Karnataka High Court
G V Nagaraj vs Smt Lakkamma on 15 February, 2024
-1-
NC: 2024:KHC:6403
WP No. 40873 of 2018
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 15TH DAY OF FEBRUARY, 2024
BEFORE
THE HON'BLE MRS JUSTICE M G UMA
WRIT PETITION NO. 40873 OF 2018 (GM-CPC)
BETWEEN:
1. G.V. NAGARAJ,
AGED ABOUT 28 YEARS,
S/O. G.H. VEERAPPA.
2. VIJAYASHRI,
AGED ABOUT 30 YEARS,
D/O. G.H. VEERAPPA.
3. HALASWAMY G.V.,
AGED ABOUT 29 YEARS,
S/O G.H. VEERAPPA.
ALL ARE R/O. KAMSAGARA VILLAGE,
PUNYASTALA POST, CHANNAGIRI TALUK
DAVANAGERE DISTRICT - 577 213
...PETITIONERS
(BY SRI: CHIDAMBARA .G.S., ADVOCATE)
AND:
Digitally
signed by
MANJANNA E 1. SMT. LAKKAMMA,
Location:
High Court of
AGED ABOUT 73 YEARS,
Karnataka W/O. HALAPPA .G.S.,
2. G.H. VEERAPPA,
AGED ABOUT 56 YEARS,
S/O. HALAPPA G.S.,
3. G.H. MANJAPPA,
AGED ABOUT 53 YEARS,
S/O HALAPPA .G.S.,
4. G.V. RAVIKUMARA,
AGED ABOUT 30 YEARS,
S/O G. VEERABHADRAPPA.
-2-
NC: 2024:KHC:6403
WP No. 40873 of 2018
5. K.N. MANJUNATHA,
AGED ABOUT 58 YEARS,
S/O. B.V. MALLAPPA.
ALL ARE R/O KAMSAGARA VILLAGE,
PUNYASTALA POST, CHANNAGIRI TALUK
DAVANAGERE DISTRICT - 577 213
...RESPONDENTS
(BY SRI: NEELAKANTAPPA K. PUJAR, ADVOCATE FOR R4 & 5
(ABSENT)
R1, 2 & 3 - SERVED & UNREPRESENTED)
THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE
CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE ORDER
DTD:16.4.2018 PASSED BY THE COURT OF THE PRL CIVIL JUDGE
AND JMFC AT CHANNAGIRI IN O.S.NO.39/2010 ON IA NO.8 AND 9
ANX -17 AND PASS APPROPRIATE CONSEQUENTIAL ORDER
ALLOWING THE SAID APPLICATIONS. AWARD COSTS OF THE WRIT
PROCEEDINGS AND ETC.,
THIS WRIT PETITION, COMING ON FOR PRELIMINARY
HEARING - B GROUP, THIS DAY, THE COURT MADE THE
FOLLOWING:
ORDER
Petitioners being the plaintiffs in OS.No.39/2010 are seeking issuance of writ of certiorari to quash the order dated 16.04.2018 dismissing IA Nos.8 and 9 filed under Section 33 of the Karnataka Stamp Act, 1957.
2. Heard Sri. Chidambara G.S., learned counsel for the petitioners. Learned counsel for the respondents has not addressed his arguments. Perused the materials on record. -3-
NC: 2024:KHC:6403 WP No. 40873 of 2018
3. Learned counsel for the petitioners contended that the petitioners as plaintiffs filed the suit for declaration that they are the joint owners and that three sale deeds referred to therein, executed by defendant Nos.1 to 3 in favour of defendant Nos.4 and 5 are not binding on them. Defendant Nos.4 and 5 who are the purchasers of the property under the sale deeds appeared before the Court and filed the written statements taking specific contention that the sale deeds executed in their favour were under valued for the purpose of registration and for payment of stamp duty. However, they got marked the sale deeds as per Ex.D6 dated 29.06.2005, Ex.D7 dated 17.07.2006 and Ex.D12. Plaintiffs filed the application Nos.8 and 9 under Section 33 of the Stamp Act requesting the trial Court to impound the said document as the same are insufficiently stamped. The trial Court proceeded to reject both the applications only on the ground that the sale deeds are already registered and therefore, the same cannot be impounded. The reasoning given by the trial Court and the order passed is illegal, perverse and the same is liable to be quashed.
-4-
NC: 2024:KHC:6403 WP No. 40873 of 2018
4. Learned counsel placed reliance on the decision of the co- ordinate Bench of this Court in 'SRI.R.MAHESH AND ANOTHER VS. B.P.VENUGOPAL'1 in support of his contention that even when the document is admitted in evidence, a duty is cast on the trial Court to impound the documents when it is brought to its notice that the document in question is not sufficiently stamped. The learned counsel has also placed reliance on Section 2 (j), 2 (mm) and Article 20 of the Karnataka Stamp Act in support of his contention and prays for quashing the impugned order as the same is perverse and illegal.
5. The short point involved in this case is with regard to the impugned order passed by the trial Court holding that the sale deeds marked as Ex.D6, 7 and 12 are not liable for impounding as the same are already registered and marked as an exhibit.
6. Chapter IV of the Karnataka Stamp Act deals with instruments not duly stamped and Section 33 empowers every person having authority by law including the Court, to examine 1 2018(3) KCCR 2394 -5- NC: 2024:KHC:6403 WP No. 40873 of 2018 and impound the instruments. Section 2 (j) of the Karnataka Stamp Act defines the word 'instrument', which is an inclusive definition. It doesn't make any difference between the document which is already registered or unregistered. Article 20 of the Karnataka Stamp Act deals with payment of stamp duty for conveyance on the market value of the property, which is the subject matter of conveyance.
7. The word 'market value' is defined under Section 2 (mm) of the Karnataka Stamp Act, which means the price which such property would have fetched in the opinion of the Deputy Commissioner or Appellate authority etc., if sold in the open market on the date of execution of such instrument or consideration stated in the instrument, which ever is higher.
8. In the present case admittedly defendant Nos.1 to 3 have executed three sale deeds marked as Ex.D.6, 7 and 12 in favour of defendant Nos.4 and 5. Defendant Nos.4 and 5 have appeared before the trial Court and filed their written statement taking specific contention that they have paid the consideration amount of Rs.4,88,625/-, 3,75,000/- and 4,30,000/- respectively to get the sale deeds registered by -6- NC: 2024:KHC:6403 WP No. 40873 of 2018 valuing it at Rs.1,39,000/-, 85,000/-, 1,70,000/- respectively. This defence taken by the defendant Nos.4 and 5 in the written statement prima-facie discloses that the sale deeds in question were undervalued only for the purpose of evading stamp duty and registration charges.
9. It is relevant to refer to Section 80A of the Karnataka Act 19 of 1980 (State amendment to the registration Act 1908) which reads as under:
"80A.- Recovery of registration fee not levied or short levied etc.- (1) If on inspection or otherwise, it is found that the fee payable under this Act in relation to any document which is registered has not been paid or has been insufficiently paid, such fee may, on a certificate of the Inspector-General of Registration, be recovered from the person who presented such document for registration, as an arrear of land revenue. The certificate of the Inspector-General shall be final and shall not be called in question in any court or before any authority:
10. When the State amendment provides for recovery of registration fees either not levied or short levied, and when there are prima-facie material to form an opinion that the fees is short levied, the same is to be considered by the authority -7- NC: 2024:KHC:6403 WP No. 40873 of 2018 concerned in accordance with law, under Section 80 A of the Registration Act (Karnataka Amendment), 1980. Similarly when there are prima-facie materials to form an opinion that an instrument is not sufficiently stamped, definitely, the document is to be impounded as required under Section 33 of the Karnataka Stamp Act. None of the provisions under Karnataka Stamp Act exempts impounding of a document which is already registered or already admitted in evidence. On the other hand Section 48 of the Indian Stamp Act and Section 80A of the Registration Act (Karnataka Amendment) Act authorizes recovery of such duties, penalties or the registration fees as arrears of land revenue.
11. Learned counsel for the petitioner placed reliance on the decision of the co-ordinate Bench of this Court in R Mahesh (supra) wherein the Court has exhaustively dealt with the position of law by referring to Sections 33, 34, 58 of the Karnataka Stamp Act and also on the decision of the Hon'ble Apex Court in 'HINDUSTAN STEEL LIMITED VS. M/S -8- NC: 2024:KHC:6403 WP No. 40873 of 2018 DILIP CONSTRUCTION COMPANY'2 wherein it is held as under:
13. On perusal of the application, it is seen that the case canvassed is not against the admission of the documents, but that they are insufficiently stamped. If that being the case, a duty was cast on the Court below to render a declaration as to whether the document is chargable to duty and if so, whether is it sufficiently stamped. This duty is cast by the provisions of Section 58 of the Act and sub-Section (2) of Section 58 provides for impounding. The scope for impounding is for the limited purpose of forwarding it to the Deputy Commissioner/Competent authority who inturn shall institute prosecution as per sub-Section (4) of Section 58 of the Act xxxxx.
14. It is the admitted case of the parties that no objections were raised when the documents were admitted in evidence by the Court below. It is also fairly admitted that no finding has been rendered by the Court below with regard to the fact, as to whether the documents, Exs.P12 and 13, require to be stamped and if so, whether they are adequately stamped or not. In short there has been no judicial determination of the fact as to whether the Exhibits require to be stamped or not. A mere marking of the document would not suffice to escape from the rigor of the Act. It is obvious that there has been no judicial application of mind before admitting the document. The marking of a document is a ministerial act and on the contrary, the admission of a document is a judicial act. Admittedly, no objections have been raised at the time of marking the document. That by 2 1969 (1) SCC 597 -9- NC: 2024:KHC:6403 WP No. 40873 of 2018 itself will not absolve the Court of its responsibility to examine the admissibility aspect of the same or the power to secure the interest of State Exchequer by calling for and impounding the document for the limited purpose of calculating the collecting the stamp duty. This view of the Court is further fortified by the scheme of the Act as set out in Section 36, 41 and 42 of the Act.
15. There can be no dispute with regard to the proposition of law, that once a document is admitted in evidence, the order admitting the document cannot be revised or reviewed by the said Court itself. The provisions of Section 58 address a wholly different circumstance. The provisions of Section 58 read in conjunction with the provisions of Section 35 of the Act provide for instances where the Court may, after the document has been admitted, conclude that the same is chargable to duty or is insufficiently stamped.
16. From a bare and conjoint reading of Sections 33 and 34 of the Act, it is apparent that both the Court and any such Authority before whom the document is produced are empowered to and duty bound to impound the document which would result in the document being made unavailable for consideration pending payment of necessary stamp duty and penalty. In the event of such document being marked on account of inadvertence or on the Court failing to detect the same on scrutiny, the Act provides for collection of the duty and penalty on such documents, which have evaded scrutiny as provided under sub-Section (2) of Section 58 of the Act.
17. A plain reading of sub-Section (2) of Section 58 of the Act makes it apparent that the Court is not rendered powerless or functus officio on account of an un-registered or insufficiently stamped document being marked and being admitted in evidence. On the contrary, the provisions of
- 10 -
NC: 2024:KHC:6403 WP No. 40873 of 2018 Section 58 (2) mandate the Court below to record a declaration to the effect that the document already marked is one on which the duty and penalty or higher duty and penalty is chargeable. On the Court recording such recording such a declaration, it is thereafter required to impound the same for the purpose of forwarding it to the Deputy Commissioner, who thereafter shall notwithstanding anything contained in the order admitting such instrument prosecute the person for any offences under the Act. The proviso to sub-Section 4 of Section 58 of the Act further provides that no such 25 prosecution shall be instituted provided the amount including duty and penalty is paid to the Deputy Commissioner.
18. xxxxx This Court draws sustenance for the afore stated view in the light of the observations of the Apex Court rendered in the case of Hindustan Steel Ltd., v. Messrs Dilip Construction Company reported in 1969 (1) SCC 597, wherein the Hon'ble Apex Court in paragraph No.7 observed as follows:
"7. The Stamp Act is a fiscal measure enacted to secure revenue for the State on certain classes of instruments:
It is not enacted to all litigant with a weapon of technicality to meet the case of his opponent. The stringent provisions of the Act are conceived in the interest of the revenue once that object is secured according to law, the party staking his claim on the instrument will not be defeated on the ground of the initial defect in the instrument. Viewed in that light the scheme is clear. Section 35 of the Stamp Act operates as bar to an unstamped instrument being admitted in evidence or being acted upon: Section 40 provides the procedure for instruments being impounded, sub-section (1) of Section 42 provides for certifying that an instrument is duly
- 11 -
NC: 2024:KHC:6403 WP No. 40873 of 2018 stamped, and sub-section (2) of Section 42 enacts the consequences resulting from such certification.
19. It is held that the Court below is entitled to impound a document already admitted in terms of Section 58 for the limited purpose of ascertaining the duty and calling upon for payment of the same and also refer it to the Deputy Commissioner for prosecution only. The order impounding the admitted document under Section 58 will in no way impinge or entrench upon the sanctity of the order admitting 27 the documents nor will it amount to a review of the order admitting the documents.
(emphasis supplied)
12. Bare reading of the decision extracted above makes the position of law very clear that a duty is cast on the Court when document is produced before it and it appears that such instrument is not duly stamped, to impound the same. Even where the document is marked without any objection that will not absolve the Court from its duty to find out about sufficiency of the stamp duty paid by the party concerned. Non payment of stamp duty or paying insufficient duly would definitely lead to loss of revenue to the state exchequer and the same cannot be permitted.
13. When the Karnataka amendment to the registration Act by inserting Section 80A is considered, the registration fee
- 12 -
NC: 2024:KHC:6403 WP No. 40873 of 2018 not levied or short levied while registering the document is to be recovered. Under both the Indian Stamp Act and the registration Act (Karnataka Amendment) such duty, penalty and the fees is to be recovered as arrears of land revenue, even when the document is already registered or marked before the Court. Therefore, I am of the opinion that the sale deeds marked as Ex.D.6, 7 and 12, which are relied on by defendant Nos.1 to 5 in respect of which, declaration is sought by plaintiffs are prima-facie insufficiently stamped and short levied with the registration fees and therefore the same are required to be considered for impounding/recovering the dues if any in accordance with law.
14. I have gone through the impugned order passed by the trial Court. The trial Court has not taken into consideration any of these facts or position of law and proceeded to reject the applications without application of mind. The finding of the trial Court that since the documents are already registered and marked, the same are not liable for impounding is perverse and illegal. Hence, I am of the opinion that the same is liable to be quashed.
Accordingly, I proceed to pass the following:
- 13 -
NC: 2024:KHC:6403 WP No. 40873 of 2018 ORDER
a) The writ petition is allowed.
b) The order dated 16.04.2018 in OS.No.39/2010 on the file of Prl.Civil Judge and JMFC, Channagiri, dismissing IA Nos.8 and 9 filed under Section 33 of the Karnataka Stamp Act, 1957 is set aside. Consequently, IA Nos.8 and 9 are allowed.
c) The trial Court is directed to pass necessary orders to refer the documents for impounding and also for recovery of registration charges, short levied if any, in accordance with law.
SD/-
JUDGE BH List No.: 1 Sl No.: 7