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Judgment
M.S. Menon, J.—The question involved in this petition is whether the stamp-duty and penalty in respect of Ex. A, a document executed by the Petitioner on 28-11-1123, can be recovered from him u/s 30 of the Travancore-Cochin Stamp Act, 1125 (Indian Stamp Act, Section 43), which provides:
All duties, penalties and other sums required to be paid under this chapter may be recovered by the Collector by distress and sale of the movable property of the person from whom the same are due, or by any other process for the time being in" force for the recovery of arrears of land revenue.
The document was produced before the Additional District Munsill of Trivandrum.by the person in whose favour Ex. A was executed in O.S. No. 628 of 1950. The learned District Munsill'' impounded the document and forwarded It to the Collector of Trivandrum along with his letter No. 4C6 dated 20-2-1951, Kx. 11 which reads us follows:
Under para 2 of Section 35 of the Travancore Stamp Regulation (Regulation IV of 1060) I have the honour "to forward herewith, in original, an unstamped doament impounded by me as it purports to beVsale and an agreement falling under Article of schedule of the Stamp Regulation and cWtrgeable with a stamp-duty and penalty of was presented in Court by S. Venkifcaramana uhdiilaya,. Plaintiff''s advocate in O.S. No. 626 of 195()\\and it purports to have been executed by M. Rataaswamy Reddiar, Merchant, Chalai, Tri-vandrumvin favour of Parvathinathan Chettiyar & Bros., resuming in Nanganachery Taluk, Tinnevelly District.
Section 35 of the Travancore Stamp Act, 1080, corresponds to Section 35 of the. Travancore-Cochin Stamp Act, 1125, and Section 33 of the Indian Stamp Act, 1399.
After receipt of Ex. B the Collector asked the Petitioner to show cause why he should not be directed to pay Rs. 455 by way of stamp duty and penalty by a notice dated 2-3-1951 and in reply thereto the Petitioner stated on 12-3-1951:
The Petitioner is in receipt of a notice dated 2-3-1951 asking him to show cause why he should not be asked to pay Rs. 433 towards stamp duty and penalty for a document tiled in O.S. 628/1950 of the Additional District Munslff''s Court, Trivandrum. The notice has been served on him on''10-3-1951.
The document in question is a deed of conveyance and the duty is payable by the executee and not by the executor.
The executee is a respectable rich man and the duty has to be realised from him and not from the Petitioner.
The Petitioner''s objection did not find favour with the Collector and he addressed him as follows on 27-3-1951:
The Petitioner is informed that the stamp-duty and penalty should be paid by the executor and not by the executee. Therefore he should pay the same within a fortnight falling which further action will be taken to recover the same.
The Petitioner then approached the Government of Travancore-Cochin but without success. The order rejecting his petition is Order L. Dis. No. 9244/51/R. D. dated.24-10-53.
Section 42 of the Travancore-Cochin Stamp Act, 1125, (Indian Stamp Act, S. 40), provides that when an instrument like Ext. A is sent to the Collector u/s 40 (2) of the Act and he is of opinion that ,it is chargeable with duty and Is not duly stamped
he shall require the payment of the proper duty or the amount required to make up the same together with a penalty of five rupees or If he thinks fit an amount not exceeding ten times the amount of the proper duty" or of the deficient portion thereof whether such amount exceeds or falls short. of five rupees.
In Secretary of State for India in Council v. Basharat Ullah, ILR 30 All 271 (A) the case of certain Plaintiffs who produced a conveyance and a receipt executed in favour of their predecessor-ln-title came ufc for consideration. The High Court said:
We are of opinion that as it was the Plaintiffs who wished the documents admitted In evidence in support of their claim, they are the persons from whom the Collector, in the first instance, can recover the duty and penalty required before the documents can be admitted in evidence. The provisions of S. 44 are important as showing that when any duty or penalty has been recovered from any person in respect of an instrument, and some other person was bound to bear the expense of providing the proper stamp, the person from whom the duty and penalty has been recovered shall be entitled to recover from such other person the amount of the duty and penalty so recovered." The Lahore High Court dealt with this decision as follows in Mahomed Hussaln v. Emperor AIR 1940 Lah 315(B):
The only authority which the learned Advocatc-. General was able to cite in support of his contentions was ILR 30 All 271(A), in which it was held that it is the person who wishes a document to be admitted in evidence in Court from whom the Collector can recover the duty and penalty In the first instance. The learned Judges who decided that case seem to have relied merely on the provisions of Section 44, Stamp Act, in support of this conclusion, but with the greatest respect I must say that that section does not appear to be at all conclusive on the point", and Bhide, J., who delivered the judgment of the Special Bench went on to say:
....There is no provision in the Act, making a person who merely presents an insufficiently stamped document for being admitted in evidence liable for payment of the requisite stamp-duty or penalty on the document. He cannot therefore be considered to be a person from whom the stamp duty or penalty is due and consequently the same cannot be recovered Irom him u/s 48. If the stamp-duty or penalty has to be recovered compulsorily, it can be legally recovered u/s 48 only from the person from whom the same is due. In order to ascertain the person or persons from whom the duty or penalty is due we must go back to Section 29.
It has been urged that Section 29 is not exhaustive, that there are several classes of instruments for which no provision is made in that section and the section would therefore be of no assistance in fixing the liability for payment of duty or penalty in the case of such instruments. This contingency does not however arise in the present Instance as a deed of settlement is covered by Section 29 and the point need not therefore be considered for the purposes of this reference. But it may be observed that if it is found that the Stamp Act does not in fact fix the liability for payment of stamp-duty on any piwticular person in the case of any instrument, the consequence will presumably be that the Collector will keep the impounded document in his custody and no person interested in the document will be able to make any use of it until and unless the necessary stamp-duty and penalty is paid.
In ''Roopchand v. Secy, of State'', 1939 Nag LJ 364 (C) there is a report of the proceedings of the Chief Controlling Revenue Authority which also deals with the same subject. The relevant portion of the order reads as follows:
The question raised by this application is from whom is the deficit duty and penalty levied in respect of an unstamped bond by the Collector u/s 40 (1) (b) of the Stamp Act to be recovered. Section 35 (b) makes the person tendering in evidence an unstamped receipt pay the penalty upon its admission In evidence. Had the legislature intended to make this a general principle for the recovery of deficit stamp duty, they would undoubtedly have enacted this specifically, and omls- sion of such a provision is the clearest possible indication that they had no such intention.
There is no provision in the Stamp Act prescribing which party shall pay the deficit duty and penalty In such a cuse. Section 29 proscribes that in the absence of an agreement to the contrary, the expense or providing the proper stamp shall be borne in the cuse of a bond by the person drawing, making or executing it. Ordinarily, therefore ir. would be reasonable that the person who has failed to discharge the duty required of him u/s 29 should bear the expense and penalty if the bond remains unstamped, no matter which party produces it.
In the Madras Stamp Manual there is a note u/s 40 of the Indian Act, 1899, which says that stamp-duty and penalty "can be compulsorily levied u/s 48 only from the person liable to pay the proper''duty in the first instance and the note u/s 48 is:
Stamp duty and penalty cannot be colleety by coercive process u/s 48 of the Act, from Utt.j person, who produced the impounded document,
when he is not concerned In its execution and is not bound, by agreement or under the provisions o� Section 29 to bear the expenses of the proper stamp. The Collector should keep the document impounded and recover the amount from the proper person. He may also prosecute the executant u/s 62 if so advised."
In the case before me the Petitioner was not the person who produced the document before the Additional District Munslfl of Trivandrum In O.S. No. 628 of 1950 and if the view of the Allahabad High Court is adopted a compulsory levy from hlaj u/s 50 of the Travancore-Cochin Stamp Act, 1125, is clearly unsustainable. I am inclined, how ever, to endorse the view of the Lahore High Coufft and hold that a person will be liable to be proceeded against u/s 50, if the stamp-duty is his liability u/s 31 (Indian Stamp Act: Section 29) and that in the case of instruments not covered by that section what the Collector should do Is to keep the impounded document in his custody and disallow its user by any person interested until and unless the necessary stamp-duty and penalty is paid.
Ext A has been construed by the Additional District Munsiff and the Collector as part conveyance, part agreement. Under S. 31, in the absence of an agreement to the contrary, the expense of providing the proper stamp for a conveyance is to be borne by the grantee, and as to the person by whom the duty is payable in respect of an agreement, it contains no specific provision. It follows that the Petitioner must succeed and that the writ of certiorari he seeks must issue.
According to Mr. Kumaran Achen, learned Government Pleader, Ext A partakes also of the of an indemnity bond, the stamp duty for which u/s 31 will be the liability of the Petitioner as the executant of that instrument and it is hence possible to proceed against him u/s 50 of the Travancore-Cochln Act, 1125. This is an aspect of the case which has not been considered by the Collector "and in view of this, I can do no more than leave the question expressly open for his future determination.
I allow the petition as indicated above. The Petitioner will have''his costs from the Respondent, advocate''s fee Rs. 100/-