Madhya Pradesh High Court
Bhagwandas And Ors. vs Collector Of Stamps And District ... on 7 August, 2002
Equivalent citations: 2003(1)MPHT136
Author: Rajendra Menon
Bench: Rajendra Menon
ORDER Rajendra Menon, J.
1. The petitioner by this petition has challenged the order An-nexure P-1, dated 16-10-95 passed by the Collector of Stamps, Distt. Shivpuri, M.P. and the recovery order Annexure P-2 issued in pursuance thereof.
2. It is the case of the petitioner that he had submitted a relinquish-ment deed Annexure P-3 for registration before the Competent Authority on 15-5-95 but the same was not registered and returned back to the petitioner on 14-11-95. Annexure P-3 is the copy of the said document wherein seal have been affixed of its presentation on 15-5-95 and it is written in the same that it returned to the petitioner on 14-11-95, refused to register and registration Rule 35-R is also mentioned. Signature of the petitioner and seal and signature of the registering authority is also affixed.
3. It is the case of the petitioner that he was unwilling to get the document registered and the same was returned to him. However, he received a notice from the office of Collector Stamps that the document was impounded on 15-5-95 under Section 33 of the Stamp Act and proceedings were conducted against him. The petitioner appeared on 13-10-95 and moved an application for return of the document and contended that he does not want to register the document. However, the said application was rejected and the impugned order was passed and thereafter proceedings for recovery of Rs. 1,03,388/- is being initiated vide Annexure R-2. It is the case of the petitioner that as the petitioner does not want to get the document registered and the same was returned back to him without registration and as the document has not been registered, the entire action of the respondents is illegal and liable to the quashed.
4. On being noticed the respondents have filed the return and it is indicated in the return that the document was never returned immediately when it was presented on 15-5-95, it was impounded under Section 33 of the Act and proceedings were conducted as per the provisions of Section 33 of the Indian Stamp Act. It has been averred that this is not a case where proceedings under Section 47A of the Stamp Act were initiated. It is also submitted that subsequently the petitioner has taken away the documents and with a view to deprive the State of its revenue has filed a suit for partition of the property, got the matter placed before the Lok Adalat and without claiming any ownership of the property has get the matter compromised in the Lok Adalat to avoid payment of stamp duty. It is therefore submitted that no relief can be granted to the petitioner.
5. It is an admitted position that the compromise decree Annexure R-1 passed in the Lok Adalat is subject matter of challenge by the State Govt. in a separate petition.
6. I have heard learned Counsel for the parties.
7. In the present case, the question is as to whether the orders impugned for recovery of the amount is sustainable or not. Section 33 of the Indian Stamp Act contemplates examination and impounding of instruments. The said section authorises and empowers the registering authority to impound any instrument which in his opinion is not duly stamped. After impounding the same, the matter has to be referred to the Collector and the Collector has to take action in accordance with the provisions of Indian Stamp Act. The procedure for dealing with such instruments are contained in Section 38 of the Stamp Act. Apart from the aforesaid, Section 47A also empowers for impounding of instruments if it is found that the instrument is under valued. A perusal of Section 33 and Section 47-A indicates that the authority is empowered to impound the document or instrument, if it is produced in the course of the performance of his function. The purpose of the aforesaid section is to empower the authorities to impound and take action for recovery of stamp duty if it comes to their knowledge that the instrument is not stamped in accordance with law. In fact the said section empowers the authorities to impound the document and release stamp duty if insufficiently paid in the instrument or document. In the instant case proceedings under Section 33 have been initiated but the question is can the said provision be applied when the document is presented for registration under the Indian Registration Act, 1908. The M.P. Registration Rules, 1939 provides for a procedure to be followed at the time of registration. In the present case the document in question was presented for registration and impounding of document as taken place under Section 33. However, in doing so, the authorities have ignored the provisions of the Registration Act and the M.P. Rules in this regard. Sections 51 and 52 of Chapter 11 of the Registration Act provides for duties and powers of the registering authorities. It also provides various registers and books to be maintained in the office of the Registrar for the purpose of entering the particulars of the document and memorandum produced for registration and various other aspects. Section 59 contains a procedure with regard to action to be taken by the Registrar when the document is presented for registration before him. Thereafter, the subsequent sections deals with the procedure to be followed by the Registrar for registering the documents and ultimately if the document is registered a certificate of registration is issued as required under Section 60. That apart, the M.P. Registration Rules, 1939 contains the entire procedure to be followed for registration of documents.
8. Rule 4 of the M.P. Rules deals with examination of Stamp Duty and Rule 6 deals with impounding of documents not duly stamped. Rule 6 empowers the Registrar to impound the documents presented for registration and thereafter refer it to the Collector. Rule 19 deals with return of documents for correction, Rule 31 deals with documents deemed to be admitted for registration and Rule 34 provides that if the document is refused for registration the party has to be given a reasonable opportunity of hearing and order of refusal with reasons thereof has to be recorded and it is to be endorsed that the registration is refused. Sub-rule (r) of Rule 35 provides for reasons for refusal if the fees and fine demanded have not been paid. Thereafter, Rule 45 provides for return of documents unregistered. According to this rule if the party who presented a document for registration wishes to withdraw it, it shall be returned to him with the endorsement "returned un-registered at the request of the person concerned who presented it". It further provides that the fact of return has to be recorded in the minute book. The purpose of considering the aforesaid rules is to sec as to whether the aforesaid procedure has been followed in the present case. Even though, the minute book and other documents have not been produced but a perusal of the order Annexure P-1, dated 16-10-95 itself indicates that these procedures were not followed because after assessing the valuation of the property and the duty to be paid thereof, it has been observed in the order that requirement of Section 40(7) have not been followed, reasonable opportunity of hearing have not been given to the petitioner, he was not informed that the document is un-stamped, there is no recording in the minutes book and thereafter a direction is given in the impugned order Annexure P-l to comply these formalities and then recover the stamp duty. In my opinion, the order impugned is totally unsustainable and is contrary to the principles of law. The authority in the said order has referred to Section 40 of the Stamp Act and has directed for taking action under Section 35 of the said Act but while considering the same, the authority has not taken note of the rules for registration. The authority has proceeded on the ground that the instrument has been impounded under Section 33 and therefore duty is being charged and action is being taken as per the provisions of the said Section. However, while exercising this power, the Collector and the authorities have ignored the requirements of the Registration Rules of 1939. When a document is presented for registration, the proceedings for impounding and taking action under the said rules have to be followed. Admittedly, the requirement of the said rules have not been followed in the present case. The endorsements have to be made as per the provisions of the said rule after affixing the stamp as required under the rules. The record indicates that the entries were not made in the minutes book. Thereafter before admitting the documents, endorsements are to be made as per the provisions of Rule 30 and thereafter a demand has to be made from the person and under Rule 45 an option is given to the person to withdraw the documents and ask for return of the same. The Registrar is required to maintain the various registers and minutes book as per the provisions of the aforesaid rule. In the instant case, it seems that nothing has been done. On the contrary, the impugned order indicates that directions have been given to follow the principles of natural justice, call the petitioner ask him to pay the stamp duty and thereafter after recording the refusal in the minutes book proceeded to recover the same. The action directed to be taken in the aforesaid order seems to be clearly inconsistent to and contrary to the statutory rules applicable in such cases, le., the Indian Registration Act and the M.P. Registration Act.
9. As this was a case where the document was presented for registration and impounding took place at the time of registration, the procedure contemplated in the M.P. Registration Rules, 1939 should have been followed. Instead of taking action in accordance with the said rules, something has been done which is neither provided for nor contemplated in the rules. That apart, when proceedings under Section 33 of the Stamp Act were initiated and when the petitioner moved an application on 13-10- 95 for withdrawal of the documents, permission was refused on the ground that the document impounding cannot be return back. There is nothing in the M.P. Registration Act which prevents the person from withdrawing the document in case he does not want to get it registered. A perusal of Rule 7 indicates that if the document is liable to advalorem duty, under the Indian Stamp Act, 1899, an opportunity has to be given by making endorsement in the back of the document wherein an opportunity is given to the person to cither comply the documents or to withdraw the same. Similarly Rule 31 provides that after requirement of Sections 34 and 35, 52, 58 and 59 have been complied, payment is made the document shall be registered. However, Rule 45 contemplates that if the party who presented the document for registration wishes to withdraw the document, it shall be returned to him but withdrawal is only refused when all the registration proceedings have been completed and the document is only pending for payment of dues. The present is not a case of the said nature. The endorsement made at the back of the documents do not indicate the proper procedure as per rules were followed. The seal affixed is as per requirement of Rule 3 and the endorsement is in Form No. 1 Appendix-A of the registration rules with regard to presentation of document. However, tor the purpose of impounding the document, a separate endorsement has to be made. Rule 6 provides that if the document presented has not duly stamped, the Registrar shall impound the document and forward it to the Collector. For this endorsement of the date and the fact of its impounding the document has to be recorded in the document. The document Annexure P-3 does indicate that it has been impounded on 15-5-95 but thereafter on 14-11-95, it has been indicated that it has refused registration under Rule 35-R, and returned to the petitioner.
10. It is the case of the petitioner that the document was returned to him and it has not been registered. If the document has not been registered and it was returned to the petitioner it is not known as to under what provisions proceedings are held in pursuance to the impounding done under Section 33. However, from the records it is clear that the petitioner on 13-10-95 has asked for return of the document and thereafter the document has been refused for registration on 14-11-95 and returned back to the petitioner. Nothing has been produced to indicate that the document has been registered. When the rules itself provide for withdrawal of document presented for registration and when the petitioner docs not want to register the document, the proposed action is unsustainable. In this case, there is nothing to indicate that after assessing the fees, demand of the same was made from the petitioner and the petitioner accepted the same and asked for registration. On the contrary, it seems that the petitioner refused to get the document registered and has expressed his desire to withdraw the same. Rule 45 permits the petitioner to withdraw the document. Admittedly, from the findings recorded in Annexure P-l it is seen that no option was given to the petitioner to withdraw the document by asking him to pay the deficit stamp. From the aforesaid it is clear that the entire action taken in the present case is contrary to the rules and regulations and the statutory provisions applicable for the purpose of registration of documents and impounding the same. Merely because the petitioner has got the matter settled in the Lok Adalat and deprived the State of its revenue it cannot be said that the action of the respondents is justified. The respondents may assail the order passed by the Lok Adalat in the proceedings instituted by them. As far as the present case is concerned, this Court is only required to see as to whether impounding and recovery of the stamp duty is being done in accordance with law. For the reasons indicated hcreinabove, it is clear that the entire action stands vitiated for non-compliance of the statutory provisions, therefore the order Annexure P-1 and the proposed recovery vide Annexure P-2 are quashed.
11. The petition is accordingly allowed.