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2020 DIGILAW 1081 (KAR)

Lakshmidevamma v. Vijayalakshmi

2020-06-15

JYOTI MULIMANI

body2020
JUDGMENT Jyoti Mulimani, J. - Petitioners / plaintiffs have filed the present writ petition invoking the writ jurisdiction of this Court assailing the order dated 02.04.2019 passed by the Court of I Additional Civil Judge and JMFC, Tumakuru in O.S.No.510/2010. A copy whereof is at Annexure -E, whereby the trial Court has directed plaintiffs to deposit an amount of Rs.1,30,900/- as duty and penalty on the instrument / agreement dated 17-08-2001. 2. Petitioners / plaintiffs have filed a suit seeking a direction to defendant to execute reconveyance deed in their favour in performance of the conveyance agreement dated 17-08-2001 by delivering the possession of the suit schedule properties in their favour by receiving loan amount of Rs.1,50,000/- from them in respect of suit schedule properties and other consequential reliefs. Defendant filed detailed written statement denying the plaint averments. Plaintiffs have relied upon the agreement executed by defendant which is in the nature of a mortgage deed with the condition of reconveyance. The trial Court after examining the instrument opined that the instrument is neither sufficiently stamped nor registered. Therefore, in view of Section 33 of the Karnataka Stamp Act, 1957, (for short the Act ), the trial Court ordered for impounding of the document / instrument. 3. The trial Court on 4.6.2010, directed the office to calculate the appropriate stamp duty and the penalty to be payable on the instrument. Petitioners paid Rs.10/- as duty and Rs.1,000/- as penalty on the instrument vide R.O.No.242787 on 02.04.2012. After examining and impounding the document / instrument, the trial court on 26.07.2014 directed the office to send the document to the concerned authority for verification and for calculation of duty and penalty. Thereafter, the office of the trial Court on 14.08.2015, sent the document to the District Registrar, Tumkur District, Tumkur for verification. Subsequently, the District Registrar vide letter dated 21.09.2015, sent a report stating that a duty to be paid on the instrument is Rs.11,900/- and it is the discretion of the trial Court to levy penalty. 4. The trial Court after receipt of the report from the District Registrar, heard the matter and directed plaintiffs to pay a sum of Rs.1,30,900/- as duty and penalty. The trial Court also held that the Court has no discretion to levy penalty less than ten times. Aggrieved by the said order, petitioners have filed the present petition. 5. Sri. 4. The trial Court after receipt of the report from the District Registrar, heard the matter and directed plaintiffs to pay a sum of Rs.1,30,900/- as duty and penalty. The trial Court also held that the Court has no discretion to levy penalty less than ten times. Aggrieved by the said order, petitioners have filed the present petition. 5. Sri. S.C.Vijaya Kumar, learned counsel appearing in person, for petitioners submitted that the order passed by the trial Court directing the petitioners / plaintiffs to deposit an amount of Rs.1,30,900/- as duty and penalty on the instrument is contrary to law, facts and circumstances of the case. He submitted that the trial Court has committed an error in not noticing the provisions of Section 38 of the Act, wherein the discretion vests with the Deputy Commissioner to refund the penalty. He further submitted that the trial Court while passing the impugned order has failed to notice the dictum of Hon ble Supreme Court reported in the case of Gangappa and Anr. v. Fakkirappa, (2019) AIR SC 90 . Therefore, he urged that the order of the trial court may be set aside. It is also submitted by learned counsel for petitioners that a direction may be issued to the trial Court to send a copy of an instrument to the Deputy Commissioner to take recourse under Section 38 of the Act. 6. Per contra, Sri. M.A. Subramani, learned High Court Government Pleader submits that the order passed by the trial Court in directing plaintiffs to pay a duty and penalty on the instrument is just and proper. Therefore, he submitted that plaintiffs are duty bound to pay / deposit duty and penalty as ordered by the trial Court. After making good of the payment, they can seek for reference for refund of penalty under Section 38 of the Act. A further submission was made that in the instant case, plaintiffs have not yet deposited duty and penalty as ordered by the trial Court. Therefore, he urged that plaintiffs may be directed to pay the stamp duty and penalty as ordered by the trial Court and then approach the trial Court to make an application for referring the matter to the Deputy Commissioner under Sections 37 and 38 of the Act. Accordingly, he prayed for dismissal of the petition. 7. Therefore, he urged that plaintiffs may be directed to pay the stamp duty and penalty as ordered by the trial Court and then approach the trial Court to make an application for referring the matter to the Deputy Commissioner under Sections 37 and 38 of the Act. Accordingly, he prayed for dismissal of the petition. 7. I have heard the learned counsel for petitioners and Sri M.A. Subramani, learned HCGP and perused the petition papers. The controversy involved in the present writ petition relates to the direction to pay the stamp duty and penalty. The grievance of petitioners is that though they have paid the duty and penalty, trial Court is not justified in impounding the document and directing petitioners to pay the deficit duty and penalty. The trial Court has noticed that plaintiffs have relied upon the agreement executed by defendant which is in the nature of mortgage deed with a condition of reconveyance. This document is neither sufficiently stamped nor registered. Hence, the document was ordered to be impounded and directed the office to calculate the appropriate duty and penalty payable. In pursuance of the order, the office sent a communication to the District Registrar, Tumakuru District, Tumakuru to calculate duty and penalty on the instrument. Accordingly, District Registrar, Tumakuru District, Tumakuru vide Annexure- D verified the document and opined that a duty to be payable on the instrument is under Article 20 of the Act. The District Registrar, Tumakuru District, Tumakuru, calculated the stamp duty to be payable on the document as Rs.12,000/- and levy of penalty was left to the discretion of the Court. After receiving the receipt from the District Registrar, the trial Court on 02-04-2019 directed the plaintiffs to deposit an amount of Rs.1,30,900/- as a duty and penalty on the instrument. As already noticed above, the controversy is with regard to impounding of an instrument, payment of duty and penalty. 8. Therefore, it would be relevant to refer to Sections 37 and 38 of the Act, which reads as under: - 37. As already noticed above, the controversy is with regard to impounding of an instrument, payment of duty and penalty. 8. Therefore, it would be relevant to refer to Sections 37 and 38 of the Act, which reads as under: - 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 sent 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 and instrument shall send it in original to the [Deputy Commissioner]. 38. [Deputy Commissioner s] power to refund penalty paid under subsection (1) of Section 37. - (1) When a copy of an instrument is sent to the [Deputy Commissioner] under subsection (1) of Section 37, he may, if he thinks fit, refund any portion of the penalty in excess of five rupees which has been paid in respect of such instrument. (2) When such instrument has been impounded only because it has been written in contravention of section 13 or Section 14, the [Deputy Commissioner] may refund the whole penalty so paid. As could be seen from Section 38 of the Act, whenever a copy of an instrument is sent to the Deputy Commissioner under Sub section (1) of Section 37, he may, if he thinks fit, refund any portion of the penalty in excesses of five rupees which has been paid in respect of such instrument. No doubt, as per Section 38 discretion vests with the Deputy Commissioner to refund the penalty. But, in order to take shelter under Section 38 of the Act, plaintiffs have to first deposit duty and penalty as ordered by the trial Court. But strangely, plaintiffs have not complied with the order of the trial Court so far. It is relevant to notice that the Apex Court in Gangappa s case, has directed the parties to take recourse under Section 38 of the Act only after payment of duty and penalty. 9. But strangely, plaintiffs have not complied with the order of the trial Court so far. It is relevant to notice that the Apex Court in Gangappa s case, has directed the parties to take recourse under Section 38 of the Act only after payment of duty and penalty. 9. Therefore, in view of the provisions contained in Sections 37 and 38 of the Act and the law laid down by the Hon ble Supreme Court in Gangappa s case, I am of the considered opinion that the trial Court is justified in imposing duty and penalty and directing plaintiffs to make good of the same. Therefore, I find no reasons to interfere with the order passed by the trial Court. However, a submission was made by learned counsel for petitioners that two months time may be given for them to deposit the amount of Rs.1,30,900/- towards duty and penalty. A further submission was made that, after the payment of duty and penalty, plaintiffs may be permitted to move an application before the trial Court to take recourse under Sections 37 and 38 of the Act, to seek refund of the penalty which would be deposited by them. 10. Learned High Court Government Pleader submits that he has no objection for the same. 11. Taking into consideration the submission made by learned counsel appearing for petitioners, petitioners are hereby directed to comply with the order of the trial Court to deposit duty and penalty of Rs.1,30,900/- on or before 31-08-2020. After the deposit of the said amount, petitioners are at a liberty to move an application to take recourse under Section 38 of the Act. A gentle direction is issued to the trial Court to permit petitioners to take recourse under Section 38 of the Act, if and only if petitioners make good of the amount within the stipulated time. Accordingly, writ petition is disposed of.