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2024 DIGILAW 402 (PNJ)

Sham Lal v. Satwinder Singh

2024-02-12

RITU TAGORE

body2024
Judgment Mrs. Ritu Tagore, J. Short prayer in this revision petition is to reduce the amount of penalty, imposed to the extent of ten times the deficiency of stamp duty, as ordered in the impugned order dated 10.10.23 (Annexure P-3) passed by learned Civil Judge (Junior Division), Hoshiarpur in a case titled ‘Sham Lal vs. Satwinder Singh and another’. 2. Learned counsel submits that petitioner had no intention to avoid payment of stamp duty, however, was ignorant of the amendment in Stamp Act, which required affixing stamp duty on the sale consideration. Learned counsel pleads that order of imposing a penalty of ten times on the original amount is too harsh, and requests a reduction in the same. In support of his arguments, learned counsel placed reliance on ’Amit Kumar vs. Neha Bhatia and others’ 2023 (1) PLR 343 and ’Trustees of H.C. Dhanda Trust vs. State of Madhya Pradesh and others’ 2020 (9) SCC 510 . 3. I have heard learned counsel for the petitioner and have gone through the paper book. 4. It is a matter of record that petitioner filed a suit for confirmation of possession by way of specific performance of agreement to sell dated 25.10.2014 for the land as detailed in the plaint against defendants. He pleaded that father of defendants had executed an agreement to sell the suit land for total consideration of Rs.18,00,000/- and received a sum of Rs.17,50,000/- under the agreement, and delivered the possession of the suit land to him. It is further pleaded that petitioner is ready and willing to execute the sale deed upon payment of the balance consideration, stamp duty and other miscellaneous charges, but defendants are not ready to execute the sale deed. The subsequent transfer-deeds executed by father of the defendants and defendant No.2 in favour of defendant No.1 have also been challenged being null and void with a prayer to set aside the same. 5. The subsequent transfer-deeds executed by father of the defendants and defendant No.2 in favour of defendant No.1 have also been challenged being null and void with a prayer to set aside the same. 5. It is further a matter of record that during the course of arguments on exparte injunction application, learned trial Court found agreement to sell dated 25.10.2014 under-stamped in view of provisions of Indian Stamp (Punjab Amendment) Act, 2001, Punjab Act No.14 of 2001 Entry No.5 Clause (cc) of Schedule I-A as applicable to Punjab, and ordered to impound the agreement to sell and directed the petitioner to make good the deficiency of stamp duty along with a penalty ten times the value of deficient amount. 6. While interpreting Sections 33, 35, 38 and 39 of the Indian Stamp Act, 1899, Hon’ble the Supreme Court in Trustees of H.C. Dhanda Trust (supra) held that imposition of penalty to the extent of ten times deficiency in the stamp duty is not mandatory and discretion lies with the competent authority. Relevant discussion is in paragraph No.17 and 18 of the judgment, which are extracted as under:- “17. The amount of penalty thus can be an amount not exceeding ten times. The expression “an amount not exceeding ten times” is preceded by expression “if he thinks fit”. The statutory scheme, thus, vests the discretion to the Collector to impose the penalty amount not exceeding ten times. Whenever statute transfers discretion to an authority the discretion is to be exercised in furtherance of objects of the enactment. The discretion is to be exercised not on whims or fancies rather the discretion is to be exercised on rational basis in a fair manner. The amount of penalty not exceeding ten times is not an amount to be imposed as a matter of force. Neither imposition of penalty of ten times under Section 40 (1) (b) is automatic nor can be mechanically imposed. The concept of imposition of penalty of ten times of a sum equal to ten times of the proper duty or deficiency thereof has occurred in other provisions of the Act as well. We may refer to Section 35 (a) in this context which is as follows: 35. The concept of imposition of penalty of ten times of a sum equal to ten times of the proper duty or deficiency thereof has occurred in other provisions of the Act as well. We may refer to Section 35 (a) in this context which is as follows: 35. Instruments not duly stamped inadmissible in evidence, etc.- No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped: Provided that- (a) any such instrument shall be admitted in evidence on payment of the duty with which the same is chargeable, or, in the case of any instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion; (b) …. “ 18. It is relevant to notice that Section 35 contemplates that when ten times the amount of the proper duty of or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion is required to be deposited. Under Section 39 Collector is empowered to refund penalty. As noticed above under Section 35 (a) there is no option except to pay sum equal to ten times of such duty or deficient portion but Section 39 empowers the Collector to refund any portion of the penalty in excess of five rupees which is expressed in following words: “if he thinks fit refund any portion of the penalty in excess of five rupees which has been paid in respect of such instrument.” 7. In Amit Kumar (supra), the Coordinate Bench of this Court, while relying on Trustees of H.C. Dhanda Trust (supra) observed that imposition of penalty to the extent of ten times of deficiency in Stamp duty is not mandatory and discretion lies with the authority. 8. In present case, there is no material to show that petitioner intentionally tried to evade the payment of Stamp duty or attempted to cause loss to the revenue. 8. In present case, there is no material to show that petitioner intentionally tried to evade the payment of Stamp duty or attempted to cause loss to the revenue. Petitioner has pleaded that he was not aware of the amendment carried out by State of Punjab, with respect to payment of stamp duty and, as per routine practice, the agreement was reduced on stamp paper of Rs.2,000/- and is ready and willing to pay the deficient stamp duty. Affidavit of petitioner placed on record shows that stamp duty is required to be paid on Rs.17,50,000/- @ 6% which arrives at Rs.1,05,000/-. Perusal of agreement indicates that the possession was delivered to the plaintiff under the agreement. In view of provision of Entry No.5 Clause (cc) Schedule-I-A as applicable to State of Punjab, the stamp duty on the amount indicated in the agreement is required to be paid. In view thereof, the petitioner shall be liable to deposit the stamp duty along with equivalent amount as penalty. 9. In view of the facts and circumstance as discussed above, present revision petition is allowed. Let deficient stamp duty along with amount of penalty be made good within a period of one month from today. 10. Pending miscellaneous applications, if any, stand disposed of accordingly.