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Chandrashekar @ Hanumantharaju Vs. Huchamma and Others - Court Judgment

LegalCrystal Citation
CourtKarnataka High Court
Decided On
Case NumberReview Petition No. 166 of 2016 in Wit Petition No. 27694 of 2012
Judge
AppellantChandrashekar @ Hanumantharaju
RespondentHuchamma and Others
Excerpt:
.....whether petitioner has made out a case to refer matter to deputy commissioner to decide quantum of penalty on agreement. court held deputy commissioner is competent authority to determine duty and penalty under provisions of the act and basing on said provisions of the act, supreme court reserved liberty to petitioner to file review petition before this court for referring matter to collector to decide quantum of penalty that should be levied upon review petitioner petitioner has made out case to refer matter to collector to decide quantum of penalty that should be levied upon plaintiff/petitioner in respect of agreement review petition partly allowed. (paras: 19, 20) cases referred: 1. javer chand and others .vs. pukhraj surana reported in air 1961 sc 1655 2. shyamal kumar roy..........the deficit stamp duty of rs.10,43,800/- with penalty of rs.5/-. aggrieved by the said order, the defendants filed w.p.no.27694/2012 before this court. 4. this court, after hearing both the parties by the order dated 20th march, 2014 has allowed the writ petition and set aside the impugned order made therein imposing penalty of rs.5/- and directed that the plaintiff shall pay penalty of rs.1,43,80,500/- before 15.4.2014 and only on such payment, the trial court was directed to proceed to pass the judgment by considering ex.p.1, otherwise ex.p.1 has to be excluded. aggrieved by the said order, the plaintiff-chandrashekar preferred civil appeal no. 1222/2015 and defendants - huchamma and others preferred special leave petition no.12489/2015 before the hon ble supreme court. 5. after.....
Judgment:

(Prayer: This Review Petition is filed under Order 47 Rule 1 of CPC, praying to review the Order dated 20/03/2014 passed in W.P. No. 27694/2012 (GM-CPC), on the file of this Court.)

1. This is the plaintiff s review petition praying to review the order dated 20th March, 2014 passed in W.P.No.27694/2012 by the learned Single Judge of this Court.

2. The petitioner had filed a suit for specific performance for enforcement of the sale agreement dated 7.1.2006 which was denied by the defendants. After framing the issues, the plaintiff entered the witness box and sought to rely on the suit document i.e., agreement of sale dated 7.1.2006. The defendants have objected to the marking of the said agreement on the ground that it is insufficiently stamped and also filed an application under Section 34-A r/w Article 5(e)(i) of the Karnataka Stamp Act, 1957 (hereinafter referred to as the Stamp Act ) for a direction to the plaintiff to pay the stamp duty and penalty on the agreement of sale dated 7.1.2006.

3. The trial Court after hearing both parties by an order dated 8.6.2012 made in O.S. No.26784/2008, over ruled the objections of the defendants for the marking of the document and directed the plaintiff to pay the deficit stamp duty of Rs.10,43,800/- with penalty of Rs.5/-. Aggrieved by the said order, the defendants filed W.P.No.27694/2012 before this Court.

4. This Court, after hearing both the parties by the order dated 20th March, 2014 has allowed the writ petition and set aside the impugned order made therein imposing penalty of Rs.5/- and directed that the plaintiff shall pay penalty of Rs.1,43,80,500/- before 15.4.2014 and only on such payment, the Trial Court was directed to proceed to pass the judgment by considering Ex.P.1, otherwise Ex.P.1 has to be excluded. Aggrieved by the said order, the plaintiff-Chandrashekar preferred Civil Appeal No. 1222/2015 and defendants - Huchamma and Others preferred Special Leave Petition No.12489/2015 before the Hon ble Supreme Court.

5. After hearing both parties, the Hon ble Supreme Court by the order dated 28th January, 2016 dismissed the Civil Appeal filed by the plaintiff/review petitioner with liberty to him to file review petition before this Court for referring the matter to the Collector to decide the quantum of penalty that should be levied upon the plaintiff, within one month. Therefore, the present review petition is filed by the plaintiff on the basis of the observation made by the Hon ble Supreme Court.

6. The respondents-defendants also filed Special Leave Petition No.12489/2015 against the order dated 20.3.2014 passed by the learned Single Judge of this Court in Writ Petition No.27694/2012. The said SLP came to be dismissed as withdrawn at the instance of counsel appearing for the defendants before the Hon ble Supreme Court.

7. I have heard the learned Counsel for the parties to the lis.

8. Sri G.S. Bhat, learned Counsel for the review petitioner contended that the order passed by the learned Single Judge of this Court imposing penalty of Rs.1,43,80,500/- is opposed to the law and constitutes an error apparent on the face of the record as the competent authority to decide the quantum of penalty is the Deputy Commissioner under the provisions of Sections 36 to 38 of the Stamp Act. He further contended that the said order is against the law laid down by the Hon ble Supreme Court in the case of Peteti Subba Rao vs- Anumala. S. Narendra reported in (2002)10 SCC 427. Therefore, he sought to allow the review petition.

9. Per contra, Sri Sanket M. Yenagi, learned Counsel for the respondents sought to dismiss the review petition, strenuously contending that the order passed by this Court is in accordance with law and there is no error apparent on the face of the record. He specifically contended that under the provisions of Section 34 of the Stamp Act, before admitting the document, the plaintiff has to pay the stamp duty together with penalty of ten times the amount of stamp duty. He further contended that the market value of the schedule property in terms of the agreement of sale - Ex.P1 is Rs.1,74,00,000/- and as per the certificate issued by the jurisdictional Sub-Registrar vide Ex.P5, the stamp duty payable on the agreement of sale dated 7.1.2006 is 9.04% of the market value. Therefore the stamp duty payable on Ex.P1 is Rs.15,72,960/-, which is 9.04% of the market value. Thus, the penalty would be ten times of the stamp duty payable on Ex.P1, which is equal to Rs.1,57,29,600/- (Rs.15,72,960/- x 10). Therefore the finding of the learned Single Judge of this Court assessing the penalty as mentioned in the impugned order requires modification. Therefore he sought to dismiss the Review Petition.

10. In view of the rival contentions urged by the learned counsel for the parties, the points that arise for consideration in the present Review Petition are:

1. Whether the review petitioner has made out a case to review the order dated 20.3.2014 made in W.P. No.27694/2012 imposing penalty of Rs.1,43,80,500/- ?

2. Whether the review petitioner has made out a case to refer the matter to the Deputy Commissioner to decide the quantum of penalty on the agreement of sale - Ex. P.1 ?

11. I have given my thoughtful consideration to the arguments advanced by the learned counsel for the parties and perused the entire material on record carefully.

Point No.1:

12. It is an admitted fact that the plaintiff/review petitioner filed Original Suit No.26784/2008 for specific performance to enforce the sale agreement dated 7.1.2006 said to have been executed by the defendants. But the defendants by filing the written statement, have denied the entire plaint averments and sought for dismissal of the suit. The trial Court after considering the entire material on record has framed the issues. It is also not in dispute that after framing of issues, the plaintiff has entered into witness box and tendered evidence and during the course of the evidence, he sought to rely on the said sale agreement dated 7.1.2006. The defendants have objected to the marking of the said agreement on the ground that it is insufficiently stamped and also filed an application under Section 34-A r/w Article 5(e)(i) of the Stamp Act for a direction to the plaintiff to pay the stamp duty and penalty on the said document.

13. It is an undisputed fact that the trial Court after hearing both the parties by an order dated 8.6.2012 overruled the objections of the defendants and directed the plaintiff to pay the stamp duty of Rs.10,43,800/- with a penalty of Rs.5/-. It is also not in dispute that aggrieved by the said order, the defendants filed writ petition No.27694/2012 before this Court, which came to be disposed of on 20.3.2014 imposing penalty of Rs.1,43,80,500/-. It is also not in dispute that aggrieved by the said order passed by the learned Single Judge of this Court, the plaintiff filed Civil Appeal No.1222/2015 and the defendants filed Special Leave Petition No.12489/2015. The Hon ble Supreme Court by an order dated 28.1.2016 dismissed the Civil Appeal filed by the plaintiff reserving liberty to file a review petition before this Court for referring the matter to the Collector to decide the quantum of penalty and dismissed the Special Leave Petition filed by the defendants as withdrawn. The order dated 28.1.2016 passed by the Hon ble Supreme Court reads as under:

Civil Appeal No.1222 of 2015:

After hearing learned counsel for the parties, we do not find any reason to interfere with the impugned order passed by the High Court at this stage.

The appeal is, accordingly, dismissed.

However, we give liberty to the appellant to file a review petition before the High Court for referring the matter to the Collector to decide the quantum of penalty that should be levied upon the appellant, within one month.

Special Leave Petition (C) No.12489 of 2015

Learned counsel for the petitioners seeks permission to withdraw this special leave petition. The prayer is allowed. The special leave petition is accordingly, dismissed as withdrawn.

14. It is an undisputed fact that the learned Single Judge while deciding the writ petition No.27694/2012 after following the provisions of Sections 33, 34 and 35 of Stamp Act and taking into consideration the law declared by the Hon ble Supreme Court in the case of JAVER CHAND AND OTHERS .vs. PUKHRAJ SURANA reported in AIR 1961 SC 1655 and in the case of SHYAMAL KUMAR ROY .vs. SUSHIL KUMAR AGARWAL reported in AIR 2007 SC 637 and other Judgments held that the statutory duty casts on the Court to examine the instrument which is tendered in evidence before it is received in evidence, irrespective of a party to the proceedings raising any objections regarding its marking on the ground that it is insufficiently stamped. On such examination if it appears to the Court that such instrument is not duly stamped, it shall impound the same. Once the instrument is held to be not duly stamped and ordered to be impounded, then it is inadmissible in evidence, as there is complete prohibition for admitting such insufficiently stamped document in evidence. When an instrument not duly stamped or insufficiently stamped is tendered in evidence, the opposite party has a right to object to the marking of the same and it is not necessary for the opposite party to file any application requesting the Court to impound the document and to collect duty and penalty. A mere oral objection at the time of receiving such an instrument as evidence is sufficient. After considering all the aspects, the learned Single Judge of this Court has held that the order passed by the trial Court imposing a penalty of Rs.5/- cannot be sustained since it is wholly illegal and without jurisdiction and also concluded that the Civil Court has no jurisdiction to impose a penalty less than 10 times and the penalty payable on the agreement of sale dated 7.1.2006 is therefore 10 times the duty found to be deficit by the trial Court. Accordingly, the learned Single Judge set aside the order passed by the trial Court imposing a penalty of Rs.5/- and directed the plaintiff to pay penalty of Rs.1,43,80,500/- before 15.4.2014 and that only on such payment, the Court shall proceed to pass judgment by considering Ex.P1 agreement, otherwise Ex.P1 has to be excluded.

15. As already stated supra, against the said Judgment and finding of the learned Single Judge, the plaintiff filed Civil Appeal No.1222/2015. The Hon ble Supreme Court by an order dated 28.1.2016 dismissed the Civil Appeal and held as under:

After hearing learned counsel for the parties, we do not find any reason to interfere with the impugned order passed by the High court at this stage. The appeal is, accordingly, dismissed.

16. Therefore it is clear that the order passed by the learned Single Judge imposing penalty of Rs.1,43,80,500/- is final and conclusive. For the reasons stated above, the 1st point raised in the Review Petition has to be answered in the negative holding that the Review Petitioner has not made out a case to review the order dated 20.3. 2014 passed in Writ Petition No.27694/2012 on the file of the learned Single Judge of this Court.

Point No.2:

17. It is an undisputed fact that the imposition of penalty of Rs.1,43,80,500/- by the learned Single Judge was the subject matter of two appeals before the Hon ble Supreme Court, one by the plaintiff in Civil Appeal No.1222/2015, and another by the defendants in Special Leave Petition No.12489/2015. In SLP No.12489/2015, it is contended by the defendants that the learned Single Judge was not justified in imposing penalty as stated supra and as on the date of the agreement dated 7.1.2006, the stamp duty payable on the agreement was Rs.15,72,960/- which is 9.04% market value and therefore the penalty payable by the plaintiff was ten times of the duty i.e., Rs.1,57,29,600/- and therefore they sought for modification of the order passed by the learned Single Judge. Admittedly, the said SLP filed by the defendants came to be dismissed as withdrawn at the instance of the learned counsel representing them before the Hon ble Supreme Court. The Hon ble Supreme Court has also dismissed the Civil Appeal filed by the plaintiff. Therefore it is clear the order passed by the learned Single of this Court has reached finality.

18. It is also not in dispute that after hearing learned counsel for the parties to the lis, the Hon ble Supreme Court reserved liberty to the plaintiff/ petitioner to file a review petition before this Court for referring the matter to the Collector to decide the quantum of penalty that should be levied upon the plaintiff. The Hon ble Supreme Court considering the arguments putforth by the counsel for the petitioner and various judgments and provisions of Sections 33, 34, 35 and 36 of the Stamp Act, by an order dated 28.1.2016 has reserved liberty to the plaintiff/petitioner to file a review petition for referring the matter to the Collector for imposing of penalty and the said order has reached finality.

19. It is also not in dispute that Section 33 of the Stamp Act deals with examination and impounding of instruments; Section 34 deals with instruments not duly stamped inadmissible in evidence; Section 35 deals with admission of instrument where not to be questioned; Section 36 deals with admission of improperly stamped instruments; Section 37 deals with instruments impounded how to be dealt with; Section 38 deals with power of the Deputy Commissioner to refund penalty paid under sub-section (1) of Section 37 and Section 39 deals with the Deputy Commissioner s power to stamp instruments impounded. Therefore it is clear that the Deputy Commissioner is the competent authority to determine the duty and penalty under the provisions of the Stamp Act and basing on the said provisions of the Stamp Act, the Hon ble Supreme Court reserved liberty to the present review petitioner to file a review petition before this Court for referring the matter to the Collector to decide the quantum of penalty that should be levied upon the review petitioner.

20. Hence the point no.2 has to be answered in the affirmative holding that the review petitioner has made out a case to refer the matter to the Collector to decide the quantum of penalty that should be levied upon the plaintiff/review petitioner in respect of the instrument Ex.P1.

21. For the reasons stated supra, the Review Petition is allowed in part. The agreement of sale dated 7.1.2006 as per Ex.P1 is referred to the jurisdictional Deputy Commissioner for determination of penalty within a period of one month from the date of receipt of copy of the order, after hearing both the parties and following the procedure as contemplated under the provisions of the Karnataka Stamp Act, 1957. The trial Court shall send the agreement of sale dated 7.1.2006 Ex.P1 to the Deputy Commissioner forthwith for determination of penalty. On such determination by the Deputy Commissioner, the plaintiff has to pay the penalty on the said document. On such payment/deposit, the trial Court can look into Ex.P1 and proceed on the merits of the suit. Till such determination made by the Deputy Commissioner, the trial Court shall not proceed further in the suit.

Ordered accordingly.


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