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2022 DIGILAW 151 (TS)

P. Sushil Ramchander v. Kakatiya Projects

2022-03-07

N.TUKARAMJI, SATISH CHANDRA SHARMA

body2022
ORDER : N. TUKARAMJI, J. This Revision is directed against the order dated 12.09.2019 in I.A.No.436 of 2019 in I.A.No.23 of 2017 in C.O.S.No.1 of 2017 on the file of the Judge, Commercial Court-cum-XXIV Additional Chief Judge, City Civil Court, Hyderabad whereby the first defendant sought for impounding the suit agreement on the ground that the District Registrar had improperly assessed and collected the deficit stamp duty and penalty under an act of fraud, misrepresentation and bribery. 2(a) The relevant facts in brief are that the respondent/plaintiff filed the suit for specific performance of agreement of sale dated 24.10.2008. At the instance of the respondent/first defendant vide I.A.No.23 of 2017, the suit agreement was forwarded to the District Registrar of Stamps, Hyderabad for impounding and collection of deficit stamp duty and penalty in I.A.No.23 of 2017. (b) The revision petitioner/first defendant in the present petition contended that in the first instance the District Registrar in the letter dated 04.06.2018 bearing No.5875/E1/imp-2017 had appraised the dues on the entire sale consideration of Rs.7,50,00,000/- at 5%, and fixed the stamp duty at Rs.37,50,000/- and the penalty of Rs.45,00,000/-. However, the first respondent/plaintiff had managed, and submitted a representation dated 24.10.2018 stating that the possession of the property in part performance of the suit agreement was not delivered. Thereupon, the District Registrar issued another letter reducing the stamp duty to Rs.7,50,000/- and penalty of Rs.30,00,000/- and collected the same. This act of scaling down the stamp duty and penalty is glaringly reflecting the fraudulent misrepresentation and bribery especially as the recitals of the suit agreement are specifying the delivery of possession of the property. (c) Therefore, the suit agreement is liable for the stamp duty as sale agreement with delivery of possession as per 47-A & Schedule-IA of the Indian Stamp Act, 1899 (for short ‘the Act’). Thus, the suit agreement shall be impounded to address the fraud and deficit stamp duty and for collection of the due stamp duty and penalty as per the first letter of District Registrar dated 04.06.2018, else the suit agreement shall not be received in evidence. 3. The first respondent/plaintiff in counter disputed the maintainability of the petition as the deficit stamp duty and penalty was already collected by the District Registrar. 3. The first respondent/plaintiff in counter disputed the maintainability of the petition as the deficit stamp duty and penalty was already collected by the District Registrar. Additionally pleaded that erroneous fixation of the stamp duty in the first instance was queried, on that the competent authority after due hearing and considering the aspects that only 5800 square feet out of total extent on different floors was given in possession but the same was not in direct nexus with the suit agreement, adjudicated the stamp duty and penalty. Howsoever, the petitioner/first defendant has no locus standi or any role in the process. Thus, the petition itself is misconceived and prayed for dismissal. 4. The trial Court in the impugned order while dismissing the petition, observed that collection of the deficit stamp duty is the prerogative of the District Registrar and alleged bribery cannot be considered as it is beyond the purview of the suit and the suit agreement cannot be impounded to collect the stamp duty. However, the petitioner/first defendant may avail remedies with the authorities. 5. During hearing, learned counsel for the revision petitioner reiterated the petition pleadings and vehemently contended that in the impugned order the trial Court expressed its inability to rectify the patent fraud and bribery and deliberately ignored these aspects to support the cause of the first respondent/plaintiff against the responsibility to impound and to collect the deficit stamp duty on the document. Thus, prayed for allowing the revision. 6. In support of the claim, the petitioner placed reliance on the authority B. Rathnamala v. G. Rudramma, AIR 2000 A.P. 167 . In B. Rathnamala (1st supra) a Division Bench of this Court held that Explanation I of Article 47-A of Schedule I-A of the Act envisages that an agreement to sell followed by or evidencing delivery of possession of the property agreed to be sold shall be chargeable as a Sale. On the expression of ‘followed by’, observed that even in the absence of a recital in the agreement, delivery must be contemporaneous with the execution of agreement and the possession should be intimately and inextricably connected with the agreement and on the word ‘evidencing separately’ held that in later case, in order to attract the explanation I of the Act 47A, the agreement must contain a recital of delivery of possession either prior or after the agreement. 7. 7. On the other hand, the learned counsel for the first respondent/plaintiff has asserted that the stamp duty and penalty collected by the District Registrar was proper. Further clarified that the Para 11 of the plaint is referring to the possession of small portion of the total area of the suit agreement since September, 2010 but it is not the delivery of possession as per the suit agreement. As such, no merit in the revision. 8. The respondent put-forth the following authorities: (1) In Nukala Sailaja Devi and others v. District Registrar and others, 2007(6) ALT 368 . (2) In Veena Hasmukh Jain and others v. State of Maharashtra and others, AIR 1999 SC 807 (3) In Omprakash v. Laxminarayan and others, 2014(1) ALD 83 (4) In Makineni Srinivas Rao and others v. Manthena Prabhakar Reddy, 2014(6) ALD 261 . i) In Nukala Sailaja Devi and others (2nd supra), the petitioner filed written statement disputing the very execution of the agreement of sale. The Trial Court sent the document for impounding, under the relevant provisions of the Act. On the dispute raised by the defendants as to the paid stamp duty, this Court held that the defendant cannot be said to have suffered any detriment, on account of the impugned order and when the defendants are disputing the very execution of the document, it is ununderstandable as to how they can insist on payment of additional stamp duty at a higher percentage. ii) In Veena Hasmukh Jain (3rd supra) the Hon’ble Apex Court held that the Court has to ascertain the nature and substance of the transaction effected by the instrument, to determine whether it falls within the charge of stamp duty. Further it was also held that the agreement duly signed by the parties and the witnesses, contents of the suit document made it clear that it was an agreement and not a draft agreement, therefore the instrument shall be stamped as a conveyance. iii) In Omprakash (4th supra) the Hon’ble Apex Court held that for determination of the question of admissibility of a document, the recitals contained therein are not only vital but they are decisive. Hence, at the time of considering the question of admissibility of a document, it is the recitals contained in that document that would govern the entire issue. iii) In Omprakash (4th supra) the Hon’ble Apex Court held that for determination of the question of admissibility of a document, the recitals contained therein are not only vital but they are decisive. Hence, at the time of considering the question of admissibility of a document, it is the recitals contained in that document that would govern the entire issue. Thus, the admissibility of a document is entirely dependent upon the contents of the recitals contained in that document but not on the basis of the pleadings set up by the party who seeks to introduce the document in question. iv) In Makineni Srinivas Rao (5th supra) it is held that in order to attract Explanation I of Article 47A of Schedule I-A of the Act, the stamp duty as conveyance the agreement must contain a recital of delivery of possession either prior to or after the agreement. The appellant denied delivery of possession, but the respondent pleaded that as registration of conveyance deed was getting delayed, possession was delivered to him. The Court considering the facts held that this is not a case where delivery of possession was in contemplation of parties at the time of execution of agreement of sale. The alleged delivery was not concurrent with the agreement and the same was due to turn of events taken place after execution of agreement of sale and at best it can be said that the delivery is in pursuance of and not following the agreement of sale. 9. In these rival contentions, the pertinent aspect for the determination would be, after the District Registrar collected deficit stamp duty and endorsed/certified the suit agreement under Section 42 of the Act, whether the Court which forwarded the document to impound, can re-impound the same document on the ground of improper assessment and collection of the stamp duty?. 10. In the given factual position, the revision petitioner/petitioner in the petition had sought interference of the Court to reimpound the document under Sections 33 and 35 of the Act. 11. Admittedly, the suit agreement was endorsed by the District Registrar to the effect that the stamp duty is collected. Thus, the prayer of the petition would amount to exercising supervisory or appellate jurisdiction to pursue the propriety of the proceedings and the order of the District Registrar. 11. Admittedly, the suit agreement was endorsed by the District Registrar to the effect that the stamp duty is collected. Thus, the prayer of the petition would amount to exercising supervisory or appellate jurisdiction to pursue the propriety of the proceedings and the order of the District Registrar. It is well settled that either the revision or the appeal is not the matter of procedure and the statute shall specify the same in clear express terms and no Court or authority can assume jurisdiction without there being statutory basis. 12. At the outset the revision petitioner did not refer to any specific legal provision empowering the Court, which forward the instrument to the District Registrar/Collector for impounding and collection of stamp duty to probe the impropriety if any in the proceedings and in collection of due stamp duty. 13. Section 33 of the Stamp Act mandates the authorized public officers including the Courts to examine every instrument chargeable with duty which is placed before them in their official function and if any insufficiently stamped instrument is found, the same shall be impounded. Section 35 of the Act contemplates that insufficiently stamped instrument cannot be admitted in evidence, unless the same is validated. 14. In the scheme of the Act, once the document is found to be impoundable, the Court or the designated public officer has to extend an opportunity to pay the deficit duty and validate the document or to send the document to the District Collector. 15. If the deficit stamp duty and penalty as provided by Section 35 of the Act is paid, the public officer or the Court is duty bound under Section 38 of the Act to send an authenticated copy collected together with certificate in writing stating that the deficit stamp duty and penalty is paid and shall also remit the collected amount to the Collector. 16. If the document is forwarded for impounding and collection of stamp duty and penalty as in this case, the District Registrar/Collector as authorised in Section 38(2) of the Act, adjudicates the proper stamp duty and if the instrument is insufficiently stamped and liable for duty, shall require the payment of proper stamp duty with penalty not exceeding ten times of the amount of the proper duty or portion thereof, as per Section 40(1)(b) of the Act. 17. 17. Section 42 of the Act contemplates collection of the deficit portion of the stamp duty either under Sections 35 or 40 of the Act, the District Registrar/Collector or the authorised public officer, whoever impounds and collects the deficit stamp duty, shall certify by endorsement on the document that proper stamp duty and penalty has been levied. Section 42(2) of the Act prescribes that the document/instrument so endorsed shall be eligible to be admitted in evidence. 18. Further Proviso (e) of Section 35 of the Act provides where the instrument bears certification of the District Registrar/Collector as provided under Section 32 or any other provision of the Act, it is admissible in evidence. 19. Therefore, as per Section 35(e) and 42(2), the endorsement/certificate of the impounding officer or the Collector shall be conclusive proof that the instrument is duly stamped. It is apposite to note that either Section 33 or 35 Act or any other provision of the Act is extending any authority to the forwarding or impounding officer/Court to examine and determine the propriety of the charged stamp duty by the Collector/District Registrar. 20. The empowering provisions of adjudication of the stamp duty dues, collection, certification by the District Registrar/Collector and the aspects that the Court/public authority after collecting the deficit stamp shall report the same to the District Registrar/Collector and the discretion of the Collector to reconsider the penalty levied by the authorised public officer and also the absence of any revision or appeal provision in the Act, against the decision of the Collector, in assessing the duty payable on instrument are confirming that the statute has placed the Collector/District Registrar as final authority in this regard. 21. It shall also be noted that, the act of impounding the suit agreement, though initiated in the suit proceedings, the functions of impounding, collection of stamp duty, and certification are parallel independent proceedings and shall ot be considered as part of the proceedings in which the instrument is impounded. Thus, questioning the propriety of the proceedings before the District Registrar/Collector in the suit proceedings would be improper. Even if it is taken that the Court has been given authority to examine the propriety of the proceedings before the District Registrar/Collector, it should be in distinct proceedings but not as a part of the suit. 22. Thus, questioning the propriety of the proceedings before the District Registrar/Collector in the suit proceedings would be improper. Even if it is taken that the Court has been given authority to examine the propriety of the proceedings before the District Registrar/Collector, it should be in distinct proceedings but not as a part of the suit. 22. Further, the authorities relied on by the learned counsel for the petitioner and the respondent are pertaining to classifying the suit document in a particular category and on the aspects of leviable the stamp duty on the suit document. As such, the authorities are no way helpful in resolving the core issue in this revision. 23. For the aforementioned reasons, we are of the considered opinion that as there is no express provision in the Act, empowering the Court to scrutinise the propriety of the proceedings or collection of due stamp duty by the District Registrar/Collector and especially as per the Section 42(2) of the Act, the Court shall reckon proper collection of stamp duty on the certification/endorsement of the District Registrar/Collector and shall receive the document in evidence. Thus, the Court cannot (re)impound the document on any ground, much less for improper collection of the stamp duty. Consequently, the prayer of the revision petitioner is misconceived and unsustainable in law. In the absence of any legal and factual infirmity the impugned order deserves to be affirmed and the revision fails on merit. 24. IN THE RESULT, the revision petition is dismissed. No costs. As a sequel, miscellaneous petitions pending if any, in this revision petition, shall stand closed.