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2017 DIGILAW 189 (KER)

RAJESH KHANNA v. DEEPU RAMAKRISHNAN

2017-01-24

A.MUHAMED MUSTAQUE

body2017
JUDGMENT : A. MUHAMED MUSTAQUE, J. 1. In a suit for setting aside a sale deed showing consideration of Rs. 3,50,000/- the defendants contended that the total consideration paid by them is Rs. 67,00,000/-. The suit filed by the plaintiffs is numbered as O.S. No. 115/2010 on the file of the Additional Sub Judge, Kollam. The plaintiffs sued them based on the certified copy of the sale deed No. 1615/2008 of Eravipuram SRO. The plaintiffs filed an application as I.A. No. 2041/2015 in O.S. No. 115/2010 to impound the document. The said application has been allowed as per Ext.P10 order. The defendants challenge the above order in this original petition. 2. It is appropriate in this context to refer to Section 33 of the Kerala Stamp Act, 1959 which deals with the Examination and impounding of instruments. Section 33 of the Stamp Act reads as follows: "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 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 purpose of this section, in cases of doubt, the Government may determine:- (a) what offices shall be deemed to be public offices. (3) For the purpose of this section, in cases of doubt, the Government may determine:- (a) what offices shall be deemed to be public offices. (b) who shall be deemed to be persons in charge of public offices." 3. The question that arises for consideration is whether adjudication is warranted as to the consideration paid for the purpose of stamp duty and registration. One of the issues in the suit itself is as to the consideration paid by the purchasers/defendants. The defendants have filed written statement opposing the averments in the plaint. The plaintiffs denied having received such consideration. These are matters which are the subject matter of the suit itself. The contention in the written statement would remain only as a contention unless that contention is accepted through an adjudicatory process. 4. However, in the peculiar circumstances of this case, a question arises whether the admission in the written statement by the purchasers/defendants as to the consideration paid by them can be relied upon for the purpose of adjudication of Stamp duty. To examine the admission as referred above, one has to look into the nature of the admission in the matter. In this case, admittedly, the stamp duty is paid in accordance with the consideration as shown in the instrument. In that sense, the instrument bears the proper stamp duty in accordance with the consideration. 5. The issue now germane for consideration is the undervaluation of the stamp duty. Undervaluation of consideration is different from the examination of proper stamp duty as contemplated under Sections 31, 33 and 34 of the Stamp Act. The competent authority for determining consideration in accordance with Section 45B of the Stamp Act is the Collector or any other officer as prescribed by the Government. In the State, the District Registrar discharges these functions. This is not a case involved under Section 45B. Therefore, that question does not arise. The authority of the District Collector in terms of Section 31 of the Stamp Act to adjudicate is as to the proper stamp duty payable, which otherwise ought to have been chargeable on the instrument. No doubt, on an appreciation of the evidence and after admitting any instrument, a question may arise as to the proper stamp duty payable on the instrument. The District Collector, under Section 31 has no independent authority to decide a question regarding actual consideration shown in the instrument. No doubt, on an appreciation of the evidence and after admitting any instrument, a question may arise as to the proper stamp duty payable on the instrument. The District Collector, under Section 31 has no independent authority to decide a question regarding actual consideration shown in the instrument. Therefore, this Court is of the view that at this stage, the question for examination as to proper stamp duty does not arise. If this Court enters into a finding regarding the consideration paid for the purpose of deciding a question under Section 33 of the Stamp Act, that would amount to deciding the disputed question in the suit. It is to be noted that under Section 33 of the Stamp Act, an opinion has to be formed as to the duty chargeable on the instrument. Therefore, when a dispute arises as to the consideration paid on the instrument, it is not safe for this Court to form an opinion as to the stamp duty chargeable on the instrument. 6. Then the next question would arise, whether an instrument which is insufficiently stamped can be admitted in evidence under Section 34 of the Stamp Act. An instrument not duly stamped is inadmissible in evidence. According to me, this provision would apply only in respect of an instrument on which there exists no dispute regarding consideration. 7. The further question that arises for consideration is what course of procedure will have to be followed by the court in a matter like this. This court is of the considered view that an instrument on which a dispute arises as to the consideration, the court will have to admit such instrument in evidence and thereafter, the court shall adjudicate the issue regarding consideration in the suit itself. On the determination of the issue of consideration, if the court finds that the consideration shown in the instrument is not the actual consideration and the instrument was undervalued for the purpose of registration and stamp duty, the court shall follow the procedure as prescribed under Section 59 of the Stamp Act. It is appropriate to refer Section 59 of the Stamp Act, which reads as follows: "59. It is appropriate to refer Section 59 of the Stamp Act, which reads as follows: "59. Revision of certain decisions of Court regarding the sufficiency of stamps:- (1) When any Court in the exercise of its Civil or Revenue jurisdiction or any Criminal Court in any proceedings under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898, makes any order admitting any instrument in evidence as duly stamped or as not requiring a stamp, or upon payment of duty and a penalty under section 34, the Court to which appeals lie from, or references are made by, such first mentioned Court may, of its own motion or on the application of the Collector, take such order into consideration. (2) If such Court, after such consideration, is of opinion that such instrument should not have been admitted in evidence without the payment of duty and penalty under section 34, or without the payment of a higher duty and penalty that those paid, it may record a declaration to that effect and determine the amount of duty with which such instrument is chargeable, and may require any person in whose possession or power such instrument then is, to produce the same and may impound the same when produced. (3) When any declaration has been recorded under sub-section (2), the Court recording the same shall send a copy thereof to the Collector and, where the instrument to which it relates has been impounded or is otherwise in the possession of such Court, shall also send him such instrument. (3) When any declaration has been recorded under sub-section (2), the Court recording the same shall send a copy thereof to the Collector and, where the instrument to which it relates has been impounded or is otherwise in the possession of such Court, shall also send him such instrument. (4) The Collector may thereupon, notwithstanding anything contained in the order admitting such instrument in evidence, or in any certificate granted under section 41, or in section 42, prosecute any person for any offence against the stamp law which the Collector considers him to have committed in respect of such instrument: Provided that – (a) no such prosecution shall be instituted where the amount (including duty and penalty) which, according to the determination of such Court, was payable in respect of the instrument under section 34, is paid to the Collector, unless he thinks that the offence was committed with an intention of avoiding payment of the proper duty; (b) except for the purpose of such prosecution, no declaration made under the section shall affect the validity of any order admitting and instrument in evidence, or of any certificate granted under section 41." 8. The court thus admitting an instrument which ought not to have been admitted, has to refer the matter to the appellate court for consideration and it is for the appellate court to then consider the chargeability of the instrument and to impound such instrument. Accordingly, the impugned order is set aside. The original petition is disposed of as above. No costs.