1. This second appeal had been preferred by the heirs of the original defendant against the decree arid judgment dated 31st March, 1971, passed by Civil Judge, Senior Division, Pune, whereunder the defendant was directed to pay to the plaintiff, the State of Maharashtra, an amount of Rs. 1,397.50 P. and costs of the suit.
2. This decree was confirmed and the defendant's appeal was dismissed by Extra Assistant Judge, Pune.
3. The original defendant Shri Ramchandra Vishwanath Ghaisas, against whom the suit was originally filed and who died during the pendency of the said suit was serving as Sub-Registrar at Baramati. On 14th June, 1952, one Govindram Ganeshram Marwadi, executed a gift deed of his properties situated in Baramati bearing City S. Nos. 23, 122, 756, 757 and 758 in favour of his wife. In the gift deed the market value of the above properties was shown at Rs. 5,000/- and on that basis the stamp duty and registration fee were assessed and recovered by Shri Ghaisas. Govindram's son by name Bansilal complained that his father undervalued the above referred properties mentioned in the gift deed, with a dishonest intention to defraud the Government. He further alleged that his father committed this fraud in collusion with the Sub-Registrar, Shri Ghaisas. On the basis of the complaint, a departmental enquiry was held in which it was found that the aforesaid properties were worth Rs. 75,000/-, on the date of the gift deed. It was also found that Shri Ghaisas was fully aware of this market value, but he dishonestly and in collusion with Govindram, allowed the document to be registered taking the value at Rs. 5,000/- only. It was averred that on the date on which the gift deed w;is executed, one Pathan was working as a Bond writer in the Sub-Registrar's office and he had pointed out to Ghaisas that a part of the gifted property was previously mortgaged for Rs. 9,000/-. He therefore refused to scribe the gift deed by stating the valuation at Rs. 5,000/-. However, defendant Ghaisas intentionally ignored the say of Patban and instead of having the gift deed written at the hands of Pathan he got it written at the hands of the other bond writer by name one Khaladkar. In the enquiry which was held by the Inspector General of Registration, Bombay State, at Pune, he passed an order on 26th July, 1955, directing that a sum of Rs. 2,275/-being the loss suffered by the Government be recovered from the Sub-Registrar Ghaisas and that he should be allowed to retire from service from the date of that order.
4. Shri Ghaisas was obviously aggrieved by the said order and hence he filed Civil Suit No. 1780 of 1956 in the Civil Court at Pune, for challenging the said order. In the said suit which was decided on 31st Aug., 1958, it was declared that the order passed by the Inspector General of Registration was ultra vires and was of no effect, so far as it provided for recovery of the amount of Rs. 2,275/- from the defendant, otherwise than from his pay, and the rest of the claim made by the defendant was rejected. The Court observed that the penalties which could be imposed on the delinquent officer have been enumerated in Rule 33 of the Bombay Civil Services (Conduct and Discipline) and Appeal Rules, and one of the penalties that can be imposed is recovery from his pay of the whole or in part or any pecuniary loss caused to the Government by negligence or breach of order. Therefore, the Court came to the conclusion that the order of Inspector General of Registration for recovering the amount of loss from Ghaisas personally and not from his pay, was bad in law and to that extent it would not bind the defendant. The plaintiff alleged in the present suit that in view of this decision, it had become necessary for the plaintiff to institute this suit for recovery of the loss sustained by the Government. It was pointed out in the plaint that the High Court of Bombay, in its judgment in Criminal Revn. Appln. No. 963 of 1959 in the case of State v. Govindram Ganeshram Marwadi had determined the market value of the property in question i.e. the property under the gift deed at Rs. 48,000/-. The plaintiff accepted the said decree and on that basis it claimed the loss that was sustained by the Government. It was averred in the plaint that on the basis of the market value at Rs. 48,000/-, the losses in stamp duty and registration fee were respectively to the tune of Rs. 1,290/-and Rs. 107.50 P. Thus the plaintiff averred that it sustained a loss to the extent of Rs. 1,397.50 P. on account of the negligent and fraudulent act of the original defendant. The cause of action for the instant suit arose within the jurisdiction of this Court on 14th June, 1952, when the disputed document was allowed to be registered. Thus the plaintiff claimed a decree for Rs. 1,397.50 P. with costs, and future interest at 6%.
5. The defendant Shri Ghaisas by his written statement at Exhibit 10, resisted the plaintiff's claim contending inter alia as follows:--
The defendant admitted that he was serving as Sub-Registrar at Pune in the year 1952 and that on 14th June, 1952, Govindram Marwadi had executed a gift deed of five properties, situate in Baramati. However he denied all other allegations and further denied that bond writer Pathan had brought to his notice that one of the properties was previously mortgaged for Rs. 9,000/-- According to him, the enquiry held by the Inspector General of Registration, was not according to law. He pleaded that he was not aware that the High Court had fixed the market value of the property at Rs. 48,000/-and claimed that the value of the said property for the purpose of the stamp duty and registration fee was much less than what was decided by the High Court. He also contended that the Court bad no jurisdiction to entertain and try the suit. Without prejudice to this contention, he further pleaded that he was paid only a part of his salary during the period of suspension, and thus the plaintiff had recovered or retained an amount of Rs. 1,267/- so far. He was granted a pension of Rs. 20/- only although his claim in this behalf is to the extent of Rs. 80/- per month. He alleged that the plaintiff did not pay him gratuity which, according to him, amounted to Rs. 3,000/- and further claimed that the plaintiff had recovered Rs. 750/-from Govindram Marwadi. The defendant also contended that inasmuch as the plaintiff resorted to an action under B. C. S. Rules and got the relief, the present suit filed by it for the same relief was not maintainable. He therefore pleaded for the dismissal of the plaintiff's suit.
6. The original defendant died during the pendency of this suit and his legal representatives were Brought on record. By their additional written statement, they submitted that they were not personally liable for the plaintiff's claim and that the deceased defendant and his wife (since deceased) during the lifetime executed a will on or about 15th April, 1965, under which they bequeathed all their property to the present legal representatives. They therefore claimed that the plaintiff's suit against them be dismissed with costs
7. At the trial the plaintiff examined at many as six witnesses and also produced numerous documents. On behalf of the defendants no oral evidence was led. Both the Courts came to the conclusion that the executant of the gift deed, Govindram had grossly undervalued the property covered by the gift deed; that the value of this property covered by the gift deed was at least Rupees 48,000/- as accepted by the High Court in the Criminal Revision Application and that the same should be accepted as being the true value of the property. They found that in registering the document, taking the value of the property at a paltry sum of Rupees 5,000/-, the defendant was grossly negligent and that therefore be was responsible for the loss that was occasioned to the plaintiff. The two Courts below came to the conclusion that the loss suffered by the plaintiff was Rs. 1,397.50 P as claimed by the plaintiff. They, therefore, decreed the plaintiff's claim for that amount Being aggrieved, the legal heirs of the original defendant have preferred this appeal.
8. Mr. Divekar, the learned Counsel fop the appellants, contended before me that the stamp duty was required to be charged under the provisions of the Indian Stamp Act, 1899, which was then applicable, on the basis of the consideration shown in the document and not on the basis of the market value. He further contended that there was no statutory obligation on the Sub-Registrar or that he had no power to make enquiry about the market value of the property and to refuse to register the document on the ground that the stamp duty was not paid on the basis of the market value of the property. According to Mr. Divekar the two Courts below erred in decreeing the plaintiff's claim for alleged loss against the defendant.
9. Now it is not in dispute that the document executed was the gift deed. The gift deed was at the material time chargeable with the duty of the amount indicated in Article No. 33 in Schedule 1 of the Indian Stamp Act. The entry reads as follows:--
'33. Gift- Instrument of not being a Settlement (No. 58 or Will or Transfer (No. 62).
The same duty as a conveyance (No. 23) for a consideration equal to the value of the property as set forth in such instrument.'
Now Article 23 of the Indian Stamp Act to the extent relevant for our present purpose reads :--
'23. Conveyance (as defined by Section 2(10)) where the amount or value of the consideration for such conveyance as set forth therein .....'
So conveyance is chargeable with duty which is to be assessed on the basis of the consideration as set forth in the document. This article came up for consideration before various High Courts on a number of occasions. In Rama Chetty v Mohamed Ghouse, ILR (1889) 16 Cal 432. the Calcutta High Court held that in determining whether a document is sufficiently stamped for the purpose of deciding upon its admissibility in evidence, the document itself as it stands, and not any collateral circumstances which may be shown in evidence must be looked at. In Sakharam Shankar v. Ramchandra Babu Mohire, ILR (1903) 27 Bom 279, if was held that in determining the question whether a particular document is sufficiently stamped, the Court should look at the instrument as it stands. A Full Bench of the Allahabad High Court in the matter of Muhammed Muzaffar Ali, ILR 44 All 339: AIR 1922 All 82 held that if in a deed of gift the value of the property dealt with is not set forth, the deed does not require any stamp, and it is not within the competence of the Collector to have the said property valued in order to assess the duty payable. If however the value of the property is intentionally omitted with a view to defraud the revenue, then prosecution will lie under Section 64 of the Stamp Act. The Division Bench of the Patna High Court in Sitaram Kamalia v. State of Bihar : AIR1960Pat210 , held that the Collector had no power under Section 40 of the Stamp Act to embark upon, an inquiry with regard to the market value of the properties covered by the document and require the payment of further stamp duty in accordance with his finding as to valuation.
10. The question, therefore, that arises for our decision in the present case is whether the valuation for the purpose of stamp duty, before a document is registered, has to be made on the basis of the market value or on the basis of the consideration shown in the deed itself. No provision in the Indian Stamp Act, 1899 has been shown to me whereunder the stamp duty either for a conveyance or a gift deed wag required to be assessed on the basis of the market value. It is true that Section 27 of the Indian Stamp Act prescribes that the consideration (if any) and all other facis and circumstances affecting the chargeability of any instrument with duty or the amount of the duty with which it is chargeable, shall be fully and truly set forth in the document. It is also true that in view of this provision the parties to a document are required to set forth in the document duly and truly the consideration (if any) and all other facts and circumstances affecting the chargeability of that document with the duty or the amount of the duty with which it is chargeable.
11. However, as observed by the Supreme Court in Himalaya House Co. Ltd. v. The Chief Controlling Revenue Authority : 3SCR332 , a failure to comply with the requirements of Section 27, is merely punishable under Section 64 of the Stamp Act The Supreme Court pointed out that no provision in the Stamp Act empowered the Revenue to make an independent inquiry of the value of the property conveyed for determining the duty chargeable.
12. Now Article 23 of the Indian Stamp Act, which is reproduced above is the article that governs the charging of the stamp duty on a conveyance. Under Article 33, the gift deed was chargeable with the stamp duty on the same basis as a conveyance. It may be mentioned that Article 34 in Schedule No. 1 of the Bombay Stamp Act, 1958 deals with the stamp duty chargeable on a gift deed. That article provides that the stamp duty payable on a gift deed is the same duty as is leviable on a conveyance under Clause (a) or (b), as the case may be, of Article 25 for a consideration equal to the value of the property which is the subject-matter of the suit. Obviously the present case is not governed by the provisions in this article, namely Article 34 of the Bombay Stamp Act, which came into force on 16-2-1959. Article 33 in Schedule 1 of the Indian Stamp Act, 1899 which was the article applicable to this case, the document having been registered on 14-6-1952, did not speak of the value of the property. On the contrary it contemplated the amount or value of the consideration as set forth in the document. The defendant Sub-Registrar, therefore, was not under a legal obligation or duty to refuse to register the gift deed on the ground that no stamp duty was paid on the basis of the market value of the property. What was required to be taken into account was what was the consideration as set forth in the document. Even otherwise, as observed by the Supreme Court, in the case of Himalaya House Co. : 3SCR332 (supra) the Legislature may have for good reasons not empowered the Revenue to make an independent enquiry as regards the valuation of the property sought to be assigned.
13. The legal position that therefore emerge is that both the Indian Stamp Act, 1899, or Bombay Stamp Act, 1958, under Article No. 25 thereof, the stamp duty payable on a conveyance is to be assessed on the basis of the amount or value of the consideration for such conveyance as set forth therein. The gift deed under Article No. 33, in Schedule No. 1 to the Indian Stamp Act is chargeable with the same duty as a conveyance for a consideration equal to the value of the property as set forth in such document. The legislature has hot empowered the revenue to make an independent enquiry as regards the valuation of the property sought to be assigned. If however the consideration (if any) and all other facts and circumstances affecting the chargeability of the instrument with duty, or the amount of the duly with which it is chargeable are not fully and truly set forth therein the omission or default will be punishable under Section 64 o the Indian Stamp Act and under Section 62 of the Bombay Stamp Act.
14. It is true that Section 33 of the Indian Stamp Act enables the Officers mentioned therein to impound the document not duly stamped. That section so far as it is material for our purposes reads as under :--
'33 (1). Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public officer, except an officer of police, before whom any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same.'
The expression 'duly stamped'' used in the said section would obviously mean so far as the conveyance or the gift deed is concerned, as the law stood at the time when the gift deed in the instant case was executed, stamped with the duty assessed on the basis of the valuation or the amount set forth in the document. No provision in the Indian Stamp Act or the Bombay Stamp Act empowering the Sub-Registrar to make enquiry into the market value of the property and to refuse to register the document unless a document was stamped on the basis of the market value has been pointed out to me. Therefore, it will have to be held that there was no legal obligation or duty on the part of the Sub-Registrar to make enquiry regarding the market value of the property and to refuse to register the document on the ground that it was not stamped on the basis of the market value. No doubt, if the gift deed is not stamped with duty on the basis of the market value after coming into force of the Bombay Stamp Act, 1958, and the value of the property is not correctly set forth in the document, the persons concerned would render themselves liable for being dealt with under Section 62 of the Bombay Stamp Act. This appeal, therefore, must be allowed on the short ground that the defendant Sub-Registrar was under no legal obligation or duty to make enquiries regarding the market value of the properly. In the view, I have taken it is not necessary to record my findings on the other issues.
15. In the result, I allow this appeal and set aside the decree and judgment passed by the two Courts below. The respondent-State shall pay the costs of the appellants throughout and bear its own. The amount, if any, recovered from the appellants shall be refunded to them.
16. Appeal allowed.