M/S Shankar Vittal Motor Company ... vs The State Of Karnataka
2023 Latest Caselaw 545 Kant

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
        DATED THIS THE 09TH DAY OF JANUARY, 2023
                         BEFORE
        THE HON'BLE MS. JUSTICE JYOTI MULIMANI
     WRIT PETITION No. 44961 OF 2013 (GM-ST/RN)
BETWEEN:

M/S. SHANKAR VITTAL MOTOR COMPANY LTD.,
ATTAVARA, MANGALORE
D.K. DISTRICT - 575 001.
REPRESENTED BY ITS MANAGING DIRECTOR
DR.A. PRASAD RAO.

                                             ... PETITIONER
(BY SRI. K. SHRIHARI., ADVOCATE)

AND:

1.     THE STATE OF KARNATAKA
       REPRESENTED BY ITS SECRETARY
       DEPARTMENT OF REVENUE
       M.S.BUILDING, AMBEDKAR VEEDHI
       BANGALORE - 560 001.

2.     THE INSPECTOR GENERAL OF REGISTRATION
       AND STAMPS, KANDAYA BHAVAN
       8TH FLOOR, K.R. ROAD
       BANGALORE - 560 001.

3.     THE SUB-REGISTRAR
       MANGALORE SUB-DIVISION
       MANGALORE
       D.K.DISTRICT - 575 001.

4.     THE DISTRICT REGISTRAR
       D.K. DISTRICT, MANGALORE - 575 001.

5.     M/S. ADITYA BIRLA RETAIL LTD.,
       HAVING ITS REGISTERED OFFICE AT
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     5 & 6TH FLOOR, SKYLINE ICON
     86/92, NEAR MITTAL INDUSTRIAL ESTATE
     ANDHERI KURLA ROAD
     ANDHERI (EAST)
     MUMBAI - 400 059.
     REPRESENTED BY ITS MANAGING DIRECTOR.
                                     ... RESPONDENTS

(BY SRI. V. SHIVAREDDY., HCGP FOR R-1 TO R-4
    SRI. D.R. RAVISHANKAR., SENIOR ADVOCATE FOR
    SRI. KETHAN KUMAR., ADVOCATE FOR R-5)


      THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
QUASH THE ENDORSEMENT DATED: 24.08.2013 PASSED BY
THE    INSPECTOR   GENERAL   OF    REGISTRATION   AND
STAMPS/RESPONDENT NO. 2 IN THE UNNUMBERED APPEAL
FILED BY THE PETITIONER HERE IN VIDE ANN-A AND
CONSEQUENTLY, QUASH THE ORDERS DATED:08.05.2013
PASSED     BY    THE    DISTRICT     REGISTRAR,   D.K.
MANGALORE/RESPONDENT     NO.4    AND   NOTICE   DATED:
03.08.2013 ISSUED BY THE DISTRICT REGISTRAR, D.K.
MANGALORE/RESPONDENT NO.4 TO THE PETITIONER VIDE
ANN-B & C RESPECTIVELY.


     THIS WRIT PETITION COMING ON FOR PRELIMINARY
HEARING IN 'B' GROUP, THIS DAY, THE COURT MADE THE
FOLLOWING:

                         ORDER

Sri.K.Shrihari., learned counsel for the petitioner,

Sri.V.Shiva Reddy., learned HCGP for respondents 1 to 4,

and Sri. D.R. Ravishankar. learned Senior counsel for

respondent No 5 has appeared in person.

2. The facts, in brief, are these:

The Petitioner is the owner of land non-agricultural

immovable properties situated in Sy.No.704, 726, and

725/2 of Attavara Village, Mangalore Taluk. Petitioner has

constructed a commercial complex namely "Ivory Enclave"

in which an area of 23,072 sq. ft on the ground floor,

25,089 sq. ft in the basement, 3580 sq. ft on the upper

cellar floor, and 469 sq. ft in the lower cellar floor was

offered for lease in favor of M/s.Aditya Birla Retail Ltd., -

the fifth respondent.

The fifth respondent is running a retail business,

wishing to open a retail outlet in Mangalore city, and

approached the petitioner to get the said building on lease.

Accordingly, the fifth respondent intimated to the

petitioner by way of a Letter of Intent dated 18.11.2008

notifying the terms and conditions upon which the fifth

respondent wanted the petitioner to agree upon. The letter

is nothing but the communication of terms of the lease

from the lessee's end of fixing security deposit as

Rs.95,28,660/- (Rupees Ninety Five Lakh Twenty-Eight

Thousand Six Hundred and Sixty only) and rents as

Rs.15,88,110/- (Rupees Fifteen Lakh Eighty Eight

Thousand One Hundred and ten only) per month, which

was amenable to further modification. It was agreed

between the parties to enter into a separate lease deed

once the terms were finalized. However, the said intent

could not materialize and the deal was dropped because of

the financial difficulties of the fifth respondent. An e-mail

was sent to the petitioner by the fifth respondent stating

that the talks as per the letter of Intent could not be

materialized.

As things stood thus, the fifth respondent filed Civil

Miscellaneous Petition as CMP No.61/2012 before this

Court and also filed an Arbitration Application before the

District Court at Mangalore. However, both cases have

been withdrawn by the fifth respondent.

The District Registrar, Dakshina Kannada District,

Mangaluru upon the complaint alleged/appears to have

been filed by an unknown person, passed an order on

08.05.2013 directing the petitioner to pay stamp duty on

the Letter of Intent without hearing the petitioner. The

District Registrar issued a notice to pay the stamp duty

upon the said Letter of Intent. The petitioner filed an

appeal before the Inspector General of Registration and

Stamps - the second respondent. The second respondent

issued an endorsement stating that there is no substantial

question of law arising in the said appeal and opined that

no grounds are made out to admit the appeal and

dismissed the appeal.

Under these circumstances, the petitioner has been

left with no other alternative and efficacious remedy and

has filed this writ petition under Articles 226 and 227 of

the Constitution of India.

3. Sri.K.Shrihari., learned counsel for the

petitioner in presenting his argument strenuously urged

that the District Registrar, D.K District, Mangalore has

erred in invoking the provision of Section 33 of the

Karnataka Stamp Act, 1957. He argued that an

understanding was made between the petitioner and the

fifth respondent regarding the lease. The fifth respondent

communicated to the petitioner notifying the terms and

conditions upon which the fifth respondent wanted the

petitioner to agree, by way of a Letter of Intent.

Learned counsel vehemently contended that the deal

was dropped because of the financial difficulties of the fifth

respondent. He argued that the District Registrar has failed

to understand the issue and impound the same.

Learned counsel Sri.K.Shrihari., drew the attention of

the Court that the petitioner and the fifth respondent are

not litigating the matter before the Court of law. Hence,

the action of impounding the Letter of Intent is

unsustainable in law.

Learned counsel placed reliance on the Judgment in

S.SURESH Vs. L.POTHE GOWDA AND OTHERS reported

in 2010 (5) KCCR 3371.

4. Sri.D.R.Ravishankar., learned Senior counsel

appearing on behalf of respondent No.5 in presenting his

argument strenuously urged that the fifth respondent

intimated the petitioner by way of a Letter of Intent dated

18.11.2008 notifying the terms and conditions upon which

the fifth respondent wanted the petitioner to agree.

Because of the financial crunch of the fifth respondent, the

talks were not materialized. Hence, they did not proceed

further in the matter.

Learned Senior counsel also argued that the deal

was dropped because of the financial difficulties of the fifth

respondent. An e-mail was sent to the petitioner by the

fifth respondent stating that the talks as per the Letter of

Intent could not be materialized. He drew the attention of

the Court to Section 33 of the Stamp Act to contend that

the whole process of impounding is untenable.

5. Sri.V.Shiva Reddy., learned HCGP justified the

order passed by respondents 2 and 4. He argued that the

fifth respondent had filed a Civil Miscellaneous Petition in

CMP No.61/2012 wherein the petitioner herein had taken

the ground that the Letter of Intent attracts stamp duty

and penalty. The fifth respondent withdrew the said case.

Learned HCGP vehemently contended that the Letter of

Intent attracts stamp duty and penalty. Accordingly, he

sought to justify the action and prayed for the dismissal of

the petition.

6. Heard, the contentions urged on behalf of the

respective parties and perused the writ paper and also

Annexures with utmost care.

Suffice it to note that the fifth respondent wished to

open a retail outlet in Mangalore city, and approached the

petitioner to get the building on lease. Accordingly, the

fifth respondent notified the terms and conditions upon

which the fifth respondent wanted the petitioner to agree.

The intention was to enter into the Lease Agreement in the

future. It is not in dispute that the talks could not

materialize and the deal was dropped because of the

financial difficulties of the fifth respondent. An e-mail was

sent to the petitioner by the fifth respondent stating that

the talks as per the letter of Intent could not be

materialized.

As things stood thus, the District Registrar

impounded the Letter of Intent based on an alleged

complaint. There are no particulars about the complaint

and also about the document which was brought to the

notice of the District Registrar.

It is relevant to note that the petitioner and the fifth

respondent have not initiated any action and there is no lis

between them. The law is well settled that impounding

arises only when documents are required to be stamped,

not stamped, or insufficiently stamped. As already noted

above, in the instant case the talks could not materialize

and the deal was dropped because of the financial

difficulties of the fifth respondent. The petitioner and the

fifth respondent exchanged a few communications. But the

District Registrar proceeded to exercise the statutory

powers based on a complaint alleged to have been given

by the unknown person and proceeded to impound the

document and imposed the stamp duty and penalty.

Nothing is brought to the notice of this Court by HCGP

about the details of the complaint and the alleged

document. I may venture to say that respondents 2 and 4

have failed to have regard to relevant considerations and

disregarded relevant matters. In the circumstances, the

entire action of impounding the document is unsustainable

in law.

The rule is issued. The result is that the Writ Petition

will be allowed. The writ of certiorari is ordered. The

Endorsement No.Kanunu/Itare/21/2013-14 dated

24.08.2013 passed by the Inspector General of

Registration and Stamps - second respondent vide

Annexure-A and the order dated 08.05.2013 in

No.Impound/52/2012-13 by the District Registrar, D.K.,

Mangalore - respondent No.4 & notice dated 03.08.2013

issued by respondent No.4 vide Annexures-B and C are

quashed.

Resultantly, the Writ Petition is allowed.

Sd/-

JUDGE TKN