Uttarakhand High Court
Krishan Kumar Singhal vs Punjab Sindh Kshetra & Another on 10 January, 2020
Equivalent citations: AIR 2020 UTTARAKHAND 92, AIRONLINE 2020 UTR 138
Author: Lok Pal Singh
Bench: Lok Pal Singh
Reserved Judgment
IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
Civil Revision No. 62 of 2019
Krishan Kumar Singhal ......... Revisionist
Versus
Punjab Sindh Kshetra & another .......... Respondents
Mr. Siddhartha Singh and Mr. P.S. Bisht, Advocates for the revisionist. Mr. V.K. Kohli, Senior Advocate assisted by Mr. Kanti Ram Sharma, Advocate for respondent no. 1.
List of cases referred:
1. (2009) 2 SCC 532, Avinash Kumar Chauhan Vs Vijay Krishan Mishra
2. 1990 (1) SCC 189, Dadu Dayal Mahasabha Vs Sukhdev Arya
3. 1956 MADRAS 454, Subramanian Chettiar Vs Revenue Divisional Officer, Devakottah and another
4. 1992 Supp (2) SCC 77, Pandey Oraon v. Ram Chander Sahu
5. (2004) 10 SCC 65, Amrendra Pratap Singh v. Tej Bahadur Prajapati and others [Per: Hon'ble Lok Pal Singh, J.] Civil Revision under Section 25 of the Provincial Small Cause Courts Act, 1887, is directed against the order dated 10.12.2018, passed by Judge, Small Cause Courts / I Addl. District Judge, Rishikesh, District Dehradun, in S.C.C. Suit No. 38 of 2015, Punjab Sindh Kshetra Vs Krishan Kumar, whereby the said court had impounded the lease deed and sent the same to the Collector for realization of stamp duty and penalty to be paid by the defendants, as also the order dated 05.04.2019, whereby the application (paper no. 86C) filed by defendant / revisionist for modification of order dated 10.12.2018 has been rejected.2
2) Brief facts of the case are that the plaintiff / respondent instituted the said suit against the defendants / revisionist seeking a decree of eviction and for recovery of rent, damages and mesne profit. Indisputably, the respondent is the owner and landlord of the suit property and the revisionist is the tenant on plaintiff's behalf. Initially, the suit property was let out to the revisionist upto the period of 31st December 2012, thereafter for renewing the tenancy of the revisionist a rent deed between the revisionist and plaintiff / respondent Punjab Sindh Kshetra, Rishikesh through its Manager / Trustee was executed on 16.03.2013. It has been mentioned in the rent deed that the tenancy has expired on 31.12.2012. The respondent agreed to let out the suit property to the revisionist at the rate of Rs.2,500/- per month. It was also agreed that besides the rent at the rate of Rs.2,500/- per month, the tenant shall also pay house tax, water tax, sewerage charges and service tax etc. which was applicable on the suit property. The aforesaid rent deed was executed w.e.f. 16.03.2013 to 31.12.2016. The same was executed on a stamp paper of Rs.100/-. The rent deed was neither properly stamped nor the same was registered. The plaintiff produced the rend deed in the suit. The defendant moved an application (paper no. 86C), stating therein that the rent deed (paper no. 86C) has been executed for a period of four years as per the provisions contained in Article 35 of Schedule I of the Stamp Act, which stipulates that the stamp duty has to be paid on rent deed. Thus, it was prayed that the rent deed is liable to be 3 impounded under Section 33 of the Indian Stamp Act, 1899.
3) The application (paper no. 41C) filed by the revisionist was allowed by the trial court vide impugned order dated 10.12.2018. The learned trial court having considered the ratio of the judgment rendered by Hon'ble Apex Court in Avinash Kumar Chauhan Vs Vijay Krishan Mishra1, as also the fact that the defendant has not denied the execution of the rent deed directed the Collector Dehradun to impound the rent deed (paper no. 8C); recover the deficient amount of stamp duty and penalty be imposed under Section 29(C) of the Stamp Act upon the defendant and he shall ensure return of the document to the trial court by the next date fixed.
4) After the order dated 10.12.2018, the defendant moved another application (paper no. 86C), stating therein, that the trial court has allowed the application filed by the defendant and impounded the document under Section 33 of the Stamp Act, but has illegally directed the Collector, Dehradun to recover the deficient amount of stamp duty and to impose penalty upon the defendant. Placing reliance upon the judgment of Hon'ble Apex Court in Dadu Dayal Mahasabha Vs Sukhdev Arya2, it was contended that under Section 29 of the Stamp Act, the plaintiff, who has produced the rent deed in evidence, is liable to pay the deficient stamp duty along with penalty. Learned trial court having considered the judgment of Dadu Dayal (supra) 4 rendered by Hon'ble Supreme Court, as also the judgment of Ashok Kumar Agarwal Vs State of Uttar Pradesh, 2016 SUPREME (All) pg 1732, passed by Hon'ble Allahabad High Court has held that no interference is called for to interfere in the order dated 10.12.2018 and consequently rejected the application (paper no. 86C). Feeling aggrieved by impugned orders dated 10.12.2018 and 05.04.2019, the revisionist has preferred the present civil revision.
5) Heard learned counsel for the parties and perused the material available on record.
6) The controversy involved in the matter is as to whether on an unregistered rent deed which requires registration in view of Section 17(d) of the Registration Act, 1908 on which insufficient stamp duty has been paid, who is liable to pay the deficient stamp duty and penalty on production of the rent deed by the plaintiff before the trial court?
7) Since the rent deed has been executed between the parties for a period of four years in view of the provisions contained in Section 17(1)(d) of the Registration Act, 1908, lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent requires compulsory registration. Section 17(1)(d) of the Registration Act, 1908 is extracted hereunder:
"17. Documents of which registration is compulsory - (1) the following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been examined on or after the date on which, Act XVI of 5 1864, or the Indian Registration Act, 1866 (20 of 1866), or the Indian Registration Act, 1871 (8 of 1871), or the Indian Registration Act, 1877 (3 of 1877), or this Act came or comes into force, namely -
(a) instruments of gifts of immovable property;
(b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any rights, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property;
(c) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest; and
(d) lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent;
(e) non-testamentary instruments transferring or assigning any decree or order of a Court or any award when such decree or order or award purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property;
Provided that the State Government may, by order published in the Official Gazette, exempt, from the operation of this sub-section any leases executed in any district, or part of a district, the terms granted by which do not exceed five years and the annual rents reserved by which do not exceed fifty rupees."
8) Under the provisions contained in the Stamp Act, 1899, "stamp" has been defined in Section 2(26) to mean:
"2. (26) "Stamp' means any mark, seal or endorsement by any agency or person duly authorized by the State Government, and includes an adhesive or impressed stamp, for the purposes of duty chargeable under this Act."
9) Section 3 of the Stamp Act, 1899 is a charging section. The same reads as under:
6"3. Instrument chargeable with duty. -Subject to the provisions of this Act and the exemptions contained in Schedule I, the following instruments shall be chargeable with duty of the amount indicated in that Schedule as the proper duty therefor, respectively, that is to say -
(a) every instrument mentioned in that Schedule which, not having been previously executed by any person, is executed in India on or after the first day of July, 1899;
(b) every bill of exchange payable otherwise than on demand, or promissory note drawn or made out of India on or after that day and accepted or paid, or presented for acceptance or payment, or endorsed, transferred or otherwise negotiated, in India; and
(c) every instrument (other than a bill of exchange or promissory note) mentioned in that Schedule, which, not having been previously executed by any person, is executed out of India on or after that day, relates to any property situate, or to any matter or thing done or to be done, in India and is received in India: Provided that no duty shall be chargeable in respect of (1) any instrument executed by, or on behalf of, or in favour of, the Government in cases where, but for this exemption, the Government would be liable to pay the duty chargeable in respect of such instrument;
(2) any instrument for the sale, transfer or other disposition, either absolutely or by way of mortgage or otherwise, of any ship or vessel, or any part, interest, share or property of or in any ship or vessel registered under the Merchant Shipping Act, 1894, or under Act, 19 of 1838, or the India Registration of Ships Act, 1841 (57 and 58 Vict., Sections 60, 10 of 1841), as amended by subsequent Acts.
(3) any instrument executed, by, or on behalf of, or, in favour of, the Developer, or Unit or in connection with the carrying out of purposes of the Special Economic Zone.
Explanation. -For the purposes of this clause, the expression "Developer", "Special Economic Zone" and "Unit" shall have meanings respectively assigned to them in clauses (g), (za) and (zc) of Section 2 of the Special Economic Zones Act, 2005."
10) Parliament has in Section 35 of the Stamp Act, 1899 advisedly used the words 'for any purpose whatsoever'. Thus, the purpose for which a document is sought to be admitted in evidence or 7 the extent thereof would not be a relevant factor for not invoking the aforesaid Section.
11) It will also be apt to reproduce Section 49 of the Registration Act, 1908, which reads as under:
"49. Effect of non-registration of documents required to be registered. - No document required by Section 17 or by any provision of the Transfer of Property Act, 1882 (4 of 1882), to be registered shall -
(a) affect any immovable property comprised therein, or
(b) confer any power to adopt, or
(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered:
Provided that an unregistered document affecting immovable property and required by this Court or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit fro specific performance under Chapter II of the Specific Relief Act, 1877 (1 of 1877) or as evidence of any collateral transaction not required to be effected by registered instrument."
12) Indisputably, the respondent / plaintiff had produced the document before the trial court with the prayer that the rent deed (paper no. 8C) be considered in evidence. Thus, the plaintiff is held as producer of the document. A perusal of the rent deed would reveal that the beneficiary of the rent deed is the revisionist. Thus, the revisionist is the executant of the rent deed.
13) Lessee has been defined under Section 2(16) of the Stamp Act. The same is extracted hereunder:
"Lease. -"Lease" means a lease of immovable property, and includes also -
(a) a patta;
(b) a kabuliyat or other undertaking in writing, not being a counterpart of a lease, to cultivate, occupy, or pay or deliver rent for, immovable property;8
(c) any instrument by which tolls of any description are let;
(d) any writing on an application for a lease intended to signify that the application is granted;"
14) Section 29 of the Stamp Act, 1899 stipulates that in the absence of an agreement to the contrary, the expenses of providing the proper stamp shall be borne by the person drawing, making or executing such instrument. Sub-Section
(c) of Section 29 says that such expenses shall be borne in the case of a conveyance (including a reconveyance of mortgaged property) by the grantee;
in the case of a lease or agreement to lease - by the lessee or intended lessee. Thus, in view of the provisions contained in Sub-Section (c) of Section 29 of the Stamp Act in the case of a lease or agreement to lease, the lessee is liable to pay the stamp duty.
15) The revisionist, in an application filed by him, has not denied the factum that the rent deed (paper no. 8C) was not executed between the parties. His contention is that since the plaintiff itself has produced the rent deed (paper no. 8C) which is unregistered and improperly stamped document, the same be impounded under Section 33C of the Stamp Act. The position might be otherwise if the revisionist / defendant denies the execution of the rent deed (paper no. 8C) and in such contingency the trial court should have impounded the document and thereafter should have sent the same to the Collector, Dehradun to charge the deficient stamp duty and penalty from 9 the plaintiff, but as the revisionist did not deny the execution of the rent deed and in view of the provisions contained in Sub Section (c) of Section 29 of the Stamp Act, the lessee is liable to pay the stamp duty, I am of the firm view that the revisionist is liable to pay the stamp duty and penalty, if any, thereon imposed by the Collector.
16) My view is fortified by the judgments of Hon'ble Apex Court rendered in the cases of -
(i) Avinash Kumar Chauhan Vs Vijay Krishan Mishra, (2009) 2 SCC 532
(ii) Subramanian Chettiar Vs Revenue Divisional Officer, Devakottah and another, 1956 MADRAS 454
17) Hon'ble Apex Court in Avinash Kumar Chauhan Vs Vijay Kumar Chauhan1 has held that if admittedly adequate stamp duty was not paid, the court was empowered to pass an order in terms of Section 35 of the Stamp Act. Relevant paragraph nos. 13, 22 and 24 of said judgment are reproduced hereunder:
"13. Chapter III of the Act provides for adjudication with regard to proper stamps, whereas Chapter IV deals with instruments not duly stamped. Section 33 casts a duty upon every person who has authority to receive evidence and every person in charge of a public office before whom the instrument is produced, if it appears to him that the same is not duly stamped, to impound the same. Sub-section (2) of Section 33 of the Act lays down the procedure for undertaking the process of impounding.
22. We have noticed heretobefore that Section 33 of the Act casts a statutory obligation on all the authorities to impound a document. The court being an authority to receive a document in evidence is bound to give effect thereto. The unregistered deed of sale was an instrument which required payment of the stamp duty applicable to a deed of conveyance. Adequate stamp duty admittedly was not paid. The court, therefore, was empowered to pass an order in terms of Section 35 of the Act.10
24. In the present case, by reason of the statutory interdict, no transfer at all is permissible. Even transfer of possession is also not permissible. [Pandey Oraon v. Ram Chander Sahu4 and Amrendra Pratap Singh v. Tej Bahadur Prajapati and Others5]. The Registration Act, 1908 provides for such a contingency in terms of the proviso appended to Section 49 thereof..."
18) The Division Bench of Madras High Court in Subramanian Chettiar Vs Revenue Divisional Officer3 having considered the judgments in the cases of Rangaraju Naidu Vs D.S. Kamesan, 1953 Mad. 698; Powell Vs London and Provincial Bank, (1893) 2 Ch 555 (B); Secretary of State Vs Bhasharatullah, 30 All 271 (C); Mahomed Hussain Vs Emperor, 1940 Lah 315; Thakardas Vs Emperor, 1932 Lah 495; Panakalarao Vs Kumaraswami, 1937 Mad 763; Puranchand Vs Monmothonath, 1928 PC 38; Shamsdin Vs Collector, Amritsar, 1936 Lah. 449 had dealt with the issues involved in details. Relevant paragraph nos. 12 and 13 of the judgment are extracted hereunder:
"12. The next question for determination is as to who is the person against whom the Collector has to proceed under Section 48 by way of recovering the stamp duty and penalty as arrears of land revenue by distress and sale, or by attachment and sale, where defectively stamped documents have been produced in Courts or have come before the Court in the performance of its functions and have been impounded and sent by the judge to the Collector for action under Section 40. Sections 40 and 48 of the Stamp Act are silent as to the person against whom the Collector has to proceed, that is, whether against the executant, who is the person bringing the document into existence and is primarily liable to the State, under Section 17, which says that all instruments chargeable with duty and executed by any person in India, except Part B States, shall be stamped before or at the time of execution and under Section 62 which says that he shall be liable to be prosecuted and punished for executing or signing otherwise than as a witness in an instrument chargeable with duty, without the same being duly stamped, or whether he should proceed against the person liable for the stamp 11 duty payable on the instrument either under the agreement between the parties or under Section 29 providing for cases where there is no such agreement to the contrary, or whether he should proceed against the person who wants to let in the defectively stamped instrument as evidence to prove his case in any suit or proceeding before the Court which impounds it. There is absolutely no doubt that an unstamped or defectively stamped document is not void and that it is effective from the date of its execution, though it is incapable of being made use of, as evidence, until it is stamped properly. As Lindley, L.J., has remarked in Powell v. London and Provincial Bank I.L.R. (1893) 2 Ch. 555.
"No case that I know of can be cited to show that an erroneous stamp would invalidate the deed."
13. There is no difficulty where the person who wishes the document to be admitted as evidence in Court is the person who is initially bound to bear the expense of providing the stamp duty, like the executant. But, very often, the person wishing to admit the instrument as evidence in Court will not be the executant, as the suit may be, and very often is, against the executant. In such a case, the question, when the party wishing to let it in as evidence does net pay the stamp duty and penalty, and it is impounded and sent to the Collector, is whether the party bringing a suit and wanting to let in the document as evidence in his favour (or the defendant, who wants to let in the document in his favour) can be compelled by the Collector, under Sections 40 and 48 to pay the stamp duty arid penalty when he is not the executant. There are two rulings of two High Courts, holding contrary views and hence the difficulty of settling the question. In Secretary of State for India, in Council v. Bhasharatullah (1908) I.L.R. 30 All. 271, a Bench of the Allahabad High Court, consisting of Knox and Aikman, JJ., has held that if a plaintiff produces in Court in support of his claim an unstamped or improperly stamped document, he primarily is the person from whom the stamp duty and penalty have to be recovered by the Collector under Section 40 of the Stamp Act, and the person to be proceeded against under Section 48, and that such duty and penalty cannot be recovered from the other parties to the instrument. A Special Bench of the Lahore High Court, consisting of three judges, Dalip Singh, Bhide and Blacker, JJ., has decided in Mohammad Hussain v. Emperor I.L.R. (1940) Lah. 637 : A.I.R. 1940 Lah. 315, that Sections 35, 40 and 48 of the Stamp Act and the other Sections of that Act contain no provision to enable either the Court or the Collector to compel the person, who wishes to have an. insufficiently stamped document admitted in evidence in Court, to pay the duty or the penalty when he is not the person who was originally bound to bear the expense of providing the 12 duty and so the stamp duty and penalty cannot be recovered from him under Section 48. They considered the ruling in Secretary of State for India in Council v. Bhasharatullah (1908) I.L.R. 30 All. 271, and expressly dissented from the view taken therein. They went on to say:
"As already pointed out, there is no provision in the Act making a person, who merely presents an insufficiently stamped document for being admitted in evidence, liable for payment of the requisite stamp duty or penalty on the document. He cannot, therefore, be considered to be a person from whom the stamp duty or penalty is due, and consequently the same cannot be recovered from him under Section 48. If the stamp duty or penalty has to be recovered compulsorily, it can be legally recovered, under Section 48, only from the person from whom the same is due.
In order to ascertain the person or persons from whom the duty or penalty is due, we must go back to, Section 29.... But it may be observed that if it is found that the Stamp Act does not in fact fix the liability for payment of stamp duty on any particular person in the case of any instrument, the consequence will presumably be that the Collector will keep the impounded document in his custody and ho person interested in the document will be able to make any use of it until and unless the necessary stamp duty and penalty is paid."
We are unable to agree with the views of either, Bench in full. We are of opinion that a distinction must be made between the person liable in the first instance to pay the stamp duty and penalty under the agreement between the parties or under Section 29, which provides for that liability in the absence of an agreement to the contrary, and the person from whom the Collector can levy the stamp duty and penalty under Sections 40 and 48. The State, obviously, is not a party to any such agreement between the parties and cannot be, therefore, bound by any such agreement, or by the provisions of Section 29 fixing the liability for the stamp duty on one of the parties in the absence of an agreement to the contrary. So, Section 29, relied on so much be the learned Judges in Mohammed Hussain v. Emperor I.L.R. (1940) Lah. 637 : A.I.R. 1940 Lah, can have no application to the Collector's powers under Sections 40 and 48. Section 44 relied on so much by the learned Judges in Secretary of State for India in Council v. Bhasharatullah (1908) I.L.R. 30 All. 271 provides only for the case of parties who have agreed to pay stamp duty inter se or who would be bound, under the provisions of Section 29, or any other enactment in force, at the time when the instrument was executed, to pay the stamp duty in the absence of an agreement to the contrary. Section 44 does not deal with the right of the State to levy the 13 stamp duty and penalty under Sections 40 and 48. Nor does it provide for the State applying to the Court for a provision, as regards the stamp duty and penalty payable to it, in its order of costs in the suit or proceeding."
19) Mr. Siddhartha Singh, learned counsel appearing for the revisionist would content that in view of the provisions contained in Section 29(c) of the Stamp Act, though it is the duty of the revisionist to pay the deficient stamp duty and penalty, but as the document has been produced by the plaintiff (respondent no. 1 herein), thus firstly the duty casts upon the plaintiff, who wish to take the benefit of the document after its impounding by placing reliance on the evidence. Thus, the plaintiff is obliged to pay the deficient stamp duty and penalty if the document is taken into evidence by the trial court. Thereafter the said amount can be included in the decree, if any, passed in favour of the plaintiff and the same shall be recoverable from the revisionist / defendant.
20) The submission of learned counsel for the revisionist is misconceived. Since a statutory duty casts upon the defendant under Section 29(c) of the Stamp Act, thus the liability of the defendant / revisionist cannot be shifted on the plaintiff at the first instance to direct the Collector to recover the amount of deficient stamp duty and amount of penalty from the plaintiff and thereafter the same be included in the decree so the same be recovered from the defendant at the time of its execution.
1421) Per contra, Mr. V.K. Kohli, learned Senior Counsel appearing on behalf of the respondent / plaintiff would contend that since Section 29(c) of the Stamp Act stipulates that the lessee is liable to pay stamp duty, thus this statutory duty cannot be shifted upon the plaintiff.
22) Having considered the rival submissions of learned counsel for the parties, I am of the firm view that it is the statutory duty of the defendant to affix the proper stamp on the rent deed. Firstly he did not pay the stamp duty at the time of execution of the rent deed (paper no. 8C) and thus he cannot shift his burden saying that firstly the deficient stamp duty and penalty be recovered from the plaintiff and thereafter the same be included in the decree.
23) For the foregoing reasons, I do not find any illegality in the impugned orders. The civil revision is devoid of merit and is hereby dismissed. Interim order dated 28.05.2019 passed by this Court stands vacated.
24) In the facts and circumstances, the parties shall bear their own costs.
(Lok Pal Singh, J.) Dt. January 10, 2020 Negi