1. The plaintiff is before this Court in this writ petition
"a. Call for the records pertaining to
Impugned Order dated 30.09.2023, order dated
14.12.2021 and Clarification dated 14.12.2021 at
Annexure-'A', 'A1' passed by the Learned Additional
Senior Civil Judge and JMFC, Channarayapatna, in
O.S.No.94/2020 and
b. Issue Writ or Order or Direction in the
nature of Certiorari Quashing the Impugned Order
dated 30.09.2023 passed by the Learned Additional
Senior Civil Judge and JMFC, Channarayapatna,
Hassan in O.S.No.94/2020, directing the Plaintiff to
pay the balance deficit Stamp Duty Plus Penalty on
the Sale Agreement dated 15.04.2010 consequent
upon Order dated 14.12.2021 and Clarification
dated 14.12.2021 the Impugned Orders are
herewith produced and marked as Annexure-'A, A1'
respectively,
c. Grant such other order or reliefs as this
Hon'ble Court deems fit in the interest of justice
and equity".
NC: 2025:KHC:40879
HC-KAR
2. Heard the learned counsel for the petitioner,
learned counsel for the respondent and learned Addl.
Government Advocate for the State.
3. The plaintiff had filed O.S.No.94/2020 before the
jurisdiction civil Court at Channarayapatna seeking the relief of
specific performance of the agreement dated 15.04.2010 and
the defendant after entering appearance in the said suit had
filed a detailed written statement. The defendant had also
raised objection before the Trial Court regarding insufficiency of
stamp duty paid on the agreement for sale dated 15.04.2010
and considering the objection raised on behalf of the defendant,
the Trial Court vide the order dated 14.12.2021 had directed
the plaintiff to pay stamp duty on the agreement for sale dated
15.04.2010 provided under Article 5(e)(i) of the Karnataka
Stamp Act, 1957 (for short, the 'Act'). Pursuant to the said
order, the document was referred to the competent authority
who had determined the deficit stamp duty and penalty payable
as Rs.1,29,800/-. It appears that subsequently the plaintiff had
paid the deficit stamp duty and penalty before the Trial Court
on 09.01.2023 and thereafter further objection was raised by
NC: 2025:KHC:40879
HC-KAR
the defendant stating that competent authority had erred in
holding that the petitioner was liable to pay stamp duty as
provided under Article 5(e)(ii) of the Act which the Trial Court
in its earlier order had specifically held that the petitioner was
liable to pay stamp duty under Article 5(e)(i) of the Act while
the Trial Court thereafter had passed the order dated
30.09.2023 and has held that the plaintiff is liable to pay
balance deficit stamp duty plus penalty at Rs.3,49,404/- on the
agreement for sale dated 15.04.2010 and being aggrieved by
the aforesaid two orders dated 30.09.2023 and 14.12.2021 the
petitioner / plaintiff is before this Court.
4. Learned counsel for the petitioner submits that in
the schedule of the plaint there are two items of property and
the said two items of property are schedule properties in the
agreement for sale dated 15.04.2010. The petitioner was in
permissible possession of item no.2 of suit schedule property
and agreement schedule property. Since the possession of the
said property was not handed over to the petitioner under the
agreement for sale, he is not liable to pay stamp duty as
provided under Article 5(e)(i) of the Act. The competent
NC: 2025:KHC:40879
HC-KAR
authority has therefore rightly held that the petitioner is liable
to pay stamp duty as provided under Article 5(e)(ii) of the Act.
The Trial Court has failed to appreciate this aspect of the
matter and has erred in passing the impugned order directing
the petitioner to pay stamp duty and penalty on the instrument
as provided under Article 5(e)(i) of the Act.
5. Per contra, learned counsel for the respondent
submits that the order dated 14.12.2021 was not challenged by
the petitioner earlier and competent authority had no
jurisdiction to hold that the petitioner is liable to pay stamp
duty as provided under Article 5(e)(ii) of the Act when the Trial
Court had specifically held that the petitioner was liable to pay
stamp duty as provided under Article 5(e)(i) of the Act. He has
placed reliance in the case of J. PRAKASH AND SMT. M.T.
KAMALAMMA AND OTHERS - 2008(2) KLJ 202 and also the
judgment of this Court in the case of J. RAMAPPA V.
J.VENKATARAMANA SETTY in W.P.No.100282/2021
disposed of on 05.10.2023. and has prayed to dismiss the
petition.
NC: 2025:KHC:40879
HC-KAR
6. Article 5(e) of the Act reads as follows:
5. Agreement or (its records or) Memorandum
of an Agreement
(a) xxx
(b) xxx
(c) xxx
(d) xxx
[(e) If relating to sale. of Same duty as a conveyance
immovable property wherein (No. 20) on the market value
part performance of the of the property. [Provided
contract that, where a deed of
cancellation of earlier
agreement is executed by
(i) possession of the and between the same
property is delivered or is parties in respect of the
agreed to be delivered same property and if proper
[before] executing the stamp duty has been paid on
conveyance such agreement, then the
duty on such "deed of
[(ii) possession of the property cancellation" shall not
is not delivered exceed rupees five hundred.]
Explanation-I.-When a Ten paise for every one
reference, of a Power of hundred rupees or part
Attorney granted separately by thereof on the market value
the seller to the purchaser in equal to the amount of
respect of the property which is consideration subject to a
the subject matter of such maximum of rupees twenty
agreement, is made in the thousand but not less that
agreement, then the possession rupees five hundred:
of the property is deemed to
have been delivered for the
purpose of this clause.
Explanation-II.- For the
purpose of clause (h) where
NC: 2025:KHC:40879
HC-KAR
subsequently conveyance or
mortgage as the case may be,
is executed between the same
parties in pursuance of such
agreement or its records or
memorandum, the stamp duty,
if any, already paid and
recovered on the agreement or
its record or memorandum shall
be adjusted towards the total
duty leviable on the
conveyance or mortgage, as
the case may be.
(b)Where such agreement or
memorandum of an agreement
doesnot resate to monetary
transactions or transactions not Fifty Rupees
susceptible to valuation in
terms of money
7. From a reading of the aforesaid provision of law it is
very clear that, if the possession of property is delivered or is
agreed to be delivered before executing the conveyance which
relates to the sale of immovable property in part performance
of the contract, then the stamp duty payable would be as
provided under Article 20 of the Act treating the document as if
it is a conveyance and stamp duty would be payable on the
market value of the property. If the possession of the property
is not delivered in part performance of the contract then the
NC: 2025:KHC:40879
HC-KAR
stamp duty payable would be as provided under Article 5(e)(ii)
of the Act.
8. A reading of the agreement for sale dated
15.04.2010 would go to show that, the petitioner was already
in possession of item no.2 of the suit schedule property which
is also item no.2 in the schedule to the agreement for sale
dated 15.04.2010 and he was running a business in the said
property in the name of 'N.M.Timber'. Therefore, it is apparent
that the petitioner was not put in possession of item no.2 of the
suit schedule property in part performance of the agreement
for sale dated 15.04.2010 nor it is agreed under the said
agreement that in part performance of the said agreement the
petitioner will be put in possession of the property. This aspect
of the matter has not been properly appreciated by the Trial
Court and it had erred in holding vide its order dated
14.12.2021 that the petitioner / plaintiff was liable to pay
stamp duty on the aforesaid agreement for sale as provided
under Article 5(e)(i) of the Act.
9. Undisputedly, the petitioner is not in possession of
item no.1 of the suit schedule property and therefore insofar
NC: 2025:KHC:40879
HC-KAR
said item of land, stamp duty is liable to be paid only as
provided under Article 5(e)(ii) of the Act. Pursuant to order
dated 14.12.2021 passed by the Trial Court, instrument was
referred to the competent authority for the purpose of
determination of stamp duty payable and the competent
authority vide Annexure-D dated 31.10.2022 had held that the
petitioner is liable to pay deficit stamp duty and penalty of
Rs.1,29,800/- and the stamp duty was rightly levied by the
competent authority on the petitioner as provided under Article
5(e)(ii) of the Act.
10. Since the Trial Court vide its order dated
14.12.2021 has held that the petitioner was liable to pay stamp
duty as provided under Article 5(e)(i) of the Act, the defendant
once again had raised objection before the Trial Court
contending that competent authority was not justified in
holding that the petitioner was liable to pay stamp duty as
provided Article 5(e)(i) of the Act. It is under these
circumstances, the Trial Court vide the order impugned dated
30.09.2023 has held that the petitioner is liable to pay stamp
duty as provided under Article 5(e)(i) of the Act and
- 10 -
NC: 2025:KHC:40879
HC-KAR
accordingly had directed him to pay balance stamp duty and
penalty of Rs.3,49,404/-.
11. In my considered opinion since the possession of
item no.2 of the suit schedule property was handed over to the
petitioner much prior to the date of execution of the agreement
for sale and since the possession of property was not delivered
under the agreement nor it was agreed to be delivered before
executing the agreement in part performance of the contract,
the Trial Court was not justified in holding vide the orders
impugned in this petition that the petitioner is liable to pay
stamp duty on the instrument as provided under Article 5(e)(i)
of the Act. Since possession of the property is not delivered in
part performance of the contract nor is not agreed to be
delivered before executing conveyance in part performance of
the contract, the petitioner is liable to pay stamp duty only as
provided under Article 5(e)(ii) of the Act.
12. In the case of J.PRAKASH (supra) which arises
from a suit filed for specific performance of agreement, the
defendant had agreed to pay the plaintiff in possession of the
property in part performance of the contract and it is under
- 11 -
NC: 2025:KHC:40879
HC-KAR
these circumstances, it was held that the plaintiff was liable to
pay stamp duty as provided under Article 5(e)(i) of the Act.
13. In the case of J. RAMAPPA (supra) which also
arises from a suit for specific performance, the plaintiff
contended that he was put in possession under a family
settlement deed. In the said case, the agreement for sale
contained a recital indicating that the plaintiff was in possession
of the property. Settlement deed was dated 20.04.1994 and
agreement for sale was dated 10.09.2000. After execution of
settlement deed and before execution of sale agreement, no
independent documentary evidence was available on record to
substantiate that the plaintiff was put in possession of suit
schedule property much prior to execution of sale agreement.
Therefore, this Court had held that possession of the property
in the said case was under agreement for sale and accordingly
held that the petitioner is liable to pay stamp duty on the sale
agreement dated 15.04.2010 as provided under Article 5(e)(i)
of the Act. Therefore, the judgments in the case of J.PRAKASH
(supra) and J.RAMAPPA (supra) cannot be made applicable to
the facts and circumstances of the present case.
- 12 -
NC: 2025:KHC:40879
HC-KAR
14. Accordingly, the following:-
ORDER
(i) Writ petition is partly allowed.
(ii) The impugned order dated 30.09.2023 vide
Annexure-A passed by the Court of Addl.
Senior Civil Judge & JMFC, Channarayapatna
in O.S.No.94/2020 is set-aside.
(iii) The impugned order dated 14.12.2021 vide
Annexure-A1 passed by the Court of Addl.
Senior Civil Judge & JMFC, Channarayapatna
in O.S.No.94/2020 is set-aside insofar as it
relates to holding that petitioner / plaintiff is
liable to pay stamp duty as provided under
Article 5(e)(i) of the Act and it is upheld
insofar as it relates to impounding instrument
and directing the petitioner / plaintiff to pay
stamp duty on the agreement for sale dated
15.04.2010.
(iv) Since the petitioner undisputedly has paid
deficit stamp duty and penalty pursuant to
determination of stamp duty and penalty
payable on the instrument by the District
Registrar, Hassan in compliance of the order
dated 14.12.2021 passed by the Trial Court,
the Trial Court is directed to proceed with the
- 13 -
NC: 2025:KHC:40879
HC-KAR
suit in accordance with law and dispose of the
same as expeditiously as possible.
Sd/-
(S VISHWAJITH SHETTY)
JUDGE
NMS
