Andhra HC (Pre-Telangana)
C. Ramachandra Naidu vs M. Rajamma And Ors. on 17 February, 1999
Equivalent citations: 1999(2)ALD314, 1999(1)ALT815, 1999 A I H C 1686, (1999) 2 ANDHLD 314, (1999) 2 RECCIVR 326, (1999) 3 ICC 384, (1999) 1 ANDH LT 815
Author: Ramesh Madhav Bapat
Bench: Ramesh Madhav Bapat
ORDER
1. The petitioner herein was the plaintiff. He had instituted the suit against the defendants i.e., the respondents herein, in OS No.301 of 1989 which is pending on the file of the Principal Senior Civil Judge, Tirupathi. The said suit was filed for specific performance of the agreement of sale dated 24-4-1989 and also to put the plaintiff in possession of the suit schedule property.
2. On completion of formalities, the evidence commenced. The plaintiff produced the document i.e., agreement of sale, which was exhibited in the evidence. After few days, the plaintiff filed an application i.e., IA No.1332 of 1997 under Section 38 of the Indian Stamp Act, 1899 with a prayer to send an agreement of sale to the Revenue Divisional Officer, Tirupathi for levying and collecting stamp duty as it was inadequately stamped. The defendants-respondents herein filed their counter and resisted IA No.1332 of 1997. The learned Judge heard the matter on merits and refused to send the agreement of sale to the Revenue Divisional Officer. Aggrieved by the said order, the present revision has been filed.
3. The learned Counsel Mr. A.T.M. Rangaramamujam appearing on behalf of the petitioner herein submitted at the Bar that the said application was made so as to avoid the difficulties which may arise at the time of execution of the decree. It was further submitted by the learned Counsel at the Bar that once the document is exhibited in evidence, the respondents i.e., the original defendants, did not raise any objection for exhibiting the document. It was further contended by the learned Counsel for the petitioner that when the plaintiff realised that an agreement of sale on which the suit is based was inadequately stamped, the plaintiff him self filed IA No.1332 of 1997 requesting the Court to send the document for impounding and collecting the deficit stamp. Under these circumstances, the learned Counsel for the petitioner submitted that the order impugned has to be set aside directing the Court to send the document for impounding and collecting the deficit stamp.
4. The learned Counsel for the petitioner herein invited my attention to Section 38 of the Indian Stamp Act, 1899. Section 38 of the said Act reads as hereunder :
"(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 of 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."
5. By reading the aforesaid section, it is evident that while admitting the document in evidence if it comes to the knowledge of the person (Judge) that the instrument has been insufficiently stamped, then the Judge has to follow the procedure as contemplated under Section 38 of the Indian Stamp Act.
6. Seciion 41 of the Indian Stamp Act provides the cases when the instruments unduly stamped by accident. Section 41 of the said Act reads as under :
"If any instrument chargeable with a duty and not duly stamped, not being an instrument chargeable with a duty of twenty paise only or a mortgage of a crop (Article 36(a) of Schedule I-A) chargeable under clause (aa) or (bb) of Section 3 with a duty of forty paise or a bill of exchange or promissory note is produced by any person of his own motion before the Collector within one year from the date of its execution or first execution and such person brings to the notice of the Collector the fact that such instrument is not duly stamped and offers to pay to the Collector the amount of the proper duty, or the amount required to make up the same, and the Collector is satisfied that the omission to duly stamp such instrument has been occasioned by accident, mistake or urgent necessity, he may, instead of proceeding under Sections 33 and 40, receive such amount and proceeds as next hereinafter described."
By reading the provisions of Section 41 of Indian Stamp Act, 1899, it is evident that the person who himself brings to the notice of the Collector that the instrument has been unduly stamped by an accident, then the Collector on being satisfied has to proceed to collect the deficit stamp as contemplated under Sections 33 and 40 of the Indian Stamp Act.
7. Section 41-A of the said Act speaks about the recovery of stamp duty not levied or short levied. Section 41-A of the said Act reads as under:
"(1) Whereafter the commencement of the Indian Stamp (Andhra Pradesh Amendment) Act, 1986, any instrument chargeable with duly has not been duly stamped and registered by any Registering Officer by mistake and remarked as such by the Collector or any Audit Party, the Collector may, within five years from the date of registration serve a notice on the person by whom the duty was payable requiring him to show-cause why the proper duty or the amount required to make up the same should not be collected from him :
Provided that where the non-payment was by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of duty, the Collector may, within twenty years from the date of registration, serve a notice on such person to show-cause why the proper duty or the amount required to make up the same should not be collected from him.
(2) The Collector or any officer specially authorised by him in this behalf shall, after considering the representation, if any, made by the person on whom notice is served under sub-section (1), determine by an order, the amount of duty due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount as determined. On payment of the duty, the Collector shall add a certificate under Section 42.
(3) Any person aggrieved by....."
By reading Section 41-A of the said Act, it is evident that Section 41-A contemplates a contingency when the instrument unduly stamped has been already registered. The said section contemplates the procedure to be adopted in collecting the stamp duty. In the present case, such contingency is not there. The plaintiff himself moved the Court on being satisfied that the instrument has been insufficiently stamped and it requires to be impounded and deficit stamp duty has to be paid.
8. The learned Counsel Mr. K.S. Gopala Krishnan appearing on behalf of the respondents herein invited my attention to the ruling reported in Balkrishna Bihari Lal v. Board of Revenue, M.P. and others, (FB) Their Lordships of Madhya Pradesh High Court were pleased to hold at para (11) of the judgment as under:
"The scheme of the Act is abundantly clear:
(i) Once an instrument chargeable with duty is tendered in a civil Court, it shall impound it, if, after examining it, the Court is of the opinion that it is not duly stamped. Section 33 of the Act. The Court has, however, power under Section 35 of the Act to admit it (barring certain instruments) in evidence on payment of duty with which the instrument is chargeable or the amount required to make up the deficiency, together with a penalty, limits of which are prescribed in the section. There is no third course open to the Court, once it finds that an instrument tendered in evidence is not duly stamped. The next step, which the Court has then to take, is provided in Section 38. If the Court has admitted in evidence an instrument upon payment of penalty and/or duty, it shall send to the Collector an authentic copy of such instrument together with a certificate stating the amount of duty and penalty levied in respect of that instrument, and shall send such amount to the Collector. This is provided in sub-section (1) of Section 38.
(ii) Then sub-section (2) of Section 38 enacts thus:
"In every other case, the person so impounding an instrument shall send it in original to the Collector."
This sub-section, therefore, clearly refers to a case where an instrument has been impounded under Section 33 of the Act but has not been admitted in evidence on payment of penalty and/or duty. The Collector has then to follow the procedure as specified in Sections 39 and 40 of the Act, according as the instrument is sent to him by the civil Court under subsection (1) or sub-section (2) respeclively of Section 38.
(iii) But when the civil Court is of the opinion that an instrument is duly stamped, it does not impound it under Section 33 of the Act but admits it in evidence.
(iv) In a case where an instrument is tendered and the civil Court just admits it in evidence, without its being questioned on the ground that it is not duly stamped, such validity cannot, by virtue of Section 36 of the Act, be subsequently questioned at any state of the same suit or proceeding on the ground that it is not duly stamped. The only course then open is the one provided in Section 61 of the Act. Under that section, it is the Court to which appeals lie from, or reference are made by, the Court which admitted the instrument in evidence, which may, on its own motion or on the application of the Collector, take into consideration the order of the subordinate Court admitting the instrument in evidence. And, if such (appeal or reference) Court is of the opinion that such instrument should not have been admitted in evidence without payment of duty and penalty under Section 35, or that higher duty and penally should have been paid, such Court may order the instrument to be produced and may impound it when produced. Such Court shall then send the instrument along with its declaration to the Collector."
9. The learned Counsel Mr. A.T.M. Rangaramanujam appearing on behalf of the petitioner herein invited my attention to the ruling reported in Simhapuri Vanijay Mandali, Nellore, by its President, Y. Venkateswarlu and others v. Commercial Tax Officer, Nellore (East) Nellore and others, 1972 ILR (AP) 1339. Their Lordships of this Court held as under:
"That from a combined reading of the various relevant provisions of the Stamp Act, it appears clear, that once an Officer, rightly or wrongly, admits an insufficiently stamped document in evidence and acts upon it, so far as that officer is concerned the matter is at an end. Either he must collect the deficit stamp duty and penalty himself or impound the instrument and-send it to the Collector, before he admits it in evidence and acts upon it. It would be irregular to admit and act upon it in the first instance and later on to take action for collection for stamp duty and penalty."
10. I intend to rely upon the ruling of this Court. The contingency, which has arisen in this case, is not contemplated in the Indian Stamp Act. It has been held by our High Court that once the document, which is chargeable with stamp but not properly stamped or unduly stamped, has been admitted in evidence rightly or wrongly, the power of the Court is not restricted and there is no embargo to send the document to the Collector for impounding and collecting the necessary stamp duty.
11. As a matter of fact, in the present case the instrument, which was not properly stamped, has been admitted in evidence. The respondents herein did not take any objection for exhibiting the said document and when the plaintiff himself realised that the instrument has been insufficiently stamped, the plaintiff himself brought the said fact to the notice of the Court and requested the Court to send the document to the Collector for impounding and collecting necessary stamp duty by filing IA No.1332 of 1997. The stamp duty is collected by the Government, which is a revenue to the Government. It is not open for the respondents to object for collecting the arrears of revenue. In fact, the respondents have no locus standi to object the same. It is in between the plaintiff, the Court and the Collector to take decision of impounding the document and to collect the deficit stamp duty.
12. Under these circumstances, this Court holds that the learned Judge erred in dismissing IA No.1332 of 1997. Therefore, this Court allows IA No.1332 of 1997 in OS No.301 of 1989 pending on the file of the Principal Senior Civil Judge, Ttrupathi with a direction to send the document to the Collector for impounding and collecting the deficit stamp duty.
13. With this direction, the civil revision petition stands allowed. No costs.