Ishwari Singh v. State Of U. P. — 1980 DIGILAW 825 (ALL)

JUDGMENT : N.D. Ojha, J. The Petitioner made an application for advance of a loan for the development of his industry to the U.P. Financial Corporation Ltd., Kanpur Respondent No. 2. A loan of rupees two lacs appears to have been sanctioned by Respondent No. 2 and intimation in this behalf was sent to the Petitioner vide letter dated 20th September, 1972. Thereafter a bilateral deed for simple mortgage was executed on 20th July, 1973, and it was registered on 1st August, 1973, before the Sub-Registrar, Bulandshahr. A notice dated 6th August, 1973, was subsequently served on the Petitioner by the District Stamp Officer, Bulandshahr, stating that a sum of rupees four thousand was payable by the Petitioner as additional stamp duty in pursuance of the provisions of Section 62(1) of the Avas Evam Vikas Parishad Adhiniyam, 1965 (U.P. Act No. 1 of 1965)(hereinafter referred to as the Adhiniyam). The deed referred to above was also impounded by the District Stamp Officer. The Petitioner submitted a reply to the notice. He also made an application to the District Magistrate and Collector, Bulandshahr, requesting him to deal with the matter himself. The District Magistrate heard the Petitioner and did not agree with the stand taken by him that the additional stamp duty referred to above was not recoverable and a direction was issued for realising the stamp duty. Aggrieved the Petitioner has instituted this writ petition. 2. Two submissions have been made by counsel for the Petitioner. Firstly it has been urged that the deed in question could not be impounded u/s 33 of the Stamp Act nor could proceedings for recovery of the additional stamp duty, which is said to be payable by the Petitioner in pursuance of Section 62(1) of the Adhiniyam, be taken under the Stamp Act. In support of this submission reliance has been placed on the decision of a Special Bench of this Court in The Board of Revenue, U.P. Vs. Electronic Industries of India, AIR 1980 All 1 . In that case a similar question came up for consideration in the context of Section 67-H of the U.P. Town Improvement Act. A comparison of the language of Section 67-H of the U.P. Town Improvement Act with that of Section 62(1) of the Adhiniyam reveals that these sections are couched in identical language. In that case a similar question came up for consideration in the context of Section 67-H of the U.P. Town Improvement Act. A comparison of the language of Section 67-H of the U.P. Town Improvement Act with that of Section 62(1) of the Adhiniyam reveals that these sections are couched in identical language. Keeping in view this circumstance and the purpose of the two sections which too is identical it is apparent that these two sections are in pari materia. What has consequently been held in regard to the interpretation of Section 67-H of the U.P. Town Improvement Act will, in our opinion, apply with equal force to the interpretation of Section 62(1) of the Adhiniyam. In that case on a conspectus of the relevant sections of the Stamp Act it has been held that for non-payment of the additional duty contemplated by Section 67-H of the U.P. Town Improvement Act a deed could not be impounded u/s 33 of the Stamp Act nor could it be subjected to any penalty under the said Act. For the reasons stated in the aforesaid case we are of opinion that in the instant case too it was not open to the District Stamp Officer or to the District Magistrate and Collector to have impounded the deed in question u/s 33 of the Stamp Act or to take any proceedings for the recovery of the amount of duty payable by the Petitioner u/s 62(1) of the Adhiniyam in exercise of any power conferred by the Stamp Act. 3. The Chief Standing Counsel, however, urged that the decision in Board of Revenue v. Electronic Industries of India (supra) requires reconsideration inasmuch as an important aspect of the matter seems to have been overlooked in that case. It was urged that Section 33 of the Stamp Act permits an instrument to be impounded if it is not “duly stamped”. According to the Chief Standing Counsel the definition pt the term “duly stamped” contained in Section 2(11) of the Stamp Act seems to have been overlooked in the case of Electronic Industries of India (supra). It was urged that Section 33 of the Stamp Act permits an instrument to be impounded if it is not “duly stamped”. According to the Chief Standing Counsel the definition pt the term “duly stamped” contained in Section 2(11) of the Stamp Act seems to have been overlooked in the case of Electronic Industries of India (supra). It was urged that if the definition of the term “duly stamped” was read with Sub-section (2) of Section 33 which inter alia provided that for the purpose of impounding an instrument on the ground that it was not duly stamped u/s 33(1) every such person referred to in the said sub-section 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 India when such instrument was executed or first executed, it was apparent that the deed in question could be and was rightly impounded. 4. Having given our anxious consideration we, however, find it difficult to accept this submission. It is true that there is no specific reference in the case of Electronic Industries of India (supra) to the term “duly stamped” as defined in Section 2(11) of the Stamp Act. However, reliance in that case has, inter alia, been placed upon the decision of a Special Bench of the Delhi High Court in Dayal Singh Vs. Collector of Stamps, AIR 1972 Delhi 131. In paragraph 11 of the report in Dayal Singh's case (supra) it was held: It is true that the words “stamp has been affixed or used in accordance with the law for the time being in force in India” in Section 2(11) of the Stamp Act are capable of being misunderstood if not read in the context of the other provisions of the Stamp Act. The words “the law for the time being in force in India” can mean only the law governing the imposition of stamp duty such as the various amendments to the Stamp Act and the Schedule thereof made by the various State Legislatures inasmuch as the subject of stamps is covered by all the three Lists in the Seventh Schedule to the Constitution. The reason is that the expression “duly stamped” is dependant on the expression “chargeable”. The reason is that the expression “duly stamped” is dependant on the expression “chargeable”. Unless an instrument is chargeable to duty, the question of it being duly stamped does not arise. It is only the stamps for the payment of stamp duty which are to be affixed under the Stamp Act to an instrument. The Stamp Act does not deal with the affixation of stamps to an instrument for any purpose other than the levy of stamp duty. It is not concerned, therefore, with the affixation of stamps on an instrument for the levy of transfer duty. It is only the Corporation Act which is concerned with the levy and recovery of stamp duty. It is also concerned with the affixation of stamps for the payment of transfer duty. This is why it is Section 147(2) and not any provision of the Stamp Act which provides that the transfer duty is to be levied in the form of a surcharge on the stamp duty. It is clear, therefore, that a sale deed being neither chargeable nor being stamped for the purpose of transfer duty under the Stamp Act, it cannot be impounded u/s 33 of the Stamp Act if the transfer duty is either not paid or is deficient. 5. Since the definition of the term “duly stamped” was specifically considered in Dayal Singh's case and reliance was placed on the aforesaid case by this Court in the case of M/s. Electronic Industries of India (supra) we are of opinion that while deciding the case of M/s. Electronic Industries of India (supra) the Special Bench of this Court cannot be said to be oblivious of the definition of the term “duly stamped” contained in Section 2(11) of the Act. Further, we are in respectful agreement with view taken by the Delhi High Court in Dayal Singh's case (supra) on this point. The words “proper amount” in the definition of the term “duly stamped” contained in Section 2(11) of the Stamp Act refer to the amount of stamp duty payable in respect of an instrument “chargeable” with stamp duty as contemplated by Section 2(6) of the Stamp Act and is to be ascertained in accordance with Section 3 of the Stamp Act read with Schedule I referred to therein. Even in Section 33(2) of the Stamp Act the words “required by the law in force in India” have to be read not in insulation but in the context in which they have been used. The use of the definite article “the” after the words “required by” and before the word “law” in the aforesaid quotation is of significance. Article “the” is, inter alia, used when reference is made to something already stated earlier. The use of the article “the” in Sub-section (2) clearly refers back to the law contemplated by Sub-section (1) of Section 33 of determination of the question as to whether an instrument is or is not “duly stamped”. The law in this behalf is the Stamp Act as has been held in the case of Electronic Industries of India (supra). 6. We are, therefore, of the opinion that the District Stamp Officer or the District Magistrate and Collector, Bulandshahr, did not have any authority to either impound the instrument u/s 33 of the Stamp Act or to take any proceedings for the recovery of the duty payable by the Petitioner in pursuance of Section 66(1) of the Adhiniyam, in exercise of any power conferred on them by the Stamp Act. 7. The second submission made by counsel for the Petitioner was that no additional duty is at all payable -by the Petitioner in pursuance of Section 62(1) of the Adhiniyam. It was urged that Section 62(1) of the Adhiniyam contemplated a duty on a deed of transfer and the simple mortgage executed by the Petitioner could not be treated as a deed of transfer in view of the observations made by this Court in Electronic Industries of India (supra). Reliance in support of this submission was placed on the following observations contained in paragraph 7 of the report: The Stamp Act does not make any provision for the payment of stamp duty on a deed of transfer. In fact it does not use the expression “deed of transfer”. 8. Counsel for the Petitioner seeks to read the aforesaid observation in isolation. This, however, is not possible to be done. In fact it does not use the expression “deed of transfer”. 8. Counsel for the Petitioner seeks to read the aforesaid observation in isolation. This, however, is not possible to be done. Keeping in view the question involved in the aforesaid case and the context in which the aforesaid observations were made we are clear in our mind that the aforesaid observations were made in order to emphasise that the duty payable u/s 67-H of the U.P. Town Improvement Act, namely, the section which was being considered in that case, could not be treated as a stamp duty within the meaning of the Stamp Act for purposes of impounding a document u/s 33 of the Stamp Act. In making the aforesaid observations it was never meant that the duty contemplated by Section 67-H of the U.P. Town Improvement Act upon a deed of transfer of an immovable property was not payable at all even though the deed was such by which a transfer of immovable property had been made as contemplated by the Transfer of Property Act. That even a simple mortgage of immovable property amounts to transfer of such property under the Transfer of Property Act admits of no doubt. This submission, therefore, cannot be sustained. 9. In the result the writ petition succeeds and is allowed in part to this extent that the District Stamp Officer and the District Magistrate and Collector, Bulandshahr, are directed not to impound the deed in question u/s 33 of the Stamp Act nor to take any proceedings for recovery of the amount of duty payable by the Petitioner in pursuance of Section 62(1) of the Adhiniyam, in exercise of any power conferred on them by the Stamp Act. Since the deed in question cannot be impounded and no other provision has been brought to our notice by counsel for the Respondents which may entitle the District Stamp Officer or the District Magistrate and Collector to keep the said document in their custody they are directed to return the said document to the Petitioner. We, however, wish to make it clear that it will be open to the Respondents to take such proceedings as may be available in law for the recovery of the amount of duty referred to above. In the circumstances of the case the parties shall bear their own costs.