Research › Search › Judgment

Karnataka High Court · body

2014 DIGILAW 332 (KAR)

Savithramma R. C. v. Vijaya Bank

2014-03-07

N.KUMAR

body2014
ORDER N. Kumar, J. 1. The defendant No. 1 has preferred this Writ Petition challenging the order passed by the trial Court declining to impound and levy duty and penalty on three documents which are alleged to be insufficiently stamped. 2. The plaintiff-Vijaya Bank filed a suit for recovery of money against the defendants. Defendants filed the written statement and contested the claim. Issues were framed. The case was posted for evidence of the plaintiff. Plaintiff examined PW 1. Through him, they got the documents marked. Ex. P6 is a declaration and indemnity executed by defendants, Ex. P7 - letter evidencing deposit of title deeds and Ex. P9 - letter of guarantee. As PW 1 was not cross-examined by the defendants, his evidence was closed. Thereafter, defendant No. 1 filed I.A. 7 to recall PW 1, I.A. 8 to summon the Manager of the plaintiff-bank, I.A. 9 to summon the survey reports on different dates and I.A. 10 under Section 34 of the Karnataka Stamp Act, 1957 (hereinafter for short referred to as 'the Act') requesting the Court to impound the documents which are insufficiently stamped and to impose duty and penalty. In this case, we are concerned with I.A. 10 filed under Section 34 of the Act. The plaintiff opposed the said application. The trial Court after hearing both the parties dismissed the said application holding that once the insufficiently stamped documents are marked without objection, then the defendants cannot have any grievance and the order admitting the document cannot be questioned. Therefore, he dismissed the application. Aggrieved by the said order, the first defendant has preferred this Writ Petition. 3. The trial Court is right to the extent that, once the document is marked without objection, no subsequent objection regarding its marking can be gone into and such document will have to be looked into while deciding the case on merits. This, however, does come in the way of the court discharging the statutory duty contemplated under Sec.33 of the Act. Section 33 of the Karnataka Stamp Act, 1957, which deals with Examination and impounding of instruments reads as under: 33. This, however, does come in the way of the court discharging the statutory duty contemplated under Sec.33 of the Act. Section 33 of the Karnataka Stamp Act, 1957, which deals with Examination and impounding of instruments reads as under: 33. Examination and impounding of instruments.- (1) Every person having by law or consent of parties authority to receive evidence, and every person in-charge of a public office, except an officer of police, before whom any instrument, chargeable in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same. (2) For that purpose every such person 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 the State of Karnataka when such instrument was executed or first executed: Provided that,-- (a) nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898; (b) in the case of a Judge of the High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints in this behalf. (3) For the purposes of this section, in cases of doubt, the Government may determine,-- (a) what offices shall be deemed to be public offices; and (b) who shall be deemed to be persons in-charge of public offices. 4. Interpreting this provision, this Court, in the case of Lakshminarayanachar Vs. Narayan and another reported in 1969(2) Mys. L.J. 299 held as under: "11. Now, the document is described in S. 33 as a document which is produced before the authority or comes before the authority in the performance of its functions. The principal function with reference to which production or reception of documents is mentioned in S. 33, so far as Courts are concerned, is the function appertaining to the exercise of the authority of taking evidence. The principal function with reference to which production or reception of documents is mentioned in S. 33, so far as Courts are concerned, is the function appertaining to the exercise of the authority of taking evidence. Production before a Court is a voluntary act, an act accompanied by the mental element of a desire to depend upon it as a piece of evidence in the litigation. Where the production of document is compelled by the Court, such document will not come within the description of 'document produced' but comes within the description of 'document which comes in the performance of its function' of taking evidence. In normal circumstances, parties produce documents voluntarily for the purpose of relying upon them as pieces of evidence. 14. The position therefore, according to the scheme of the statute, is that when a document chargeable to duty and produced into Court in connection with a proceeding before it is found by that Court to be either not stamped at all or is insufficiently stamped, it is bound to impound it. But the idea of impounding is to enforce collection of duty or deficient duty together with penalty. When a document has come before Court for the purpose of being used in evidence, the first jurisdiction of determining the duty and penalty is that of the Court. It is only when that stage has crossed and the document is not tendered in evidence that it ceases to be a document impounded by the Court which by law has authority to receive evidence and has admitted the same in evidence; though the first part of the description applies to the document, the second part has ceased to be applicable. It is then and then only that a document comes within the description of "in every other case" contained in sub-sec. (2) of S. 37. 19. The correct position therefore, in law, would be that documents which are liable to be impounded should be impounded as soon as their liability to be impounded comes to the notice of the Presiding Officer. He should retain them till the date of the trial. If they are tendered in evidence, he should act under the proviso to S. 34. The correct position therefore, in law, would be that documents which are liable to be impounded should be impounded as soon as their liability to be impounded comes to the notice of the Presiding Officer. He should retain them till the date of the trial. If they are tendered in evidence, he should act under the proviso to S. 34. Sec.37(1) imposes a duty on him to send an authenticated copy of such instrument together with a certificate stating the amount of duty and penalty levied in respect thereof to the Deputy Commissioner. If they are not admitted in evidence, he will then act under sub-sec. (2) of S. 37 and send the original document to the Deputy Commissioner for assessment of duty and penalty." 5. Again, this Court in the case of K. Amarnath Vs. Smt. Puttamma reported in 2000(4) Kar. L.J. 55 dealing with the duty of the Court under Section 33 of the Act held as under: 9. When a document is produced and sought to be exhibited, the Court should decide whether it is admissible or not immediately, so that the parties will know whether such document could be relied on or not. If a document is not admitted, by refusing to mark it, the party may take steps to let in other relevant and permissible evidence to prove the document. On the other hand, if the document is marked in evidence, the parties may not choose to let in further evidence on that aspect. When the question of marking of the document is left open, the parties will have to proceed with the evidence with considerable uncertainty. Therefore, Courts should consider and decide the question of admissibility of a document sought to be exhibited, before proceeding further with the evidence. If the Court has any doubt, it may hear arguments on the question. 10. A duty is cast upon every Judge to examine every document that is sought to be marked in evidence. The nomenclature of the document is not decisive. The question of admissibility (with reference to Section 34 of Karnataka Stamp Act, or Section 35 of Indian Stamp Act and Section 49 of Registration Act) will have to be decided by reading the document and deciding its nature and classification. The tendency to mark documents without inspection and verification should be eschewed. The question of admissibility (with reference to Section 34 of Karnataka Stamp Act, or Section 35 of Indian Stamp Act and Section 49 of Registration Act) will have to be decided by reading the document and deciding its nature and classification. The tendency to mark documents without inspection and verification should be eschewed. Even while recording ex parte evidence or while recording evidence in the absence of the Counsel for the other side, the Court should be vigilant and examine and ascertain the nature of the document proposed to be marked and ensure that it is a document which is admissible. The Court should not depend on objections of the other Counsel before considering whether the document is admissible in evidence or not. Section 33 of the Stamp Act casts a duty on the Court to examine the document to find out whether it is duly stamped or not, irrespective of the fact whether an objection to its marking is raised or not. It should be borne in mind that once a document is admitted in evidence, it cannot be called in question thereafter on the ground that it was not duly stamped. Once the Court admits a document even wrongly, such admission becomes final and cannot be reopened. Hence, the need for diligence not only on the part of the opposite Counsel, but also on the part of the Court having regard to the statutory obligation under Section 33 of Karnataka Stamp Act. 11. A combined reading of Sections 33, 34, 35, 37 and 41 of the Karnataka Stamp Act requires the following procedure to be adopted by a Court while considering the question of admissibility of a document with reference to the Stamp Act: (a) when a document comes up before the Court, it has to examine and determine whether it is properly stamped. When the other side objects to it, the Court should consider such objection and hear both sides; (b) after hearing, if the Court comes to the conclusion that the document has been duly stamped, it shall proceed to admit the document into evidence; (c) on the other hand, if the Court comes to the conclusion that the document is not stamped or insufficiently stamped, it shall pass an order holding that the document is not duly stamped and determine the Stamp duty/deficit stamp duty and penalty to be paid and fix a date to enable the party who produces the document to pay the Stamp duty/deficit Stamp duty plus penalty; (d) if the party pays the duty and penalty the Court shall certify that proper amount of duty and penalty has been levied and record the name and address of the person paying the said duty and penalty and then admit the document in evidence as provided under Section 41(2); and the Court shall send an authenticated copy of the instrument to the District Registrar together with a Certificate and the amount collected as duty and penalty, as provided under Section 37(1); (e) if the party does not pay the duty and penalty, the Court will have to pass an order impounding the document and send the instrument in original, to the District Registrar for being dealt with in accordance with law as per Section 37(2) of the Karnataka Stamp Act. 6. From the aforesaid statutory provisions and the decisions, it is clear that a duty is cast upon every Judge to examine every document, which is produced or comes before him in the performance of his functions. On such examination, if it appears to the Judge that such instrument is not duly stamped, an obligation is cast upon him to impound the same. This duty is to be performed by the Judge irrespective of the fact whether any objection to its marking is raised or not. Hence, there is a need for diligence on the part of the Court having regard to the statutory obligation under Section 33 of the Karnataka Stamp Act. Section 34 of the Karnataka Stamp Act mandates that an instrument, which is not duly stamped shall not be admitted in evidence. If any objection is taken to the admissibility of the evidence, it shall be decided then and there. Section 34 of the Karnataka Stamp Act mandates that an instrument, which is not duly stamped shall not be admitted in evidence. If any objection is taken to the admissibility of the evidence, it shall be decided then and there. If this document is found to be insufficiently stamped, then in terms of the proviso (a) to Section 34, the Court shall call upon the person, who is tendering the said document to pay duty and ten times penalty and thereafter admit the document in evidence. If duty and penalty is not paid, the document shall not be admitted in evidence. If such an objection is not taken at the time of admitting the said instrument in evidence, and the insufficiently stamped document is admitted in evidence then section 35 of the Act provides that such admission shall not be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped. It has nothing to do with impounding the document. A duty is cast upon every Judge to examine every document that is sought to be marked in evidence. The nomenclature of the document is not decisive. The question of admissibility will have to be decided by reading the document and deciding its nature and classification. The tendency to mark documents without inspection and verification should be eschewed. Even while recording ex parte evidence or while recording evidence in the absence of the Counsel for the other side, the Court should be vigilant and examine and ascertain the nature of the document proposed to be marked and ensure that it is a document which is admissible. The Court should not depend on objections of the other Counsel before considering whether the document is admissible in evidence or not. Section33 of the Stamp Act casts a duty on the Court to examine the document to find out whether it is duly stamped or not, irrespective of the fact whether an objection to its marking is raised or not. Section 37 of the Act provides what the Judge has to do when he has collected duty and penalty under Section 34 of the Act and what he has to do, if the case does not fall under Section 34 of the Act. Section 37 of the Karnataka Stamp Act reads thus: 37. Section 37 of the Act provides what the Judge has to do when he has collected duty and penalty under Section 34 of the Act and what he has to do, if the case does not fall under Section 34 of the Act. Section 37 of the Karnataka Stamp Act reads thus: 37. Instruments impounded how dealt with.- (1) When the person impounding an instrument under section 33 has by law or consent of parties authority to receive evidence and admits such instrument in evidence upon payment of a penalty as provided by section 34 or of duty as provided by section 36, he shall send to the Deputy Commissioner 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 Deputy Commissioner or to such person as he may appoint in this behalf. (2) In every other case, the person so impounding an instrument shall send it in original to the Deputy Commissioner. 7. If the Judge has acted under Section 34 of the Act and collected duty and penalty and admitted the document in evidence, then under sub-Section (1) of Section 37, he shall send to the Deputy Commissioner 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 Deputy Commissioner or such person as he may appoint in this behalf. If the Judge does not act under Section 34 of the Act, but the document is insufficiently stamped and admitted in evidence though objection regarding admissibility cannot be raised subsequently that does not take away his obligation to impound the document under Section 33 of the Act. If the document is insufficiently stamped and if the Court has admitted such instrument in evidence without collecting duty and penalty, then the Judge shall proceed under Section 33 of the Act and impound the document. After impounding the document, he shall proceed under Section 37(2) of the Act and shall send the impounded instrument in original to the Deputy Commissioner to be dealt with under Section 39 of the Act. Therefore, impounding the document should not be confused to admission of document without objection regarding admissibility or on such objection being taken after collecting the duty and penalty. 8. Therefore, impounding the document should not be confused to admission of document without objection regarding admissibility or on such objection being taken after collecting the duty and penalty. 8. In the instant case, though the Trial Court has said that the documents are duly stamped, it has not discussed about the nature of the documents in order to find out whether it is duly stamped. Only after the said exercise, the Trial Court could have come to the conclusion whether the duty paid on the instrument is sufficient or not. Therefore, the Trial Court is directed to undertake the above exercise and pass appropriate orders and to proceed under Section 33 of the Act read with Section 37(2) of the Stamp Act, if the documents are found to be insufficiently stamped. Writ petition stands disposed of in the above terms.