Karnataka High Court

Sri T Venkatesh vs Sri M C Nagaraja on 17 June, 2022

Bench: Ashok S.Kinagi

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 17TH DAY OF JUNE 2022

                      BEFORE

       THE HON'BLE MR.JUSTICE ASHOK S. KINAGI

 WRIT PETITION NO.45880 OF 2018 (GM-CPC)

BETWEEN:

1 . SRI T VENKATESH
    S/O LATE TEJAPPA,
    AGED ABOUT 60 YEARS,

2 . SMT. G L UMADEVI
    W/O T VENKATESH,
    AGED ABOUT 57 YEARS,

3 . SMT. VINUTHA V
    D/O T VENKATESH,
    AGED ABOUT 33 YEARS,

   ALL ARE R/AT
   POST OFFICE ROAD, HOSPET,
   ANEKAL TOWN, ANEKAL TALUK,
   BENGALURU DISTRICT - 562 106.
                                     ...PETITIONERS
(BY SRI. PATEEL G S, ADVOCATE)

AND:

1 . SRI M C NAGARAJA
    S/O CHINNASWAMY REDDY,
    AGED ABOUT 54 YEARS,
    DOING PRINTING BUSINESS
                              2




   R/AT HOSPET POST OFFICE ROAD,
   ANEKAL TOWN, ANEKAL
   BENGALURU DISTRICT - 562 106.

2 . SRI V VINAYKUMAR
    S/O T VENKATESH,
    AGED ABOUT 28 YEARS,

3 . SRI V PAVANKUMAR
    S/O T VENKATESH,
    AGED ABOUT 26 YEARS,

   RESPONDENTS 2 AND 3 ARE
   R/AT POST OFFICE ROAD,
   HOSPET ANEKAL TOWN,
   ANEKAL TALUK
   BENGALURU DISTRICT - 562 106.
                                    ....RESPONDENTS

(BY SRI. V. NAGAREDDY, ADVOCATE FOR R-1
    R-2 AND R-3 ARE SERVED)

                    ------

      THIS WRIT PETITION IS FILED UNDER ARTICLE 227
OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR
THE RECORDS AND QUASH THE IMPUGNED ORDER DATED
7.9.2017 PASSED BY THE SENIOR CIVIL JDUGE AND JMFC,
AT   ANEKAL    IN   O.S.1449/2006   DIRECTING   THE
PLAINTIFF/R-1 IN SO FAR AS TO PAYMENT PENALTY OF
RS.5/- ONLY VIDE AT ANNEXURE-D, CONSEQUENTLY
DIRECTING THE R-1/PLAINTIFF TO PAY PENALTY OF TEN
TIMES OF THE DEFICIT STAMP DUTY SO PAYABLE ON
EX.P4 ON HIS FILE.

     THIS WRIT PETITION COMING ON FOR ORDERS
THIS DAY, THE COURT MADE THE FOLLOWING:
                                3




                         ORDER

Defendants No.1 to 3 aggrieved by the order

dated 7.9.2017 in O.S.No.1449/2006 passed by the

learned Senior Civil Judge, Anekal, has filed the

present writ petition.

2. Brief facts leading rise to filing of this petition

are as under:

Respondent No.1 herein filed a suit in

O.S.No.1449/2006 for specific performance of

contract. Defendants (petitioners and respondents 2

and 3 herein) filed written statement. When the case

was posted for plaintiff's evidence, counsel for the

defendants raised objections in regard to the

agreement of sale, which was tendered in evidence as

admissible in evidence, and further that stamp duty

has not been paid on the agreement of sale and

directed the office to calculate stamp duty and

penalty.

The Trial Court relying upon the judgment of this

Court in ILR 2011 KAR 4719 (Govinde Gowda v.

Akkayamma), has directed the plaintiff to pay stamp

duty of Rs.42,600/- with penalty of Rs.5/-. Aggrieved

by the order of the Trial Court, the petitioners have

filed this writ petition.

3. Heard learned counsel for petitioners and

learned counsel for respondent No.1.

4. Learned counsel for the petitioners

/defendants No.1 to 3 submits that respondent No.1-

plaintiff filed a suit for specific performance of

contract. In the said suit, respondent No.1 has

tendered an agreement of sale in evidence. The

petitioners raised objections on the ground that under

the agreement of sale, possession has been delivered

to respondent No.1 and stamp duty is liable to be paid

under Article 5(e)(i) of the Schedule to the Karnataka

Stamp Act, 1957. He further submits that the Trial

Court has committed an error in directing respondent

No.1 to pay penalty of only Rs.5/-. Hence, on these

grounds, he prays to allow the writ petition.

5. Per contra, learned counsel for respondent

No.1 supports the impugned order.

6. Perused the records and considered the

submissions made by learned counsel for the parties.

7. In order to consider the case in hand, it is

necessary to examine some of the provisions of the

Karnataka Stamp Act, 1957 (hereinafter referred to

'the Act' for brevity) .

"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 send 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 an instrument shall send it in original to the Deputy Commissioner.

38. Deputy Commissioner's power to refund penalty paid under sub-section (1) of section 37.- (1) When 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 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.

39. Deputy Commissioner's power to stamp instruments impounded.- (1) When the Deputy Commissioner impounds any instrument under section 33, or receives any instrument sent to him under sub-section (2) of section 37, not being an instrument chargeable with a duty not exceeding fifteen paise only or a mortgage of crop Article [35] (a) of the Schedule chargeable under clause (a) or (b) of section 3 with a duty of twenty -five paise, he shall adopt the following procedure:--

        (a)   if   he      is    of    opinion     that        such
instrument         is    duly        stamped,      or     is        not

chargeable with duty, he shall certify by endorsement thereon that it is duly stamped, or that it is not so chargeable, as the case may be;

(b) if he is of opinion that such instrument is chargeable with duty and is not duly stamped he shall require the payment of the proper duty or the amount required to make up the same, together with a penalty of five rupees; or if he thinks fit; an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof, whether such amount exceeds or falls short of five rupees:"

Section 37 deals with instruments impounded or

dealt with. Section 39 deals with the power of Deputy

Commissioner to stamp the instruments. When the

Deputy Commissioner impounds that instrument

under Section 33 or he receives any instrument sent

to him under Sub Section (2) of Section 37, if he is of

the opinion that the instrument chargeable with the

duty or is not duly stamped, he shall require the

payment of the proper duty or the amount required to

make the same, together with a penalty of five

rupees or if he thinks fit an amount not exceeding ten

times the amount of proper duty or of the deficient

portion thereof, whether such amount exceeds or falls

short of five rupees. The discretion is conferred on

the Deputy Commissioner to impose a penalty less

than ten times the duty payable.

7.1. Therefore, Sections 38 and 39 of the Act

confers power on the Deputy Commissioner to levy

penalty on an insufficiently stamped instrument or an

instrument which is not stamped at all less than ten

times penalty payable thereof under Section 34 of the

Act. The discretion conferred on the Deputy

Commissioner should be exercised in the judicial

manner while exercising a quasi judicial power. The

discretion is vested with the Deputy Commissioner to

reduce the penalty and the same should be exercised

judicially. The Court has no jurisdiction to reduce the

penalty.

8. The Trial Court relying upon the judgment

rendered by the Co-ordinate Bench of this Court in

Govinde Gowda supra has passed the impugned

order. The said judgment has been overruled by the

Division Bench of this Court in the case of Digambar

Warty and Others v. District Registrar, Bangalore

Urban Dist. And Another reported in ILR 2013 KAR

2099, has observed at paragraph (58) which reads as

under :

"58. In view of the aforesaid judgment of the Apex Court, it is clarified that the observations made in the jdugment in K. Govinde Gowda's (AIR 2012 KAR 60) case should neither be treated as a binding by the learned Single benches of the High Court or subordinate courts and other judicial foras nor should that order be relied upon or made basis, for bypassing the principle led down in the case of J.S.Paramesh (AIR 2008 KAR 172) by the Division Bench of this Court"

In view of law laid down by the Division Bench of

this Court in the case of Digambar Warty supra, the

judgment rendered by the Co-ordinate Bench in K.

Govindegowda supra has no binding effect. The

Trial Court committed an error in placing reliance on

the judgment of K.Govindegowda supra.

9. In the instant case, it is not in dispute that

respondent No.1 has filed a suit for specific

performance of contract. Respondent No.1 has

produced a copy of the agreement of sale marked as

Annexure-B. From the perusal of Annexure-B, it is

apparent that under the agreement of sale, possession