Writ petition seeking quashing of Civil Court order. Court held impugned order quashing order directing petitioner to pay stamp duty and proceed under Section 37(1) requiring penalty calculation by court.
Impugned order dated 14.01.2019 in O.S.No.381/2015 quashed. Civil Court directed to consider deficit stamp duty and penalty afresh.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 29TH DAY OF NOVEMBER 2021
BEFORE
THE HON’BLE MR. JUSTICE B. M. SHYAM PRASAD
WRIT PETITION NO.11976/2019 (GM-CPC)
BETWEEN :
SMT SAROJA W/O SRI G NAGARAJ, AGED ABOUT 44 YEARS, R/AT NO.19, JYOTHI NAGARA, NELAMANGALA TOWN, BENGALURU RURAL DISTRICT, BENGALURU-562123
... PETITIONER
(BY SRI. K.K.VASANTH, ADVOCATE AND SRI. G. BALAJI NAIDU, ADVOCATE)
AND :
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THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER DATED 14.01.2019, PASSED IN O.S.NO.381/2015, ON THE FILE OF III ADDITIONAL
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SENIOR CIVIL JUDGE AND JMFC AT TUMAKURU, VIDE ANNEXURE-D. WITH RESPECT STAMP DULY AND ETC.
THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R
The petitioner, who is the plaintiff in
O.S.No.381/2015 on the file of the III Additional Senior
Civil Judge and JMFC, Tumakuru (for short, 'the civil Court '), has impugned the civil Court's order dated 14.01.2019. The civil Court by this order has called upon the petitioner to pay stamp duty and penalty as per the Communication dated 27.12.2018 received from the District Registrar, Tumakuru District, Tumakuru.
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of being dealt in accordance with law. The civil Court has allowed this application by its order dated 14.12.2018 and has called for a report by the District Registrar, Tumakuru District, who has filed the report on 27.12.2018 after repeated reminders. The District Registrar, by the report dated 27.12.2018, has opined that the petitioner must pay a sum of Rs.1,54,800/(Rupees One Lakh Fifty Four Thousand Eight Hundred Only) as deficit stamp duty.
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the penalty payable by the petitioner instead of leaving it to the civil Court’s discretion. The learned counsel elaborates that the civil Court, while referring the document, did not decide the deficit stamp duty and the quantum of penalty to be paid as required under Section 37(1) of the Stamp Act and therefore, the reference to the District Registrar to file a report should have been necessarily construed as a reference under Section 37(2) thereof which would entail an obligation on the District Registrar to not only quantify the deficit stamp duty but also the penalty.
Court in United Precision Engineers Pvt. Ltd. Vs.
KIOCL Ltd. reported in ILR 2016 KAR 1707 , and a useful reference in this regard could be made to paragraph Nos.11 and 12 of this decision which reads as under:
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"11. From the provisions contained in Sections 33, 34, 37(1), 37(2), 38, 39 of the Karnataka Act, 1957, the view expressed by the Hon'ble Supreme Court and the Hon'ble Division Bench, the position of law is therefore clear that the obligation cast on the Civil Court in respect of an instrument not being duly stamped, is to impound the same and determine the duty and penalty payable. The Civil Court has no discretion, but to impose the penalty of ten times of the deficit and permit the party to pay the same. If the party chooses to pay the same, the effect of impounding gets diluted and the document will become admissible in evidence for the purpose of proving the same as per law. In such event, the Civil Court is required to despatch an authenticated copy of the instrument along with the deficit duty and penalty collected, to the Deputy Commissioner. The matter does not stop at that. Though the Civil Court as bound by law would collect the penalty at ten times, the power is still vested with the Deputy Commissioner under Section 38 of the Karnataka Act, 1957 to hold an enquiry and reduce the penalty in the manner as provided therein.
12. As observed in Digambar Warty (supra) the said procedure is prescribed with a dual purpose, firstly, to avoid overburdening the Court with the
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work of deciding the quantum of penalty as it would require providing opportunity and arriving at a decision. Secondly, it is also to accelerate the proceedings before the Court by giving an option to the party to pay the amount and proceed with the case and thereafter secure a decision from the Deputy Commissioner with regard to actual penalty payable and obtain refund if any. On the other hand, on determination by the Civil Court if the party does not choose to pay the amount, the impounding will continue to subsist. In such situation the instrument will not be available to be admitted in evidence and as such the original is to be sent to the Deputy Commissioner as provided under Section 37(2) of the Karnataka Act, 1957. In that case, the Deputy Commissioner shall proceed in terms of Section 39 of the Karnataka Act, 1957 and on such consideration after collecting the amount, it will be sent back to the Impounding Officer since on such collection of the amount the impounding will stand diluted and the instrument will become admissible."
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decide on the deficit stamp duty and collect the penalty as contemplated under the Stamp Act. If only the deficit stamp duty and penalty is not paid, the document is to be sent under Section 37(2) of the Stamp Act.
In the light of the above, the impugned order dated 14.01.2019 in O.S.No.381/2015 on the file of the III Additional Senior Civil Judge and JMFC, Tumakuru is quashed. The civil Court is called upon to consider the question of deficit stamp duty and the penalty afresh in the light of the aforesaid decision.
Sd/JUDGE
RB
2 issues framed by the court
Whether the District Registrar should have decided the quantum of penalty instead of leaving it to the Civil Court after referring the instrument.
Whether the reference to the District Registrar amounts to a reference under Section 37(2) of the Stamp Act when the Civil Court refrained from determining deficit duty and penalty.
Colour shows how this judgement treated each authority
United Precision Engineers Pvt. Ltd. Vs. KIOCL Ltd.Relied on¶38
ILR 2016 KAR 1707 · Who else cites this
5 provisions across 2 enactments
Smt Saroja w/o Sri Nagaraj
Smt GANGAMMA d/o Late Rangaiah
Sri ERANNA s/o Late Nanjundaiy
Sri RANGAIAH s/o Late Nanjundaiy
Smt HANUMAKKA d/o Late Nanjundaiy
Sri N KUKMAR s/o Late Nanjundaiy
B. M. Shyam Prasad
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
B. M. Shyam Prasad
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