Sensmal v. State Of Rajasthan — 1955 DIGILAW 324 (RAJ)

Wanchoo, C. J.—Sensmal and his father and brother separated in October, 1952 and a deed of partition was executed between them on the 11th of Oct, 1952 on a stamp worth Rs. 229/-. This document was presented for registration before the Sub-Registrar. Jalore on the same day. The Sub-Registrar came to the conclusion that there was a deficiency in stamp amounting Rs. 531/-. He seems to have made a demand for the deficit stamp as well as for a penalty ten times the amount It was then pointed out to him on behalf of the applicant that he had no such authority and that all he could do was to impound the document under sec. 33 2) of the Stamp Act. Thereupon, the Sub-Registrar impounded the document and submitted it, to the Collector under sec. 38(2) of the Act. The Collector, after hearing the parties, ordered recovery of Rs. 531/- as deficit stamp duty and, according to the applicant, this was done under sec.40(1) of the Stamp Act. It is said that the applicant deposited the deficit stamp worth Rs. 531/-as directed by the Collector and thereafter the Collector certified the document to be duty and properly stamped and forwarded it to the Sub Registrar for registration. It is said that when this document was received by the Sub-Registrar along with the Collectors certificate, he took steps for its registration. Before however, the document could be registered, the Inspector of Registration made an inspection and found that the earlier report of the Sub-Registrar that there was only deficiency of Rs. 531/- was incorrect. According to the Inspector, the instrument was chargeable under Article 45 of the Stamp Law. The Inspector was of the view, and we think rightly, that under that article, only one share and that the largest is exempt in the case of a partition deed and duty has to be paid on the remaining shares which are deemed to be the separated share or shares. In this case, the largest share was valued at Rs. 37,900/-, while two other shares were valued at Rs. 26,126/- and Rs. 36,000/- respectively. The duty should have been charged, therefore, on Rs. 62,126/- and it worked out to Rs. 1,260/- The Inspector thought that the previous Sub-Registrar was wrong in coming to the conclusion that the duty was only Rs. 760/-. He, therefore, ordered that this deficiency should also be realised. 26,126/- and Rs. 36,000/- respectively. The duty should have been charged, therefore, on Rs. 62,126/- and it worked out to Rs. 1,260/- The Inspector thought that the previous Sub-Registrar was wrong in coming to the conclusion that the duty was only Rs. 760/-. He, therefore, ordered that this deficiency should also be realised. Thereupon, on the 13th October, 1953, a report was made again by the Sub-Registrar to the Collector that further stamp duty of Rs. 500/-over and above the deficit stamp of Rs. 531/-was due on the instrument. It was also reported that a penalty of Rs. 5,000/- should be recovered from the executants. On receipt of this report, the Collector of Jalore, who was by now a different person from the one who had passed the original order in December, 1952, passed the following order :— "This office order, dated 11-12-1952 be taken as cancelled and proceeding for recovery of the deficit amount be effected if warranted by law Returned with the above remarks." Thereafter, proceedings started for recovery of a further amount of Rs. 500/- as deficit stamp duty and a some of Rs. 5,000/- as penalty. It is in consequence of these proceedings that the present application has been made and the applicant contends that the order of the Collector, dated 11th of December, 1952 was final and his successor had no authority to cancel it and that, in any case, it could not be cancelled without notice to the executants of the deed. The application has been opposed on behalf of the State and it is being contended that the order passed by the Collector under sec. 40(1) (b) is not a final order and that even inspite of a certificate under sec. 42(2), it is open to the Sub Registrar to question that order and certificate and make another report as was done in this case. The main question, therefore, that calls for determination is about the effect of the order of the Collector under sec.40(l)(b) and the certificate under sec.42(2). 2. When the Collector receives an instrument under sec. 38(2), he proceeds under sec. 40 to decide whether the instrument is sufficiently stamped or not, provided the instrument is not one chargeable with a duty of one anna or half an anna. Section 40 does not specifically provide for notice to the executant of the document. 2. When the Collector receives an instrument under sec. 38(2), he proceeds under sec. 40 to decide whether the instrument is sufficiently stamped or not, provided the instrument is not one chargeable with a duty of one anna or half an anna. Section 40 does not specifically provide for notice to the executant of the document. But it is expected that the Collector, before he decides whether the instrument is properly stamped or not would give notice to the executant so that he may put forward his point of view before the Collector, in case he desires to do so. Thereafter, the Collector after taking into account the report submitted by the impounding officer and any submissions of the executant, in case he appears in reply to the notice given to him, may come to one of the two conclusions. He may come to the conclusion that the instrument is duly stamped and is not chargeable with duty at all. In that case, under clause (a) of sec. 40(1) he certifies by endorsement on the document that it is duly stamped or that it is not so chargeable. Thereupon, under sub-sec. (2) of sec. 40, such a certificate becomes conclusive evidence of the matters stated therein. On the other hand the Collector may come to the conclusion that the document is deficiently stamped in which case under clause (b) of sec. 40(1), he passes an order requiring the deposit of the proper duty or the amount required to make up the same together with a penalty. This penalty can either be a sum of Rs. 5/- or any amount up to ten times the amount of the proper duty or of the deficient portion thereof. It is in the discretion of the Collector to decide whether to charge only Rs 2/- or any sum up to ten times the proper duty or the deficient duty, if it is more than Rs. 5/-. 3. Then comes sec. 42. Under Sub-sec. (1) of that section, the Collector issues a certificate by endorsing on the document itself the proper duty and penalty, stating the amount of each that has been levied in respect thereof, and the name and residence of the person paying them. When such endorsement has been certified on the document, the consequences mentioned in sub-sec. (2) of sec. (1) of that section, the Collector issues a certificate by endorsing on the document itself the proper duty and penalty, stating the amount of each that has been levied in respect thereof, and the name and residence of the person paying them. When such endorsement has been certified on the document, the consequences mentioned in sub-sec. (2) of sec. 42 follow, namely, thereafter the document becomes admissible in evidence and may be registered and acted upon as if it had been duly stamped. The contention on behalf of the State is that as sub-sec. (2) of sec. 42 uses the words may be registered, it is open to the Sub-Registrar, after a certificate has been given under sec. 42(1), to register the document or to refuse to register it and impound it again. We are of opinion that this contention is incorrect. Sec. 40(1) as we have already mentioned, provides for two contingencies depending upon what the deci -sion of the Collector is. In the contingency provided in clause (a) of sec. 40 (1), the consequences mentioned in sub-sec. (2) of sec. 40 follow. In the contingency provided in clause (b) of sec. 40 (2), there is to be a further act by the executant, namely, deposit of the duty and the penalty and it is only after that has been done that the Collector issues a certificate under sec. 42 (1). As soon as that certificate has been issued, the matter, in our opinion, is concluded so far as the Sub-Registrar, who made the reference, is concerned. He has thereafter to register the instrument. It is true that the word may appears before the word be registered. But it is unthinkable that the intention was that after the Collector had come to decision under sec. 42(1), the Sub-Registrar should question that decision by refusing to register the document. The word may in this context has in our opinion the same force as shall. If the executive authorities are dissatisfied with the order of the Collector, their remedy is by way of a revision to the Chief Controlling Revenue authority under sec. 56(1) of the Act. We may also point out that there is no provision any where in the Stamp Act for cancellation of his order by the Collector, once it has been passed under sec. 40(l)(a) or (b). 56(1) of the Act. We may also point out that there is no provision any where in the Stamp Act for cancellation of his order by the Collector, once it has been passed under sec. 40(l)(a) or (b). We are in no doubt that no Collector has power to pass this sort of order which was passed on the 24th of February 1954, by the successor Collector in this case. We have already set out the terms of that order. In the first place, the order cancels the earlier order without even giving a chance to the person, in whose favour the earlier order had been passed, to be heard. In the second place, the Collector did not even apply his mind to the matter. All that he says is that proceedings for recovery of the deficit amount be effected if warranted by law. He thus decides nothing and leaves it to the Sub-Registrar, who made the report to decide whether any deficiency is there and any penalty should be levied. This is not contemplated by the provisions of secs. 40 and 42 of the Stamp Act. It is the Collector who has to exercise his mind and decide whether there is deficiency or not and whether any penalty should be levied and if so, what amount. The order, therefore, that was passed by the successor Collector on the 24th of February, 1954, cancelling the order of the 11th of December, 1952, was clearly a wrong order and of no effect whatsoever and without jurisdiction. The proceedings, therefore, that have taken place after the 24th of February, 1954, by virtue of this wrong order are all uncalled for and must stop. The result of our declaring the order of the 24th of February, 1954, as without jurisdiction is that the order of the 11th of December, 1952, stands. 4. Let us now see what happened after this order of the 1lth of December, 1952. Under the law, the executants should thereafter have deposed the duty as well as the penalty before the collector. It seems that the Collector in this case levied no penalty at all, which was not in accordance with sec. 40 (l)(b) under which he has to levy a minimum penalty of Rs.5/- where ten times the deficit duty is more than Rs.5/-. However, he can endorse a certificate under sec. It seems that the Collector in this case levied no penalty at all, which was not in accordance with sec. 40 (l)(b) under which he has to levy a minimum penalty of Rs.5/- where ten times the deficit duty is more than Rs.5/-. However, he can endorse a certificate under sec. 42(1) after the duty of and penalty on the document have been paid. In this case, all that we know is that there is a separate certificate dated 11th of December, 1952, but that certificate does not show that the duty and the penalty had been paid on the 11th of Dec, 1952, when it was issued. It merely says that the deficiency of the 531/- may now be recovered from the executants. So that though we are told that the deficit amount of Rs. 531/- has been deposited, the Collector has not yet issued a certificate under sec. 42(1) as contemplated therein, the position, therefore, is that the applicant should go to the Collector and ask him to endorse a certificate on the document after payment of the requisite duty and penalty. But there is no doubt that the order of the 24th of February, 1954 by which the earlier order of the 11th of December, 1952, was cancelled is wrong and it must be suit aside and any proceedings taken in pursuance of that must stop. 5. We, therefore allow the application and declare that the order of 24th of February, 1954, is of no effect and any proceedings taken in pursuance of that order must stop. For the rest, it is for the Collector to proceed further from the order of the 11th of Dec, 1952, as explained above. We order parties to bear their own costs, in the circumstances of the case.