Nagar Mal vs Accountant General and Others

An order passed on 1.1.1982 by respondent No.3 and the proceedings initiated by respondents No. 1 and 2 as also their reports are all

challenged in this petition on the solitary ground of inherent lack of jurisdiction and being violative of provisions of Stamp Act.

The petitioner is a partner of the firm known as M/S Himalayan Construction Company and this firm obtained some credit facilities for purchase

of Hydraulic excavator etc. The facility was obtained from Jammu and Kashmir Bank Ltd: Hiranagar on the basis of execution of certain

documents by the firm and its partner. On deed of collateral security (registered on July 10,1979) vide registration No.74 and one power of

attorney {also registered on July 10, 1979) vide registration No. 75, were two of such documents which were executed by the firm. It is admitted

case of the parties that the original documents had been taken away by the petitioner after registration. It appears that at some stage, after the

registration of these documents, an Audit took place of the accounts etc. in the office of SubRegistrar, Hiranagar and the audit party deputed by

the Accountant General came across the copies and other record of the aforesaid documents and found that they had been grossly insufficiently

stamped and despite their being insufficiently stamped were registered by the SubRegistrar. Pursuant to the aforesaid finding of the Audit Party,

SubRegistrar, Hiranagar, respondent No.3 demanded recovery of Rs. 45762.00 as stamp duty and Rs. 14224.00 as registration fee against the

deed of collateral security and Rs. 47 327.50 as stamp duty against the power of attorney. It is this order which has been challanged in this

petition.

Mr. P.S. Datta, learned counsel for the petitioner took me through the various provisions of Stamp Act and contended that the SubRegistrar or

for that matter, the Audit Party or the Accountant General had no jurisdiction or authority to either demand making up of the deficiency of the

Stamp duty or to recover any amount on account of any alleged deficiency in the Stamp duty.

Mr. Dutta submits that the only person who was invested with such power was the Collector, Mr. S.K. Gupta, on the other hand referred to

section 33 of the Stamp Act and submitted that the powers did vest both in the Audit party as well as in the SubRegistrar.

Section 33 of the Stamp Act deals with the subject matter of examination and impounding of instruments and stipulates that whenever any

person having the authority to receive the evidence or any other person before whom an instrument, chargeable with duty, is produced or comes in

the performance of his functions, then such a person if he considers that such an instrument is not dully stamped, may impound the same. In the

present case, no document was either produced before any person mentioned in section 33 nor didany such person have the occasion to otherwise

receive a document and, therefore, there was no question of impounding it. In fact it is not the case of the parties that arty impounding ever took

place. Actually impounding could not have taken place because neither the subRegistrar .nor the Audit Party had any occasion to have any access

to the original documents. Section 33, therefore, has no application to this case.

Chapter III of the Stamp Act comprising of Section 31, 32 deals with. the subject matter of adjudication about Stamps and as per section 31,

the Collector has the power to determine the duty for which a document is chargeable and only after such determination can proceedings be

initiated either for making up deficiency of the stamp duty or for recovery of the amount of such deficiency. In the present case, admittedly, neither

the mater was referred to the Collector nor was section 31 invoked for the purposes of determination of the requisite stamp duty Because the

mandatory requirements of law were not followed, I have no hesitation in holding that the order impugned in this petition suffers from the vice of

legal infirmity and on. that ground alone is liable to be quashed and setaside.

By this judgment, I shall not be deemed to have expressed any opinion about the sufficiency of [SIC] deficiency of the Stamp duty with regard to

the documents in question. That question is left wide open for the appropriate authorities to be decided, if they so choose and for taking such

appropriate action according to law as is available to them.

The petition is accordingly allowed and the impugned order is quashed and setaside. No costs.