Indian Kanoon - Search engine for Indian Law

1. These three are connected matters. W.P. No. 921 of 1955 is against the order of the Revenue Divisional Officer, Devakottai, confirmed by the Collector of Ramnad at Madurai, with certain modifications, levying stamp duty and penalty on two bonds from Subramanian Chettiar, the Petitioner and the executant of those two bonds.

2. The facts were briefly these : The two documents were produced before the Subordinate Judge of Sivaganga by one Palaniappa Chettiar in O.S. No. 81 of 1952 on his file, filed by the said Palaniappa Chettiar, against the Petitioner, Subramaniam Chettiar, for recovering moneys due under a document renewing the debt under the two bonds, which were labelled "deposit letters". The Court-fee Examiner put in a check-slip contending that the alleged deposit letters were really bonds and had not been duly stamped and suggesting that they should be impounded and sent to the Collector. When the matter was taken up by the Court, the plaintiff Palaniappa Chettiar agreed to have the document impounded and sent to the Collector for levying the appropriate stamp duty and penalty. The learned Subordinate Judge impounded those documents under Section 35 of the Indian Stamp Act and sent them to the Collector (the Revenue Divisional Officer, Devakottai). The Revenue Divisional Officer, Devakottai, received the documents. The amount covered by the first document, which was dated 9th July, 1938, had been taken over to the second document, dated 19th September, 1946, including interest. The Revenue Divisional Officer, Devakottai, Mr. Subramaniam, finally passed an order under Section 40 of the Stamp Act levying a duty of Rs. 135 and penalty of Rs. 675 on the first document, and a duty of Rs. 60 and a penalty of Rs. 300 on the second document, and called upon the petitioner Subramaniam Chettiar (instead of the plaintiff Palaniappa Chettiar, as had been intended by his predecessor Mr. Ramakrishnan) to pay the amount of Rs. 1170. The Petitioner moved him to reconsider the order stating that the documents in question were only deposit letters, and not bonds. That petition was rejected by the Revenue Divisional Officer, Mr. Subramaniam, on 12th March, 1955, and the Petitioner was asked to pay the amount within 10 days of the receipt of his order, failing which he was told that the amount would be realised from him as arrears of land revenue and steps would be taken to prosecute him under the provisions of the Stamp Act, evidently under Section 62, as the executant of the two documents chargeable with duty but not duly stamped. The Petitioner then appealed to the Collector of Ramnad. The Collector reduced the penalty from five times the duty to three times the duty in both the cases, as he considered it to be somewhat excessive, but otherwise dismissed the appeal. As the Petitioner did not pay the amount, a warrant was issued for the attachment of the petitioner's properties for the recovery of the stamp duty and penalty. Thereupon this writ was filed on the ground that even if there is an alternative remedy open to the Petitioner, like taking the matter in appeal or revision to the Board of Revenue that remedy was not equally convenient or beneficial or effective, since the Petitioner's properties were in imminent danger of being sold for recovering the stamp duty and penalty as arrears of land revenue.

6. On 31 d July, 1946, the defendant, Rangaraju Naidu, contended in a notice that Rs. 1,00,000 more than what was admitted in the plaint had been paid to Dr. Kamesam by him, by a payment made on 29th March, 1945, and that only Rs. 1,00,000, were due from him, and that the conveyance was executed actually on 2nd April, 1945 and the date had been altered by Dr. Kamesam to 9th April, 1945. Thereupon Dr. Kamesam filed O.S. No. 8 of 1947 on 19th December, 1946. The defendant contended in his written statement that the conveyance deed was vitiated by undue influence and misrepresentation amounting to fraud by Dr. Kamesam, and that the transaction was unfair and unconscionable in its nature, and advantage had been taken of the defendant's youth and inexperience, and that the conveyance deed, which ought to have been stamped under the Madras Stamp Act, as it related to the conveyance of property rights in Madras State required a stamp duty of Rs. 9,000 under the Madras Stamp Act, and had not been stamped properly, and was inadmissible in evidence and unenforceable. Thereupon, Dr. Kamesam summoned the defendant to produce the original conveyance deed, and the defendant produced it in Court, and Dr. Kamesam wanted to mark it on his behalf in order to establish his claim. On 23rd April, 1950, the Subordinate Judge of Salem impounded the document under Section 35, as not duly stamped, and sent it to the Collector for action under Section 40 of the Stamp Act, as the defendant, who had produced the document, did not pay the stamp duty and penalty.

8. After this the suit was withdrawn to the Original Side of this Court and was numbered as C.S. No. 30 of 1953. Then the original of the assignment deed was sent to the Collector of Madras for action under Section 40 of the Stamp Act. The Collector levied a stamp duty of Rs. 9,000, the correct duty due in the Madras State on the document, and a penalty of Rs. 5, under Section 40(1)(b) of the Madras Stamp Act, and gave a notice to the defendant Rangaraju Naidu to remit the amount on or before 20th October, 1954, in order to return the document duly stamped with the necessary certificate to this Court, as directed by the order of this Court dated 13th August, 1954.

No case that I know of can be cited to show that an erroneous stamp would invalidate the deed.

13. There is no difficulty where the person who wishes the document to be admitted as evidence in Court is the person who is initially bound to bear the expense of providing the stamp duty, like the executant. But, very often, the person wishing to admit the instrument as evidence in Court will not be the executant, as the suit may be, and very often is, against the executant. In such a case, the question, when the party wishing to let it in as evidence does net pay the stamp duty and penalty, and it is impounded and sent to the Collector, is whether the party bringing a suit and wanting to let in the document as evidence in his favour (or the defendant, who wants to let in the document in his favour) can be compelled by the Collector, under Sections 40 and 48 to pay the stamp duty arid penalty when he is not the executant. There are two rulings of two High Courts, holding contrary views and hence the difficulty of settling the question. In Secretary of State for India, in Council v. Bhasharatullah (1908) I.L.R. 30 All. 271, a Bench of the Allahabad High Court, consisting of Knox and Aikman, JJ., has held that if a plaintiff produces in Court in support of his claim an unstamped or improperly stamped document, he primarily is the person from whom the stamp duty and penalty have to be recovered by the Collector under Section 40 of the Stamp Act, and the person to be proceeded against under Section 48, and that such duty and penalty cannot be recovered from the other parties to the instrument. A Special Bench of the Lahore High Court, consisting of three judges, Dalip Singh, Bhide and Blacker, JJ., has decided in Mohammad Hussain v. Emperor I.L.R. (1940) Lah. 637 : A.I.R. 1940 Lah. 315, that Sections 35, 40 and 48 of the Stamp Act and the other Sections of that Act contain no provision to enable either the Court or the Collector to compel the person, who wishes to have an. insufficiently stamped document admitted in evidence in Court, to pay the duty or the penalty when he is not the person who was originally bound to bear the expense of providing the duty and so the stamp duty and penalty cannot be recovered from him under Section 48. They considered the ruling in Secretary of State for India in Council v. Bhasharatullah (1908) I.L.R. 30 All. 271, and expressly dissented from the view taken therein. They went en to say: