P. Venkateshan and Others vs Yellappa and Others

Ram Mohan Reddy, J.—Defendants in OS 6007/2006 on the file of 12th Addl. City Civil and Sessions Judge, (CCH No. 27), Bangalore, aggrieved by the orders dated 18.3.2011, allowing I.A. No. 11, Annexure-J and order dated 24.4.2013, dismissing I.A. No. 12 and allowing I.A. No. 13 Annexure-P, reports dated 16.11.2012, Annexure-K of the District Registrar-2nd respondent and his letter dated 18.7.2013, Annexure-Q, have presented these petitions, invoking Articles 226 and 227 of the Constitution.

1st respondent instituted the suit for specific performance of an agreement of sale dated 10.4.2002 executed by the petitioners'' arraigned as defendants to convey the suit schedule property for a valuable sale consideration. Before the commencement of the trial, defendants filed I.A. No. 9 under Section 34 of the Karnataka Stamp Act, 1957 (for short the ''''Act'''') to impound the agreement of sale dated 10.4.2002 engrossed on Rs. 100/- stamp paper, being, deficit in stamp duty and determine the deficit stamp duty and penalty. That application was opposed by filing statement of objections stating amongst others, that the application is premature and that question of sufficiency of stamp duty is between the plaintiff and the court. That application when considered by the Court below, regard being had to the amended Article 5(e) of the Schedule to the ''Act'', w.e.f. 1.4.95, providing the rate of stamp duty in respect of an agreement of sale of immovable property coupled with delivery of possession, being the same duty as applicable for a conveyance, on the market value, held that the agreement in question engrossed on stamp paper of Rs. 100/- was deficient, since the sale consideration is Rs. 90 lakhs, and by order dated 13.11.2009, allowed I.A. No. 9, directed the plaintiff to pay the deficit stamp duty and penalty at 10 times the said deficit duty, on the sale agreement. By the said order, the Court below rejected plaintiff''s I.A. No. 10 under Sections 33 and 37 of the ''Act'' to forward the document to the Deputy Commissioner to adjudicate the payment of stamp duty, which when called in question in WP 36252-253/2009, a learned single Judge by order dated 30th August 2010, while dismissing the petitions observed that it was for the plaintiff to pay such duty and penalty if the document is to be admitted in evidence and is to be acted upon by the trial court and if the plaintiff chooses not to pay duty and penalty or seeks to abandon the suit, the court would be required to send the document to the Deputy Commissioner under Section 37(2) for further action and during the pendency of the suit would only ''Act'' under Order 13 Rule 38 CPC. That order when carried in SLP 34652-653/2010, the Apex Court by order dated 3.1.2011, dismissed the petitions.

Plaintiff without complying with the directions of the Civil Court in the order dated 13.11.2009 allowing I.A. No. 9, filed I.A. No. 11 under Section 151 CPC for the following relief:

"to keep the suit proceedings in abeyance in compliance with the order dated 30.8.2010 of this Court, passed in W.P. No. 36252-253/2009 (GM-CPC), till jurisdiction of the Deputy Commissioner passed an order under Section 37 and 38 of the Karnataka Stamp Act, 1957, in the interest of justice and equity".

In the affidavit accompanying the application, it was stated that under Sub-section (2) of Section 37 of the ''Act'', the Court impounding the instrument shall send it in original to the Deputy Commissioner and that as the Court had not impounded the document nor passed an order under Section 34 of the ''Act'' and having regard to the observations in the order in WP 36252-253/2009, the plaintiff had the first option to proceed with the suit by paying duty and penalty and the second option to abandon the suit itself. The deponent to the affidavit stated thus:

"So I have selecting the second option i.e., seeking abandons of the suit."

That application was opposed by filing statement of objections inter alia pointing out to the order of the Civil court which was unsuccessfully challenged in the writ proceeding as well as in SLP. Reference was made to the reported opinion of this Court in Sri J. Prakash Vs. Smt. M.T. Kamalamma and Another, AIR 2008 Kar 26 : (2007) ILR (Kar) 4752 : (2008) 2 KarLJ 202 : (2007) 4 KCCR 2793 . It was also stated that once the court determines duty and penalty under Section 34 of the ''Act'', there is no option with the plaintiff but to deposit the deficient duty as well as penalty, if the document is to be admitted in evidence and thereafter, the Court has to forward the certificate of deposit of duty and penalty along with an authenticated copy of the instrument to the Deputy Commissioner for further proceeding under Section 38 of the ''Act'' so as to extend the benefit of reducing the penalty in favour of plaintiff. It was lastly stated that there was no provision to keep the proceeding in abeyance until the stamp duty and penalty is deposited nor was there a provision to send the instrument for a fresh adjudication under sub-section (2) of Section 37 of the ''Act''. It was also stated that the use of word ''abandon'' would mean in the legal dictionary, "giving up with the intention of never again claiming a right or interest". Plaintiff having sought to abandon the suit, the claim in the suit for specific performance was rendered infructuous. According to the defendants, the prayer in I.A. No. 10 when rejected, the plaintiff could not seek the same relief by filing I.A. No. 11.

The trial Court, having noticed the pleadings of the parties and the observation of the learned single Judge in W.P. 36252-53/2009, by order dated 18th March 2011, allowed I.A. No. 11 and forwarded the sale agreement to the Deputy Commissioner under sub-section (2) of Section 37 of the ''Act'' for ''adjudication of duty and penalty'' with a direction to submit his certificate within one month from the date of receipt of the order and till such date, the suit be kept in abeyance.

It appears that the Deputy Commissioner, by order dated 16.11.2012, Annexure-K, determined the deficit duty and also penalty at Rs. 8,99,900/- and Rs. 89,99,000/- respectively, and by another communication dated 26.12.2012, addressed to the Assistant Registrar, 12th Addl. City Civil Court, (CCH No. 27), Bangalore, sought re-determination of the said report since certain errors had crept in determining of duty and penalty.

Petitioners filed I.A. No. 12 under Section 151 CPC on 21.1.2013 to permit abandonment of the suit in the light of the averments in the affidavit of defendants to I.A. No. 11. That application was opposed by filing statement of objections inter alia not denying the use of word ''abandon'' in the affidavit, however, pointing out to report dated 16.11.2012 of the Deputy Commissioner and the suo motu action to recall the said order in the communication dated 26.12.2012 in the light of the principles laid down by this Court in WP 8892/2010.

Plaintiff filed I.A. No. 13 under Section 151 CPC seeking a direction to re-transmit the agreement of sale dated 10.4.2002 to the District Registrar, Jayanagar, Bangalore for correct valuation of stamp duty and penalty on consideration of memorandum of requests dated 26.12.2012. In the affidavit accompanying the application, it was stated that the authority having made a mistake in the calculation of the duty and penalty, an error apparent, in the light of the order in W.P. 8892/2010, it was just and proper to retransmit the report determining the duty and penalty. That application was opposed by filing statement of objection yet again pointing out to the earlier order of the court on I.A. No. 9 and the rejection of I.A. No. 10 that duty and penalty had already been decided by the Court.

The trial Court by a common order dated 24th April 2013, having noticed Section 67-A of the ''Act'', investing a jurisdiction in the Deputy Commissioner, to suo motu review the order relating to proper stamp duty payable under the ''Act'', rejected I.A. No. 12 filed by defendants and allowed I.A. 13 filed by the plaintiff directing the Registrar to retransmit the report dated 16.11.2012 to the District Registrar, Jayanagar, Bangalore.

Suffice it to notice that the defendants IA No. 9 to impound the agreement of sale, dated 10.4.2002 the suit document, was allowed by order dated 13.11.2009, whence the document was impounded exercising jurisdiction under Section 34 of the ''Act'', deficit stamp duty and penalty at 10 times of the said sum was determined. I.A. No. 10 filed by the plaintiff to forward the agreement of sale to the Deputy Commissioner for adjudication of the deficit stamp duty and penalty under Section 37 of the ''Act'', was rejected by the very same order. That common order was confirmed by the learned single Judge rejecting W.P. 36252-53/2009, as affirmed by the Apex Court by dismissing SLP 34652- 53/2010. Therefore, the order impounding the document determining deficit stamp duty and penalty on the sale agreement is final and binding.

In the face of that order, with full knowledge of the order having attained a finality in the matter of impounding, determination of deficit duty and penalty, nevertheless, plaintiff filed I.A. No. 11 under Section 151 CPC to forward the agreement of sale for a fresh adjudication of deficit stamp duty and penalty under sub-section (2) of Section 37 of the ''Act'', on the premise, that the learned single Judge by order dated 30.08.2010 extended such a benefit to the plaintiff, if he did not choose to pay the duty and penalty or abandons the suit.

The observation of the learned single Judge reads thus:

"It is only after the plaintiff chooses not to pay duty and penalty or seeks to abandon the suit itself, the court is required to send the document to Deputy Commissioner under section 37(2) of the ''Act'' for further action."

It is useful to extract Section 37 of the ''Act'', which reads thus:

"37. Instruments impounded how dealt with.-

(1) When the person impounding an instrument under Section 33 has by law or consent of parties authority to receive evidence and admits such instrument in evidence upon payment of a penalty as provided by Section 34, or of duty as provided by Section 36, 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.

(2) In every other case, the person so impounding an instrument shall send it in original to the Deputy Commissioner."

Regard being had to the order dated 30.8.2010 in WP Nos. 36252-253/2009, the aforesaid observation, by no stretch of imagination, extends a benefit for fresh determination in favour of plaintiff, at the hands of the Deputy Commissioner in exercise of jurisdiction under sub-section (2) of Section 37 of the ''Act''.

In the aforesaid light of the submission of learned counsel for respondent/plaintiff that sub-section (2) of Section 37 invests a jurisdiction for a fresh determination of deficit duty and penalty over an instrument impounded under Section-34 of the ''Act'' by the Deputy Commissioner, is noticed only to be rejected. Neither the observation of the learned single Judge to send the document to the Deputy Commissioner for further action under sub-section (2) of Section 37 means fresh adjudication by the Deputy Commissioner nor can that statutory provisions be interpreted in the manner as suggested by the learned counsel.

The trial Court, on the basis of the said observations, without applying its mind to the aforesaid statutory provisions, as to what is "further ''action'', jumped to the conclusion that sub-section (2) of Section 37 of the ''Act'' requires a reference to the Deputy Commissioner for fresh adjudication in the matter of deficit duty and penalty over the instrument impounded. So also the trial Court without noticing the words ''abandon the suit'' in the affidavit of the plaintiff accompanying I.A. No. 11, was to the effect that the plaintiff did not propose to continue the suit but abandon his claim on the basis of the suit document none other than the agreement of sale nevertheless allowed I.A. No. 11, observing that "plaintiff does not want to abandon the suit". That observation is ex facie perverse, while the order a judicial impropriety calling for interference.

The Deputy Commissioner, apparently, on the basis of the order allowing I.A. No. 11, misconstruing sub-section (2) of Section 37 as investing a jurisdiction in him to determine afresh the deficit duty and penalty, submitted the report dated 16.11.2012 Annexure-K, determining deficit stamp duty of Rs. 8,99,900/- and penalty of Rs. 89,99,00/-, totaling to Rs. 98,98,900/-, and followed it by addressing a letter dated 26.12.2012 Annexure-L to re-forward the said report dated 16.11.2012, to correct the discrepancies and errors that had crept in the adjudication of the deficit duty and penalty.

Defendants plea in I.A. No. 12, to pass an order to dismiss the suit, in the light of the plaintiff''s sworn testimony to abandon the claim in the suit as disclosed in the affidavit accompanying I.A. No. 11, without assigning any reasons, rejected it by order dated 24th April 2013. The Order on the face of it suffers from non-consideration of relevant material and hence, perverse.

Insofar as the order relating to allowing I.A. No. 13 filed by the plaintiff to re-forward the report dated 16.11.2012 of the Deputy Commissioner for correction of the errors over determination of the deficit stamp duty and penalty, the trial Court on an erroneous understanding of Section 67-A of the ''Act'' held that the order passed under Sub-section (2) of Section 37 of the ''Act'' was subject matter of review jurisdiction. Without much ado, as the ''Act'' does not permit fresh adjudication of deficit stamp duty and penalty on instrument once impounded and so determined by the Court, the Deputy Commissioner could not have exercised review jurisdiction under Section 67-A. On that score too, the Court below committed an error apparent on the face of the record, calling for interference.

The less said the better over the conduct of the plaintiff in abusing the process of the Court. The suit is instituted in the year 2006 and from 2009 onwards the matter relating to payment of deficit duty and penalty over the suit document is pursued vigorously by the plaintiff by filing a writ petition, special leave petition and there afterwards three IAs., supra, while at the same time, swearing on oath in the affidavit accompanying I.A. 11 that he has abandoned the suit. The conduct of the plaintiff while deserving condemnation, warrants imposition of extraordinary costs.

In the result, these petitions are allowed. Order dated 18.3.2011 allowing I.A. No. 11 of the plaintiff; report dated 16.11.2012 Annexure-K of the Deputy Commissioner, the correspondence dated 26.12.2012 Annexure-L of the Deputy Commissioner; and the common order dated 24th April 2013 on I.A. 12 and 13 are quashed. I.A. 11 and I.A. 13 are dismissed. Proceeding is remitted for consideration afresh over I.A. No. 12 and to pass orders strictly in accordance with law. Plaintiff is directed to pay cost of Rs. 8,000/- to defendants at Rs. 2,000/- for each defendant.