Karnataka High Court
Volvo Group India Private Limited vs The Deputy Commissioner Of on 16 January, 2021
Author: P.S.Dinesh Kumar
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 16TH DAY OF JANUARY, 2021
BEFORE
THE HON'BLE MR. JUSTICE P.S. DINESH KUMAR R
WRIT PETITION No.42926 OF 2017 (GM-ST/RN)
BETWEEN :
VOLVO GROUP INDIA PRIVATE LIMITED
(EARLIER KNOWN AS VOLVO
INDIA PRIVATE LIMITED)
YALACHAHALLY
TAVAREKERE POST
HOSAKOTE
BENGALURU-562 122
ITS AUTHORISED SIGANTORY
MR. LAXMINARAYAN HEGDE
AGED ABOUT 53 YEARS ... PETITIONER
(BY SHRI. A. MURALI, ADVOCATE)
[THROUGH VIDEO CONFERENCE]
AND :
THE DEPUTY COMMISSIONER OF
STAMPS AND DISTRICT REGISTRAR
SHIVAJINAGAR
REGISTRATION DISTRICT
NO.48, 3RD FLOOR
TRUMP TOWERS
CHURCH STREET
BENGALURU-1 ... RESPONDENT
(BY SHRI. R. SUBRAMANYA, AAG A/W
SHRI. M. VINOD KUMAR, AGA)
....
2
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE
CONSTITUTION OF INDIA PRAYING TO QUASH/SETTING ASIDE THE
IMPUGNED ORDER DTD.04.08.2017 [VIDE ANNEXURE-A] AND DIRECT
THE RESPONDENT TO RECALCULATED AND RE-ADJUDICATE THE
STAMP DUTY PAYABLE BY THE PETITIONER UNDER ARTICLE 11 UNDER
THE SCHEDULE TO THE KARNATAKA STAMP ACT 1957 WITHOUT
RESORTING TO IMPOSITION OF ANY PENALTY AND ALSO BY
COMPLYING WITH THE PROVISIONS OF SECTION 23 OF THE
KARNATAKA STAMP ACT 1957.
THIS WRIT PETITION, HAVING BEEN HEARD THROUGH VIDEO
CONFERENCING AND RESERVED FOR ORDERS ON 04.01.2021,
COMING ON FOR PRONOUNCEMENT OF ORDERS THIS DAY, THE
COURT PRONOUNCED THE FOLLOWING:-
ORDER
Heard Shri. A. Murali, learned Advocate for petitioner,
Shri. R. Subramanya, learned Additional Advocate General
(AAG) and Shri. M.Vinod Kumar, learned AGA for
respondent-State.
2. Briefly stated the facts of the case are, petitioner
obtained an award dated May 21, 2012 from the Arbitral
Tribunal headed by Justice S. Venkataraman (Retd.) against
Karnataka State Road Transport Corporation ('KSRTC' for
short).
3. The Arbitral Tribunal held that petitioner was
entitled to receive Rs.3,51,12,209.63 ps. with interest at
12% p.a. from April 6, 2010. Accordingly, it directed
KSRTC to pay Rs.4,40,65,822.63 ps. (including interest up
to the date of the award) together with interest at 12% p.a.
on the determined amount till the date of payment. In
addition, the Tribunal also allowed petitioner's claim for
Rs.2,70,48,509.94 ps. towards reimbursement of tax on
works contract payable with interest at 12% p.a. from the
date of the Award till the date of payment.
4. KSRTC challenged the Award under Section 34 of
the Arbitration and Conciliation Act, 1996 ('Arbitration Act'
for short) in A.S. No.63/2012 and the same stood dismissed
by judgment and order dated February 7, 2017.
5. Petitioner submitted a representation through its
Advocate on March 30, 2017 enclosing a copy of the award
with a request to determine and inform the Stamp duty
payable on the Award to enable petitioner to pay the same.
6. By the impugned order dated August 4, 2017,
the District Registrar and the Deputy Commissioner of
Stamps has directed petitioner to pay stamp duty of
Rs.1,09,65,400/-. Hence, this writ petition.
7. Shri. Murali, made following submissions:
x In its representation, petitioner has sought for
determination of the Stamp duty in the hands of the
District Registrar;
x Learned Arbitrator has directed payment of
Rs.4,40,65,822.63 ps. and Rs.2,70,48,509.94 ps.
Thus the total amount works out to
Rs.7,11,14,332.57 ps.;
x Award passed under the Arbitration Act is required to
be stamped under Article 11 of the Karnataka Stamp
Act, 1957 ('Stamp Act' for short) and in this case, the
Stamp duty is 5% of the amount;
x No Stamp duty is payable on the interest component;
x The District Registrar ought to have conveyed the
Stamp duty payable by exercising powers under
Section 31(1) of the Stamp Act. However, the
respondent has incorrectly calculated the Stamp duty
by imposing penalty under Section 39(2) which deals
with the documents which are impounded.
8. With the above submissions, he prayed for
allowing this writ petition.
9. Opposing the writ petition, Shri. Subramanya,
learned Addl. Advocate General submitted that once any
instrument which is not duly stamped is brought before the
respondent, he is duty bound to impound the same and the
respondent has rightly done so. Petitioner is entitled to
receive the interest as per the award. Therefore, the
respondent has rightly added the interest component.
Further, since the instrument was impounded, the Registrar
has rightly imposed the penalty. With these submissions, he
sought to justify the impugned order.
10. I have carefully considered rival contentions and
perused the records.
11. The operative portion of the Award is
unambiguous. Learned Arbitrator has directed the KSRTC to
pay money under two heads. A sum of Rs.4,40,65,822.63
ps. (which is inclusive of interest till the date of Award) is
towards petitioner's claim towards Annual Maintenance
Contract and Rs.2,70,48,509.94 ps. towards reimbursement
of tax. The total works out to Rs.7,11,14,332.57 ps. It is
the case of both petitioner as also the respondent that the
chargeable Stamp duty is 5% under Article 11 of the Stamp
Act.
12. The issues which need to be decided are with
regard to the correct Award amount, whether interest can
be added and imposition of penalty.
13. Re: Correct Award amount
As recorded hereinabove, the operative portion of the
Award is clear and the total amount awarded is
Rs.7,11,14,332.57 ps.
Unfortunately, the respondent has added the sum of
Rs.3,51,12,209.63 ps. upon which KSRTC is liable to pay
only the interest.
14. Re: Stamp Duty on interest
Section 23 of the Stamp Act makes it clear that where
interest is expressly made payable, the instrument shall not
be chargeable with duty higher than that with which it
would have been chargeable if there was no mention about
the interest.
Therefore, interest component cannot be considered
while calculating the Stamp duty.
15. Re: Penalty
The representation as per Annexure-E submitted on
petitioner's behalf on March 30, 2017 to the District
Registrar is with a specific prayer which reads as follows:
"We understand that the Award needs to be stamped in
accordance to Article 11 of the Stamp Act. We request that
the Stamp duty payable on the Award be determined and
informed to us so that we can make the necessary
payments at the earliest."
16. Chapter-III of the Stamp Act deals with the
procedure when a person applies to have the opinion of the
Officer as to the duty chargeable on the instrument. It
applies in both cases where an instrument is previously
stamped or not. Under Section 31(1) of the Stamp Act, the
Deputy Commissioner is required to determine the duty.
The District Registrar has clearly misdirected himself by
applying Section 39(2) of the Stamp Act and imposing the
penalty. The said provision falls under Chapter-IV which
deals with instruments not duly stamped. In this case,
petitioner has sought the opinion of the Officer with regard
to the duty payable and therefore, the respondent ought to
have dealt the matter under Chapter-III of the Stamp Act
and simply conveyed the stamp duty payable to the
petitioner.
17. Learned AAG also urged the ground of
alternative remedy by way of revision under Section 53A of
the Stamp Act. The said submission is noted only to be
rejected because revision is not an alternative remedy
because, under the Karnataka Stamp Act, the revisional
power can be exercised suo moto within a period of five
years. Therefore, the ground of alternative remedy has no
substance.
18. Further, having observed patent irregularities
and recorded the aforesaid findings, no useful purpose
would be served by remitting the matter to the respondent
for fresh adjudication. This would not only cause further
delay for petitioner to get the instrument stamped, but
remittance of Stamp duty to State exchequer would also be
equally delayed.
19. In view of the above, following:
ORDER
(a) Writ petition is allowed.
(b) The impugned order dated August 4, 2017 as per
Annexure-A is quashed.
(c) The respondent shall calculate Stamp Duty on
Rs.7,11,14,332.57 ps. at 5% and collect the same from
petitioner.
No costs.
Sd/-
JUDGE
SPS
