Karnataka High Court
Smt. Asha Ramesh vs Smt. C. M. Chinnamma on 27 March, 2024
1 W.P.NO.1655/2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF MARCH, 2024
BEFORE
THE HON'BLE MRS JUSTICE M G UMA
WRIT PETITION NO.1655/2024
BETWEEN:
SMT. ASHA RAMESH
W/O. H.R.RAMESH,
AGED ABOUT 55 YEARS,
R/AT NO.419, LAKSHMI NIVASA,
4TH MAIN, 4TH STAGE, T K LAYOUT,
KUVEMPUNAGARA NORTH,
MYSURU - 570 009.
...PETITIONER
(BY SRI SHARATH S. GOWDA, ADV.)
AND:
1. SMT. C M CHINNAMMA
W/O. B.V KUMAR, AGED ABOUT 65 YEARS,
R/AT 33/2, 1ST MAIN ROAD,
NEHRU NAGAR, SHESHADRIPURAM,
BENGALURU - 560 020.
REP BY HER GPA HOLDER,
B.K NAGABUSHAN,
S/O SRI B.V KUMAR,
AGED ABOUT 43 YEARS,
Digitally R/AT NO.33/2, 1ST MAIN ROAD,
signed by
MANJANNA E NEHRU NAGAR, SHESHADRIPURAM,
Location:
High Court of BENGALURU - 560 020.
Karnataka
2. MIRLE VARADARAJ
S/O. LATE BOREGOWDA,
AGED ABOUT 62 YEARS,
2 W.P.NO.1655/2024
R/AT NO.544, 5HT MAIN,
KENGERI SATELLITE TOWN,
BENGALURU - 560 060.
3. N.R NAGARAJ,
S/O. LATE K. RAMEGOWDA,
AGED ABOUT 45 YERS,
R/AT HANUMANTHANAGAR,
NELAMANE POST,
SRIRANGAPATHNA TALUK,
MANDYA DISTRICT - 571 403.
4. M/S REMCO (BHEL) HOUSING
BUILDING CO-OPERATIVE SOCIETY LTD.,
359, 5HT MAIN, R.P.C (REMCO)
LAYOUT, HAMPLINAGAR,
BENGALURU - 560 104,
REP BY IT PRESIDENT
SRI VIJAYA KUMAR.
...RESPONDENTS
(BY SRI MANIAN K B S, ADV. FOR R1;
NOTICE TO R2 TO R4 ARE DISPENSED WITH)
THIS WP IS FILED UNDER ARTICLES 226 AND 227,
PRAYING TO ISSUE WRIT IN THE NATURE OF CERTIORARI OR
ANY OTHE APPROPRIATE WRIT, ORDER OR DIRECTION TO QUASH
THE IMPUGNED ORDER DATED 20.12.2023 PASSED IN
O.S.NO.2667/2015 ON IA NO.10 BY THE XLII ADDITIONAL CITY
CIVIL AND SESSIONS JUDGE, BANGALORE, VIDE ANNEXURE - A.
CONSEQUENTLY ALLOW IA NO.10 AND ETC.,
THIS PETITION HAVING BEEN HEARD AND RESERVED ON
04.03.2024, COMING ON FOR PRONOUNCEMENT OF ORDER THIS
DAY, THE COURT MADE THE FOLLOWING:
3 W.P.NO.1655/2024
ORDER
Defendant No.2 in OS No.2667 of 2015 on the file of the learned XLII Additional City Civil and Sessions Judge, Bengaluru, is seeking issuance of writ of certiorari to quash the order dated 20.12.2023 dismissing I.A.No.X filed under Section 151 of CPC seeking an order not to mark three documents mentioned in the application.
2. Heard Sri.Sharath S.Gowda, learned counsel for the petitioner and Sri.Manian K B S, learned counsel for respondent No.1. Perused the materials on record.
3. Learned counsel for the petitioner contended that respondent No.1 as plaintiff filed the suit OS No.2667 of 2015 seeking permanent injunction against the defendants. It is the contention of the plaintiff before the Trial Court that she purchased the schedule property under the registered sale deed said to have been executed by REMCO BHEL Co- Operative Society (hereinafter referred to as 'Society' for short) and is in possession and enjoyment of the same. 4 W.P.NO.1655/2024 Therefore, she is claiming permanent injunction against the defendants from interfering with her peaceful possession and enjoyment of the property.
4. Learned counsel submitted that initially larger extent of the land in question was acquired by the Government by issuing Notification. The said Notification was challenged and the Hon'ble Apex Court in H.M.T. House Building Co-operative Society Vs Syed Khader1, quashed the land acquisition proceedings including the Notification in question. The possession of the land was ordered to be restored to the respective land owners irrespective of the fact whether they have challenged acquisition of their land or not. In view of the said order, the land owners came in possession of the property as per the direction issued by the Hon'ble Apex Court. Contrary to the judgment of Hon'ble Apex Court and the direction issued therein, the Society came in possession of the property and started executing several sale deeds in favour of different persons. The plaintiff 1 ILR 1995 KAR 1962 5 W.P.NO.1655/2024 is one such purchaser said to have purchased the property under the registered sale deed and now seeking to be in possession of the property. The defendants are seriously disputing the contention taken by the plaintiff.
5. The learned counsel contended that the plaintiff while examining the witnesses, proposed to mark the agreements dated 29.04.1984, 25.02.1992. These are the agreements under which possession of the property was handed over and therefore, both these documents are liable for duty and penalty. The trial court is bound to impound the document and collect duty and penalty under the Karnataka Stamp Act, 1957 (hereinafter referred to as 'the Stamp Act' for short). Similarly, the document styled as declaration- cum-ratification deed dated 18.11.2000 is in fact the document under which owners have denounced their right over the property and there is transfer of ownership under the document. Under such circumstances, as per Section 17 of the Registration Act, 1908 (hereinafter referred to as 'the Registration Act' for short), the document is compulsorily 6 W.P.NO.1655/2024 registrable. When the document is not registered, the same cannot be admitted in evidence. Therefore, the petitioner had moved an application requesting the trial court not to mark those documents on behalf of the plaintiff. The trial court ignoring the position of law proceeded to dismiss the application. Therefore, the petitioner is before this court.
6. Learned counsel contended that a specific contention was taken by the petitioner that the documents in question are forged document. Landlords have never executed such documents. Even if the contention taken by respondent No.1 is to be accepted, it is the Society, which is the proper custodian of the original document styled as declaration-cum-ratification deed. Without stating anything about the possession of original document, the plaintiff has produced the certified copy of the said documents on the ground that the said documents are marked in an uncontested suit without any objection and therefore, the plaintiff is entitled to mark the same.
7 W.P.NO.1655/2024
7. Learned counsel submitted that the memorandum of agreements referred to above specifically state that the possession of the property was handed over under the agreements. Therefore, the documents attract stamp duty. Since the stamp duty is not paid, the documents are to be impounded. The plaintiff is liable to pay the duty and penalty, without which the documents cannot be admitted in evidence.
8. Learned counsel further submitted that the Co- ordinate Bench of this Court in Mohan S Vs P T Sadashivaiah and Others2 has considered a similar document styled as declaration-cum-ratification deed and categorically held that the document in question where the right in respect of the immovable property was transferred, it is compulsorily registerable. In the said case, the Trial Court had refused to mark the document as the same is unregistered document. This Court held that the Trial Court was justified in recording the finding in that regard. Learned 2 WP No.12340/2021 DD 24.08.2021 8 W.P.NO.1655/2024 counsel submitted that since the declaration-cum-ratification deed being unregistered document, is inadmissible in evidence. Accordingly, he prays for allowing the petition.
9. Per contra, learned advocate for respondent No.1
- plaintiff opposing the petition submitted that the agreements referred to by the defendants are dated 29.04.1984 and 25.02.1992. As per amended Article 5(e)(i) of the Stamp Act, such agreement relating to sale of immovable property, wherein part performance of the contract, possession of the property was delivered or was agreed to be delivered, stamp duty as a conveyance on the market value of the property was required to be paid. But this provision of law was inserted by Act No.8 of 1995 which came into effect from 31.03.1995 by substituting the earlier clause (e). Therefore, the stamp duty that may be payable under the agreement, where the possession of the property is handed over in part performance of contract may be a meagre amount which has to be calculated on the basis of un-amended Article 5(e) as the agreements were executed 9 W.P.NO.1655/2024 prior to the amendment i.e., 31.03.1995. In this regard, learned counsel placed reliance on the decision of the Hon'ble Apex Court in Suraj Lamp and Industries Private Limited (2) Through Director Vs State of Haryana and Others3 in support of his contention that the amendment to Article 5 of the Stamp Act is prospective in nature and it cannot be made applicable to the document which are already executed.
10. Learned advocate contended that the decision of Co-ordinate Bench of this Court in Mohan (supra) was on the basis of concession made by the learned counsel representing the plaintiff and therefore, the said finding cannot be made applicable in the present case.
11. Learned advocate would submit that after the Hon'ble Apex Court quashed the Notification for acquisition of land and ordered for re-delivery of the possession in favour of land owners, they entered into an agreement with the Society and in part performance of the same, possession was 3 (2012) 1 SCC 656 10 W.P.NO.1655/2024 handed over. In turn, the Society handed over the possession of the property in favour of the plaintiff. The plaintiff has filed the suit for permanent injunction wherein she is required to prove her possession and not title.
12. Learned advocate places reliance on the decision of the Hon'ble Apex Court in S Kaladevi Vs V R Somasundaram and Others4, in support of his contention that even when the document is compulsorily registerable under Section 17 of the Registration Act, still it is admissible to prove the character of the possession of the person who holds it. Since in the present case, the plaintiff is only required to prove her possession and the character of such possession, the document styled as declaration-cum- ratification deed is required to be marked only for said limited purpose. The Trial Court on considering all these facts and circumstances, rightly rejected IA.X filed by the plaintiff. There are no reasons to interfere with the impugned order. Hence, he prays for dismissal of the petition. 4 (2010) 5 SCC 401 11 W.P.NO.1655/2024
13. The points that would arise for consideration are,
(i) whether the agreements dated 29.04.1984 and 25.02.1992 produced by the plaintiff before the trial court are required to be impounded and
(ii) whether the declaration-cum-ratification deed dated 18.11.2000 is admissible in evidence, as the same is not a registered document.
14. The trial court rejected the application filed by defendant No.2 who is the petitioner herein, seeking not to permit marking of those documents without impounding or without registration.
15. The agreements dated 29.04.1984 and 25.02.1992 are the agreements entered into between the parties, where it is stated that Smt.Parvathamma w/o Channaveerappa is the owner of the land in question and the possession of the property was delivered in favour of the second party for the purpose of moving the concerned authorities for acquisition of the land. As per the terms of the agreements, consideration amount was paid by the second 12 W.P.NO.1655/2024 party in favour of the first party while handing over the possession of the property, to enable the second party to get the compensation to be awarded for acquisition of the land, subject to the second party paying some more amount as stated in the agreement, on publication of the preliminary notification and the final notification. Therefore, for all practical purposes, it is an agreement relating to the immovable property. Even though the nomenclature of the document does not suggest that it is an agreement of sale, the intention of the parties is nothing short of agreeing to sell the property by first party to the second party and handing over the possession in favour of the second party for a specified consideration. Therefore, Article 5 of the Stamp Act is applicable and the agreements attract stamp duty.
16. Article 5 of the Stamp Act deals with the agreement or memorandum of agreement. This Article 5 was substituted to Section 3 by Act No.6 of 1910, i.e, The Karnataka Stamp (Amendment) Act 1966, which came into effect from 15.11.1966. As per the amended Article 5(d), if 13 W.P.NO.1655/2024 the agreement or memorandum of agreement is not otherwise provided for, the proper stamp duty payable is Rs.3/-. Similarly, Karnataka Stamp (Amendment) Act, 1981, came into effect from 07.04.1981. According to which, Article 5, item (d) was renumbered as item (e). It is thereafter, Karnataka Stamp (Amendment) Act, 1995, came into effect from 31.03.1995. But the agreements referred to in the present petition are dated 29.04.1984 and 25.02.1992, which are admittedly prior to coming into force of Act No.8 of 1995. Therefore, the relevant Act to attract the stamp duty is Karnataka Stamp (Amendment) Act, 1981, which was in force, when the agreements were executed.
17. The other document which is to be considered is, declaration-cum-ratification deed dated 18.11.2000 executed by Sri.Channaveerappa @ Channappa in favour of the Society. As per the terms of this document, Sy.No.42/3A measuring 1.11 acres situated at Pattanagere village was owned by Smt.Parvathamma w/o Channaveerappa entered into an agreement with the second party on 29.04.1984 and 14 W.P.NO.1655/2024 in part performance of the same, second party was in possession of the schedule property and also executed an irrevocable Power of Attorney in favour of the second party, by receiving the agreed consideration amount. Thereby the first party authorizes the second party to manage the schedule property.
18. The document also states that another agreement dated 25.02.1992 was entered into between the parties where additional payment was made to the first party, i.e., Channaveerappa @ Channappa and also to Smt.Parvathamma, in turn they have denounced their right, title and interest in respect of the schedule property in favour of the second party. It is also agreed that transfer of possession in favour of the second party was absolute and forever and the first party and Parvathamma were barred from dealing with the property in any manner whatsoever, which is detrimental to the interest of the second party.
19. The recitals in the agreement referred to above and the declaration-cum-ratification deed make it abundantly 15 W.P.NO.1655/2024 clear that owners of the property by entering into two different agreements, handed over the possession of the property for a specified consideration. Instead of executing an agreement for sale, the nomenclature given is only as an agreement. The declaration-cum-ratification deed is the document under which the owners have denounced their right over the immovable property in favour of the second party for a specified consideration, agreeing not to exercise any right of ownership including management. In other words, the owners have given up their right of ownership over the property under the document and the ownership is transferred and vested in favour of the second party.
20. Section 2(d) of the Stamp Act defines the word 'conveyance' which includes, a conveyance on sale; every instrument etc., by which the property, whether moveable or immovable or any estate is transferred to, or vested in, any other person, and which is not otherwise specifically provided for by the schedule.
16 W.P.NO.1655/2024
21. If the definition of the word 'conveyance' is taken into consideration in the light of the recitals found in the declaration-cum-ratification deed, there is no room for any doubt that it is a conveyance, as defined above. It is settled proposition of law that the nomenclature of the document will not decide the nature of the document but the recitals found therein will convey the true intention of the parties. Therefore, Article 20(i) of the Act will be attracted to levy the stamp duty.
22. Section 17 of the Registration Act refers to the documents of which registration is compulsory. Sub-section (1)(b) deals with non-testamentary instruments which purport or operate 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, to be a document which required registration, compulsorily. 17 W.P.NO.1655/2024
23. Section 49 of the Registration Act deals with effect of non-registration of the documents required to be registered under Section 17. Clause (c) bars receiving such documents in evidence of any transaction affecting such property or conferring such power, unless the document is registered. Proviso to Section 49 of the Registration Act provides an explanation to the general Rule to state that an unregistered document affecting immovable property and required by the Registration Act or the Transfer of Property Act, 1882, to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 or as evidence of any collateral transaction not required to be effected by registered instrument. Thus, Section 49 of the Registration Act makes it very clear that when a document which is compulsorily registrable under Section 17, if not registered, it cannot be received as evidence of any transaction affecting such property. The explanation to the general Rule is that, an unregistered document can be received in evidence in a suit 18 W.P.NO.1655/2024 for specific performance of contract under Chapter II of the Specific Relief Act or as evidence of any collateral transaction not required to be effected by registered instrument.
24. In the present case, admittedly, the suit filed by the respondent as plaintiff before the trial court is one for permanent injunction in respect of the very same property, against the petitioner and other defendants from interfering with the peaceful possession and enjoyment of the suit schedule property and from committing acts of trespass into the suit schedule property etc. Therefore, the possession of the property is to be proved by the plaintiff and for the said purpose, the plaintiff wants to rely on the agreements and the declaration-cum-ratification deed. Under such circumstances, it cannot be said that the plaintiff is placing reliance on those documents only for collateral purposes.
25. In view of the above, I am of the opinion that the agreements dated 29.04.1984 and 25.02.1992 are required to be impounded in accordance with law and the declaration- 19 W.P.NO.1655/2024 cum-ratification deed dated 18.11.2000 is compulsorily registrable document, but not registered and therefore, the same shall not be received as evidence in the suit for permanent injunction filed by the plaintiff.
26. I have gone through the impugned order passed by the trial court, produced as per Annexure-A. The trial court has never applied its mind to any of these facts and the position of law, but proceeded to reject the application filed by the petitioner solely on the ground that, when once an instrument is admitted in evidence, even by inadvertence, the admissibility of the same on the ground of insufficiently stamped cannot be questioned. It also proceeded to hold that since the Karnataka Stamp Act prescribes time limit of five years (10 years in case of fraud) for the State to recover stamp duty, the documents cannot be impounded and duty and penalty cannot be collected. In this regard, the trial court placed reliance on the decision of this court in Shri 20 W.P.NO.1655/2024 Anil vs Shri Babu and Another5, wherein the Co-ordinate Bench of this court considered Section 46-A of the Stamp Act where there is restriction for recovery of the stamp duty which was not levied or short levied by the Chief Controlling Revenue Authority or any other officer authorized by the Government.
27. It is relevant to refer to the recent decision of this Court in E.B.Basavaraju Vs. T.S.Somahekaraiah6 wherein, the Co-ordinate Bench of this Court placing reliance on the earlier decision of the Co-ordinate Bench of this Court in Smt. Savithramma R.C v/s M/s. Vijaya Bank & Anr7 held in para No.9 as under:
"9. The question whether a document once marked can be subject to scrutiny under Section 33 of the Act, is no longer res integra in view of the judgment of the Co- ordinate Bench of this Court in the case of Smt. Savithramma R.C. vs. M/s. Vijaya Bank and another [ILR 2015 KAR 1984]. This Court held while considering the said question as follows:
"If the Judge does not act under Section 34 of the Act, but the document is insufficiently stamped and admitted in evidence, though objection 5 W.P.No.112448/2017 6 W.P.No.12966/2016 DD 7.9.2022 7 (ILR 2015 KAR 1984) 21 W.P.NO.1655/2024 regarding admissibility cannot be raised subsequently, that does not take away his obligation to impound the document under Section 33 of the Act. If the document is insufficiently stamped and if the Court has admitted such instrument in evidence without collecting duty and penalty, then the Judge shall proceed under Section 33 of the Act and impound the document. After impounding the document, he shall proceed under Section 37(2) of the Act and shall send the impounded instrument in original to the Deputy Commissioner to be dealt with under Section 39 of the Act. Therefore, impounding the 6 document should not be confused to admission of document without objection regarding admissibility or on such objection being taken after collecting the duty and penalty."
28. It also referred to another decision of the Coordinate Bench of this Court in K. Dinesh V.Kumaraswamy & Ors8, where it is held as under;
"10. Similarly, another Co-ordinate Bench in the case of K. Dinesh vs. Kumaraswamy and others [2010 (4) AIR KAR R. 647] has held as follows:-
"It is thus clear that any document, produced in Court, may for sufficient reason, be impounded and dealt with as above. It may be before or even after a document is admitted in evidence."
29. Thus, the position of law on the subject is very well settled by series of orders on merits rendered by this Court and therefore, it has to be held that even if the 8 (2010) (4) AIR KAR R.647 22 W.P.NO.1655/2024 document is already admitted without there being any objections, the same would not exclude the document from impounding as the same would result in loss of revenue to the Government, which was not the intention of the legislature. Marking of the document is only an administrative Act, but the same cannot be a bar for impounding the document, as a duty is cast on the Court for examination and impounding the instruments as provided under Section 33 of Karnataka Stamp Act. It is also relevant to refer to Section 58 of the Karnataka Stamp Act, where, even the Appellate Court is authorized on its own motion or on an application to pass such orders regarding sufficiency of the duty and penalty under Section 34 of the Act.
30. It is therefore, the impugned order passed by the trial court is perverse and the same is liable to be set aside. Accordingly, I proceed to pass the following:
ORDER
i) The writ petition is allowed.23 W.P.NO.1655/2024
ii) The impugned order dated 20.12.2023 passed in O.S.S.No.2667/2015 on I.A.No.X by the XLII Additional City Civil and Sessions Judge, Bangalore is set aside. Consequently, the application is allowed.
iii) The trial court is directed to impound the agreements dated 29.04.1984 and 25.02.1992 as provided under Article 5(e) of the Karnataka Stamp Act, 1957 in the light of the observations made above.
iv) The declaration-cum-ratification deed
18.11.2000 is compulsorily registrable
document, but the same is not registered
and therefore, the same shall not be
received in evidence.
SD/-
JUDGE
BGN/MBS