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2017 DIGILAW 157 (KAR)

DANDAMUDI RAMESH @ RAMARAO S/O TATALLU @ NARAIAH v. SHARNAPPA S/O BASSAPPA

2017-01-27

A.N.VENUGOPALA GOWDA

body2017
ORDER : The petitioners are plaintiffs and the respondents are defendants in O.S. No.4/1999 pending on the file of the Senior Civil Judge, Lingasugur. Suit has been founded on the agreements to sell dated 04.06.2008 and 10.06.2008. It is the case of the plaintiffs that the possession of property in question was delivered to them under the agreement dated 10.06.2008 and they are in possession and enjoyment in part performance of the contract. By filing written statement suit has been contested. Issues having been raised, suit is at the stage of trial. When the suit document – sale agreement dated 10.06.2008 was sought to be marked as an exhibit in the evidence by plaintiffs, objection was raised by defendants on the ground that the instrument having not been engrossed on the requisite stamp paper, cannot be admitted. Arguments of learned advocates having been heard, learned Trial Judge having found that the stipulated amount of stamp duty has not been paid in respect of the said instrument, has passed an order dated 26.03.2010, directing payment of deficit stamp duty and penalty. Assailing the said order this petition was filed. 2. Sri Shivakumar Kalloor, learned advocate contended that deficit stamp duty payable in respect of the agreement dated 10.06.2008 having been made good by way of purchase of the requisite stamp i.e. before the institution of the suit and the stamp papers having been produced along with the plaint, there is no scope for impounding of the instrument. He submitted that the order passed to pay deficit stamp duty and penalty is contrary to S.34 of the Karnataka Stamp Act, 1957 (for short, ‘the Act’). Reliance was placed on the decision in S. KALADEVI Vs. V.R. SOMASUNDARAM, AIR 2010 SC 1654 . Learned counsel contended that the impugned order is arbitrary and liable to be set aside. 3. Sri Veeranagouda Patil, learned advocate on the other hand contended that the agreement dated 10.06.2008 being insufficiently stamped and attempted to be admitted in evidence, learned Trial Judge having examined the instrument upon objection being raised, is justified in passing the order directing payment of the deficit stamp duty and penalty. He submitted that Ss.33 and 34 of the Act impose a duty upon the Court to impound the document which has not been sufficiently stamped so as to safeguard the interest of the revenue. He submitted that Ss.33 and 34 of the Act impose a duty upon the Court to impound the document which has not been sufficiently stamped so as to safeguard the interest of the revenue. He further submitted that the plaintiffs having not followed the procedure as per S.31 of the Act, mere production of stamp papers along with the plaint to cover the deficit stamp duty does not satisfy the requirement of law. Learned advocate submitted that having regard to the facts and circumstances of the case, no case exists for interference. 4. Considered the rival contentions and perused the record. There is no dispute that stipulated stamp duty was not paid while entering into the agreement dated 10.06.2008 i.e., when the possession of the suit property was allegedly delivered to the plaintiffs. The case of the plaintiffs is, “that to make up the deficit stamp duty in respect of the said instrument, they purchased and produced the stamp papers of the requisite value along with plaint”. In the said background, the point for consideration is, whether Trial Judge is justified in directing payment of the deficit stamp duty and penalty on the instrument which is the foundation for the suit? 5. S.33 of the Act casts a duty upon the authorities concerned, including the Courts, to impound a document, where the instrument produced is insufficiently stamped. S.34 makes the instruments not duly stamped inadmissible in evidence. An instrument not duly stamped shall be admitted in evidence on payment of the duty with which the same is chargeable or in the case of an instrument insufficiently stamped of the amount required to make up such duty together with penalty. 6. In the present case, instrument dated 10.06.2008 being insufficiently stamped, same is inadmissible in evidence on account of prohibition in S.34. Court being the authority to receive the instrument in evidence, to give effect thereto, agreement to sell with possession being an instrument which requires payment of the stamp duty applicable to the deed of conveyance, stamp duty required to be paid having not been paid, Trial Judge has held the instrument is inadmissible in evidence. By impounding the instrument, Trial Judge has determined the deficit stamp duty and penalty as per the provisions of the Act. 7. By impounding the instrument, Trial Judge has determined the deficit stamp duty and penalty as per the provisions of the Act. 7. S.31 provides for adjudication as to proper stamps i.e., when an instrument whether executed or not and whether previously stamped or not is brought to the Deputy Commissioner and the person bringing it applies to have the opinion of that officer as to the duty (if any) with which it is chargeable, and pays the fee, Deputy Commissioner shall determine the duty (if any) with which, in his judgment, the instrument is chargeable. Sub-section(1) of S.32 provides that when an instrument is brought to the Deputy Commissioner under S.31 and the duty payable is determined and is paid, shall certify by endorsement on the instrument that the full duty (stating the amount) with which it is chargeable has been paid. Sub-section (2) makes clear that when such instrument is in the opinion of the Deputy Commissioner not chargeable with duty, he shall certify in the manner stated in sub-section (1), that such instrument is not so chargeable. Sub-section (3) makes clear that (subject to any orders made under Chapter IV of the Act, any instrument upon which) an endorsement has been made under the Section shall be deemed to be duly stamped or not chargeable with duty, as the case may be; and, if chargeable with duty shall be receivable in evidence or otherwise, and may be acted upon and registered as if it is originally duly stamped. 8. Ss.31 and 32 of the Act provide for adjudication of stamp duty. Under S.31 it is open to the executant of any instrument to produce the document before the Deputy Commissioner, and require him to adjudicate on the question whether the document should bear any stamp duty. The Deputy Commissioner, thereupon should adjudicate stamp duty with which payment can be made to avoid impounding the document by a court of authority empowered to receive the document in evidence. The said procedure could have been followed by the petitioners instead of buying the stamp papers and producing along with the plaint which does not meet the requirement of law. 9. In the present case, the plaintiffs did not approach the Deputy Commissioner for adjudication as to the proper stamp duty i.e. in exercise of the power under S.31 of the Act. 9. In the present case, the plaintiffs did not approach the Deputy Commissioner for adjudication as to the proper stamp duty i.e. in exercise of the power under S.31 of the Act. The plaintiffs have not produced the certificate of Deputy Commissioner as per the provisions of S.32 of the Act. Merely because the deficit stamp duty payable in respect of the agreement dated 10.06.2008 was produced along with the plaint, it cannot be construed that such an act amounts to adjudication and certification by the Deputy Commissioner as per the provisions made under Ss.31 and 32 respectively of the Act. 10. In KALADEVI’s case, suit was laid for specific performance and stress was laid on the proviso to S.49 of the Registration Act which specifically excludes the mandatory requirement of registration in the substantive part of S.49 read with S.17 of the Transfer of Property Act. Reliance having been placed upon the unregistered sale deed at least for the purpose of proof of an oral agreement of sale as collateral transaction, Apex Court has held that in such a situation, the document in question can be received in evidence by making an endorsement that it is received only as evidence of oral agreement of sale under the proviso to S.49 of the Registration Act. Having regard to the fact situation as is appearing in the present case, the said decision has no application and is clearly distinguishable in as much as the instrument in question is sought to be admitted in evidence to prove the transaction and not for collateral purpose. 11. In the above view of the matter, the learned Trial Judge is justified in passing the order dated 26.03.2010 directing payment of stamp duty and penalty. Impugned order does not suffer from any legal infirmity warranting interference in exercise of power under Article 227 of the Constitution. In the result, petition is dismissed. However, the petitioners are granted time till 31.03.2017 to pay duty and penalty on the instrument in question. Learned Trial Judge shall follow the procedure as has been indicated in the case of Digambar Warty vs. District Registrar, Bangalore Urban District reported in ILR 2013 KAR 2099.