Allowed

M/S Kalyani Motors Private Limited v. Sri Krishnappa L

Karnataka HC21 Feb 2024WP/5917/2020

Case brief

AI extract

What is this about?

A writ petition challenging a trial court's imposition of duty penalty under Article 5(e)(i) on an agreement of sale in a specific performance suit. The court found possession was agreed to be delivered only at sale deed execution, so Article 5(e)(ii) applies, quashed the prior determination, and directed fresh calculation.

What did the court decide?

Determination of duty/penalty invoking Article 5(e)(i) quashed; Trial Court directed to apply Article 5(e)(ii) and determine duty penalty afresh.

M/S Kalyani Motors Private Limited Vs Sri Krishnappa L — Specific Performance | Karnataka HC (2024)

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1 - NC: 2024:KHC:7195 WP No. 5917 of 2020

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 21^ST DAY OF FEBRUARY, 2024

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BEFORE

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THE HON'BLE MRS JUSTICE M G UMA WRIT PETITION NO. 5917 OF 2020 (GM-CPC)

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BETWEEN:

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M/S KALYANI MOTORS PRIVATE LIMITED A COMPANY INCORPORATED UNDER THE COMPANIES ACT 1956 AND HAVING ITS REGISTERED OFFICE AT NO.24/1 AND 25/1 NEAR NAYANDAHALLI SIGNAL 100 FEET RING ROAD MYSORE JUNCTION BENGALURU - 560 039 REPRESENTED BY ITS AUTHORIZED SIGNATORY MR. D NAGENDRA PRASAD

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…PETITIONER

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(BY SRI. PRASANNA KUMAR R S.,ADVOCATE)

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AND:

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SRI KRISHNAPPA L Digitally signed by S/O LATE KRISHNAPPA PAVITHRA N AGED ABOUT 60 YEARS Location: High R/AT NO.119 Court of Karnataka BILLEKAHALLI SUNAKALLU BEEDHI BANNERGHATTA ROAD, BANGALORE - 560 076

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…RESPONDENT

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(BY SRI. D NAGARAJA REDDY .,ADVOCATE)

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THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE ORDER DATED 08.08.2019, 23.08.2019, 22.10.2019 AND 30.11.2019 PASSED BY THE LEARNED LX ADDITIONAL CITY CIVIL JUDGE AND

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NC: 2024:KHC:7195 WP No. 5917 of 2020

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SESSIONS JUDGE AT BENGALURU IN O.S.NO.8559/2016 THEREBY DISMISSING THE IA NO,.2 UNDER SECTION 33 AND 34 OF KARNATAKA STAMP ACT READ WITH SECTION 151 OF CODE OF CIVIL PROCEDURE AND ETC.,

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THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN B-GROUP THIS DAY, THE COURT PASSED THE FOLLOWING:

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ORDER

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The plaintiff in OS No.8559 of 2016 on the file of the learned LX Additional City Civil and Sessions Judge, Bengaluru, is seeking issuance of writ of certiorari to quash the orders dated 08.08.2019, 23.08.2019, 22.10.2019 and 30.11.2019, dismissing IA No.2 filed under Sections 33 and 34 of Karnataka Stamp Act read with Section 151 of CPC.

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Heard Sri. Prasanna Kumar R S, learned counsel for the petitioner and Sri. D Nagaraja Reddy, learned counsel for the respondent. Perused the materials on record.

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Learned counsel for the petitioner contended that

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the petitioner as plaintiff filed the suit for specific performance of the contract i.e., agreement of sale dated 18.07.2016. The defendant had filed IA No.2 under Sections 33 and 34 of

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3 - NC: 2024:KHC:7195 WP No. 5917 of 2020

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Karnataka Stamp Act seeking impounding of the agreement of sale dated 18.07.2016.

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Learned counsel contended that the Trial Court only relying on the endorsement made by the officials in the office called upon the plaintiff to pay duty penalty of Rs.19,58,800/-. The Office has invoked Article 5 (e) (i) of the Karnataka Stamp Act to hold that the plaintiff is liable to pay duty penalty as per conveyance, since the delivery of possession was agreed to be delivered.

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Learned counsel submitted that the recitals in the

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agreement to sale make it clear that the parties have agreed to get the delivery of subject property within 45 days from the date of execution of the agreement i.e., at the time of executing the sale deed. Therefore, clause 1 of Article 5 (e) (i) is not applicable but it is clause 2 of Article 5 (e) is to be made applicable. Accordingly, he prays for allowing the petition with necessary directions.

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Per contra, learned counsel for the respondent opposing the petition submitted that the office has made calculations on the basis of recitals found in the agreement.

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4 - NC: 2024:KHC:7195 WP No. 5917 of 2020

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The application IA No.2 filed under Sections 33 and 34 of Karnataka Stamp Act is not yet disposed off. Under such circumstances, the petitioner could not have approached this Court seeking issuance of writ of certiorari. Learned counsel submitted that the Trial Court may be directed to determine proper stamp duty and penalty to be payable and prays for dismissal of the petition.

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The agreement to sale relied on by the plaintiff is dated 18.07.2016. Clause 2 of the agreement reads as under:

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"2. The PURCHASER has already paid the total sale consideration of Rs.35,00,000/-(Rupees Thirty Five Lakh Only) to the SELLER by way of cash payment, in advance, the receipt of which is acknowledged by the SELLER, before the undersigned witnessed. The SELLER undertakes to execute the Sale Deed for sale of the Schedule Property to the PURCHASER (or to its nominee, as the case may be) and deliver possession of the Schedule Property to the PURCHASER (or to its nominee, as the case may be), on or before the expiry of 45 (forty five) days from the date of this Agreement."

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Bare reading of this clause discloses that the seller

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had undertaken to execute the sale deed and hand over the

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NC: 2024:KHC:7195 WP No. 5917 of 2020

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possession of the property to the purchaser on or before the expiry of 45 days from the date of the agreement.

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Article 5 (e) (i) and (ii) reads as under:

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[(e) If relating to sale of immovable property wherein part performance of the contract

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(i) possession of the property is delivered or is agreed to be delivered [before] executing the conveyance

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Same duty as a conveyance (No. 20) on the market value of the property:

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[Provided that, where a deed of cancellation of earlier agreement is executed by and between the same parties in respect of the same property and if proper stamp duty has been paid on such agreement, then the duty on such "deed of cancellation" shall not exceed rupees five hundred.]

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[(ii) possession of the property is not delivered

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Explanation-I.- When a reference, of a Power of Attorney granted separately by the seller to the purchaser in respect of the property which is the subject matter of such agreement, is made in the agreement, then the possession of the property is deemed to have been delivered for the purpose of this clause.

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Ten paise for every one hundred rupees or part thereof on the market value equal to the amount of consideration subject to a maximum of rupees twenty thousand but not less than rupees five hundred:

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[provided that the duty paid on power of attorney under Articles 41(e) or 41(eb), as the case may be, is adjustable towards the duty payable on agreement for sale under Article 5(e) or instrument of sale or transfer, as the case may be, executed between the same parties and in respect of the same property.]

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Explanation-II.- For the purpose of clause (e) and clause (h) where subsequently conveyance or mortgage as the case may be, is executed between the same parties in pursuance of such agreement or its records or memorandum, the stamp duty, if any, already paid and recovered on the agreement or its record or memorandum shall be adjusted towards the total duty leviable on the conveyance or mortgage, as the case may be

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NC: 2024:KHC:7195 WP No. 5917 of 2020

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If the provision of law is read along with the recitals found in the agreement, it is clear that the seller has never agreed to deliver the possession of property before executing the conveyance. On the other hand, it was agreed that the possession of the property will be delivered in favour of purchaser or nominee, on the date of executing the sale deed. Therefore, it is Article 5 (e) (ii) which could be made applicable to the present case.

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The order sheets of the Trial Court dated 08.08.2019, 23.08.2019, 22.10.2019 and 30.11.2019 discloses that the Court has not applied its mind for calculating the stamp duty and penalty to be payable by the plaintiff. It has entrusted the duty to the office to determine the provision of law and duty penalty payable on the agreement. Accordingly, office note states that the duty under Article 5 (e) (i) is liable to be calculated, which was blindly accepted by the Trial Court. The office note further states that the plaintiff is liable to pay duty penalty under Article 5 (e) (i) at Rs. 19,58,800/-. Further, the order sheet dated 13.01.2020, 15.02.2020 and 16.03.2020 discloses that time was granted to the plaintiff for paying the

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NC: 2024:KHC:7195 WP No. 5917 of 2020

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duty penalty. However, there is no reference to the application IA No.2 filed by the defendant under Sections 33 and 34 of the Karnataka Stamp Act and it is not stated as to whether the said application was allowed or not. However, the fact remains that as per the direction of the Court, the office calculated the stamp duty and penalty payable by the plaintiff invoking Article 5(e) (i) of the Karnataka Stamp Act. Accordingly, plaintiff was given time to pay the same.

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Under such circumstances, I do not find any merit

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in the submissions made by the learned counsel for the respondent. In view of the above, I do find considerable force in the contentions taken by the petitioner.

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Hence, I proceed to pass the following:

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ORDER

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(i) The Writ Petition is allowed.

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(ii) Determining the duty and penalty payable by the plaintiff on the agreement to sale dated 18.07.2016, invoking Article 5(e) (i) of the Karnataka Stamp Act, is hereby quashed.

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NC: 2024:KHC:7195 WP No. 5917 of 2020

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(iii) The Trial Court is directed to apply Article 5 (e) (ii)

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of Karnataka Stamp Act to determine the duty penalty payable afresh, in accordance with the observations made above.

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Sd/JUDGE

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SB,SPV List No.: 1 Sl No.: 6

M/S Kalyani Motors Private Limited v. Sri Krishnappa L

Case brief

What is this about?

What did the court decide?

M/S Kalyani Motors Private Limited v. Sri Krishnappa L

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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