Karnataka High Court
Shri. Shiddappa S/O Andaneppa ... vs Smt. Mahadevi W/O Sangappa Shirahatti on 13 January, 2022
Author: H.B.Prabhakara Sastry
Bench: H.B.Prabhakara Sastry
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 13TH DAY OF JANUARY, 2022
BEFORE
THE HON'BLE Dr.JUSTICE H.B.PRABHAKARA SASTRY
WRIT PETITION No.105667 OF 2018 (GM-CPC)
& WRIT PETITION No.106050 OF 2018 (GM-CPC)
Between :
Shri Shiddappa,
S/o Andaneppa Shirahatti,
Age : 29 years, Occ : Agriculture,
R/o Dhannur, Tq : Hungund,
Dist : Bagalakote.
.. Petitioner
(By Sri.Girish A.Yadwad, Advocate)
And :
1. Smt.Mahadevi,
W/o Sangappa Shirahatti,
Age : 51 years,
Occ : Housemaking,
2. Sujata
Sangappa Shirahatti,
Age : 35 years,
Occ : Housemaking,
3. Shiddappa,
S/o Sangappa Shirahatti
Age : 32 years,
Occ : Agriculture,
WP.No.105667/2018
2 & WP.No.106050/2018
All are R/o Dhannur,
Now residing at Gadag,
Tq : & Dist : Gadag.
4. Ashok,
S/o Basavantappa Pattanashetti,
Age : 41 years,
Occ : Agriculture
R/o Dhannur, Tq : Hungund,
Dist : Bagalakote. .. Respondents
( By Sri.Sanjay S.Katageri, Advocate for R1 to R3 and
Sri.B. Sharanabasawa, Advocate for R4)
These Writ Petitions are filed under Articles 226 & 227
of the Constitution of India praying to quash the order dated
28.07.2018, passed in O.S No.58/2017, on the file of the
Senior Civil Judge and JMFC, Hungund on I.A No.1, vide
Annexure - A and etc.
These Writ Petitions coming on for Preliminary Hearing
'B' Group through Physical Hearing/Video Conference this
day, the Court made the following :
ORDER
The petitioner, as a plaintiff had instituted a suit in O.S.No.58/2017, in the Court of learned Senior Civil Judge & J.M.F.C., Hungund, (hereinafter for brevity referred to as `trial Court'), for the relief of specific performance of the contract with respect to an alleged Agreement of Sale dated 06.07.2015 against the present respondents who were the defendants in the said Original Suit.
WP.No.105667/20183 & WP.No.106050/2018
2. During the pendency of the suit, the trial Court suo motto noticed that the suit document which is said to be an Agreement of Sale dated 06.07.2015 was executed on insufficiently stamped document. It appears that the learned counsel for the plaintiff submitted before the Court that he would file a memo as to the deficit stamp duty and penalty, but, failed to do it. On the other hand, learned counsel for the defendants filed a memo of calculation as to the deficit stamp duty and penalty. The trial Court passed an order dated 28.07.2018 on the said memo of calculation holding that the plaintiff is liable to pay a deficit stamp duty of `79,900/- and a penalty which is of ten times of the said amount and amounting to `7,99,000/-, thus in all a sum of `8,78,900/- The said agreement dated 06.07.2015 impounded.
Apart from the above, in the same suit, the plaintiff had filed an interlocutory application bearing IA.No.I under Sections 33 and 34 read with Section 45-A of Karnataka Stamp Act, 1957, (hereinafter for brevity referred to as WP.No.105667/2018 4 & WP.No.106050/2018 `Stamp Act'), requesting the trial Court to impound a registered Sale Deed dated 11.04.2017 said to have been executed by defendant Nos.1 to 3 in favour of defendant No.4 with respect to the suit schedule property and which document was said to be filed by the defendants in the very same suit i.e., O.S. No.58/2017.
The trial Court after inviting objections to the said IA.No.I and hearing both side, pronounced its order on the said IA. on the very same day i.e., on 28.07.2018, dismissing the said IA.No.1 with a cost of `2,000/-. It is challenging the above said two orders, both dated 28.07.2018, the plaintiff in the trial Court has preferred this writ petition.
3. The respondents are being represented by their respective learned counsels.
4. Heard the learned counsel from both side.
5. Perused the materials placed before this Court, including the writ petition and the impugned order. WP.No.105667/2018 5 & WP.No.106050/2018
6. It is not in dispute that the present petitioner as a plaintiff in the trial Court has instituted a suit against the present respondents arraying them as defendants for the relief of specific performance of an alleged Agreement of Sale dated 06.07.2015 with respect to an immovable property. Admittedly, the plaintiff had also produced the said Agreement of Sale dated 06.07.2015 in the trial Court. The defendants appeared in the matter through their learned counsel. It is also an admitted fact that the trial Court observed that the said Agreement dated 06.07.2015 was suffered with deficit stamp duty. As could be seen in the impugned order and the memo, the learned counsel for the plaintiff volunteered to file his memo of calculation regarding stamp duty on the said Agreement of Sale dated 06.07.2015, however, he did not file any such memo of calculation. On the other hand, it was only the defendant Nos.1 to 3 who filed their memo of calculation about the deficit stamp duty on the alleged agreement dated 06.07.2015. The trial Court after hearing both side, proceeded to pass the impugned order on the said memo of calculation holding that the deficit WP.No.105667/2018 6 & WP.No.106050/2018 stamp duty payable is `79,900/- and ten times penalty for that would be `7,99,000/-, thus, in all the plaintiff is required to pay a deficit stamp duty and penalty of a total sum of `8,78,900/-. It also impounded the said Agreement of Sale dated 06.07.2015.
7. The argument of learned counsel for the petitioner on the said order passed on memo of calculation was that, even though if it is taken that the said agreement dated 06.07.2015 was suffered with deficit stamp duty, still, unless it is tendered in the evidence and attempted to mark it as an exhibit, the trial Court ought not to have imposed duty and penalty on the same, on the other hand, it could have exercised its power under Section 33 of Stamp Act by impounding the said document and sending the same to the Deputy Commissioner for dealing with the said document in a manner known to law. In his support, he relied upon two judgments of this Court which would be referred to at a subsequent stage hereafterwards.
WP.No.105667/20187 & WP.No.106050/2018
8. Per contra, learned counsel for the respondents in his argument submitted that since the plaintiff himself has admitted in the trial Court that there is a deficit stamp duty of `1,500/- and that he is ready to pay the said deficit stamp duty, he cannot now challenge the impugned order, but, to pay the duty and penalty imposed by the trial Court.
9. Section 33 and Section 34 of the Stamp Act reads as below :
"Section 33 : Examination and impounding of instruments.- (1) Every person having by law or consent of parties authority to receive evidence, and every person in-charge of a public office, except an officer of police, before whom any instrument, chargeable in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same.
(2) For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him, in order to ascertain whether it is stamped with a stamp of the value and description required by the law in force in the State WP.No.105667/2018 8 & WP.No.106050/2018 of Karnataka when such instrument was executed or first executed:
Provided that.-
(a) Nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898;
(b) in the case of a Judge of the High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints in this behalf.
(3) For the purposes of this section, in cases of doubt, the Government may determine.-
(a) what offices shall be deemed to be public offices; and
(b) who shall be deemed to be persons in-charge of public offices.
Section 34 : Instruments not duly stamped inadmissible in evidence, etc.- No instrument chargeable with duty shall be admitted in WP.No.105667/2018 9 & WP.No.106050/2018 evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped:
Provided that,--
(a) any such instrument not being an instrument chargeable with a duty not exceeding fifteen paise only, or a mortgage of crop Article [35]
(a) of the Schedule chargeable under clauses
(a) and (b) of Section 3 with a duty of twenty-
five paise shall, subject to all just exceptions, be admitted in evidence on payment of the duty with which the same is chargeable, or, in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion;
(b) where a contract or agreement of any kind is effected by correspondence consisting of two or more letters and any one of the letters bears the proper stamp, the contract or agreement shall be deemed to be duly stamped;
WP.No.105667/201810 & WP.No.106050/2018
(c) nothing herein contained shall prevent the admission of any instrument in evidence in any proceeding in a Criminal Court, other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898;
(d) nothing herein contained shall prevent the admission of any instrument in any Court when such instrument has been executed by or on behalf of the Government, or where it bears the certificate of the Deputy Commissioner as provided by Section 32 or any other provision of this Act and such certificate has not been revised in exercise of the powers conferred by the provisions of Chapter VI.
10. A careful readying of the above Sections would go to show that under Section 33 of the Stamp Act, the Court which receives the said document and permits the party to produce and mark the said document in evidence, can while receiving the document or when the said document comes to its notice and if it is noticed that the said document suffers with any deficiency in the stamp duty payable, it can only impound the said document. Section 33 of the Stamp Act WP.No.105667/2018 11 & WP.No.106050/2018 admittedly does not empower the receiving authority of the said document, which in the instant case, the trial Court, to impose any duty and penalty upon a person who has produced the said document, except impounding, whereas, it is Section 34 of the Stamp Act which empowers the Court to impose stamp duty and penalty, provided the said document is tendered before it for its admission in evidence for all purposes. At that point of time, the Court can exercise its power under Section 34 of the Stamp Act in imposing the duty and penalty.
11. The said aspect is made clear by a Coordinate Bench of this Court in two judgments which are relied upon by the learned counsel for the petitioner. The first judgment is in S.Vidhya -vs- R.S.Venkata Reddy, reported in MANU/KA/ 1259/2010, where this Court had an occasion to analyse Section 33 of the Stamp Act and was pleased to observe in Paragraph Nos.8 and 9 of its judgment as below :
" 8. Section 33 of the Act casts a statutory obligation on every person in charge of a public office, except an officer of police, before whom any WP.No.105667/2018 12 & WP.No.106050/2018 instrument chargeable, in his opinion, is produced or comes in the performance of his functions shall, if it appears to him that such instrument is not duly stamped, impound the same. The Court being an authority to receive a document in evidence is bound to give effect to the statutory mandate. The sale agreement dated 20.08.2004 was an instrument, which required payment of the stamp duty applicable to a deed of conveyance. Adequate stamp duty was not paid. Hence, the court was empowered to pass an order in terms of Section 33 of the Act.
9. The suit having not been posted for trial and the document having not been admitted in evidence for being acted upon, the trial Court has committed error in directing the payment of deficit stamp duty and penalty at 10 times. In the said view of the matter, the impugned order is illegal."
12. In A. Babu Reddy -vs- H.P.Sathyanarayana Reddy and others, reported in MANU/KA/9414/2019, this Court in Paragraph Nos.2(a) and 2(b) of its judgment was pleased to observe as below :
" 2. Having heard the learned counsel for the parties and having perused the petition papers, this WP.No.105667/2018 13 & WP.No.106050/2018 Court grants a limited reprieve to the petitioner for the following reasons :
a) going by the scheme envisaged in Karnataka Stamp Act, 1957, a marked difference is maintained between Section 33 and Section 34 of the Act; Section 33 provides for impounding of the documents when they are placed on record, in any proceeding whereas, Section 34 becomes invokable for the purpose of recovery of deficit stamp duty along with its ten time penalty when the documents are pressed into evidence; the second stage has not yet readied, admittedly in this case.
b) the impugned order suffers from an error of law of great magnitude inasmuch as the reasoning in the impugned order does not maintain the difference envisaged in the Scheme of Chapter IV of the;
although the subject documents are liable to be impounded under Section 33 of the Act, Section 34 remains miles away since the case has not attained the stage of recording of evidence at all." The above two judgments squarely corroborates the view taken above that Sections 33 and 34 of the Stamp Act operates at two different stages and that, merely because Section 33 of the Stamp Act operates in a case, WP.No.105667/2018 14 & WP.No.106050/2018 it cannot be automatically held that the Court or the authority impounding the document has necessarily to compute or calculate the alleged deficit stamp duty and penalty and direct the producer of the document to pay the deficit stamp duty and penalty. It is also because there may be some instances where a party, who is producing a document which is suffering with deficit stamp duty, may not be inclined to get that document marked as an exhibit in the evidence and does not want to rely upon the said document during the trial of the case. In such a case, it is only Section 33 of the Stamp Act comes into picture, where after noticing the said document, the very Court or authority may impound the said document for deficit stamp duty, but, may not proceed further in imposing duty and penalty upon the person. In such an event, the said authority or the Court before which such a document is produced has to only impound the document and proceed further in accordance with Section 37 of the Stamp Act for its onward process by the Deputy Commissioner.
WP.No.105667/201815 & WP.No.106050/2018
13. In the instant case, admittedly the alleged Agreement of Sale dated 06.07.1995 was just placed before the Court along with the plaint by the plaintiff. But, the matter had not yet ripened for trial and as such, admittedly the said document was not attempted for its marking as an exhibit by the witness. As such, the trial Court should have at the maximum impounded the said document under Section 33 of the Stamp Act.
14. Learned counsel for the respondents submitted that the plaintiff by volunteering to file a memo regarding deficit stamp duty since has not performed the same, on the other hand, the plaintiff had volunteered to pay the deficit stamp duty at `1,500/-, leads to an inference that the trial Court had power under Section 34 of Stamp Act and in the instant case, to calculate the deficit stamp duty and penalty and to recover it from the plaintiff.
The said argument is not acceptable for the reason that the said submission by the learned counsel for the respondents is based upon an observation made by the trial WP.No.105667/2018 16 & WP.No.106050/2018 Court in Paragraph-3 of the impugned order passed on the memo, which is at Annexure-`B'. In the very same paragraph, the trial Court has observed that the plaintiff is ready to pay the deficit stamp duty of `1,500/- and penalty that the authorities under the Karnataka Stamp Act may determine and had prayed to pass an order and to send the document to the concerned authority for regularisation of the suit document, this very clearly go to show that the plaintiff was not agreeable for the calculation to be made by the trial Court. On the other hand, he has throughout insisting the trial Court to send the document to the concerned authorities under the Karnataka Stamp Act for the regularisation of the suit document in a manner known to law.
15. Learned counsel for the petitioner also submitted that the plaintiff by mentioning that he would plead his case before the concerned authorities under the Karnataka Stamp Act, has shown that he has decided to invoke the power of the Deputy Commissioner under Section 39 of the Stamp Act WP.No.105667/2018 17 & WP.No.106050/2018 who has got a discretion in imposing the duty and penalty or to give remission, as such, the plaintiff had been requesting for sending the document to the concerned authorities. I find some force in the said argument of learned counsel for the petitioner on the said aspect.
16. Section 39 of the Stamp Act deals with power of the Deputy Commissioner to stamp the instruments impounded. Section 38 of the Stamp Act empowers him to refund the penalty as provided under sub-section (1) of Section 37 of the Stamp Act. The said Section 37 of the Stamp Act deals with the procedure as to how the document impounded has to be dealt with. The said Section 37 of the Stamp Act makes it mandatory for bringing the aspect of deficit stamp duty either collected or to be paid to the notice of the Deputy Commissioner. In such an event, if the plaintiff, who has not yet tendered the document for its marking as an exhibit in a evidence and for its admission in evidence, has requested the Court for sending the said document to the concerned authority for its regularisation, WP.No.105667/2018 18 & WP.No.106050/2018 then the option left open for the trial Court, in the instant case, was only to impound the document and then refer the same to the Deputy Commissioner to deal with the same in accordance with law.
On the other hand, in the instant case, merely because the alleged deficit stamp duty on the alleged Agreement of Sale dated 06.07.2015 came to the notice of the learned Judge in the trial Court, apart from impounding the document, it proceeded to collect the alleged deficit stamp duty and penalty and also directed the plaintiff to pay the said amount within the prescribed time, which according to law, was not called for in the circumstances of the case. As such, the order of the trial Court on the memo and dated 28.07.2018 to the extent of directing the plaintiff to pay the deficit stamp duty with penalty, in a total sum of `8,78,900/- deserves to be set aside.
17. The petitioner also challenges the order on IA.No.I passed by the trial Court on an application filed by the plaintiff under Sections 33 and 34 read with Section 45-A of WP.No.105667/2018 19 & WP.No.106050/2018 the Stamp Act. The plaintiff, who is the applicant in the said application, contends that defendant Nos.1 to 3 have sold the very same suit schedule property in favour of defendant No.4 under a registered Sale Deed dated 11.04.2017 for a lesser value than what they have agreed in their alleged Agreement of Sale. According to the learned counsel for the petitioner, the agreement between the vendor and vendee was for a total consideration of `16 lakhs, however, the registered Sale Deed has shown that the property was sold only for a sum of `8 lakhs, as such, the said document is required to be impounded.
The said argument of learned counsel for the petitioner is not acceptable for the reason that, admittedly the applicant/plaintiff has not produced any guidance value or minimum registration value of the suit property. In the absence of any such guidance value, merely because the sale value is shown to be a sum of `8 lakhs, which has been duly registered by the competent registering authority, the Court cannot on its own hold that there is deficit stamp duty and WP.No.105667/2018 20 & WP.No.106050/2018 that the plaintiff be required to pay the same. The proper recourse if at all was available to the plaintiff in the matter was though under Section 45-A of the Stamp Act, but, the same was not before the trial Court, but, it was before different authority. As such, the trial Court has rightly not exercised its power either under Section 45-A or under Sections 33 and 34 of the Stamp Act, which resulted in dismissal of IA.No.I filed by the plaintiff. As such, I do not find any reason to interfere in the said order dated 28.07.2018 passed on IA.No.I by the trial Court.
18. Accordingly, I proceed to pass the following order :
ORDER The Writ Petition challenging `Annexure-B' is allowed in-part. The order dated 28.07.2018, passed on a memo by the learned Senior Civil Judge & J.M.F.C., Hungund, holding the plaintiff before it to pay the deficit stamp duty and penalty of a total sum of `8,78,900/- alone is set aside. However, impounding of the suit document under the same order stands confirmed. The trial Court to deal with the impounded document in WP.No.105667/2018 21 & WP.No.106050/2018 accordance with law and more particularly, under Section 37 of the Karnataka Stamp Act, 1957.
Writ Petition challenging `Annexure-A' is dismissed.
The order of learned Senior Civil Judge & J.M.F.C., Hungund, in O.S.No.58/2017, passed on IA.No.I and dated 28.07.2018, dismissing IA.No.I filed by the plaintiff under Sections 33 and 34 read with Section 45-A of the Karnataka Stamp Act, stands confirmed.
Registry to transmit a copy of this order to the concerned trial Court without delay.
Sd/-
JUDGE bk/