Nitin vs Basavant and Others

A.N. Venugopala Gowda, J.—Heard the learned Counsel for the petitioner and perused the record. Plaintiff is the petitioner. Suit was filed to pass a decree of specific performance based on an agreement of sale dated 12-4-1997. By an order dated 23-8-2008, the suit document having been found to be insufficiently stamped, was impounded and the petitioner was directed to pay the duty and penalty. An application having been filed thereafter, to review the order passed on 23-8-2008 and the said application having been dismissed on 2-7-2012, these writ petitions have been filed based on a decision rendered in the case of Sri K. Govinde Gowda Vs. Smt. Akkayamma and Others, .

In the case of Digambar Warty and Others Vs. District Registrar and Chief Controller of Revenue and Commissioner of Stamps, , with reference to the decision in the case of K. Govinde Gowda it has been held as follows:

In view of the aforesaid judgment of the Apex Court, it is clarified that the observations made in the judgment in K. Govinde Gowda''s case should neither be treated as binding by the learned Single Bench of High Court or Subordinate Courts and other judicial for as nor should that order be relied upon or made basis, for bypassing the principles laid down in the case of J.S. Paramesh Vs. Smt. Indramma Murthy, , by the Division Bench of this Court.

Learned Counsel for the petitioner does not dispute the fact that the agreement of sale dated 12-4-1997 is insufficiently stamped. He submits that a reference ought to have been made u/s 37 of Karnataka Stamp Act for determination by the Deputy Commissioner and the same having not been done, the impugned orders are irrational. Even the said contentions have been answered and the decision noticed supra, which is to the following effect: 37. Section 37 of the Act deals with the procedure to be followed by the authority after impounding the document u/s 33 and after passing of the orders u/s 34 or Section 36. When the person impounding an instrument u/s 33 has by law or consent of parties authority to receive evidence and admits such an instrument in evidence upon payment of a penalty as provided by Section 34 or of duty as provided by Section 36, under sub-section (1) of Section 37, he shall send to the Deputy Commissioner an authenticated copy of such instrument, together with a certificate in writing, stating the amount of duty and penalty, levied in respect thereof, and shall send such amount to the Deputy Commissioner or to such person as he may appoint in this behalf. Sub-section (2) of Section 37 provides that in every other case, the person so impounding an instrument shall send it in original to the Deputy Commissioner.

The reason is obvious. Generally, it is the Civil Court which receives the instrument in evidence. Admission of instrument in evidence is not proof of the said instrument. If the execution of the instrument is denied by the executant or the opposite party, burden is cast on the person producing the said instrument to prove that the instrument was executed in accordance with law. He may have to examine the attesting witnesses if there is any, or he may request the Court to compare the signature found on the said instrument with the admitted signatures in the case or he may request for sending the said instrument containing the signature for the opinion of the handwriting expert. Therefore the original document, after it being impounded and the party paying the duty and penalty cannot be sent to the Deputy Commissioner, the law provides for a authenticated copy of such an instrument being sent to the Deputy Commissioner. However, in all other cases, it is the original of the document impounded which is to be sent to the Deputy Commissioner. The object being, the said provision should not come in the way of speedy disposal of cases before the Court.

Section 38 of the Act deals with the power of the Deputy Commissioner to refund the penalty paid under sub-section (1) of Section 37. When a copy of an instrument is sent to the Deputy Commissioner under sub-section (1) of Section 37, he may, if he thinks fit, refund any portion of the penalty in excess of five rupees which has been paid in respect of such instrument. The reason being, when a person receiving the evidence impounds the document and collects the duty u/s 34 of the Act, which in most of the cases, is the Civil Court, the time of the Court should not be wasted in deciding, whether it is a fit case where penalty of ten times the duty is to be levied or a case is made out for imposition of lesser penalty. Therefore, the Legislature consciously has used the word ''shall'' taking away any discretion in the Civil Court in the matter of imposition of penalty equal to ten time the duty payable. However, the Civil Court after impounding the document, collecting the duty and penalty, is under a statutory obligation to sent it to the Deputy Commissioner under sub-section (1) of Section 37. Therefore, when such an instrument is so sent to the Deputy Commissioner, he has been conferred the power to reduce the penalty already paid before the Civil Court. One of the reasons why such a discretion is not vested with the Civil Court is, it is the Revenue Authorities who are more concerned with the collection of revenue, and that is not the job of the Civil Courts. However, if a document which is not stamped or insufficiently stamped is tendered in evidence in Civil Court and admitted in evidence, then the very purpose of the Stamp Act itself would be defeated. Therefore, a power is vested in Civil Court to impound the document. In fact, it is an obligation cast on the Civil Court by the statute. But, the Legislature does not want to burden the Civil Court to go into the question, whether a case for payment of lesser penalty is made out or not. The Civil Courts cannot be expected to be wasting their precious judicial time in deciding matters which exclusively fall within the sphere of Revenue Authorities and under the scheme of the Act, which has to be decided by them. Therefore, it prescribes that after determining the duty payable on such instrument, to collect the duty with ten times penalty and then transmit the document to the Deputy Commissioner with duty and penalty so collected. Thereafter, a power is conferred on the Deputy Commissioner u/s 38 of the Act to hold an enquiry after giving an opportunity to the person who has paid duty and penalty to extend the benefit of reduction of penalty. Such a reduction in penalty. Such a reduction in penalty is available to both the documents i.e., tendered before the Civil Court or produced directly before the Deputy Commissioner u/s 33. No discrimination in law is made between these two types of documents. However, there appears to be some conflicting opinion in this regard.

The view which the Trial Court has taken in the orders passed on 23-7-2008 and 2-7-2012 being in consonance with the Division Bench judgment, noticed supra, the impugned order is neither irrational nor illegal, warranting any interference in exercise of power under Article 227 of the Constitution of India. In the result, the petitions being devoid of merit is rejected.

ANVGJ: W.P. Nos. 75142 and 75143 of 2013 (GM-CPC)

10-9-2013

ORDER ON "FOR BEING SPOKEN TO"

There is an inadvertent mistake crept in the Order dated 21-8-2013 passed in W.P. Nos. 75142 and 75143 of 2013. In the operative portion of the Order at page No. 9, third line of Para 5, the words "inconsonance that" be corrected and read as "in consonance with". Similarly, at page No. 6, last but fourth line, "most 65 of" be corrected and read as "most of".

Registry to carry out the said corrections in the original autograph.