The High Court dismissed a writ petition challenging an order impounding sale agreements alleged to be insufficiently stamped. Relying on statutory duties under the Stamp Act, the Court held that insufficiently stamped documents must be impounded upon examination to protect revenue, regardless of whether the documents were yet tendered as evidence.
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 21ST DAY OF APRIL, 2022
BEFORE
THE HON’BLE MR. JUSTICE E.S. INDIRESH
WRIT PETITION NO.8983 OF 2019 (GM-CPC)
BETWEEN:
M J BABU
SINCE DECEASED BY HIS LRS.
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W/O AVINASH GOPAL REDDY R/AT NO.105, 5TH MAIN I CROSS, KRISHNAGAR KOTHANUR DINNE J P NAGAR, 8TH PHASE BENGALURU-560 076.
...PETITIONERS
(BY SRI ANANTHA NARAYANA B N, ADVOCATE)
AND:
HANUMANTHA REDDY SINCE DECEASED BY LRS.
R1 TO 4 ARE R/AT NO.184, 44TH CROSS, JAYANGAR, 8TH BLOCK BENGALURU- 560062.
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R/AT NO.184, 44TH CROSS, JAYANAGAR, 8TH BLOCK, BENGALURU - 560 062.
6 . R. GOPALA REDDY S/O LATE RAMA REDDY AGED 56 YEARS R/O NO.42, RAJANI TOWERS, 27TH CROSS, 7TH "B" MAIN, 4TH BLOCK JAYANGAR, BENGALURU - 560 011.
8 . T.V. RAMANATHA SETTY MAJOR S/O T.V. VENKATACHALA SETTY NO.96, 11TH CROSS, 16TH MAIN ROAD, BTM 1ST STAGE, TAVAREKERE ROAD, BENGALURU 560 029.
9 . SMT. T.R. NAVARATHNA MAJOR W/O T.V. RAMANATHA SETTY 11TH CROSS, 16TH MAIN ROAD, BTM 1ST STAGE, TAVARAKERE ROAD, BENGALURU- 560 029.
10 . SMT. M.P. SHAMALA MAJOR W/O M.L. PRAKASH GUPTA,
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NO.204/B, 6TH MAIN ROAD, 3RD BLOCK, JAYANGAR, BENGALURU - 560 011.
11 . T.S. CHITTAPPA AGED ABOUT 73 YEARS S/O LATE T.K. SUBBAIAH PROP: ADISHAKTHI POLULTRY FARM, 5TH PHASE, 5TH PHASE, J.P. NAGAR, BENGALURU - 560078.
….RESPONDENTS (BY SRI M C JAYA KIRTHI, ADVOCATE FOR R11; SRI B S MAHENDRA, ADVOCATE FOR R1 TO 5; SRI D P PRASANNA, ADVOCATE FOR R7 SRI DORESWAMY GOWDA, ADVOCATE FOR R6)
THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO THE ORDER DATED 28TH JANUARY, 2019 PASSED IN ORIGINAL SUIT NO. 6338 OF 2003 PENDING ON THE FILE OF THE COURT OF THE XXX ADDITIONAL CITY CIVIL & SESSIONS JUDGE, BANGALORE DIRECTING THE PLAINTIFF/PETITIONER TO PAY DEFICITY STAMP DUTY AND PENALTY OF RS.20,05,025/- ON THE SALE AGREEMENT DATED 05TH JULY, 2001 AS PER ANENXURE-J BE QUASHED AND ETC.,
IN THIS WRIT PETITION ARGUMENTS BEING HEARD, JUDGMENT RESERVED, COMING ON FOR "PRONOUNCEMENT OF ORDERS", THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R
This Writ Petition is filed by the plaintiff in Original Suit No.6338 of 2003 on the file of XXX Additional City Civil and
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Sessions Judge, challenging the order dated 28th January, 2019; on his demise, being prosecuted by the legal representatives of the deceased plaintiff.
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duty and accordingly, the documents were impounded. Being aggrieved by the same, the plaintiff has preferred this Writ Petition.
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05th July, 2001, purchaser has been put in possession of the suit schedule property on the date of execution of sale agreement and therefore, the finding recorded by the trial Court requires interference in this Writ Petition.
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the defendants 1 and 2 are the absolute owners of the suit schedule property and they have entered into an agreement of sale dated 05th July, 2001 with the defendant No.3 for sale of the suit schedule property for a total consideration of Rs.18,24,570/and in addition to this, defendants 1 and 2 had executed a General Power of Attorney in favour of the defendant No.3 to negotiate and to sell the suit schedule property. The third defendant, on the basis of the agreement of sale dated 05th July, 2001 and the General Power of Attorney dated 08th August, 2001, entered into an agreement with the plaintiff on 06th December, 2001, agreeing to sell the suit schedule property for total consideration of Rs.18,24,570/-. It is the case of the plaintiffs that the defendants 1 to 3 received a sum of Rs.4,20,000/- as advance amount towards the sale consideration amount and agreed to complete the transaction within six months from the date of the said agreement of sale. It is further stated that the third defendant delivered the original agreement dated 05th July, 2001 entered into between himself and defendants 1 and 2 as well as the original power of attorney along with other title deeds. The dispute arose, as the
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defendants refused to execute the registered sale deed culminating the plaintiff to file Original Suit No.6338 of 2003 before the trial Court seeking relief of specific performance. Defendants entered appearance. Issues were framed and at the time of chief examination of PW1, the plaintiff sought to produce the sale agreements dated 05th July, 2001, 06th December, 2001 and the GPA dated 08th August, 2001 executed by the defendants 1 and 2 in favour of the defendant No.3 and at that stage, the defendants objected for marking of aforementioned documents on the ground that they are insufficiently stamped. The trial Court, in furtherance of the same and after hearing the parties, passed the impugned order. The principal argument of the learned counsel appearing for the petitioner is that, the trial Court impounded the aforementioned documents without affording opportunity by causing notice and the same is bad in law. The next, limb of argument was that the documents are liable for impounding within five years from the execution of the sale in terms of Section 46A of the Act and therefore, the impugned order is bad in law. In the light of these facts, the relevant point to be answered is whether the document is liable
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to be impounded or not. In this regard, it is settled principle of law that when the document is produced before the Court and if the Court is of the opinion that the said document is insufficiently stamped, shall, at any stage of the proceedings, impound the same under Section 33 of the Act, which is the statutory duty under the Act. Section 33 of the Act cast a duty on the court to examine the document to find out whether it is duly stamped or not, irrespective of the fact whether an objection to its marking is raised or not. Section 37 of the Act, confers power on the trial Court to do when the person has collected duty and penalty under Section 34 of the Act and what he has to do, if the case does not call fall under Section 34 of the Act. Perusal of the provisions of Section 34 read with Section 37 of the Act would substantiate that, when the trial Court has acted under Section 34 and collected stamp duty and penalty and admitted the document in evidence, then under Section 37(1) of the Act, the trial Court shall send the document to the Deputy Commissioner for authenticated copy of such document together with a certificate in writing stating the amount of duty and penalty levied in respect thereof and shall send such amount
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to the Deputy Commissioner or such person, as he may appoint in this behalf. If the document is insufficiently stamped and if the Court has admitted such instrument in evidence without collecting duty and penalty, then the judge shall proceed under Section 33 of the Act and impound the document. After impounding the document, he shall proceed under Section 37(2) of the Act and shall send the impounded instrument, in original, to the Deputy Commissioner, to be dealt with under Section 39 of the Act. Even if the objection is not raised at the time of marking of the document, it does not mean that it takes away the obligation of the Court to impound the document under Section 33 of the Act. In that view of the matter, I am not inclined to accept the submission of the learned counsel appearing for the petitioner that the document has been accepted without objection and no notice has been given to the petitioner seeking explanation. In this regard, it is relevant to the refer to the Division Bench judgment of this Court in the case of MISS. SANDRA LESLEY ANNA BARTELS (supra) at paragraphs 11 to 13 of the judgment has observed thus:
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“11. There are two different circumstances under the Stamp Act for impounding a document; (1) the Court has power to impound the document, 13 WP 30884/2012 moment it appears to the Court that such instrument is not duly stamped and (2) or to wait till such document is tendered in the evidence. A combined reading of Secions 33 and 34 clearly reveal that a discretion is granted to the Court either to impound the document under Section 33 before the same is tendered in evidence and even if a document is not impounded under Section 33, the Court is bound to impound the document when the same is tendered in the evidence under Section 34. In other words, the Court cannot say that it will wait till the document is tendered in the evidence. It is only an option given to Court to exercise the power under Section 33 and 34 but the difference between Sections 33 and 34 is that, Section 34 can be enforced by a Court when a document has to be received in the evidence but Section 33 can be invoked not only by the Court, but, by every person 14 WP 30884/2012 in-charge of a public office. A person in-charge of a public office has no power to exercise the power vested under Section 34 of the Act.
12. Court cannot say that it would impound the document only when the document is tendered in evidence for marking. There may be instances where duty and penalty payable may be very high and the party may not choose to rely upon such insufficiently stamped document in order to avoid stamp duty and penalty. In such
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circumstances, it would result in loss of revenue to the exchequer. The power of impounding a document is to collect stamp duty and penalty whenever there is an escape of duty. Therefore, when it is brought to the notice of the Court that a document is insufficiently stamped, the Court exercising its power under Section 33 of the Act has to pass an order at the first instance for 15 WP 30884/2012 impounding the document. Though there is a discretion vested in the Court to exercise powers under Sections 33 and 34 of the Act, no Court can hold that it would wait till the document is tendered in evidence. In such circumstances, there may be chances of loss of revenue to the exchequer.
13. In the circumstances, we answer the reference "holding that under Section 33 of the Stamp Act, the moment an insufficiently stamped instrument comes to the notice of the Court, the same has to be impounded in accordance with Section 33, whether the same would be relied upon by the party under Section 34 or not". ”
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continuation of the sale agreement dated 05th July, 2001 and therefore, the impugned order passed by the trial Court is just and proper. Writ Petition is accordingly dismissed.
Sd/JUDGE
lnn
3 issues framed by the court
Whether the trial Court was obligated to impound an insufficiently stamped document under Section 33 of the Stamp Act even before it was tendered as evidence.
Whether the limitation period under Section 46A of the Stamp Act bars the impounding of documents executed years prior.
Whether the High Court should interfere with the trial Court's order impounding the sale agreements for specific performance proceedings.
Colour shows how this judgement treated each authority
MISS. SANDRA LESLEY ANNA BARTELS v. MISS. P. GUNAVATHYDistinguished¶62
ILR 2013 KAR 368 · Who else cites this
2 provisions across 2 enactments
SMT. K C BHAGYALAKSHMI AND ORS.
SMT. GEETHA AND ORS.
E.S. INDIRESH
As recorded by the court registry
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