Karnataka High Court

Smt. K Indiramma vs Smt. G Nagrathnamma on 4 March, 2025

Author: M.G.S. Kamal

Bench: M.G.S. Kamal

                                                -1-
                                                              NC: 2025:KHC:9264
                                                           WP No. 52984 of 2017




                           IN THE HIGH COURT OF KRNATAKA AT BENGALURU

                              DATED THIS THE 4TH DAY OF MARCH, 2025

                                              BEFORE
                               THE HON'BLE MR JUSTICE M.G.S. KAMAL
                             WRIT PETITION NO.52984 OF 2017 (GM-CPC)


                      BETWEEN:

                      SMT. K. INDIRAMMA,
                      W/O S. CHANDRA,
                      AGED ABOUT 43 YEARS,
                      RESIDING AT NO.203, 17TH CROSS
                      MALLESHWARAM,
                      BENGALURU-560 003.
                                                                   ...PETITIONER
                      (BY SRI. LEELADHAR H.P., ADVOCATE)

                      AND:

                      1.   SMT. G NAGRATHNAMMA,
                           W/O SIDDAGANGAIAH,
                           AGED ABOUT 33 YEARS,
Digitally signed by        WORKING AT GOVERNMENT MIDDLLE
AASEEFA PARVEEN
                           SCHOOL AS TEACHER,
Location: HIGH
COURT OF                   MATHAHALLI VILLAGE & POST,
KARNATAKA                  DASANAPURA HOBLI,
                           BENGALURU NORTH TALUK
                           AND ALSO AT NO.341, 9TH CROSS,
                           SARASWATHIPURAM MAIN ROAD,
                           MAHALAKSHMI LAYOUT,
                           BENGALURU-560 086.

                      2.   SMT. MANGALA
                           W/O MUNISWAMAIAH,
                           AGED ABOUT 34 YEARS,
                           RESIDING AT NO.13, 11TH CROSS
                           BHUVANESHWARI NAGAR
                              -2-
                                            NC: 2025:KHC:9264
                                       WP No. 52984 of 2017




     T DASARAHALLI,
     BENGALURU-560 057.

3.   SMT. CHANDRAKANTHAMMA,
     W/O. SRI KRISHNAPPA,
     MAJOR IN AGE,
     R/AT NEAR NEW CONSTRUCTING
     BUILDING NO.5,
     4TH BLOCK, 4TH MAIN ROAD,
     GORAGUNTEPALYA,
     BENGALURU-560 022.
                                             ...RESPONDENTS
(BY SRI.T.SESHAGIRI RAO, ADVOCATE FOR R1;
V/O. DATED 30.09.2024 SERVICE OF NOTICE
TO R2 HELD SUFFICIENT;
V/O. DATED 08.02.2023, NOTICE TO R3 HELD SUFFICIENT)

     THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF
THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE
ENTIRE RECORDS IN O.S.11181/2006 PENDING ON THE FILE
OF THE XI ADDL. CITY CIVIL JUDGE, BANGALORE CITY AND
QUASH THE OFFICE NOTE DATED 17.4.2017 PAYMENT OF
DUTY AND PENALTY CALCULATED BY THE OFFICE IN
O.S.11181/2006 ON THE FILE OF THE XI ADDL. CITY CIVIL
JUDGE, BENGALURU AT ANNEX-A1 AND ETC.

     THIS PETITION, COMING ON FOR PRELIMINARY
HEARING B- GROUP, THIS DAY, ORDER WAS MADE THEREIN
AS UNDER:


CORAM:    HON'BLE MR JUSTICE M.G.S. KAMAL


                       ORAL ORDER

The petitioner/plaintiff in O.S.No.11181/2006, which is

pending consideration on the file of XI Additional City Civil

Judge, Bengaluru City, is before this Court being aggrieved by

NC: 2025:KHC:9264

the order dated 23.10.2017 passed by the Trial Court

impounding document dated 1.2.2006 under the provisions of

Karnataka Stamp Act, 1957 with a direction to the plaintiff to

pay duty and penalty as calculated by the office.

2. Facts in brief are that the petitioner/plaintiff herein

had entered into an agreement of sale dated 4.4.2005 agreeing

to purchase the suit schedule property for a total consideration

of Rs.7,60,000/-. The petitioner/plaintiff had apparently paid

part of the sale consideration and had agreed to pay balance

sale consideration on or before the date of registration of the

deed of sale. It appears, subsequent to the agreement

petitioner paid balance sale consideration in several

installments and endorsement/shara in this regard was made

on the said agreement of sale and also on certain additional

stamp paper enclosed to the said agreement. Another

document dated 1.2.2006 under the heading "ಮ ೆ ಹ ಾಂತರ

ದೃ ೕಕರಣ ಪ ಾಣ ಪತ " ("Mane Hastantara Dhrudikarana Pramana

Patra") came to be executed between the petitioner and the

respondents which document referring to agreement of sale,

had provided that the petitioner/plaintiff herein had been

NC: 2025:KHC:9264

handed over/delivered the possession of the residential house

with a right to recover the rents and also to receive the

mortgage amount from the tenants/mortgagees.

3. Dispute arose between the parties resulting in the

petitioner/plaintiff filing the above suit for the relief of specific

performance. The aforesaid agreement of sale dated 4.4.2005

along with endorsement and the aforesaid document dated

1.2.2006 are filed as a suit documents. An application under

Section 151 of the Code of Civil Procedure came to be filed by

defendant No.3 seeking direction to the Trial Court to refer the

matter to the District Registrar, Bengaluru for determination of

duty and penalty payable on the aforesaid documents.

4. Objections to the said application came to be filed

by the plaintiff.

5. By order dated 23.10.2017 impugned in this writ

petition, the Trial Court held that the plaintiff is liable to pay

duty and penalty calculated by the office on the basis of the

consideration amount as mentioned in the document dated

4.4.2005. Though plaintiff was put in possession of the suit

property by the document dated 1.2.2006, which is nothing but

NC: 2025:KHC:9264

continuation of the document dated 4.4.2005. It is this order

that is put in question by the petitioner/plaintiff before this

Court.

6. Sri.H.P.Leeladhar, learned counsel appearing for

the petitioner/plaintiff reiterating the petition averments and

the grounds urged in the writ petition vehemently submits:

(a) that the suit is filed seeking specific performance of

the agreement of sale dated 4.4.2005 and not of document

dated 1.2.2006, since the agreement dated 4.4.2005 does not

contain any clause with regard to delivery of possession, the

Trial Court erred in directing the petitioner/plaintiff to pay the

duty and penalty.

(b) That even though document dated 1.2.2006

provides for delivery of possession of the property by the

defendants in favour of the plaintiff, said document not being

the principal document/instrument, the Trial Court ought not to

have held the said document dated 1.2.2006 to be the

document in continuation of the agreement dated 4.4.2005.

(c) He refers to Section 4 of the Karnataka Stamp Act,

1957 (hereinafter referred to as the 'Act' for short) to contend

NC: 2025:KHC:9264

only the principal document/instrument which shall be

chargeable with duty prescribed in the Schedule for

conveyance and no other document subsequent to the principal

document/instrument are liable for payment of stamp duty.

(d) That the stage of impounding the document is when

the same is tendered in evidence and not otherwise and that

the trial Court impounding the said document even before the

same is tendered for evidence has committed an error.

(e) The alternate submission being canvassed by the

learned counsel for the petitioner/plaintiff is that the Trial Court

erred in directing the Registry of the Court to calculate the

stamp duty without there being any authority or any provision

of law providing therefor. As such, such a direction is one

without jurisdiction. He submits calculation of duty and penalty

is the domain of the District Registrar which cannot be

exercised by the Trial Court. Hence, he submits that the order

passed by the Trial Court is per say illegal and unsustainable.

7. He relies upon the judgments of the Apex Court and

Co-ordinate Bench of this Court in support of his submissions;

NC: 2025:KHC:9264

(i) Seetharama Shetty Vs. Monappa Shetty reported in AIR 2004 SC 5327

(ii) Danappagouda Fakkiragouda Patil Vs. Kamallawwa and Another reported in 2006(4) KCCR 2439.

(iii) N.Srinivasa Vs. Srimurulesh reported in ILR(KAR)- 2014-0-4350.

(iv) B.C.Narayanaswamy and Others Vs. Makbulunnisa and Others reported in LAWS(KAR) 2015 6 370.

Hence, seeks for allowing the petition setting aside the

order passed by the Trial Court.

8. Sri.T.Seshagiri Rao, learned counsel appearing for

the respondents/defendants justifying the impugned order

vehemently submits;

(a) that the document dated 1.2.2006 cannot be read in

isolation to the contents of agreement dated 4.4.2005.

(b) The contention urged by the petitioner that only the

principal document/instrument namely agreement dated

4.4.2005 is required to be stamped and not the document

dated 01.02.2006 which is subsequent to the principal

document has to be rejected.

NC: 2025:KHC:9264

the plaintiff requires to be discouraged as the same is aimed at

denying the revenue to the State Exchequer.

(d) that the provisions of the Stamp Act has to be

construed strictly inasmuch as the same involves collection of

revenue to the State. Any method or device adopted by the

parties to deny the said payment of stamp duty has to be dealt

with seriously.

(e) He refers to Sections 33, 34, 37 and 38 of the

Stamp Act to submit that the documents requiring payment of

stamp duty once comes before the Authority which is

authorized to receive the same in evidence, the only option for

such authority including the Courts is, to impound the

document, collect the stamp duty and thereafter permit the

party relying upon the said document to lead evidence.

(f) He however fairly concedes the direction issued by the

Trial Court to calculate and to collect the stamp duty to the

Registry is inappropriate. Proper course has to be in terms of

the provisions of Section 39 of the Act. He submits that

impugned order to the extent impounding the said document

NC: 2025:KHC:9264

directing the party to pay the duty and penalty has to be

sustained. However, a direction can be issued to refer the

impounded document to the Registrar for adjudication and

payment of stamp duty.

9. Heard. Perused the records.

10. Facts as narrated above do not require any

iteration. However, in view of the specific contention urged by

learned counsel for the petitioner/plaintiff that a suit is based

only on the sale agreement dated 4.4.2005 and not on the

agreement dated 1.2.2006 and that the duty and penalty

payable if any, has to be considered based on the contents of

agreement dated 4.4.2005 alone, this Court is constrained to

look into the averments made in the plaint.

11. Paragraph No.13 of the plaint reads as under:

"13. It is further stated that in the scheduled property there are two tenants and 2 mortgagees with possession in different tenements and for them, the defendants owes the following amounts:

1.Gurunath Sonna (Mortgage) Rs. 50,000-00

2.Lakkappa (Mortgage) Rs. 35,000-00

3.Shekar (Tenant) (Advance Amount) Rs. 10,000-00

- 10 -

NC: 2025:KHC:9264

4.Veeresh (Tenant) (Advance Amount) Rs. 5,000-00 Total Rs. 1,00,000-00

The said amount was also taken into account of the plaintiff and adjusted towards the balance sale consideration amount payable by the plaintiff and in that connection, the defendant has empowered the plaintiff to collect the rent from the tenants and appropriate the same by the plaintiff. In that connection a separate document came to be executed by the defendant in favour of the plaintiff on 1.2.2006.

The original of the same is produced herewith for kind perusal of this Hon'ble Court."

12. Document dated 1.2.2006 produced at 'Annexure-

E' to the writ petition reads as under:

"ಮ ೆ ಹ ಾಂತರ ದೃ ೕಕರಣ ಪ ಾಣ ಪತ

ಾಂಕ 01.02.2006 ರಂದು ೕಮ . ಾಗರತ ಮ ೋಂ. ದಗಂಗಯ , ನಂ. 341, 9 ೇ ಾ ". ಸರಸ$ ಪ%ರ ಮುಖ ರ ೆ, ಮ'ಾಲ)*ೕ +ೇಔ-, .ೆಂಗಳ0ರು- 560 086 ಆದ ಾನು ೕಮ . ೆ. ಇಂ ರಮ ೋಂ. ಎ". ಚಂದ , ನಂ. 293, 17 ೇ ಾ ", ಮ+ೆ5ೕಶ$ರಂ, .ೆಂಗಳ0ರು-560 003 ಆದ ಇವ89ೆ

:ಾಸರಹ;< ನಗರ ಸ=ೆ, ಾಗಲಗುಂ> 9ಾ ಮದ, 123 ಸ?ೆ@ ನಂಬ8ನ ಜCೕDನ 8 ೇ D?ೇಶನದE5 ಕ>Fರುವ ಮ ೆ 2263 ೇ ನಂಬGಾH IಾJೆKಾHರುವ ನನ ಸ$Jಾದ ೕ>ನ ಮ ೆಯನು ಶುದL ಕ ಯಪತ ೆM ರೂ. 7,60,000- (ಏಳO ಲP ಅರವತು ಾRರ) ಗ;9ೆ ಶುದL ಕ ಯ ೆM ಬGೆದು ೊಡ+ಾHದು, 8T ೆUೕಷW ಆಗದ ಪ ಯುಕ ಇನೂ ಮ ೆಯು ನನ ಾ$XೕನದE5Yೕ ಇದು ಇನು ಮುಂ:ೆ ಈ [ೕಲMಂಡ ಾಂಕ ಂದ ನನ ಮ ೆಯನು ೕಮ . ೆ. ಇಂ ರಮ ರವ89ೆ ಹ ಾಂತ8ಸುವ%:ಾH ಈ ಮೂಲಕ ಪ ಾ\ಕ?ಾH ದೃ ೕಕ8ಸುJೇ ೆ.

ಈ ನನ ೕ>ನ ಮ ೆಯE5 4 ಮ ೆಗ;ದು ಅದರE5 ಗುರು ಾಥ ೊನ ಮತು ಲಕMಪ^ ಅವರ ಮ ೆಗಳನು =ೋಗ ೆM ೊಡ+ಾHದು ಅವರ =ೋಗ ದ _ತ ಕ ಮ?ಾH ರೂ. 50,000/- ಮತು ರೂ. 35,000/- ಗಳನು ಪ`ೆ ರುJೇ ೆ. aೇಖb ಮತು RೕGೇc ಅವ89ೆ 2 ಮ ೆಗಳನು .ಾd9ೆ9ೆ Dೕಡ+ಾHದು ಅವ8ಂದ ಪ`ೆದ ಮುಂಗಡ ಹಣ ರೂ. 10,000/- ಮತು ರೂ. 5,000/- ಆHದು ಅವ8ಂದ .ಾd9ೆ ರೂ. 1,100/-

- 11 -

NC: 2025:KHC:9264

ಮತು ರೂ.750 ಪ ಂಗಳO ಪ`ೆಯು :ೇ ೆ. ಒಟುF ಈ ಾಲುM ಮ ೆಗಳ ಮುಂಗಡ ಹಣ ರೂ.1,00,000/- ಗಳನು ಪ`ೆ ರುJೇ ೆ.

ಇನು ಮುಂ:ೆ ಈ [ೕಲMಂಡ ಸದ8 ಮ ೆಯನು ಈ [ೕಲMಂಡ ಾಂಕ ಂದ Dಮ ವಶ ೆM ಹ ಾಂತ8ಸುJೇ ೆ. ಇನು ಮುಂ:ೆ .ಾd9ೆ ವ9ೈGೆ ಮತು ಅದರ ಮುಂಗಡ ಹಣವನು hಾವ ಸುವ ಜ?ಾ.ಾ8 Dಮ :ಾH:ೆ. Kಾವ%:ೇ ತಂiೆ ತಕGಾರು ಾಡ:ೇ Dಮ ವಶ ೆM ಮ ೆಯನು ಹ ಾಂತ8ಸುJೇ ೆಂದು ಪ ಾ\ಕ?ಾH ದೃ ೕಕ8ಸುJೇ ೆ. ಇನು ಮುಂ:ೆ .ಾd9ೆಯವರು ಮತು =ೋಗ ದವರು Dಮ jೊJೆಯE5 ವ ವಹ8 ೊಂಡು 'ೋಗತಕMದು. ನಮಗೂ .ಾd9ೆಯವ8ಗೂ Kಾವ%:ೇ ವ ವ'ಾರRರುವ% ಲ5. ಅವರೂ ಕೂಡ Dಮ jೊJೆ ವ ವಹ8ಸಲು ಒk^:ಾGೆಂದು ಅದನು ಅದರ ಸlಯ ಮೂಲಕ ವ ಕಪd ರುJಾGೆ."

(Underlining by this Court)

13. It is clear from the averments made in paragraph

13 of the plaint and the contents of the document dated

1.2.2006 extracted above that the said document has come

into existence between the parties only in furtherance to and

on the basis of the agreement of sale dated 4.4.2005 under

which the plaintiff agreed to purchase the suit property for a

sum of Rs.7,60,000/-. The language employed in the aforesaid

document would clearly indicate the parties had entered into

the said arrangement dated 01.02.2006 in furtherance to the

agreement dated 4.4.2005 with regard to mode of payment

and existence of sale consideration. It is under these

circumstances, parties have agreed and confirmed delivery of

possession of the property.

- 12 -

NC: 2025:KHC:9264

14. Vehement submission made by learned counsel for

the petitioner/plaintiff with regard to Section 4 of the Stamp

Act is untenable. Section 4 of the Stamp Act is extracted

hereunder:

Section 4: Several instruments used in single transaction of sale, mortgage or settlement.-(1) Where, in the case of any sale, mortgage or settlement, several instruments are employed for completing the transaction, the principal instrument only shall be chargeable with the duty prescribed in the Schedule for the conveyance, mortgage, or settlement, and each of the other instruments shall be chargeable with a duty of [one hundred] rupees instead of the duty (if any) prescribed for it in the Schedule.

(2) The parties may determine for themselves which of the instruments so employed shall, for the purpose of sub-section (1), be deemed to be the principal instrument:

Provided that the duty chargeable on the instrument so determined shall be the highest duty which would be chargeable in respect of any of the said instruments employed.

15. Though Sub- Section (2) of Section 4 provides that

parties may determine for themselves which of the instruments

be deemed to be the principal instrument for the purpose of

payment of stamp duty, since the plaintiff has specifically

pleaded in paragraph No.13 of the plaint with regard to she

having been put in possession of the suit property in terms of

- 13 -

NC: 2025:KHC:9264

document dated 1.2.2006, which itself came into existence in

furtherance to the agreement of sale dated 4.4.2005 and since

both the documents are relied upon by the plaintiff, this Court

is unable to accept the contentions of the learned counsel for

the petitioner that it is only the agreement dated 04.04.2005

has to be looked into and not the subsequent document. Since

the plaintiff has based the suit on all these documents, these

documents has to be read as one single transaction though

entered into at different level at different point of time.

16. Also necessary to note that what is contemplated

under Section 4 of the Act is instrument of "sale" which is

different from instrument regarding "agreement of sale". The

term "Sale" is not defined under the Act, however the same is

included within the definition of the term "Conveyance" as

found in Section 2(d) of the Act which reads as under:

"Section 2(d) "conveyance" includes,-

(i) a conveyance on sale,

(ii) every instrument,

(iii) every decree or final order of any civil court,

(iv) every order made by the High Court under section 394 of the Companies Act, 1956 in respect of amalgamation of Companies,

- 14 -

NC: 2025:KHC:9264

by which property, whether moveable, or immoveable or any estate is transferred to, or vested in, any other person, and which is not otherwise specifically provided for by the Schedule;

"Sale" and "Contract for Sale" has been defined under Section 54 of the Transfer of Property Act which reads as under:

54. "Sale" defined.--"Sale" is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.

Sale how made.--Such transfer, in the case of tangible immoveable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.

In the case of tangible immoveable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.

Delivery of tangible immoveable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.

Contract for sale.--A contract for the sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, of itself, create any interest in or charge on such property.

17. In the light of the aforesaid provisions of law and the

facts involved in this case, the agreement of sale dated

04.04.2005 cannot be considered as Principal Instrument

effecting the sale as contemplated under Section 4 of the Act.

- 15 -

NC: 2025:KHC:9264

18. Relevant also to refer to Sections 33 and 34 of the

Act which places complete embargo on admissibility of the

instrument which is insufficiently stamped. The said Section is

extracted hereunder:

Section 33. Examination and impounding of instruments.

(1)Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an officer of police, before whom any instrument, chargeable in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same.(2)For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him, in order to ascertain whether it is stamped with a stamp of the value and description required by the law in force in the [State of Karnataka] [Adapted by the Karnataka Adaptations of Laws Order, 1973 w.e.f. 1.11.1973] when such instrument was executed or first executed:Provided that,-(a)nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898;(b)in the case of a Judge of the High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints in this behalf.(3)For the purposes of this section, in cases of doubt, the Government may determine,-(a)what offices shall be deemed to be public offices; and(b)who shall be deemed to be persons in charge of public offices.

Section 34. Instruments not duly stamped inadmissible in evidence, etc.-No instrument

- 16 -

NC: 2025:KHC:9264

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 not being an instrument chargeable [with a duty not exceeding fifteen paise] only, or a mortgage of crop Article 2[35](a) of the Schedule chargeable under clauses

(a) and (b) of Section 3 with a duty of twenty-five paise shall, subject to all just exceptions, be admitted in evidence on payment of the duty with which the same is chargeable, or, in the case of an 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) where a contract or agreement of any kind is effected by correspondence consisting of two or more letters and any one of the letters bears the proper stamp, the contract or agreement shall be deemed to be duly stamped;

(c) nothing herein contained shall prevent the admission of any instrument in evidence in any proceeding in a Criminal Court, other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898;

(d) nothing herein contained shall prevent the admission of any instrument in any Court when such instrument has been executed by or on behalf of the Government, or where it bears the certificate of the [Deputy Commissioner] as provided by Section 32 or any other provision of this Act [and such certificate has not been revised in exercise of the powers conferred by the provisions of Chapter VI].

- 17 -

NC: 2025:KHC:9264

19. Also relevant to refer to Article 5(e) of the Act,

which reads as under:

Article 5(e): if relating to sale of immovable property wherein part performance of the contract.

(i) possession of the property is delivered or is agreed to be delivered [before] executing the conveyance

Same duty as a conveyance (No. 20) on the market value of the property:

[Provided that, where a deed of cancellation of earlier agreement is executed by and between the same parties in respect of the same property and if proper stamp duty has been paid on such agreement, then the duty on such "deed of cancellation" shall not exceed rupees five hundred.]

ii) possession of the property is not delivered Ten paise for every one hundred rupees or part thereof on the market value equal to the amount of consideration subject to a maximum of rupees twenty thousand but not less than rupees five hundred:

[Provided that the duty paid on power of attorney under Articles 41(e) or 41(eb), as the case may be, is adjustable towards the duty payable on agreement for sale under Article 5(e) instrument of

- 18 -

NC: 2025:KHC:9264

sale or transfer, as the case may be, executed between the same parties and in respect of the same property.

20. Cumulative reading of the averments made in the

plaint, documents relied upon and the relevant provisions of

the Act noted above would indicate, that an

agreement/transaction can be entered into between the parties

under more than one document. All that is required is one of

the documents forming part of the same transaction should be

sufficiently stamped. In such an event all documents forming

part of the transaction is capable of being received as

evidence. In the instant case since document dated

01.02.2006 is part of the document dated 04.04.2005, and

same being not sufficiently stamped cannot be taken in

evidence unless sufficient stamp duty is paid thereon.

21. The other contention raised is that the document can

be impounded only when they are tendered in evidence and

not otherwise also cannot be countenanced inasmuch as it is

settled position of law that under Section 33 of the Act power is

vested in the Court to impound the document if it is

insufficiently stamped the moment it is produced before the

- 19 -

NC: 2025:KHC:9264

Court. Under Section 34 of the Act power to impound is

provided when the document is received in evidence. Thus, a

Court has power to impound the document even before the

same is tendered in evidence.

22. In view of the above, the contentions in this regard

urged by the learned counsel for the petitioner is rejected.

Further the judgments, relied upon by the learned counsel for

the petitioner in support of his contentions are of no avail as

they are factually distinguishable.

23. With regard to the contentions urged by the

learned counsel for the petitioner regarding validity of the

impugned order to the extent of directing the registry to

calculate the stamp duty and penalty, the Apex Court under

similar fact situation of the matter dealing with the scheme of

the Act and the power of the Court to impound the document

and collect the stamp duty, at paragraph No.21.1.1 and 22 of

its judgment in the case of Seetharama Shetty Vs.Monappa

Shetty reported in AIR 2024 SC 5327 has held as under:.

"21.1.1. The person who intends to rely on an insufficiently/ improperly stamped instrument has option to submit to the scope of Section 34 of the

- 20 -

NC: 2025:KHC:9264

Act , pay duty and penalty. The party also has the option to directly move an application under Section 39 of the Act before the District Registrar and have the deficit stamp duty and the penalty are paid, the impounding effected under Section 35 of the Act is released and the instrument available to the party for relying as evidence. In the event, a party prefers to have the document sent to the deputy commissioner for collecting the deficit stamp duty and penalty, the Court/ Every Person has no option except to send the document to the District Registrar. The caveat to the above is that, before the Court/Every Person exercises the jurisdiction under Section 34 of the Act, the option must be exercised by a party."

22. Reverting to the circumstances of the case by keeping in perspective the steps summarized in the preceding paragraph, we notice that, before the stage of admission of the instrument in evidence, the respondent raised an objection on the deficit stamp duty. Therefore, it was the respondent who required the suit agreement to be impounded and then sent to the District Registrar to be dealt with under Section 39 of the Act. In this case, the respondent desired the impounding of the suit agreement and collect the deficit stamp duty and penalty. The trial court is yet to exercise its jurisdiction under Section 34 of the Act. On the contrary, the trial court has called for a report from the District Registrar, so for all purposes, the suit instrument is still at one or the other steps summed up in paragraph 21. Therefore, going by the request of the respondent, the option is left for decision of the District Registrar. Contrary to these admitted circumstances, though the suit instrument is insufficiently stamped, still the penalty of ten times under Section 34 of the Act is imposed through the impugned orders. The imposition of penalty of ten times at this juncture in the facts and circumstances of this case is illegal and contrary to the steps summed up in paragraph 21. The instrument is sent to the District Registrar, thereafter the District Registrar in exercise of his jurisdiction under Section 39 of the Act, decides the quantum of stamp duty and

- 21 -

NC: 2025:KHC:9264

penalty payable on the instrument. the appellant is denied this option by the impugned orders. It is trite law that the appellant must pay what is due, but as is decided by the District Registrar and not the Court under Section 34 of the Act."

24. Even in the present case it is upon the application

made by defendant No.3 who is the respondent No.3 in this

petition the trial Court passed the impugned order impounding

the document and directing payment of duty and penalty even

before exercise of its power under Section 34 of the Act. In the

light of the above decision of the Apex Court, this Court is of

the view the order to the extent directing the petitioner herein

to pay the stamp duty and penalty as calculated by the office is

an error requiring interference.

25. For the aforesaid reasons, the petition is partly

allowed.

Order of the Trial Court dated 23.10.2017 to the extent