer from 8.I'4"v__',~»«TVV_:"'v'-.¢3i'C.,€ of unconstitutionality nor there is any error o.f§V__ eXeVr;C--is;ef--V___of jurisdiction by the trial Court.
32. In the circumstances, I pass t11e"folioylriI1glo;jderV: ~. 33 oRDEQ_ Agreement ofajsiale 'possession coming within the gjurrvievgf V'of,the Schedule to the cdonyreyance deed liable for duty and. . ,1 ,: 1;; , _ " u SeVctionlC'{4.c1au'se Via} of the proviso, does not suffer from any jroice' ofdunlconstitutionality nor is in violation of
- }:5g-ticles 321 of the Constitution of India. definition of "Conveyance" and the definition of in clause 2(d} and 20] of the Karnataka Act includes agreement of sale coupled with "iaossession, and is an instrument chargeable under Section 3 of the Act.
33 Hence. the order of the Trial Court does not Call for interference.
Accordingly. Writ Petitions fail and are dismissed.
MisC.W. applications do I1_«:rL~.- ..ifsu1'v1veA __f0xg consideration and are disp0sed=.'_0f ' Krnv/KIns