Ramani vs Icici Bank
2021 Latest Caselaw 15681 Ker

                   IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                     PRESENT

                      THE HONOURABLE MRS. JUSTICE M.R.ANITHA

              FRIDAY, THE 30TH DAY OF JULY 2021 / 8TH SRAVANA, 1943

                              OP(C) NO. 2361 OF 2013

                OS 245/2011 OF II ADDITIONAL SUB COURT,ERNAKULAM,

PETITIONERS

     1        Mrs.RAMANI
              AGED 58,W/O.LATE REGHUVARAN.K.K,PERMANENTLY RESIDING AT SREEHARI
              ARACKAL HOUSE, KANIYAMPUZHA ROAD, EROOR DESOM,NADAMA VILLAGE,
              KANAYANNUR TALUK,ERNAKULAM DISTRICT - 682 306.
     2        MS.DRISYA
              AGED 30, D/O.LATE RAGUVARAN.K.K,PERMANENTLY RESIDING AT SREEHARI
              ARACKAL HOUSE, KANIYAMPUZHA ROAD, EROOR DESOM, NADAMA VILLAGE,
              KANAYANNUR TALUK, ERNAKULAM DISTRICT - 682 306.
     3        MS.ATHULLYA HEERABEN
              AGED 24 YEARS
              D/O.LATE RAGHUVARAN.K.K., PERMANENTLY RESIDING AT SREEHARI ARACKAL
              HOUSE, KANIYAMPUZHA ROAD, EROOR DESOM, NADAMA VILLAGE, KANAYANNUR
              TALUK, ERNAKULM DISTRICT-682 306.
              BY ADV SRI.JOLLY JOHN


RESPONDENT

              ICICI BANK
              HAVING ITS REGISTERED OFFICE AT LANDMARK, RACE COURSE CIRCLE,
              ALKAPURI, VADODARA - 390 007, REPRESENTED BY ITS CHANNEL MANAGER,
              ICICI BANK LTD., REGIONAL OFFICE, EMGEE SQUARE, NEAR PADMA
              JUNCTION, MG ROAD-KOCHI 682 035.
              BY ADVS.
              SRI.LAL K.JOSEPH
              SRI.P.MURALEEDHARAN THURAVOOR
              SRI.V.S.SHIRAZ BAVA


      THIS OP (CIVIL) HAVING BEEN FINALLY HEARD ON 30.6.2021, THE COURT ON
30.07.2021 DELIVERED THE FOLLOWING:
 O.P.(C)No.2361/2013

                                           2




                                      JUDGMENT

Dated : 30th July, 2021

1. This Original Petition has been filed against the order in

I.A.508/2013 dated 22.03.2013 in O.S.245/2011 on the file

of second Addl.Sub Court, Ernakulam which was filed to

Review the order dated 15.01.2013, for deleting the penalty

which was ordered to be calculated and paid. This is the

second round of litigation before this Court in connection

with impounding of the lease deed and directing to pay the

stamp duty and penalty in the said case.

2. Earlier O.P.(C)No.3880/2011 was disposed by this Court as

per the judgment dated 28.11.2012, copy of which is

produced as Exhibit P6. As per that order, this Court

dismissed the Original Petition upholding the order passed

by the learned Second Additional Sub Judge impounding the

lease deed and directing the same to be forwarded to the

District Collector.

3. According to the learned counsel for the petitioners, after

passing that order, at the request of the petitioners, the

matter was posted as "spoken to" on the very next day and

paragraph No.4 was added subsequent to that. In paragraph O.P.(C)No.2361/2013

No.4 of Exhibit P6 this Court observed that nothing in the

judgment will preclude the petitioners from moving the

court below again to validate the document by recourse to

Section 34(a) of the Act and the dictum in State of Bihar

v. M/s. Karam Chand Thapar and Brothers Ltd [1962 KHC 430

(SC)].

4. The learned counsel would vehemently contend that in spite

of the specific direction of this Court, the Additional

Sub Judge failed to comply the directions in paragraph No.4

of Ext.P6 judgment and hence they came up before this Court

again .

5. Notice was issued to the respondent and the respondent

appeared through counsel. Heard both sides.

6. Though there was an argument from the side of the

petitioners that the impounded document is not the original

and is only a counter-part and the original is actually

with the respondent Bank, the contentions so advanced is no

longer available to the petitioners in view of the findings

of this Court in paragraph No.2 in Ext.P6 judgment, the

relevant portion of which reads as follows:

"..... The fact that the petitioners are the lessors who would normally retain the original of the lease deed would raise a strong presumption that the one produced by them in court has to be O.P.(C)No.2361/2013

treated as the original."

7. That is the reason why this court categorically found that

there is no error of jurisdiction in the order impugned

warranting interference under Article 227 of the

Constitution of India and Original Petition was dismissed.

Exhibit.P6 judgment of this court is not further challenged

by the petitioner and it has become final. The learned

counsel for the respondent in this context would take my

attention to clause 31 of Ext.P1 lease deed. He would also

drew my attention to paragraph No.6 of Ext.P5, the original

proceedings by which Ext.P1 was impounded which reads

thus :

"In clause 31 of Ext.A1, it is stated that two originals are executed, one in stamp paper No.52305 and another in stamp paper No.52306. It further states that the agreement prepared using stamp paper No.52305 shall be retained by the licensor (plaintiffs) and the one executed in stamp paper No.52306 shall be retained by the licensee (defendant). Ext.A1 is the one prepared in stamp paper No.52306, to be kept by the defendant. However, it is produced by the plaintiffs."

8. So it has been found in Ext.P5 proceedings that Ext.A1 is

the one prepared in stamp paper No.52306. Though it is

recited in paragraph No.31 of the lease deed that it has to O.P.(C)No.2361/2013

be kept by the defendant, it has been produced by the

petitioners/plaintiffs. Hence the petitioners can not be

heard to contend that the lease deed produced by them is

not the original and only a counter part. The argument

advanced by the learned counsel is that the lease deed

produced by them is a counter part and hence the

petitioners are entitled for the protection under Section 7

of the Kerala Stamp Act (here in after be referred as the

Act)which require them to pay only the stamp duty and not

the penalty. The learned counsel would also contend that it

was in the above circumstances while passing Ext.P6

judgment this Court in paragraph No.4 expressly provided

that nothing in the judgment would preclude the petitioners

from seeking the benefit in Karam Chand Thapar's case

referred above.

9. Before going to the scope of Section 7 of the Act and the

benefit claimed there-under, I would straight away go to

the impact of Karam Chand Thapar, to the case in hand. It

arose out of an appeal against the judgment of High Court

of Patna in an appeal under the Arbitration Act, 1940. In

that decision two questions mainly arose and the first one

was with reference to the requirements of Section 175(3) of

Government of India Act, 1935; (1) that the agreement for

reference to arbitration did not comply with the O.P.(C)No.2361/2013

requirements of Section 175(3) of the Government of India

Act, 1935 and therefore it was void and the award passed in

proceedings found thereon is a nullity and no decree could

be passed in terms thereof. Since we are not concerned with

that issue it need not be discussed further.

10. The second issue of production of unstamped award in

court and contention that no decree could be passed based

on an unstamped award is relevant here. In that case

actually the arbitrator prepared the award in triplicate

and sent one each to each parties and third copy was sent

to the court and it was contended that the copy of the

award which was sent to the Government would have been

insufficiently stamped and if it had been produced in court

it could have been validated on payment of deficiency and

penalty under Section 35 of the Stamp Act. But the

Government did not produce the award and the copy of the

award sent to the respondent was said to have been seized

by the police along with other papers and it was not

available. When the third copy was received in court, the

respondents paid the requisite stamp duty under Section 35

of the Stamp Act and it was validated. On going further

it could be seen that appellant in that case further raised

a contention that the copy before the court is a certified

copy and under Section 35 of the Stamp Act there can be O.P.(C)No.2361/2013

validation of only the original when it is unstamped or

insufficiently stamped and since the document in court is

only a copy, it cannot be validated and acted upon and no

decree can be passed based upon it. In that context the

decision reported in The Rajah of, Bobbili v. Inuganti

China Chitaramasani Garu [(1899) L.R. 26 I.A. 262] has been

quoted thus:

"The provisions of this section (section 35) which allow a document to be admitted in evidence on payment of penalty, have no application when the original document, which was unstamped or was insufficiently stamped, has not been produced- and, accordingly, secondary evidence of its contents cannot be given. To hold otherwise would be to add to the Act a provision which it does not contain.

Payment of penalty will not render secondary evidence admissible, for under the stamp law penalty is leviable only on an unstamped or insufficiently stamped document actually produced in Court and that law does not provide for the levy of any penalty on lost documents".

11. Ultimately it was found that there cannot be any doubt

that it is the original that has been sent by the

arbitrator to the court and not a copy of the award and it

was also found that what the arbitrator did was to prepare

the award in triplicate, sign all of them and send one each O.P.(C)No.2361/2013

to the party and the third one to the court and this would

be an original instrument and the words, "certified copy"

appearing thereon are a mis-description and cannot have the

effect of altering the true character of the instrument and

ultimately the appeal was dismissed. So there is an

observation in paragraph No.6 that when third copy was

received in court the respondent paid the requisite stamp

duty under Section 35 of the Stamp Act and had it

validated. Obviously the document in question in that case

was an Arbitral award.

12. The learned counsel further placed reliance on 194 th

Report of Law Commission which arose pursuant to the

recommendations of the Hon'ble Madras High Court in

Jayarama Iyer v. Ramanatha Iyer (1976 (1) MLJ, 135) dated

17.12.2003 modified on 30.01.2004. The question mainly

arose in the context of change in law due to the advent of

the Arbitration and Conciliation Act, 1996 which directs

the Arbitral Tribunal to send the signed copy of the award

to the parties and the parties who wants to file

application under Sec.34(1) or for enforcement of award

under Sec.36, has to annexe a copy of award communicated to

them. If only a copy of award is to be filed along with the

said applications under the 1996 Act the court will not be

in a position to know whether the original award is duly O.P.(C)No.2361/2013

stamped or where it requires compulsory registration,

whether it is duly registered. Whereas under Sec.14(2) of

the Act of 1940, the original award has to be filed in

Court and hence the Court was able to verify whether the

original award was duly stamped or was duly registered

where it required compulsory registration. The report would

show that the Madras High Court gave an interim working

solution that the applicant will have to deposit the

requisite stamp papers or equivalent value in cash in court

and a right to get refund after the original award is

called for and produced. That interim measure was not found

to be inconvenient to the parties when huge amounts are

involved as stamp duty. Thereafter possible solutions were

suggested like a new provision in 1996 Act that the

original award should be filed in Court within whose

jurisdiction the award is passed as has been being done

under the Act of 1940. Another suggestion was that the

Arbitrarl Tribunal while signing the copy of the award

should make an endorsement that the original award is duly

stamped and duly registered if it requires compulsory

registration and so on.

13. On going through the entire copy of the Law Commission

Report, what could be gathered is that the whole

recommendations and suggestions are with respect to the O.P.(C)No.2361/2013

award passed by the Arbitral Tribunal. Arbitral Tribunal

is a statutory body constituted under the provisions of the

Arbitration and Conciliation Act. Hence the award passed by

the Arbitral Tribunal stand on a different footing than a

lease deed executed between the parties. The decision in

Karam Chand Thapar's case also, the Hon'ble Supreme Court

was dealing with a matter in connection with insufficiently

stamped award which was produced before the Court. So the

reference of payment of stamp duty in the case of

production of Arbitral award before the Court cannot be

taken at par with the production of lease deed by the

parties in a proceedings before the Court. So I am of the

view that either Karam chand Thapar's case or 194th Report

of Law Commission is of no relevance to the imposition of

stamp duty and penalty with respect to the lease deed

produced by the petitioner.

14. Now coming to the benefit claimed under S.7 of the

Act. It has been found already that the contention that the

lease deed produced by the petitioner is not the original

and is a counter part will no longer stand. The learned

counsel would further content that Sec.7 of the Act

provides a situation when there is more than one original

and according to him, in such cases, the duty which would

have been charged under Sec.19 alone need be paid and O.P.(C)No.2361/2013

there won't be any liability to pay the penalty. The

learned counsel for the respondent on the other hand would

contend that Sec.7 of the Act provides a situation when the

documents provided therein are received in the State and it

has no application whatsoever to the case in hand.

Identical provision to Sec.7 of Kerala Stamp Act inserted

in Uttar Pradesh, Punjab and Haryana, and Himachal Pradesh

as Sec.6A was also taken to my attention by the learned

counsel for the respondent.

   15.             Sec.7 of the Act             reads thus :



              Payment      of        higher    duty     in     respect       of    certain

instruments - (1) Notwithstanding anything contained in Section 4 or 6 or in any other enactment, unless it is proved that the duty chargeable under this Act has been paid-

(a) on the principal or original instrument, as the case may be, or

(b)in accordance with the provisions of this section, the duty chargeable on an instrument of sale, mortgage or settlement, other than a principal instrument or on a counter-part, duplicate or copy of any instrument, shall, if the principal or original instrument would, when received in the State, have been chargeable under this Act with a higher rate of duty, be the duty with which the principal or original instrument would have been chargeable under Section 19.

O.P.(C)No.2361/2013

(2) Notwithstanding anything contained in any enactment for the time being in force, no instrument, counter-part, duplicate or copy chargeable with duty under this section shall be received in evidence unless the duty chargeable under this section has been paid thereon :

Provides that any Court before which any such instrument, duplicate or copy is produced may permit the duty chargeable under this section to be paid thereon and may then receive it in evidence."

16. Sec.19 of the Act states about the duty chargeable on

an instrument where any instrument of the nature described

in any Article in the schedule and relating to any property

situate or to any matter or thing done or to be done in the

State of Kerala is executed out of the State and

subsequently received in the State. So obviously Sec.19 is

dealing with payment of duty with respect to the

instruments which are executed outside the State and when

subsequently received in the State.

17. So Sec.7 (1) (b) speaks about the duty chargeable when

a Principal or original instrument is received in state

and a higher duty is chargeable under the Act, the duty

would be the duty with which principal or original would

have been chargeable under S.19. It does not have any

application to the case in hand. The decision in Karam

Chand Thapar's case referred in Ext.P6 judgment also does O.P.(C)No.2361/2013

not make any reference with respect to any identical

provision to Sec.7 of the Act. More over while disposing

the earlier O.P.,this court has found in para No.2 that

Section 7(2) of the Act can be called in aid only if it is

established that the one produced by the petitioner is only

a counter part or a duplicate or a copy. That would

indicate that no argument on the basis of S.7(1) (b) was

raised in the previous O.P., Ext.P6. So the argument of the

learned counsel seeking protection under Sec.7 of the Act

and the contention that he would be liable to pay only the

stamp duty and not the penalty as provided under Sec.35 of

the Stamp Act is not legally sustainable.

18. So much so, the lease deed produced by the petitioner

lesser being insufficiently stamped the procedure

prescribed under Sec.34(a) of the Act has to be complied.

In Mohanan v. M.A.C.T.Moovattupuzha (2005 (4) KLT 273) a

learned Single Judge of this Court had occasion to examine

the procedure to be followed when an insufficiently stamped

document is produced before the Court. After an elaborate

discussion of the case law, it has been found in paragraph

No.6 thus :

"......the documents impounded by the court on mere production of the same and when they are not relied O.P.(C)No.2361/2013

on by the parties as part of evidence have to be forwarded to the District Collector for action under Sec.39; only when an insufficiently stamped document is sought to be admitted in evidence, the court is empowered to realise the deficient portion and impose the penalty at ten times of such portion. The difference between Ss.34 and 39 in the matter of penalty is that a discretion is given to the Collector under S.39 but not to the court under S.34. In other words, if an insufficiently stamped instrument is to be admitted in evidence, it is permissible only if the deficiency is made up and ten times the deficient portion is paid as penalty. As far as the document that is mainly produced before the Court when impounded and sent to the Collector under S.37(2), the Collector has a discretion to realise the deficient portion together with a penalty of Rs.5/- or if he thinks fit an amount not exceeding ten times the amount of the proper duty or deficient portion. In fact Chandrasekhara Menon J, has considered this procedure in Chanda Pillai v. Munsiff, Thiruvalla & others (1975 KLT 753). To quote from the judgment, "As long as an instrument is not admitted in evidence, the Munsiff though he may have impounded the same has no jurisdiction to levy any penalty or charge any duty on the same. The question whether the Munsiff should not under sub-s.(2) of S.37 by which every person impounding an instrument has to send it in original to the Collector, depends upon the answer to the question whether the case is one which can come within the description of every other case mentioned therein. Every other case means every case other than the cases mentioned in sub-s.(1) of O.P.(C)No.2361/2013

S.37. Among cases mentioned therein is the case of a person impounding an instrument under S.33 who has by law authority to receive evidence and admits such instrument in evidence upon payment of penalty as provided by the proviso to S.34. It is only when the case is different from the one mentioned therein that an occasion will arise for a Civil Court to act under sub-s.2. Ordinarily, the duty or power of assessing the amount of stamp duty or collecting stamp duty and penalties is invested by the Act in the Collector. The proviso to S.34 invests courts with the special jurisdiction of adjudicating upon stamp duty and imposing penalty in certain cases and those are cases where a party to a litigation before the court tenders a document in evidence. In the instant case, as the documents have not been admitted in evidence no question of imposition of stamp duty by the Munsiff arises. He could have acted only under S.37(2) by which he is to send the documents to the Collector who then can proceed to stamp the instruments concerned and collect the required duty and penalty if any from the person or persons who are liable to pay the same."

19. In Lifetime Reality (P) Ltd v. Poddar Udyog Ltd (2012

(2) KLT 46) the procedure to be adopted when an

insufficiently stamped document has been produced before

the Court, has been dealt with in detail and it has been

held that a Court before whom unregistered instrument

charged with duty is produced has to examine the instrument

to ascertain whether it is duly stamped and if the Court O.P.(C)No.2361/2013

comes to the conclusion that instrument is not duly

stamped, it has to impound the document and deal with it as

per Sec.38 of the Stamp Act. It was also laid down that

authenticated copy of the agreement cannot be impounded and

forwarded to the Collector in terms of Secs 33 and 37 of

the Act. Further that, Sec.2(j) of the Act does not include

a copy of the document.

20. In Avinash Kumar Chauhan v. Vijay Krishna Mishra

((2009) 2 SCC 532) while dealing with Indian Stamp Act,

1899, Secs 33, 35 and 36 and the power of court to impound

insufficiently stamped instrument, it has been held that

the Court before admitting the document/instrument is

empowered to direct payment of unpaid duty and penalty. It

was also laid down by placing reliance on Ram Rattan v.

Parma Nand (AIR 1946 PC 51), that a document which is

insufficiently stamped cannot be used for any collateral

purpose to corroborate any oral evidence.

21. In the present case, the lease deed has been produced

by the petitioners/plaintiffs before the Court which is

found to be insufficiently stamped. So liability to pay the

penalty is upon the petitioners. In Sivaraman v. State Of

Kerala (1992 (2) KLT 347), the question of liability of

payment of stamp duty when produced before Court has been

decided by a learned Single Judge of this Court and it has O.P.(C)No.2361/2013

been held that stamp duty and penalty should be recovered

from the party who wanted to rely on the documents before

the Court.

22. If an insufficiently stamped document is to be

admitted in evidence, deficient stamp duty and ten times

the penalty is to be paid and the Court has no discretion

in the matter of fixing the penalty. Hence in order to

admit the lease deed in evidence petitioners are bound to

pay the deficit stamp duty together with penalty as

provided under Sec.34(a) of the Act. Hence there is no

illegality or error of jurisdiction in the impugned order

calling for an interference by this Court under Article

227 of the Constitution of India.

23. In the result, the Original Petition is found to be

devoid of merit. Hence dismissed.

Sd/-

M.R.ANITHA, JUDGE

Mrcs/Shg/5.7 O.P.(C)No.2361/2013

APPENDIX

PETITIONER EXHIBITS EXHIBIT P1: THE TRUE COPY OF THE AGREEMENT DATED 12.01.2008 ENTERED INTO BETWEEN THE PETITIONERS AND THE RESPONDENT BANK.

EXHIBIT P2: TRUE COPY OF THE PLAINT IN ORIGINAL SUIT NO:245/2011 BEFORE THE 2ND ADDITIONAL SUB COURT, ERNAKULAM.

EXHIBIT P3: TRUE COPY OF THE WRITTEN STATEMENT FILED BY THE RESPONDENT IN ORIGINAL SUIT NO:245/2011 BEFORE THE 2ND ADDITIONAL SUB COURT, ERNAKULAM. EXHIBIT P4: THE TRUE COPY OF THE AFFIDAVIT FILED BY THE RESPONDENT IN OS 245/2011.

EXHIBIT P5: A TRUE COPY OF THE ORDER DATED 16TH NOVEMBER, 2011 PASSED BY SUB COURT, ERNAKULAM IN OS 245/2011.

EXHIBIT P6: THE TRUE COPY OF THE JUDGMENT DATED 28.11.2012 PASSED BY HIGH COURT, ERNAKULAM IN OP(C)NO.3880 OF 2011.

EXHIBIT P7: THE TRUE COPY OF THE MEMO DATED 18TH DECEMBER, 2012 FILED BY THE PETITIONERS. EXHIBIT P8: THE TRUE COPY OF THE REVIEW PETITION DATED 22.1.2013 FILED BY THE PETITIONER BEFORE THE 2ND ADDITIONAL SUB COURT, ERNAKULAM.

EXHIBIT P9: THE CERTIFIED COPY OF THE ORDER DATED 22.3.2013 IN IA NO.508 OF 2013 PASSED BY THE 2ND ADDITIONAL SUB COURT, ERNAKULAM.