Sri Shrishail Alias Shrishailgouda S/O Basangouda… — Writ and Judicial Review | Karnataka HC (2025)

Sri Shrishail Alias Shrishailgouda S/O Basangouda… — Writ and Judicial Review | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Dismissed

Issue for consideration

Whether the Trial Court could lawfully determine the deficit stamp duty and consequent penalty on the agreement dated 29.09.2014 when it relates to the same property as the earlier sale agreement dated 09.12.2011. +1 more

Court's answer

On the agreement dated 29.09.2014, stamp duty under Article 5(e)(ii) at 10 paise per Rs.100 of the Rs.11,00,000/- consideration works out to Rs.1,100/-; execution on a Rs.100/- stamp paper left a deficit of Rs.1,000/- and the Trial Court's imposition of a ten-times penalty totalling Rs.11,000/- is consonant with the statutory mandate, without illegality or procedural infirmity, and is fully justified.

Ratio / Principle

The Court acts as an independent authority in assessing whether a document is properly stamped; if it is not, the Court can calculate the deficit in stamp duty, impose the appropriate penalty (up to 10 times the shortfall), and admit the document in evidence upon payment.

Key takeaways

Even in the absence of a reference under Section 37 of the Act to the Deputy Commissioner, the Court was well within its jurisdiction to determine the deficit stamp duty and penalty; the petitioner's contention is devoid of merit and warrants no interference.ratio¶36

Detailed headnote1 paragraphs

High Court of Karnataka, Dharwad Bench (Sachin Shankar Magadum, J.), dismissed a writ petition under Articles 226 and 227 filed by the plaintiff in O.S. No.579/2014 seeking certiorari against the order dated 19-10-2021 of the III Addl. Sr. CJ and CJM, Dharwad, which called upon him to pay deficit stamp duty of Rs.65,800/- with ten-times penalty (Rs.6,58,000/-) on the sale agreement dated 09.12.2011 and deficit duty of Rs.1,000/- with Rs.10,000/- penalty on the agreement dated 29.09.2014. Holding: the agreement dated 29.09.2014 attracts duty under Article 5(e)(ii) of the Karnataka Stamp Act, 1957 at 10 paise per Rs.100 of the Rs.11,00,000/- consideration, i.e., Rs.1,100/-, so execution on a Rs.100/- paper left a Rs.1,000/- deficit and the ten-times penalty (Rs.11,000/- total) accords with the statute. The civil Court acts as an independent authority under Section 34 of the Act: it may itself compute the deficit, impose penalty up to ten times the shortfall and admit the document on payment; a reference to the Deputy Commissioner under Section 37 was not a prerequisite. Reliance placed on Seetharama Shetty v. Monappa Shetty (Apex Court). Writ petition dismissed as devoid of merit.

1 - NC: 2025:KHC-D:6349 WP No. 102033 of 2022

IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

DATED THIS THE 9^TH DAY OF APRIL 2025

BEFORE THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM

WRIT PETITION NO.102033 OF 2022 (GM-CPC)

BETWEEN:

SRI. SHRISHAIL @ SHRISHAILGOUDA S/O. BASANGOUDA RONAD, AGE: 50 YEARS, OCC: ADVOCATE, R/O. KHATIJA HANCHINAMANI, H.NO.227, SAPTAGIRI NAGAR, DHARWAD-580001.

…PETITIONER

(BY SRI. VINAY S.KOUJALAGI, ADVOCATE)

AND:

SRI. NAGAPPA @ NAGARAJ S/O. SHANKARAPPA SURYAVAMSHI, AGE: 53 YEARS, OCC: AGRICULTURE, R/O. TERAGAOAN, TQ: HALIYAL, DIST: UTTAR KANNADA-581363.

Digitally signed by ASHPAK KASHIMSA MALAGALADINNI Location: HIGH COURT OF KARNATAKA DHARWAD BENCH Date: 2025.04.25 14:30:16 +0530

SRI. NARAYAN S/O. SHANKARAPPA SURYAVAMSHI, AGE: 50 YEARS, OCC: AGRICULTURE, R/O. TERAGAOAN, TQ: HALIYAL, DIST: UTTAR KANNADA-581363.

BASHASAB S/O. ADAMSAB HAVALADAR, AGE: 78 YEARS, OCC: AGRICULTURE, R/O. LINE BAZAR, KORWAR ONI, DIST: DHARWAD-580001.

…RESPONDENTS

(BY SRI. ARUN L.NEELOPANT AND MISS. KAVITA S.JADHAV, ADVOCATES FOR R1 AND R2; NOTICE TO R3 IS SERVED)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT IN THE NATURE OF CERTIORARI OR ANY OTHER WRIT, ORDER QUASHING THE ORDER DATED 19-10-2021 PASSED BY THE III ADDL SR.CJ AND

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CJM, IN OS NO.579/2014 DHARWAD PRODUCED AT ANNEXURE-E BY ALLOWING THIS WRIT PETITION IN THE INTEREST OF JUSTICE AND EQUITY.

THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM

ORAL ORDER

Captioned petition is filed by the plaintiff assailing the order passed by the Court below, wherein, learned Judge has called upon the plaintiff to pay the deficit stamp duty of ₹65,800/- and 10 times of penalty to the tune of ₹6,58,000/- on the sale agreement dated 09.12.2011. Learned Judge has also called upon the plaintiff to pay a deficit stamp duty of ₹1,000/- including penalty of ₹10,000/- on agreement dated 29.09.2014.

Plaintiff's counsel contends that the agreement dated 29.09.2014 relates to the same property and therefore, learned Judge could not have determined the deficit stamp duty and consequent penalty.

Upon a specific query posed to the learned

counsel appearing for the plaintiff as to whether the

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plaintiff is willing to relinquish reliance on the document dated 29.09.2014, it was submitted that the plaintiff intends to place reliance on both the second agreement dated 29.09.2014 as well as the earlier sale agreement dated 09.12.2011. In light of the plaintiff’s decision to rely on the second agreement, it becomes necessary to examine the adequacy of the stamp duty paid thereon. The said agreement, being dated 29.09.2014, attracts stamp duty in accordance with Article 5(e)(ii) of the Karnataka Stamp Act, 1957 (hereinafter referred to as ‘the Act’ for brevity), which prescribes a rate of 10 paise for every ₹100/- of the sale consideration. The agreement records a sale consideration of ₹11,00,000/-, and therefore, the proper stamp duty payable thereon would amount to ₹1,100/-. However, the agreement is executed on a stamp paper of merely ₹100/-, thereby resulting in a deficit of ₹1,000/-. The learned Trial Judge, having rightly taken note of this deficit, has proceeded to impose a penalty of ten times the deficit stamp duty, as contemplated under the Act, thereby directing the plaintiff

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to pay a total of ₹11,000/-. This order is in consonance with the statutory mandate and does not suffer from any illegality or procedural infirmity. The determination made by the Court below is therefore fully justified and in accordance with the law.

With regard to the earlier sale agreement dated 09.12.2011, the petitioner has contended that the learned Trial Judge ought to have referred the document to the Deputy Commissioner for proper adjudication and determination of the requisite stamp duty and penalty, as envisaged under Section 37 of the Act. However, such contention does not merit acceptance. It is evident from the records that the learned Trial Judge has taken into account the relevant material, including the report obtained from the competent authority, while determining the stamp duty payable.

As rightly submitted by the learned counsel

appearing for the defendant, the authority of the Court to assess the deficit stamp duty and impose penalty under

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Section 34 of the Act, is well-recognized. The power of the Court to impose appropriate penalty under Section 34 of the Act was reiterated by the Apex Court in the case of Seetharama Shetty v. Monappa Shetty¹ . The Court acts as an independent authority in assessing whether a document is properly stamped. If it is not, the Court can calculate the deficit in stamp duty, and impose the appropriate penalty (up to 10 times the shortfall), and admit the document in evidence upon payment of the same.

Therefore, even in the absence of a reference under Section 37 of the Act, the Court was well within its jurisdiction to make such determination. In view of this, the contention raised by the petitioner is devoid of merit and does not warrant any interference.

Writ petition being devoid of merits stands dismissed.

Sd/(SACHIN SHANKAR MAGADUM) JUDGE

AM/-. Ct:vh. List No.: 1 Sl No.: 7

1 2024 SCC OnLine 2320