Nagar Mal vs Accountant General & Ors.

An order passed on 111982 by respondent No. 3 and the proceedings initiated by respondents No, 1 and 2 also their reports are all challenged in

this petition on the solitary ground of inherent act of jurisdiction and being violative of provisions of Scamp 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 parties

that the original documents bad 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 Sub Registrar, 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. 47327. 50 as stamp duty against the power of attorney. It is this order which has been challenged 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. Datta submits that the only person who was invested with such powers 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 no dully stamped, may impound the same. In the present

case, no document was either produced before any person mentioned in section 33 nor did any 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 any 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 powers 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

matter 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 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 chose 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.