Karnataka High Court
Sri. K V. Venkatesh vs Smt. Vasanth Kumari on 8 January, 2025
Author: R Devdas
Bench: R Devdas
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU R
DATED THIS THE 08TH DAY OF JANUARY, 2025
BEFORE
THE HON'BLE MR.JUSTICE R.DEVDAS
WRIT PETITON NO. 2720 OF 2023 (GM-CPC)
BETWEEN
SRI. K V. VENKATESH
S/O LATE VENKATARAMAIAH
AGED ABOUT 54 YEARS
OCC BUSINESS ADD NO 4/3
HOSATTI LAYOUT, KODIGEHALLI
SAHAKARANAGAR POST
BENGALURU 560095
......PETITIONER
(BY SRI. VENKATESH P DALWAI., ADVOCATE)
AND
1 . SMT. VASANTH KUMARI
D/O SRI NARAYANAPPA
AGE ABOUT 52 YEARS
ADD 3769 OPP GARADI TALUK ROAD
DODDABALLAPUR
BANGALORE RURAL DISTRICT-561203
2 . SRI M VIJAYAKUMAR
S/O SRI MUDDAPPA
AGE 46 YEARS
ADD GANGADHARAPURA MAJARA
HOSAHALLI KASABA HOBLI
DODDABALLAPURA
BANGALORE RURAL DISTRICT-561203
3 . MRS UMA DEVI
W/O B LAKHAN SINGH
AGE 60 YEARS
OCC HOUSE WIFE
ADD NO 22/1 MILLERS ROAD
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1ST CROSS BENSON TOWN
BANGALORE - 560046
4 . MRS L PRABHADEVI
D/O LATE B LAKHAN SINGH
AGED ABOUT 55 YEARS
R/AT NO 22/4 3RD FLOOR
MILLERS ROAD 1ST CROSS
BENSON TOWN BANGALORE - 560046
5 . SRI L RAKESH SINGH
S/O LATE B LAKHAN SINGH
AGED ABOUT 42 YEARS
R/AT NO 22/1 3RD FLOOR
MILLERS ROAD 1ST CROSS
BENSON TOWN BANGALORE - 560046
6 . SRI L RAJESH SINGH
S/O LATE B LAKHAN SINGH
AGED ABOUT 40 YEARS
R/AT NO 22/1 3RD FLOOR
MILLERS ROAD 1ST CROSS
BENSON TOWN BANGALORE - 560046
7 . MRS KAJAL SINGH
D/O LATE B LAKHAN SINGH
AGED ABOUT 34 YEARS
R/AT NO 22/1 3RD FLOOR
MILLERS ROAD 1ST CROSS
BENSON TOWN BANGALORE - 560046
8 . STATE OF KARNATAKA
BY PRINCIPAL SECRETARY
REVENUE DEPARTMENT
VIDHANA SOUDHA
BANGALORE-01.
...RESPONDENTS
(BY SRI. PRABHUGOUD B TUMBIGI., ADVOCATE FOR R1
SRI. RAMACHANDRA., ADVOCATE FOR R2
SRI. M.R.RAJAGOPAL., SR. COUNSEL FOR
SRI. B.RAVINDRA PRASAD., ADVOCATE FOR R4 TO R7
SMT. H.R. AMARAVATHY., AGA FOR R8
R3 SERVED - UNREPRESENTED)
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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227
OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
IMPUGNED ORDER DATED 28/02/2019 PASSED BY THE LEARNED
SENIOR CIVIL JUDGE AND J M F C DODDABALLAPURA IN
O.S.NO.71/2012 PRODUCED AT ANNEXURE-D AND ETC.
THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED
ON 18.09.2024 AND COMING ON FOR PRONOUNCEMENT OF
ORDERS, THIS DAY, THIS COURT MADE THE FOLLOWING:
CORAM: HON'BLE MR JUSTICE R DEVDAS
CAV ORDER
(PER: HON'BLE MR JUSTICE R DEVDAS)
This writ petition filed under Articles 226 and 227 of
the Constitution of India seeks to quash the impugned order
dated 28.02.2019 passed by the learned Senior Civil Judge
and JMFC, Doddaballapur in O.S.No.71/2012.
2. It is necessary to notice the fact that the
impugned order was passed on 28.02.2019 directing the
petitioner/plaintiff to pay stamp duty of Rs.38,06,250/- and
ten times penalty amounting to Rs.3,80,62,500/-, totaling
to Rs.4,18,68,750/-, within two months from the date of the
order failing which, it was ordered that the plaintiff is not
entitled to get any other relief as per law. However, this
writ petition is filed on 31.01.2023, nearly 4 years after the
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impugned order was passed. However, it should also be
noticed that after the impugned order was passed on
28.02.2019, calling upon the petitioner/plaintiff to pay the
deficit stamp duty along with penalty, on non-payment of
the deficit stamp duty and penalty, the suit in
O.S.No.71/2012 was dismissed on 24.10.2019. The suit is
one for specific performance of the Memorandum of
Agreement dated 08.08.2009. The said order of dismissal
of the suit was questioned by the petitioner/plaintiff in Civil
Revision Petition No.299/2021, before this Court. This
Court, by order dated 11.08.2022, dismissed the CRP on the
ground that the order dated 28.02.2019, which is impugned
herein remained unchallenged by the plaintiff and the same
had reached finality. This Court held that the application
filed by the defendants in I.A.No.9, seeking dismissal of the
suit for non payment of stamp duty and penalty was rightly
allowed by the trial court, having regard to the fact that the
plaintiff failed to pay the stamp duty and penalty despite
sufficient time being granted and nearly 10 months had
elapsed after the order was passed on 28.02.2019.
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3. In this background, learned counsel for the
petitioner/plaintiff submits that the right of the plaintiff to
have his suit decided on merits cannot be curtailed because
of non payment of the stamp duty and penalty. At any rate,
when the plaintiff seeks to pay the stamp duty and penalty,
this Court should consider the challenge raised to the
impugned order dated 28.02.2019.
4. Learned counsel for the petitioner/plaintiff would
also argue that the petitioner has raised several relevant
grounds, including the fact that Section 46A of the
Karnataka Stamp Act bars recovery of stamp duty not levied
or short levied, after lapse of five years from the date of
commencement of the Karnataka Stamp (Amendment) Act,
1980 or the date on which the duty became payable,
whichever is later. It is contended that under the
Memorandum of Agreement dated 08.08.2009 physical
possession was not delivered to the plaintiff and therefore
invocation of Article 5(1)(e) of the Karnataka Stamp Act
seeking payment of 7% stamp duty on the basis of
Conveyance, is contrary to law. It is contended that the
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trial court has erred in not taking into consideration the
amendments brought to the Karnataka Stamp Act on
01.03.2014 and 01.04.2016. According to the learned
counsel for the petitioner the amendments create a liability
on the agreement holder to whom possession was delivered
even prior to the parties entering into an agreement of sale
and therefore, such provision being penal in nature are
prospective in nature. It is therefore contended that when
the petitioner/plaintiff sought for determination of the stamp
duty payable, the trial court should have referred the matter
to the competent authority. In this regard, reliance is
sought to be placed on a decision of the Hon'ble Supreme
Court in the case of Chilakuri Gangulappa VS. Revenue
Divisional Officer, Madanpalle and another - AIR 2001
SC 1321, wherein it was held that if the party agrees to
remit the stamp duty and penalty levied by the Court, the
Court has to proceed with the trial after admitting the
documents in evidence. If the parties are unwilling to remit
the amount, the Court should forward the original of the
document to the Collector for the purpose of adjudication on
the question of deficiency of stamp duty. Sub-section (2) of
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Section 37 of the Act provides that in every other case, the
person so impounding an instrument shall send it in original
to the Deputy Commissioner. Further, it was submitted that
a Division Bench of this Court, in Digambar Warty and
others VS. District Registrar, Bangalore Urban District
and another - ILR 2013 KAR 2099 also held in view of
sub-section (2) of Section 37 of the Act, the trail court may
proceed to send the instrument in original to the Deputy
Commissioner. The Deputy Commissioner may exercise his
power under Section 38 of the Act to refund the penalty
paid under sub-section (1) of Section 37 of the Act.
However, it was also held that the discretion conferred on
the Deputy Commissioner should be exercised in a judicial
manner. He will be exercising a quasi judicial power and
therefore he has to take into consideration the fact of the
case, the circumstances under which the instrument is
executed, the reason given either for not paying the stamp
duty or for payment of insufficient duty on such instrument
and other attendant circumstances and then, in his
discretion, he can reduce the penalty payable. This
submission is made while pointing out to the ordersheet
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maintained by the trial court, that after objections were
raised at the hands of the defendants regarding insufficiency
of stamp duty, the trial court impounded the document on
11.01.2018 and passed an order on 21.02.2018 - "for
payment of the deficit stamp duty and penalty - write letter
to the District Registrar - Call on 20.03.2018". Reliance is
also placed on a recent decision of the Apex Court in the
case of Seetharama Shetty VS. Monappa Shetty - 2024
SCC Online SC 2320.
5. Per contra, learned Senior Counsel Sri
M.R.Rajagopal, appearing for the contesting respondents,
raised the ground of delay and laches, while also contending
that the writ petition is not maintainable. It is submitted
that when the petitioner/plaintiff raised a challenge to the
order of dismissal of suit, by filing a Civil Revision Petition
before this Court and was unsuccessful, he cannot be
permitted to raise a challenge to the previous order dated
28.02.2019, regarding payment of stamp duty and penalty,
when the suit itself stands dismissed subsequently.
Reliance is placed on Gangappa and Another VS.
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Fakkirappa - (2019) 3 SCC 788, where the Hon'ble
Supreme Court upheld the decision of a Division Bench of
this Court in Digambar Warty (supra), that there is no
discretion vested with the authority impounding the
document in the matter of collecting the duty under Section
33. The word used in the said provision is 'shall' and
therefore Sections 33 and 34 clearly indicate that penalty
imposed has to be 10 times.
6. Reliance was also placed on State of Orissa
and another VS. Mamata Mohanty - 2011 AIR SCW
1332, to buttress the contention that although Limitation
Act, 1963 does not apply in writ jurisdiction, however, the
doctrine of limitation being based on public policy, the
principles enshrined therein are applicable and writ petitions
are dismissed at initial stage on the ground of delay and
laches.
7. Heard the learned counsel Sri Venkatesh.P.
Dalwai, for the petitioner and the learned Senior Counsel Sri
M.R.Rajagopal, on behalf of the learned counsel for the
respondent No.2 and perused the petition papers.
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8. In the recent decision cited by the learned
counsel for the petitioner, in Seetharama Shetty (supra),
the Hon'ble Supreme Court noticed the decision of a co-
ordinate bench of this Court as follows:
"8. The learned Single Judge has, in great detail,
referred to all the attending circumstances,
appreciated their implication vis-à-vis the statutory
obligation under the Act to pay ad valorem stamp
duty on an agreement of sale satisfying the
definition of a conveyance under the Act and
dismissed the Review Petition. The findings, in brief,
are as follows:
8.1. Section 33 of the Act requires the adjudicating
authorities to impound and determine the duty
payable on the suit agreement.
8.2. Section 34 of the Act provides for levy of deficit
stamp duty and penalty. The Section employs the
expression "ten times the amount of the proper duty
or deficit portion thereof." Therefore, there is no
discretion granted to the adjudicating authorities to
waive or reduce the penalty.
8.3. Only on the payment of deficit stamp duty along
with ten times penalty, the suit agreement is relied
in evidence.
8.4. The text used in Sections 34 and 39 of the Act
cannot be linguistically approximated, as the
legislature has not vested the discretion given to the
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Deputy Commissioner under Section 39 of the Act in
the same way to the adjudicating authorities under
Section 34 of the Act.
8.5. Relying on case law, the impugned order noted
that the adjudicating authorities do not have the
discretion to disobey the legislative command to
waive or reduce the penalty in any circumstance.
The discretion however extends to the grant of a
reasonable time for the payment of duty and
penalty.
8.6. Thus, through the Impugned Order, the Learned
Single judge concluded that the Review Petition fails,
and the appellant was granted a period of six
months' time to pay the deficit stamp duty along
with ten times penalty."
9. The Apex Court has held that the object of the
Act is not to exclude evidence or to enable parties to avoid
obligations on technical grounds. Rather, the object is to
obtain revenue even from such instruments which are at the
first instance unstamped or insufficiently stamped. The said
objective has the twin elements of recovering the due stamp
duty and penalty, and also the public policy of binding
parties to agreed obligations. It was noticed that a seven
Judges bench in Re:Interplay Between Arbitration
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Agreements under Arbitration and Conciliation Act,
1996 and Stamp Act, 1889 (2024) 6 SCC 1, has held
that Section 35 of the Indian Stamp Act, (analogous to
Section 34 of the Karnataka Act) unambiguously requires an
instrument chargeable with the stamp duty to only be
"admitted in evidence" if it is properly stamped. It was
noted that improperly stamping the instrument does not
render that instrument void or invalid. On the contrary, it is
a defect which is curable upon payment of requisite stamp
duty and penalty. It was also noticed that in Hindustan
Steel Limited /vs./ M/s. Dilip Construction Company
(1969) 1 SCC 597, the Apex Court has held that the
Stamp Act is a fiscal measure intended to raise revenue,
and the stringent provisions of the Stamp Act cannot be
used as a weapon to defeat the cause of the opponent.
However, after considering all the relevant provisions of the
Act, the Hon'ble Apex Court in Seetharama Shetty
(supra), held as follows:
"21. As per the steps taken under Sections 3319,
3420, 3521, 3722 and 3923 under Chapter IV of the
Act, the position of law is well-established, and
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axiomatic by the letter of law and precedents of this
Court. However, there are a few misgivings in the
sequence of its application. For the benefit of
practice and procedure, we sum up the steps as
follows.
21.1. Section 33 of the Act is titled examination and
impounding of instruments. The object of the
provision is to disable persons from withdrawing the
instruments produced by them on being told that
proper stamp duty and penalty should be paid.
21.1.1. The person who intends to rely on an
insufficiently/improperly stamped instrument has
option to submit to the scope of Section 34 of the
Act, pay duty and penalty. The party also has the
option to directly move an application under Section
39 of the Act before the District Registrar and have
the deficit stamp duty and the penalty as may be
imposed collected. In either of the cases, after the
deficit stamp duty and the penalty are paid, the
impounding effected under Section 35 of the Act is
released and the instrument available to the party
for relying as evidence. In the event, a party prefers
to have the document sent to the deputy
commissioner for collecting the deficit stamp duty
and penalty, the Court/Every Person has no option
except to send the document to the District
Registrar. The caveat to the above is that, before
the Court/Every Person exercises the jurisdiction
under Section 34 of the Act, the option must be
exercised by a party.
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21.2. Section 34 of the Act is titled instruments not
duly stamped inadmissible in evidence. This
provision bars the admission of an instrument in
evidence unless adequate stamp duty and the
penalty are paid. Every person so authorised to
collect deficit stamp duty and penalty has no
discretion except to levy and collect ten times the
penalty of deficit stamp duty.
21.3. Section 35 of the Act is titled admission of
instrument where not to be questioned. Section 35
prohibits questioning the admission of an
insufficiently stamped instrument in evidence.
21.4. Section 37 of the Act is titled instruments
impounded, how dealt with. This Section arises when
the party pays the deficit duty and penalty, the
Court is to impound the instrument under Section 33
of the Act and has to forward the instrument to the
Deputy Commissioner/District Registrar. Sub-
section (2) of Section 37 of the Act deals with cases
not falling under Section 34 and 36, and the person
impounding an instrument shall send it in original to
the Deputy Commissioner. This includes the
exigencies set out in paragraph 21.1.1.
21.5. Being a regulatory and remedial statute, a
party who follows the regulation, and pays the
stamp duty and penalty, as per Sections 34 or 39 of
the Act, the legal objection emanating from Section
33 of the Act alone is effaced and the document is
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admitted in evidence. In other words, the objection
under the Stamp Act is no more available to a
contesting party.
21.6. Section 39 of the Act is titled deputy
commissioner's power to stamp instruments
impounded. This Section provides the procedure to
be followed by the Deputy Commissioner/District
Registrar while stamping instruments that are
impounded under Section 33 of the Act. As per
Section 39(1)(b) of the Act, the penalty may extend
to ten times the stamp duty payable; however, ten
times is the farthest limit which is meant only for
very extreme situations. Therefore, the Deputy
Commissioner/District Registrar has discretion to
levy and collect commensurate penalty.
21.7. The above steps followed and completed by
paying/depositing the deficit duty and penalty would
result in the instrument becoming compliant with the
checklist of the Act. The finality is subject to the just
exceptions envisaged by the Act addressing different
contingencies.
21.8. The scheme does not prohibit a party to a
document to first invoke directly the jurisdiction of
the District Registrar and present the instrument
before Court/Every Person after complying with the
requirement of duty and penalty. In such an event,
the available objection under Sections 33 or 34 of
the Act is erased beforehand. The quantum of
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penalty is primarily between the authority/court and
the opposing party has little role to discharge."
10. It is noticeable that having regard to the facts
obtained therein, where the defendant therein raised an
objection and sought for the agreement to be impounded
and then sent to the District Registrar to be dealt with under
Section 39 of the Act and that such objections were raised
at a preliminary stage while considering an interlocutory
application for grant of temporary injunction, it was held
that the trial court is yet to exercise its jurisdiction under
Section 34 of the Act. However, it was found that the trial
court called for a report from the District Registrar and
therefore it was held that the suit instrument was still at
one or the other steps summed up in paragraph No.21
therein. It was therefore held that, going by the request of
the defendant, the option is left for the decision of the
District Registrar. Consequently, it was held under such
circumstances, though the suit instrument is insufficiently
stamped, still the levy penalty of 10 times under Section 34
of the Act, was illegal and contrary to the steps summed up
in paragraph No.21 therein.
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11. The facts in the present case, having regard to
the orders passed by the trial court, as evident from the
order sheets, show that objections were raised at the hands
of the defendant on 11.01.2018 when the examination-in-
chief of PW1, by way of an affidavit, was filed on behalf of
the plaintiff. The trial court made a note in the order sheet
that the unregistered agreement of sale dated 08.08.2009 is
impounded, for payment of deficit stamp duty and penalty.
On the next date of hearing i.e., 21.02.2018, the trial court
directed - write letter to the District Registrar, for payment
of the deficit stamp duty and penalty- call on 20.03.2018.
On 20.03.2018 the matter was adjourned to 17.07.2018 for
payment of stamp duty and penalty. On 17.07.2018 the
parties were directed to file memo of calculation for
payment of stamp duty and penalty. On 31.07.2018 the
legal representatives of defendant No.3 filed memo of
calculation. The matter was adjourned to 11.10.2018 for
objections, if any and for hearing on the question of stamp
duty and penalty. The order sheet does not reveal of any
objections being filed at the hands of the plaintiff. However,
the learned counsels on both the sides are heard on
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28.01.2019 and the impugned order was passed on
28.02.2019.
12. The impugned order clearly records the fact that
the counsel for the defendant raised objections regarding
the maintainability of the suit on the ground that proper
stamp duty and penalty over the suit document is not paid
in accordance with law. It is recorded that the plaintiff is
ready to pay the required stamp duty and penalty as per
law and sought direction of the court in that regard in
respect of the specific amount of the stamp duty and
penalty to be paid over the suit document. Nothing is said
in the impugned order regarding the letter directed to be
written to the District Registrar, by order dated 21.02.2018.
It is therefore clear that the plaintiff failed to invoke Section
34 or 39 to have the deficit stamp duty and penalty
determined and to pay the same. On the other hand, the
Court impounded the document on 11.01.2018 when the
plaintiff sought to mark the document in evidence.
Therefore, this is a case falling under Section 33 of the Act.
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13. However, in Digambar Warty (surpa), in the
latter portion of paragraph 39, it is held as follows:
"Therefore, a power is vested in Civil Court to impound
the document. In fact, it is an obligation cast on the Civil
Court by the statute. But, the Legislature does not want
to burden the Civil Court to go into the question, whether
a case for payment of lesser penalty is made out or not.
The Civil Courts cannot be expected to be wasting their
precious judicial time in deciding matters which
exclusively fall within the sphere of revenue authorities
and under the scheme of the Act, which has to be decided
by them. Therefore, it prescribes that after determining
the duty payable on such instrument, to collect the duty
with ten times penalty and then transmit the document to
the Deputy Commissioner with duty and penalty so
collected. Thereafter, a power is conferred on the Deputy
Commissioner under Section 38 of the Act to hold an
enquiry after giving an opportunity to the person who has
paid duty and penalty to extend the benefit of reduction
of penalty. Such a reduction in penalty is available to both
the documents i.e., tendered before the Civil Court or
produced directly before the Deputy Commissioner under
Section 33. No discrimination in law is made between
these two types of documents. However, there appears to
be some conflicting opinion in this regard".
14. Further, the Division Bench considered two
conflicting decisions, in the case of J.S.Paramesh Vs. Smt.
Indramma - 2008 (5) KLJ 502 and K.Govinde Gowda
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Vs. Akkayamma and Others, an unreported decision
rendered in W.P.No.8892/2010. The Division Bench held
that the order in K.Govinde Gowda's case cannot be
treated as a binding precedent, since the decision in the
case of J.S.Paramesh was rendered by a Division Bench of
this Court, while a learned Single Judge decided the case in
K.Govinde Gowda. Finally, it was held in Digambar
Warty (supra) that Section 39 of the Act deals with the
power of the Deputy Commissioner to stamp the
instruments. When he impounds the instrument under
Section 33 or he receives any instrument sent to him under
sub-section (2) of Section 37, if he is of the opinion that the
instrument chargeable with duty or is not duly stamped, he
shall require the payment of the proper duty or the amount
required to make up the same, together with a penalty of
rupees five or if he thinks fit, an amount not exceeding ten
times the amount of the proper duty or of the deficient
portion thereof, whether such amount exceeds or falls short
of five rupees. The Division Bench has held that the
discretion is conferred on the Deputy Commissioner to
impose a penalty less than ten times the duty payable.
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Therefore, Sections 38 and 39 of the Act confer power on
the Deputy Commissioner to levy penalty on an
insufficiently stamped instrument or an instrument which is
not stamped at all, with less than ten times the penalty
payable thereon under Section 34 of the Act. However, it
was made clear that the discretion conferred on the Deputy
Commissioner should be exercised in a judicious manner.
15. Having regard to the law laid down in Digambar
Warty, which has been upheld in various decisions of the
Hon'ble Apex Court including the recent decision of the Apex
Court in Seetharama Shetty (supra), and having regard to
the fact that the trial court has recorded in the impugned
order that the plaintiff is ready to pay the required stamp
duty and penalty as per the law and sought direction of the
court in that regard and the admitted fact that the trial
court had earlier directed the office to write a letter to the
District Registrar, to assess the stamp duty payable, the
trial court should have followed the procedure as prescribed
in Digambar Warty (supra). In the impugned order the
trial court determined the deficit stamp duty payable at
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Rs.38,06,250/- and ten times penalty amounting to
Rs.3,80,62,500/-, totaling to Rs.4,18,68,750/-. Further, the
trial court directed that the plaintiff shall pay, within two
months from the date of the order, the said amount, failing
which, it was ordered that the plaintiff is not entitled to get
any other relief as per law.
16. The petitioner/plaintiff did not raise a challenge
to the impugned order and did not pay the deficit stamp
duty and penalty, within two months from the date of the
order. The matter was adjourned several times for
compliance. On 26.07.2019, the defendant filed I.A.No.9
under Order VII Rule 11(c) for rejecting the plaint. Though
objections were called for, the petitioner/plaintiff did not file
any objections to I.A.No.9 and consequently the said
interlocutory application was heard and by order dated
24.10.2019 I.A.No.9 was allowed and consequently the suit
was dismissed for non-prosecution and for non-payment of
deficit stamp duty and penalty. It is seen that in the said
order dated 24.10.2019, the trial court has recorded the
fact that learned counsel for the plaintiff submitted during
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the course of the arguments that the plaintiff was
imprisoned and was languishing in jail and therefore he was
unable to pay court fee/deficit stamp duty and penalty. The
trial court proceeded to hold that no documents were filed
on behalf of the plaintiff to establish the fact that he was
imprisoned. It was further held that the plaintiff could have
sought for legal aid and could have sought for appointment
of amicus curie, from the Jailor of the concerned jail and in
that case the court would have considered his application,
but the plaintiff has not done so. However, it would be
relevant to notice that these facts were not brought to the
notice of this court by the learned counsels. It is also not
clear as to whether the petitioner/plaintiff is in a position to
pay the deficit stamp duty of Rs.38,06,250/-, let alone the
penalty.
17. As regards the other limb of argument sought to
be put forth by the learned counsel for the
petitioner/plaintiff that in terms of Section 46A of the Act
there is a bar for recovery of stamp duty not levied or short
levied, beyond five years from the date of the
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commencement of the Karnataka Stamp (Amendment) Act
1980 or the date of which the duty payable, whichever is
later, this court finds that in Digambar Warty (supra), the
Division Bench has clarified the position insofar as
documents which do not require registration, as follows:
69. "However, under the Scheme of the Act, the
said benefit could be extended only to such
instruments, which are not compulsorily
registrable. If an instrument which is not
compulsorily registrable but on which the person
relies on to prove his title, and it is to be tendered
in evidence in a Court of law, unless the proper
stamp duty and penalty payable thereon is paid, it
is inadmissible. Therefore, the said document
would be of no use to enforce a right of such a
person. If the documents require registration i.e.,
compulsory registration, unless the document is
registered, there is no transfer of interest in an
immovable property. Even though the authorities
are prevented from recovering the stamp duty
payable on such instrument for non payment of
stamp duty, for non registration of the said
document, the said document in the eye of law,
has no value. Therefore, the provisions contained
in Sections 33 and 67 make it clear that even
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though the revenue is prevented from collecting
the revenue, the person claiming right under the
instrument is given an opportunity to pay duty,
penalty and get the document registered".
18. Therefore, the said contention raised on behalf of
the petitioner/plaintiff, cannot be accepted. If the
petitioner/plaintiff seeks to rely upon the Memorandum of
Agreement dated 08.08.2009, then he is required to pay the
deficit stamp duty and penalty.
19. It is necessary to notice here that although
I.A.No.9 was filed by the defendant No.3(d) for rejection of
the plaint Under Order VII Rule 11 (c) of CPC, the trial court
rightly held that the said provision is applicable only when
deficit court fee is not paid by the plaintiff within the time
fixed by the court and it does not apply in respect of non-
payment of deficit stamp duty and penalty. However, the
trial court found it a fit case for dismissal of the suit for non-
prosecution under Order VII Rule 11(c) of CPC.
20. In the considered opinion of this Court, the trial
court could not have invoked Order VII Rule 11(c) of CPC
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for dismissal of the suit for non-prosecution. Non-payment
of the deficit stamp duty and penalty would only render the
instrument inadmissible in evidence. The instrument will
continue to be impounded and in the custody of the court.
Such a situation will not enable the court to dismiss the suit,
for non-payment of deficit stamp duty and penalty.
21. Having regard to such peculiar facts and
circumstances, and having regard to the law laid down by
the Hon'ble Division Bench in the case of Digambar Warty
(supra), this court proceeds to pass the following:
ORDER
(i) The writ petition is partly allowed.
(ii) The impugned order dated 28.02.2019
passed by the learned Senior Civil Judge
and JMFC, Doddaballapur, in
O.S.No.71/2012, though upheld,
nevertheless, three months time is hereby
granted to the petitioner/plaintiff to pay the
deficit stamp duty and penalty as
determined by the trial court.
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(iii) On receipt of such deficit stamp duty and
penalty, the trial court shall re-open the
case and forward the original Memorandum
of Agreement dated 08.08.2009, along with
the deficit stamp duty and penalty to the
District Registrar/Deputy Commissioner
concerned.
(iv) The District Registrar/Deputy
Commissioner concerned, shall hear the
petitioner/plaintiff, in terms of sub-
section(2) of Section 37 of the Act, and
determine the penalty payable, which may
be rupees five or if he thinks fit, an amount
not exceeding ten times the amount of
proper duty or of the deficit portion
thereof. The Officer shall pass orders
accordingly and while retaining the
determined stamp duty and penalty, he
shall return the remaining to the
petitioner/plaintiff.
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(v) After completion of the entire process, the
trial court may proceed from the stage
immediately before the passing of the
impugned order dated 28.02.2019.
Ordered accordingly.
Sd/-
(R DEVDAS)
JUDGE
KLY
CT: JL
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