2. The plaintiff has filed the suit for specific
performance. The Court has taken suo-motu
proceedings for impounding the agreement dated
12.03.2018 relied upon by the plaintiff and impounded
the documents and calculated that the plaintiff has to pay
stamp duty of Rs.52,475/- and penalty in total plaintiff
has been ordered to pay a sum of Rs.5,71,615/-.
(iv) Other than that, all objections available to
the respondents is left open for consideration."
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6. In pursuance of the aforesaid order passed by this
Court, the trial Court passed the impugned order directing the
Agreement dated 12.03.2018 as well as the Joint Development
Agreement dated 14.06.2017 to be sent to the District Registrar to
determine deficit stamp duty and penalty by holding as under:
ORDERS ON PAYMENT OF STAMP DUTY AND
PENALTY:
The plaintiff has filed this suit seeking the relief of
Specific Performance of Contract and the case is set down
for evidence on behalf of the plaintiff and at this juncture,
the plaintiff has produced Sale Agreement dated
18.06.2017, 12.03.2018 and an agreement with respect to
development of schedule property dated 14.06.2017. The
learned counsel for the defendant objected to mark the said
documents as the plaintiff has not paid the proper stamp
duty on those documents.
2. This Court on 08.11.2024 ordered the plaintiff to
pay necessary stamp duty and penalty of Rs.5,71,615-00
on the sale agreement dated 12.03.2018. Against the said
order the plaintiff preferred writ petition before the Hon'ble
High Court of Karnataka in W.P.No.31603/2024 and the
Hon'ble High Court directed this Court to send the
agreement dated 12.03.2018 to the District Registrar to
determine the deficit stamp duty and penalty. The learned
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counsel for the defendant further argued that not only the
sale agreement dated 12.03.2018, but the development
agreement dated 14.06.2017 also needs to be sent to the
District Registrar to determine the deficit stamp duty and
penalty. It is specifically argued that, since the said
agreement is a development agreement and, as per Article
5(f) of the Karnataka Stamp Act, the plaintiff has to pay
necessary Stamp Duty and Penalty on the said develop
agreement also.
3. On the other hand, the learned counsel for the
plaintiff submitted that the said agreement need not to be
sent to the District Registrar to collect the necessary duty
and penalty and the Hon'ble High Court of Karnataka has
directed only to send the Sale agreement dated 12.03.2018
and prays to send only the said agreement dated
12.03.2018 accordingly, to the District Registrar to
determine the deficit stamp duty and penalty. On going
through the order passed in W.P.No.31603/2024, Hon'ble
High Court of Karnataka has directed this Court to send the
agreement dated 12.03.2018 to the District Registrar to
determine the deficit stamp duty and penalty. Further the
Hon'ble High Court of Karnataka also has ordered that all
objections available to the respondents are left open for
consideration. Accordingly, the defendant has taken
contention that the development agreement dated
14.06.2017, also needs to be sent to the District Registrar
for determination of deficit stamp duty and penalty. As
rightly argued by the learned counsel for the defendant, the
plaintiff also relied upon the said development agreement
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dated 14.06.2017. As per Article 5(f) of Karnataka Stamp
Act, the plaintiff also has to pay necessary stamp duty and
penalty since it is an unregistered document.
4. The provisions of Article 5(f) states that, if the
description of instrument relating to giving authority or
power to a developer by whatever name called, for
construction or, development or sale or transfer (in any
manner what so ever) of any immovable property, the
stamp duty is to be paid on the market value of the property.
As such, here in this case also the plaintiff is relying upon
the said agreement dated 14.06.2017 and he has to pay
necessary stamp duty and penalty along with sale
agreement dated 12.03.2018. Hence, I proceed to pass the
following:
ORDER
Office is hereby directed to send the agreement
dated 12.03.2018 development agreement and dated
14.06.2017 to the District Registrar to determine the deficit
stamp duty and penalty.
Further the District Registrar is requested to
determine the necessary stamp duty and penalty on the
above said agreement deeds within short period and submit
the report as early as possible within next date of hearing.
Call on 03.05.2025."
7. Learned counsel for the petitioner submits that having
regard to the earlier order passed in WP No.31603/2024, directing
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the District Registrar to calculate/quantify the deficient stamp duty
and penalty payable only on the agreement dated 12.03.2018, the
trial Court committed an error in directing one more document i.e.,
the Joint Development Agreement dated 14.06.2017 also to the
District Registrar, which is impermissible in law and contrary to the
earlier order passed by this Court and as such, the impugned order
insofar as it directs the Joint Development Agreement dated
14.06.2017 to be sent to the District Registrar for calculation of
deficit stamp duty and penalty deserves to be set aside.
8. Per contra, learned counsel for the respondents would
place reliance upon the provisions contained in Sections 33 and 34
of the Karnataka Stamp Act and the principles enunciated by the
Division Bench of this Court in the case of Sandra Lesley Anna
Bartels versus P. Gunavaty-ILR 2013 Kar 368, in order to point
out that the petitioner having undisputedly produced the Joint
Development Agreement dated 14.06.2017, the trial Court is fully
justified in directing the said document also to be referred to the
District Registrar for calculation of deficit stamp duty and penalty
and the impugned order passed by the trial Court does not warrant
interference by this Court in the present petition.
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9. It is well settled law that the moment a document is
produced before a Court or any Authority entitled/empowered in
law to receive evidence, the said Court/Authority would be suo
motu entitled to refer the matter to take necessary steps to
impound the said documents for the purpose of calculating the
deficit stamp duty and penalty in terms of Sections 33 and 34 of the
Karnataka Stamp Act.
10. In Gunavathy's case supra, the Division Bench of this
Court has categorically held that the said act of impounding and
referring the document for calculation of duty and penalty would be
exercisable irrespective of the fact as to whether the said document
is sought to be relied upon by the party producing the document or
not. In the said Gunavathy's case supra, the Division Bench held
as under:
This writ petition is referred to the Bench
pursuant to an order dated 11.10.2012 passed by
a learned single Judge of this Court.
2. The question that arose before the
learned Judge in the writ petition is in respect of
"impounding an insufficiently stamped document".
According to the defendant, in view of Section 33
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of the Karnataka Stamp Act, 1957, the moment an
insufficiently stamped document is produced before
the Court, Court has to impound the same. It was
contended by the plaintiff that, the question of
impounding of an insufficiently stamped document
would come into play only when a party intending to
rely upon such document tenders in his evidence.
3. The learned City Civil Judge
considering the rival contentions relying upon the
judgment of this Court in Lakshminarayanachar -
vs- Narayan and another reported in 1969 (2) MLJ
299 rejected the contention of the defendant
holding that, Court can impound the document
only when the same is tendered during the course
of the evidence.
4. Aggrieved by the same, the defendant
has filed the writ petition.
5. The learned single Judge having
noticed that, in K.Dinesh -vs- Kumaraswamy
another learned single Judge in
W.P.No.10441/2008 dated 30.08.2010 has ruled
that, a document can be impounded in terms of
Section 33 of the Karnataka Stamp Act, the
moment it comes to the attention of the Court
and the Court need not wait till the document is
tendered in evidence. Considering the conflict of
decisions in Lakshminarayanachar and K.Dinesh,
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he was of the opinion that the matter has to be
considered by a larger Bench. Accordingly, the
matter is listed before us.
6. We have heard the learned counsel
appearing for the parties.
7. In order to appreciate the rival
contentions and decisions relied upon by the
respective parties, we feel it appropriate to
consider the provisions of Sections 33 and 34 of
the Karnataka Stamp Act, 1957 which reads as
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 when
such instrument was executed or first
executed:
Provided that, -
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(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 office; and
(b) who shall be deemed to
be persons in charge of public
offices.
Instruments not duly stamped
inadmissible in evidence, etc. No
instrument 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, -
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(a) any such instrument not
being an instrument chargeable with
a duty not exceeding fifteen naye
paise) only, or a mortgage of crop
(Article (35)(a) of the Schedule)
chargeable under Clauses (a) and
(b) of Section 3 with a duty of
twenty- five naye 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 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) no thing 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
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Commissioner, 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).
8. This Court while considering the case
of Lakshminarayanachar has considered the
provisions of Sections 33 to 37 of the then Mysore
Stamp Act. In Paragraph No.5 of the judgment,
while considering sub-section (1) of Section 33 of
the Stamp Act, his Lordship Narayana Pai, J., as
he then was has ruled as hereunder:
"5. Under Sub-section (1) of Section 33
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".
There is no doubt that a Civil Court or
the Presiding officer of a Civil Court will
certainly answer the description of "a
person having by law authority to receive
evidence". The Munsiff in this case,
therefore, will be entitled to, or more
accurately, bound to impound
the document if by looking into it, he
entertains an opinion that it is liable to
stamp duty but that it is either not
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stamped at all or is insufficiently
stamped".
9. In Dinesh case, the learned single Judge
of this Court while considering the provisions of
Sections 33 to 38 and 41 of the Karnataka Stamp Act
and also other relevant provisions of the Registration
Act came to the conclusion that, in view of
Section 33 of the Karnataka Stamp Act, a Court
can impound the document without waiting till such
document is sought to be produced in evidence.
10. The respondent counsel has also relied
upon another judgment of this Court reported in 2010
(6) Kar.L.J. 166 (S.Suresh -vs- L.Pothe Gowda and
others) wherein the learned single Judge while
dealing with Section 34 came to the conclusion,
under what circumstances a document can be
impounded when the same is tendered in the
evidence. Considering all the three judgments
relied upon by the respective parties and
considering the provisions of Sections 33 and 34,
we are of the view that this Court in
Lakshminarayanachar case and Dinesh case while
considering the provisions of Section 33 has
clearly held that, a power is vested in the Court to
impound the document if it is insufficiently stamped
the moment it is produced before the Court. Under
Section 34 of the Act, when such a document is to
be received in evidence, the Court has got powers
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to impound the document before admitting the
document.
11. There are two different circumstances
under the Stamp Act for impounding a document;
(1) the Court has power to impound the
document, moment it appears to the Court that
such instrument is not duly stamped and (2) or to
wait till such document is tendered in the evidence.
A combined reading of Sections 33 and 34 clearly
reveal that a discretion is granted to the Court
either to impound the document under Section 33
before the same is tendered in evidence and even
if a document is not impounded under Section 33,
the Court is bound to impound the document when
the same is tendered in the evidence under
Section 34. In other words, the Court cannot say
that it will wait till the document is tendered in the
evidence. It is only an option given to Court to
exercise the power under Section 33 & 34 but
the difference between Sections 33 and 34 is that,
Section 34 can be enforced by a Court when a
document has to be received in the evidence but
Section 33 can be invoked not only by the Court, but
by every person invoked not only by the Court,
but, by every person in-charge of a public office. A
person in-charge of a public office has no power to
exercise the power vested under Section 34 of the
Act.
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12. Court cannot say that it would
impound the document only when the document is
tendered in evidence for marking. There may be
instances where duty and penalty payable may be
very high and the party may not choose to rely upon
such insufficiently stamped document in order to
avoid stamp duty and penalty. In such
circumstances, it would result in loss of revenue to
the exchequer. The power of impounding a
document is to collect stamp duty and penalty
whenever there is an escape of duty. Therefore,
when it is brought to the notice of the Court that a
document is insufficiently stamped, the Court
exercising its power under Section 33 of the Act
has to pass an order at the first instance for
impounding the document. Though there is a
discretion vested in the Court to exercise powers
under Sections 33 and 34 of the Act, no Court can
hold that it would wait till the document is tendered
in evidence. In such circumstances, there may be
chances of loss of revenue to the exchequer.
13. In the circumstances, we answer the
reference "holding that under Section 33 of the
Stamp Act, the moment an insufficiently stamped
instrument comes to the notice of the Court, the
same has to be impounded in accordance with
Section 33, whether the same would be relied
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upon by the party under Section 34 or not".
14. We further clarify that, on careful
reading of the judgment in Lakshminarayanachar's
case also this Court has held that the Court has
power to impound the document under Section
33. In this background, we are of the view that,
there is no conflict of judgments in interpreting
Section 33 but the question is when Sections 33 and
34 has to be exercised by the Court which have been
answered in the preceding paragraphs.
15. Accordingly, the writ petition is
allowed.
The order dated 07.07.2012 passed
on I.A.No.9 in O.S.No. 27376/2009 by the
City Civil Judge, Mayo Hall, Bangalore is
set aside directing the City Civil Judge,
Mayo Hall, Bangalore to impound the
document in accordance with Section 33 of
the Stamp Act and proceed with the matter
in accordance with law."
11. In the instant case, it is an undisputed fact that the
petitioner not only produced the sale agreement dated 12.03.2018,
which was directed to be referred to the District Register by this
Court in WP No.31603/2024, but the petitioner had also produced
the Joint Development Agreement dated 14.06.2017, which was
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also produced from his custody and possession. Under these
circumstances, notwithstanding the fact that the petitioner would
rely or not rely upon the said document, I am of the considered
opinion that in the light of the provisions contained under Sections
33 and 34 of the Karnataka Stamp Act and the principles
enunciated by the Division Bench in Gunavathy's case supra, the
trial Court was fully justified in directing both documents i.e., the
Agreement dated 12.03.2018 and Joint Development Agreement
dated 14.06.2017 for calculation/determination of deficit stamp duty
and penalty payable on both the documents.
12. In view of the aforesaid facts and circumstances, upon
re-appreciation, re-evaluation and reconsideration of the entire
material on record, I am of the considered opinion that the
impugned order passed by the trial Court cannot be said to suffer
from any illegality or infirmity nor can the same be said to be
capricious or perverse or having occasioned failure of justice,
warranting interference by this Court in exercise of its jurisdiction
under Article 227 of the Constitution of India as held by the Apex
Court in the cases of Radhey Shyam Vs. Chhabi Nath - (2015) 5
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SCC 423, K.P. Natarajan Vs. Muthalammal - AIR 2021 SC 3443
and Mohammed Ali Vs. Jaya - (2022) 10 SCC 477.
13. In the result, I pass the following:
ORDER
i) The petition is hereby dismissed.
ii) Liberty is reserved in favour of the petitioner to
approach this Court once again in the event he is aggrieved by the
calculation of stamp duty and penalty adjudicated upon by the
authorities.
Sd/-
(S.R.KRISHNA KUMAR)
JUDGE
MDS
List No.: 1 Sl No.: 40
