Karnataka High Court
Smt.Umadevi W/O Mallikarjungouda ... vs Sri.Maheshakumar S/O Pampanna Aroli on 18 March, 2020
Author: B.M.Shyam Prasad
Bench: B.M. Shyam Prasad
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IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
Dated this the 18th day of March 2020
Before
THE HON'BLE MR. JUSTICE B.M. SHYAM PRASAD
Writ Petition Nos.115048-115049 of 2019 (GM-CPC)
Between
Smt.Umadevi
W/O Mallikarjungouda Patil
Age: 48 Years, Occ: Agriculture & Household,
R/O: Haunsabhavi, Tq: Hirekerur,
Dist: Haveri-581109. ... Petitioner
(By Sri. V.P.Kulkarni, Adv., for Sri. B.M. Patil, Advocate)
And
Sri.Maheshakumar
S/O Pampanna Aroli
Age: 43 Years, Occ: Agriculture,
R/O: Jageeravenkatapur, Tq & Dist: Raichur-584134.
...Respondent
(By Sri. Chandrashekhar R. Hiremath, Advocate)
These Writ Petitions are filed under Articles 226 & 227 of
the Constitution of India praying to call for the records; issue a
writ in the nature of certiorari or any other writ or order, set aside
the impugned orders passed by the District Registrar for Stamp
KRA/ SUM/COURT/S.T.P/2/2019-20 dated 03.09.2019 produced
at vide Annexure-L and order passed by the learned Senior Civil
Judge & JMFC, Hirekerur in O.S.No.35/2017 dated 16.09.2019
accepting the order passed by the District Registrar For Stamp and
order plaintiff to pay deficit duty and penalty produced at
Annexure-M be passed by allowing the writ petition.
These Writ Petitions coming on for Orders this day, the
Court made the following:
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ORDER
The Hon'ble Supreme Court in the S.L.P. (Civil) No.1810/2020 has requested this Court to take up this writ petition for expeditious disposal and to dispose of the writ petition preferably within a period of three weeks from the date on which the certified copy of the order is placed before this Court. The Hon'ble Supreme Court's aforesaid order is placed before this Court on 04.03.2020. The learned counsel for the petitioner and the respondent are heard with their consent for final disposal of the writ petition.
2 The petitioner, who is the plaintiff in O.S.No.35/2017 on the file of the Senior Civil Judge and JMFC, Hirekerur (for short 'the civil Court'), has filed this writ petition calling in question the order dated 16.09.2019 and the report dated 03.09.2019 of the District Registrar for Stamp, Haveri District. The present petition is filed in the following circumstances.
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3 The petitioner has filed the suit in O.S.No.35/2017 for specific performance of an agreement dated 11.06.2015 allegedly executed by the respondent in favour of the plaintiff agreeing to transfer the lands in R.S. No.8/2, 306 and 337 of Hansabhavi village, Hirekerur Taluk, Haveri District, for a total sale consideration of Rs.35,00,000/-. The respondent is yet to file his written statement. The suit being listed for evidence, the petitioner has examined himself as P.W.1. Insofar as marking the agreement dated 11.06.2015, the civil Court, at the time of recording chief-examination on 17.06.2019, has adjourned the suit to 15.07.2019 to hear on the payment of stamp duty and penalty. The petitioner, on the next date of hearing i.e. on 15.07.2019, has filed an application under Section 34 of the Karnataka Stamp Act (for short, 'the Act') read with Section 151 of CPC for referring the agreement dated 11.06.2015 (for short, 'the agreement') to the jurisdictional 4 District Registrar for Stamp for determination of the stamp duty and penalty payable.
4 The civil Court, by its order dated 15.07.2019, has allowed this application and directed the office to send the sale agreement to the District Registrar for Stamps, Haveri, to assess the duty and penalty. The District Registrar for Stamps, Haveri, on receipt of communication from the office of the Civil Court, has filed the report as per Annexure-L. This report is significant for two reasons. The District Registrar, after reading the terms of the agreement dated 11.06.2015, has opined that because of certain recitals in the agreement there is delivery of possession of the subject property in part performance; as such, the agreement dated 11.06.2015 would be chargeable under Article 5(e)(i) of the Act. Insofar as the market value, the District Registrar for Stamps, Haveri has opined that the total value of the subject property would be Rs.23,37,825/- as against the agreed value of Rs.35,00,000/-. The District Registrar for Stamps, Haveri, 5 has also concluded that stamp duty payable is Rs.1,75,000/- and the penalty payable is Rs.17,50,000/-. Thus, the petitioner will have to pay a sum of Rs.19,25,000/-. The civil Court, on receipt of this impugned report, has passed the following order:
"Pltf absent Sri. MKB P/T to pay duties & penalty as ordered by the District Registrar Haveri. Call on 14/10."
5 The learned counsel for the petitioner submits that the civil Court's impugned order dated 16.09.2019 and the impugned Report by the District Registrar for Stamps, Haveri, cannot be sustained in law on two grounds. Firstly, it is settled law that the nature of a document will have to be decided by the civil court and it could not have been delegated to the District Registrar. The learned counsel for the petitioner relies upon the decision of the Hon'ble Supreme Court in Black Pearl Hotels Private Limited Vs. Planet 6 M.Retail Limited1 in support of this proposition. Secondly, the opinion of the District Registrar, Haveri, that the possession of the subject property has been delivered to the petitioner in part performance of the agreement to sell is totally extraneous. The learned counsel submits that the recitals of the agreement alone should be considered in deciding whether the nature of transaction between the petitioner and the respondent is an agreement simplicitor or a sale agreement with delivery of possession in part performance of the agreement. The learned counsel relies upon the decision of the Hon'ble Supreme Court in Omprakash Vs. Laxminarayan and others2.
6 The learned counsel for the respondent justifies the order of the civil court as well as the report of the District Registrar for Stamps, Haveri District, placing reliance upon the terms of the sale agreement asserting that the petitioner cannot contend that the agreement dated 01.06.2015 is a sale 1 (2017)4 SCC 498 2 (2014)1 SCC 618 7 agreement simpliciter, and in fact, the agreement is an agreement to sell with delivery of possession in part performance thereof. As such, the petitioner inevitably is obliged to pay not only the deficit stamp duty but also the penalty of ten times in the light of the different provisions of the Act. Therefore, the impugned order is justified and does not call for any interference.
7 This Court, on consideration of the circumstances leading to the impugned order dated 16.09.2019, cannot but observe that the petitioner invited the impugned order with filing an application under Section 34 of the Act calling upon the civil Court to refer the agreement dated 11.06.2015 to the District Registrar for determination of the stamp duty and penalty payable. However, having stated thus, this Court must hasten to conclude that the civil Court ought to have considered the questions whether the agreement was duly stamped or not and collected the penalty payable, if any, in the light of the settled law. The civil Court could not have 8 called upon the District Registrar to decide on whether the document was duly stamped or not. It is by now settled that when a document which is not duly stamped is produced before a court of law, the court must, acting under Section 33 of the Act, impound the document, determine the deficit stamp duty and collect such deficit stamp duty with the penalty as prescribed. If the deficit duty and penalty is paid, send the original of the agreement along with the amount collected to the District Registrar as contemplated under Section 37 of the Act with further right to the party concerned to seek reduction in the penalty under Section 38 of the Act. It would be useful to refer to a decision of this Court in United Precision Engineers Pvt. Limited Vs. KIOCL Ltd.3. This Court has held as follows:
" From the provisions contained in Sections 33, 34, 37(1)(2), 38, 39 of the Karnataka Stamp Act,1957, the view expressed by the Hon'ble Supreme Court and the Hon'ble Division Bench, the position of law is therefore clear that the obligation cast on the Civil 3 ILR 2016 KAR 1707 9 Court in respect of an instrument not being duly stamped, is to impound the same and determine the duty and penalty payable. The Civil Court has no discretion, but to impose the penalty of ten times of the deficit and permit the party to pay the same. If the party chooses to pay the same, the effect of impounding gets diluted and the document will become admissible in evidence for the purpose of proving the same as per law. In such event, the Civil Court is required to despatch an authenticated copy of the instrument along with the deficit duty and penalty collected, to the Deputy Commissioner. The matter does not stop at that. Though the Civil Court as bound by law would collect the penalty at ten times, the power is still vested with the Deputy Commissioner under Section 38 of the Karnataka Act,1957 to hold an enquiry and reduce the penalty in the manner as provided therein."
8 Therefore, the impugned order and the Report of the District Registrar's are liable to be set aside solely on the ground that the civil Court could not have called upon the District Registrar of Stamps to decide on the nature of the document and determine the deficit duty. Further, in the 10 given facts and circumstances of the case and the dispute as regards the nature of document viz., whether the agreement is a sale agreement simplicitor or sale agreement with delivery of possession in part performance, it would be just and reasonable to call upon the civil court to adjudicate on the nature of the document and follow up such determination with the decision on the duty to be paid, if any, and the consequential penalty, as exposited by this Court in United Precision Engineers Ltd., (supra). The Civil Court, in determining the nature of the agreement, should bear in mind that the Hon'ble Supreme Court, while deciding the questions whether the admissibility of a document produced should depend on the recitals of the documents or the pleadings in the suit and whether the document in question is "conveyance" as defined under the Act, has held as follows:
"As stated earlier, the plaintiffs filed a suit for specific performance of contract and their case is founded on the agreement to sell executed on 27th December, 2000. The agreement to sell acknowledges payment of the part of consideration money and further 11 giving actual physical possession to the purchaser by the seller. Though the defendants dispute that, but in our opinion, for determination of the question of admissibility of a document, it is the recital therein which shall be decisive. Whether the possession in fact was given or not in terms of the agreement to sell is a question of fact which requires adjudication. But, at the time of considering the question of admissibility of document, it is the recital therein which shall govern the issue. It does not mean that the recital in the document shall be conclusive but for the purpose of admissibility it is the terms and conditions incorporated therein which shall hold the field. Having said that, we proceed to consider as to whether the document in question is "conveyance" within the meaning of Section 2(10) of the Act".
For the foregoing, the following:
ORDER The writ petition is allowed in part setting aside the order dated 16.09.2019 of the civil Court. The civil court is directed to reconsider the nature of the agreement dated 11.06.2015 and the 12 question of payment of sufficient stamp duty and take further action in the light of the observations made herein.
Sd/-
JUDGE Kms