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2012 DIGILAW 128 (MP)

Bhagwati Prasad v. Mathura Devi

2012-01-30

ALOK ARADHE

body2012
JUDGMENT : Withthe consent of parties, the matter is heard finally. 2.In this writ petition under Article 227 of the Constitution of India thepetitioners have challenged the validity of the order dated 8-8-2011 passed by the Trial Court. Inorder to appreciate the petitioner's challenge to the impugned order, few factsneed mention which are state infra. 3.The respondents-plaintiffs filed the suit for specific performance of thecontract on the basis of an agreement dated 25-7-2006 . Under the agreement, out of total considerationof Rs . 11 ,01,000 /-, sum of Rs . 6,01,000/- was paid to the defendants by way of cheques . The plaintiff submitted his examination-in-chiefunder Order 18 Rule 4 of the Code of Civil Procedure. On behalf of thedefendants another agreement dated 5-8-2006 was produced in which the amount ofsale consideration was mentioned as Rs . 25 lacs and an amount of Rs .6,01,000/- was paid under the agreement to the defendants and the amount of Rs . 18,99,000/- was shown payable to the defendants. Anobjection was raised by the Counsel for the plaintiffs with regard to theadmissibility of the aforesaid agreement dated 5-8-2006 on the ground that thesame was insufficiently stamped in view of the amendment made in the IndianStamp Act, 1899 (for short 'the Act') as applicable to the State of MadhyaPradesh which came into force on 13-8-2002. 4.The Trial Court thereupon directed the petitioners that in case they want totender the aforesaid agreement in evidence, they will have to pay a sum of Rs . 24,950/- by way of duty and a sum of Rs . 2.5 lacs by way of penalty.Accordingly, the petitioners were granted time to deposit the amount of dutyand penalty, in case they wanted to exhibit the document. 5.Learned Senior Counsel for the petitioners has assailed the aforesaid orderpassed by the Trial Court on the ground that the Trial Court ought to haveimpounded the document in question and should have sent the same to Collectorof Stamps for determination of the stamp duty and penalty. It is furthersubmitted that the Collector of Stamps is the only authority to determine theamount of duty and penalty as per his discretion. Learned Senior Counsel in support of his submission has placed reliance on thedecision of the Supreme Court in Petiti Subba Rao Vs. Anumala S. Narendra , (2002) 10 SCC 427 . It is furthersubmitted that the Collector of Stamps is the only authority to determine theamount of duty and penalty as per his discretion. Learned Senior Counsel in support of his submission has placed reliance on thedecision of the Supreme Court in Petiti Subba Rao Vs. Anumala S. Narendra , (2002) 10 SCC 427 . 6.On the other hand, learned Counsel for the respondents submitted that the orderpassed by the Trial Court is perfectly just and legal. It is further submittedthat only when the petitioners inform the Trial Court that they are not willingto pay the amount of duty and penalty then the Court is required to adopt theprocedure under Section 38 (2) of the Act. 1 7.I have considered the submissions made on both sides. Section 33 of the Actprovides that when an insufficient stamped document is filed in the Court, theCourt is duty bound to impound the same. Section 35 of the Act provides that noinstrument chargeable with duty shall be admitted in evidence for any purposeunless such instrument is duly stamped. Clause (a) of the proviso to Section 35provides that such an instrument shall, be admitted in evidence on payment ofthe duty with which the same is chargeable, or, in the case of an instrumentinsufficiently stamped, of the amount required to make up such duty, togetherwith a penalty of five rupees, or when ten times the amount of the propertyduty or deficient portion thereof exceeds five rupees, of a sum equal to tentimes such duty or portion. Section 38 prescribes the procedure afterimpounding document. Section 38(1) provides that when the person impounding aninstrument under Section 33 has by law or consent of parties authority toreceive evidence and admit such instrument in evidence upon payment of apenalty as provided by Section 35, or of duty as provided by Section 37, heshall send to the Collector an authenticated copy of such instrument, togetherwith a certificate in writing, stating the amount of duty and penalty levied inrespect thereof, and shall send such amount to the Collector, or to such personas he may appoint in this behalf. Sub-section (2) of Section 38 provides thatin every other case, the person so impounding an instrument shall send it inoriginal to the Collector. Section 40 of the Act deals with power of theCollector to stamp the instrument which have beenimpounded. Sub-section (2) of Section 38 provides thatin every other case, the person so impounding an instrument shall send it inoriginal to the Collector. Section 40 of the Act deals with power of theCollector to stamp the instrument which have beenimpounded. Section 40 (1) (b) provides that if the Collector is of the opinionthat instrument is chargeable with duty and is not duly stamped, he shallrequire the payment of the property duty or the amount required to make up thesame, together with a penalty of five rupees; or, if he thinks fit, an amountnot exceeding ten times the amount of the proper duty or of the deficientportion thereof, whether such amount exceeds or falls short of five rupees. 8.Thus, the scheme of the Act is abundantly clear. Where the instrument ischargeable to duty is tendered in the Court, the Court is duty bound to impoundthe same, if it is of the opinion that the document is not duly stamped. TheCourt under Section 35 of the Act has the power to admit the document inquestion on payment of duty with which the instrument is chargeable or amountrequired to make up such deficiency together with penalty, limits of which areprescribed in the section. There is no other course open to the Court, once itis found that instrument tendered in evidence is not duly stamped. However, ifthe instrument has been impounded under Section 33 of the Act, but has not beenadmitted in evidence, on payment of penalty and duty the Court has to send thedocument to the Collector under Section 38 (2) of the Act and the Collector isrequired to deal with the document in the manner prescribed under Section 40 ofthe Act. 9.The Full Bench of this Court in Nathuram Arjim Vs. Siyasharan Harprasad , AIR 1970 MP 79 , has held that the instrument canbe sent to the Collector under Section 38 (2) of the Act only when it isimpounded under Section 33 of the Act, but has not been admitted in evidence onpayment of penalty and or duty with the aid of Section 35 of the Act. 10.The Supreme Court in Petiti Subba Rao (supra ), has held thatwhere the party fails to pay the penalty suggested by the Court the documentimpounded has to be sent to the Collector for the purpose of taking furthersteps in respect of document as provided in Section 40 of the Act. 10.The Supreme Court in Petiti Subba Rao (supra ), has held thatwhere the party fails to pay the penalty suggested by the Court the documentimpounded has to be sent to the Collector for the purpose of taking furthersteps in respect of document as provided in Section 40 of the Act. 11.In the backdrop of aforesaid legal position if the impugned order is seen, thedocument is yet to be tendered in evidence. If the petitioners tender thedocument in evidence, the Trial Court shall deal with the document in the lightof the aforesaid well settled legal position and in view of the law laid downby the Supreme Court in Petiti Subba Rao's case as well as by the Full Bench of this Courtin Nathuram Arjun's case(supra). 12.With the aforesaid direction, the writ petition is disposed of.