Madras High Court
V. Ponnusamy vs N. Namis Dhas And Ors. on 27 August, 1997
Equivalent citations: (1998)1MLJ407
ORDER E. Padmanabhan, J.
1. This revision petition has been preferred by the plaintiff in the unnumbered suit O.S.S.R. No. 7066 of 1966 on the file of Subordinate Judge, Nagercoil.
2. Before taking the plaint on file, the Court below by order, dated 28.2.1997 directed the petitioner/plaintiff to remit Rs. 13,180 towards stamp duty and penalty in respect of document (item II) filed along with the plaint. Being aggrieved by the said order, the present revision has been referred.
3. The petitioner had instituted the suit for the recovery of Rs. 61,000 along with simple interest at the rate of 36% per annum from 16.12.1996 till the date of realisation on the entire mortgage value and costs and to pass a preliminary mortgage decree against the first defendant charged on plaint A Schedule property at Rs. 61,000 with interest and also for other consequential reliefs.
4. In paragraph 3 of the plaint, the plaintiff/petitioner stated that the first defendant on 29.1.1994 executed anomalous, unregistered mortgage deed in favour of the plaintiff wherein the first defendant had agreed to repay the said sum of Rs. 30,000 with interest on the same at the rate of 36% per annum, and that the first defendant had agreed to repay the said entire mortgage money with interest within six months, as stipulated in the aforesaid, unregistered, anomalous mortgage deed, dated 29.1.1994.
5. The plaintiff has further stated that the said unregistered mortgage deed was attested by the defendants 2 and 3 on 29.1.1994. It is the further claim of the plaintiff/petitioner that the first defendant had created a mortgage over the plaint A schedule property in favour of the plaintiff. The very suit has been instituted under Section 26, Order 7, Rule 1 and Order 34, Rules 1 and 4 of the Code of Civil Procedure.
6. Along with the plaint, the petitioner/plaintiff filed the said unregistered, anomalous mortgage deed dated 29.1.1994. The Court below called upon the petitioner/plaintiff to remit Rs. 13,180 towards stamp duty and penalty payable on the said mortgage deed.
7. In the present revision petition, Mr. Ananthakrishna Nair, learned Counsel for the petitioner contends that a suit has been instituted for recovery of the amounts due on promissory notes executed by the defendant 1 and as such the order directing payment of stamp duty on the unregistered mortgage deed cannot be sustained and that the cause of action is not based on the unregistered mortgage deed.
8. It is further contended that since the suit is not based on the unregistered mortgage deed, there is no need to pay the stamp duty and penalty as ordered by the Court below. These contentions, raised by the learned Counsel have to be rejected as the same have been raised on a factual misconception and misreading of the plaint averments. Paragraphs 3,7,11 and 15 makes it abundantly clear that the suit is also based on the mortgage deed, that the plaintiff/petitioner seeks to recover the amount due by proceeding against the mortgaged property and that the suit itself has been instituted under Order 34, Rules 1 and 4 of the Code.
9. In paragraph 15, the plaintiff had stated that the cause of action for the suit arose on 29.1.1994, is the date of anomalous mortgage deed executed by the first defendant and attested by the defendants 2 and 3 herein on 29.1.1994. Thus, on the very plaint averments, the said contentions raised by the learned Counsel for the petitioner cannot be sustained at all.
10. The learned Counsel for the petitioner further contended that being a mortgage deed, it is only the mortgagor, who is liable to pay the stamp duty and penalty on the mortgage deed and not the mortgagee. Learned Counsel for the petitioner relied on Section 29 of the Indian Stamp Act and contended that the stamp duty in respect of mortgage deed in question has to be paid by the executant and that the petitioner cannot be called upon to remit the stamp duty as well as penalty. Section 29 of the Indian Stamp Act provides that in the absence of an agreement to the contrary, the expense of providing proper stamp shall be borne by the executant of the mortgage deed. In this respect, Section 44 of the Stamp Act enable the person paying stamp duty and penalty to recover the same from the person who was bound to bear the expenses of providing the same for such instrument. Therefore, it is always open to the petitioner who had instituted the suit to recover the stamp duty and penalty and recover the same from the executant of the mortgage deed in question.
11. Learned Counsel for the petitioner next contended that the Court below in terms of Section 35 under proviso, the stamp duty of unregistered document filed in Court has to be collected at the time of admission of the document into evidence under proviso (a) to Section 35 of the Stamp Act and that the Court below erred in ordering payment of stamp duty and penalty before the stage of admission of document in evidence is reached. In this respondent, learned Counsel relied on a judgment reported in Santhakumari v. Susheela Devi and contended that stamp duty on unstamped document filed in Court has to be collected at the time of admission of the document into evidence and not at any time earlier thereto.
12. Learned Counsel also relied on a decision reported in T.M. Kantharaj v. Md. Nazaar Khan A.I.R. 1959 Mys. 172 and contended that terms of Sub-section 2 of Section 38 of the Stamp Act should be applied so that the Court should have sent the document in original to the Authority under Section 40 of the said Act and that the stage when the lower Court could direct the petitioner to pay any stamp duty and penalty having never reached, the direction of the Court below that the petitioner should pay the duty and penalty in respect of the document is not sustainable. Somnath Iyer, J has held thus:
It is contended by Sri. Govinda Rao, learned Counsel for the petitioner, that although the order of the learned Munsif impounding the document under the provisions of Section 33 of the Stamp Act is not liable to be assailed on any ground whatsoever, the further order made by him that the petitioner shall pay the duty and penalty to be fixed by the Court in due course was unsustainable.
His argument is that ordinarily a document impounded under, Section 33 of the Act should be sent by the Court so impounding it to the Deputy Commissioner under the provisions of Sub-section (2) of Section 38 of the Stamp Act unless the Court which impounded the instrument admitted such instrument in evidence, in which event, it could do so on payment of the duty with which the instrument is chargeable together with a penalty as provided by Section 35 of the Act. His contention is that it is only if a document is asked to be admitted in evidence that it becomes exigiable to such duty and penalty and not otherwise. It is not disputed that in this case the document in respect of which the petitioner was required by the Court to pay such duty and penalty was not sought to be produced in evidence. That document was merely produced before Court and the petitioner did not seek to get the document admitted in evidence so far. This was therefore, plainly a case to which Sub-section (2) of Section 38 applied so that the Court should have sent the document in original to the Deputy Commissioner for necessary action under Section 40 of the Act. "
13. There is no dispute that the Court below which is competent to receive document could impound the mortgage deed in question after examination of the deed. Section 33 of the Stamp Act enables the Court below, to examine and impound the mortgage deed which was produced by the petitioner along with the plaint and it has rightly impounded the document as the document has not been duly stamped. Section 38 of the Indian Stamp Act provides as to how the instruments impounded has to be dealt with, Seb-section (1) of Section 38 of the said Act enables the Court below which receives and admits the document in evidence after collecting the stamp duty and penalty as provided under Section 35 of the Stamp Act to send a copy of the authenticated document to the Collector together with a certificate in writing, stating the amount of duty and penalty levied in respect thereof. Sub-section (2) of Section 38 of the Act refers to several other cases i.e., where the document is impounded but the stamp duty and penalty have not been collected, the document impounded should be sent in original to the Collector. When a document insufficiently stamped is tendered but not admitted in evidence, the court has to exercise discretion under Section 38(2) of the said Act and has to send the impounded document to the Collector.
14. In other words, if the party filing the document wants it to be admitted in evidence, then only the court shall collect the stamp duty and penalty and admit it in evidence. But, if the party, instead of requiring the document to be admitted in evidence merely wants to send it to the Collector to be dealt with under Section 40 of the said Act, the Court has no option but to send it to the Collector as provided under Section 38. The Court also cannot compel the party to pay the stamp duty and penalty and for admitting it in evidence.
15. In B.V.R. Reddy v. Adoni Cooperative Central Stores it has been held thus:
It is provided under Section 38(1) that when a person impounding an instrument has authority to receive evidence and admits such instrument in evidence upon payment of penalty as provided by Section 35, then 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 thereof, and shall send such amount to the Collector. It is further provided in Section 38(2) that in every other case the person impounding the instrument shall send it in original to the Collector who shall deal with it as provided under Section 40. A reading of Section 38 shows that if the party who filed the document wants it to be admitted in evidence, then only the Court shall collect the stamp duty and penalty and then admit the instrument in evidence. But if the party instead of requiring the document to be admitted in evidence merely wants the Court to sent it to the Collector to be dealt with under Section 40, I do not think the Court can have any option but to send it to the Collector as provided under Section 38(2). The Court cannot compel a party to pay the stamp duty and penalty and have it admitted in evidence. It is for the party to have the document admitted in evidence by paying stamp duty and penalty or leave the Court to take action as provided under Section 38(2). It is clear that the intention of the petitioner is not to have the document admitted in evidence by paying stamp duty and penalty and therefore he requested the Court either to send the document to the Collector as provided under Section 38(2) or deliver it to him so that he himself can place it before the Collector for taking action under Section 40. The latter course cannot certainly be adopted because the party may fail to put up the document before the Collector for collecting the proper stamp duty and penalty. Under these circumstances, the Civil Revision Petition is allowed and the lower Court is directed to send the instrument which is impounded to the Collector for taking the necessary action as provided under Section 40.
16. The learned Counsel for the petitioner may be justified in contending that at this stage the Civil Court cannot compel the petitioner to pay the stamp duty penalty and it is only when the petitioner requires the document to be admitted in evidence, the Court has to adjudicate the stamp duty and penalty payable and collect the same. On the mere production of the document in question, the Court below could only impound the document and cannot compel the petitioner to remit the stamp duty and penalty at this stage. But at the same time, having impounded the document, the Court has to forward the same to the Collector and it cannot, also return the document to the plaintiff/petitioner. I am in agreement with the view taken by the Andhra Pradesh High Court.
17. If the petitioner/plaintiff so chooses, he could either pay the stamp duty and penalty and if he is not prepared to pay the stamp duty and penalty at this stage, the Court has to forward the same to the Collector and it cannot return the impounded document to the plaintiff/petitioner.
18. In the circumstances, the Court below shall call upon the plaintiff to state as to whether the plaintiff is willing to remit the stamp duty and penalty and get it taken in file. After recording the reply, if the plaintiff is not willing to pay the stamp duty and penalty, the impounded document has to be forwarded to the Collector in terms of Section 38(2) of the Stamp Act. It is made clear that it is well open to the Court below to proceed with the plaint according to law. If the petitioner/plaintiff either pays the stamp duty and penalty or if he is not willing to pay the stamp duty and penalty at this stage, after forwarding the same to the Collector the Court below has to proceed with the plaint and pass orders according to law after hearing the petitioner/plaintiff.
19. The revision petition is ordered with the above directions.