1. This and Misc. Civil Case No. 102/80 are two references made under Section 57(1) of the Stamp Act, by the Chief Controlling Revenue Authority, the Board of Revenue, Madhya Pradesh, for answering the following question :--
'Whether it ii proper or legal to recover short-paid stamp duty on a document which has become infructuous and is no longer required for any purpose ?'
2. The statement of case submitted by the learned member of the Board is that Municipal Committee, Sakti gave a Theka to non-applicant Jiwan Mathura Prasad for the recovery of the market fee imposed on the purchase of cattle in the Bazars. The Theka was for an amount of Rs. 2,05,000/-. The non-applicant Jiwan Mathura Prasad deposited an amount of Rs. 68,334/- only. The remaining amount of Rs. 1,36,666/- was to be paid in two equal instalments of Rupees 68,333/- only on 1st Jan., 1976 and 29th Feb., 1976. The non-applicant Jiwan Mathura Prasad executed a bond on this account and Abheram, Lalsao, Vireshkumar and Bahadur Sao stood as sureties on his behalf. The bond executed by Jiwan Mathura Prasad and the sureties were accepted by the Administrator, Municipal Committee, Sakti on 11-7-1975.
3. The Inspector of Stamps and Registration, Bilaspur Division, while inspecting the office of the Municipal Committee, Sakti, impounded these documents because they were under-stamped. According to him, the document executed by non-applicant Jiwan Mathura Prasad was under-stamped to the extent of Rs. 5,841/- while those of the sureties were under-stamped to the extent of Rs. 46/- only. After impounding these documents, he made a report to the Collector of Stamps, Sakti for recovery and appropriateaction under Section 38(2) and Section 40 of the Stamp Act. Before Collector of Stamps i.e. Sub-Divisional Officer-cum-Collector of Stamps, Sakti, the non-applicants raised various contentions contending (1) that as the documents were not to be used in evidence, no extra stamp duty could be recovered from them; and (2) that in view of the decision in Dhaniram v. Janapad Sabha, AIR 1965 Madh Pra 219 (FB), the Municipal Committee was not competent to impose a fee on the sale of cattle. But these contentions were not accepted by the Collector of Stamps. But he, instead of passing an order, made a reference to the Chief Controlling Revenue Authority Under Section 56(2) of the Stamp Act.
4. The learned member of the Board of Revenue, the Chief Controlling Revenue Authority, in turn repelled similar contentions raised before it but found that by the time these proceedings were going on, the whole of the amount which non-applicant Jiwan Mathura Prasad was required to pay has been paid and, therefore, found that these documents have become infructuous and no longer required for any purpose and, therefore, felt that in this situation, the under-paid stamp duty cannot be recovered. The learned member of the Board of Revenue while making this reference, expressed his opinion that in such a situation, it would not be proper or legal to recover any stamp duty on it but holding that it is a substantial question of law, be has made this reference to this Court under Section 57(1) of the Act.
5. Learned Deputy Advocate General appearing for the State contended that under Section 33, a document could be impounded if it was offered in evidence or produced. At the same time, it also could be impounded by a person in charge of a public office if it comes before him in the performance of his functions and it is in this respect that the Inspector of Stamps and Registration, Bilaspur Division, while inspecting the office of the Municipal Committee noticed these documents which were accepted by the Administrator of the Municipal Committee. It was contended that once impounding under Section 33(1) has been effected, the only course open to the Collector of Stamps is to proceed in accordance with Sections 38 and 40 and there is no provision which justified the view that as during these proceedings, the amounts have been paid and the document has become infructuous as is no longer required for any purpose, action as contemplated in this part of the Stamp Act i. e. Chap. IV, need not be taken.
6. Learned counsel appearing for the non-applicant, on the other hand, contended that the officer who impounded the documents i. e. the Inspector of Stamps and Registration, Bilaspur Division, was not a person authorised under Section 33(1) and, therefore, impounding was not proper. The learned counsel also attempted to raise other contentions and contended tbat this Court should exercise powers under Section 58 to get further particulars about the case so stated by the Chief Controlling Revenue Authority. Learned counsel referred to Govt. of U. P. v. Raja Mohammad Amir, AIR 1961 SC 787 and Komalchand Jain v. State of Madhya Pradesh, 1965 MPLJ 606 : (AIR 1966 Madh Pra 20) (FB).
7. From the statement of case submitted by the Chief Controlling Revenue Authority, it is apparent that the question as to whether the Inspector of Stamps and Registration, Bilaspur Division, who was acting under Section 33(1), bad the authority or not to impound the document has not been considered. It also appears that the Chief Controlling Revenue Authority bas only made this reference on a short ground as the learned member felt that as during the pendency of these proceedings, the amount bas been paid by the non-applicant under the bends and, therefore, the bonds are no longer required for any purpose and, therefore, felt that on this short ground alone, the proceedings before tbe Collector of Stamps initiated on a report by the Inspector of Stamps and Registration, deserves to be dropped and, therefore, it appears that other questions have not been discussed or decided although from the report of the Collector of Stamps to tbe Chief Controlling Revenue Authority it appears that the Inspector of Stamps and Registration, Bilaspur Division who exercised jurisdiction under Section 33(1) exercised that jurisdiction under some notification dated 4-11-1963 which has been referred to by the Collector, Stamps in bis order of reference to the Chief Controlling Revenue Authority, But it is apparent that this question bas not been considered by the Chief Controlling Revenue Authority and, therefore, in our opinion, it is not necessary for us to call forfurther statement from the Chief Controlling Revenue Authority when this reference has been made to us only on the short questionreferred to above.
8. The decision on which reliance was placed by the learned counsel for the non-applicant i.e. Govt. of U. F. v. Raja Mohammad Amir (AJR 1961 SC 787), is of no assistance in this case as in this decision, it has been laid down that when the Collector is exercising functions under Section 33 of the Stamp Act for giving his opinion about the proper stamp duty for a particular document, it is not open to the Collector of. Stamps in those proceedings to exercise jurisdiction under Section 33 and it is in this context that the phrase, 'is produced or comes in tbe performance of his functions' was considered and it was observed (at pp. 789-90 of AIR) :--
'The scheme of the Act shows that where a person is simply seeking the opinion of the Collector as to the prpper duty in regard to an instrument, he approaches him under Section 31. If it is not properly stamped and the person executing the document wants to proceed with effectuating the document or using it for the purposes of evidence, he is to make up the duty and under Section 32 the Collector will then make an endorsement and the instrument will be treated as if it was duly stamped from the very beginning. But if he does not want to proceed any further than seeking tbe determination of the duty payable then no consequence will follow and an executed document is in the same position as an instrument which is unexecuted and unstamped and after tbe determination of the duty tbe Collector becomes functus officio and the provisions of Section 33 bave no application. The provisions of tbat section are a subsequent stage when something more than mere asking of tbe opinion of the Collector is to be done.'
9. The decision reported in Komal Cband Jain v. State of Madhya Pradesh, 1965 MPU 606: (AIR 1966 Madh Pra 20) (FB), also is of no assistance in the present case. In that decision, tbe question which was considered was as to whether after registration of a document, the registering authority could bold an enquiry regarding the value of the property. Apparently, this has no bearing on the question before us.
10. The learned member of the Board of Revenue while expressing his opinion that 'as the document which is under-stamped is not required any longer for any purpose, it would not be proper or legal to recover any stamp duty on it'. But unfortunately, the learned member has not referred to any provision under the Stamp Act to indicate as to how he is of this opinion.
11. Section 33(1) of the Stamp Act provides :--
'33. Examination and impounding of instruments -
(1) Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, 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.
Provided that nothing contained in this sub-section shall be deemed to authorise the Collector to impound any instrument which has not been executed but is brought to him under Section 31 for determining the duty with which the instrument is chargeable or any instrument which he is authorised to endorse under Section 32.'
This provision contemplates noticing of a document under two different sets of circumstances; (1) when a document is tendered in evidence or is produced before an authority who is competent to receive evidence; or (2) when a person in charge of a public office noticed it, as it is stated, 'comes in the performance of his functions'. It is apparent that in the present case, the Inspector of Stamps and Registration, Bilaspur Division, white inspecting the Municipal Committee, Sakti, noticed these documents which were accepted by the Administrator of the Municipal Committee and, therefore, it is clear that they will fall in the category of a person in charge of public office which came to his notice in the performance of his functions and it is clear that exercising these powers under Section 33(1), the Inspector impounded the documents and this is what is contemplated under Section 33.
12. From the statement of facts stated by the Chief Controlling Revenue Authority, it does not appear that at the time when these documents were impounded they were no longer required for any purpose. On the contrary, it appears that these documents were produced and were accepted by the Administrator of the Municipal Committee. The Inspector, after impounding, submitted these documents with his report under Section 38(2) to the Collector of Stamps. Section 38 of the Stamp Act provides :--
'38. Instruments impounded, how dealt with -
(1) When the person impounding an instrument under Section 33 has by law or consent of parties authority to receive evidence and admits such instrument in evidence upon payment of a penalty' as provided by Section 35or of duty as provided by Section 37, he shall send to the Collector an authenticated copy of such instrument, together with a certificate in writing stating the amount of duty and penalty levied in respect thereof, and shall send such amount to the Collector, or to such person as he may appoint in this behalf.
(2) In every other case, the person so impounding an instrument shall send it in original to the Collector.'
This section contemplates the manner in which the impounded document will be proceeded with. Clause (1) deals with the circumstances when the document is produced or tendered in evidence and Clause (2) deals with the second circumstance under Section 33 when the document is noticed by a person in charge of public office coming in the performance of bis functions and it is, therefore, clear that the Inspector exercising powers under Clause (2) of Section 38 sent his report to the Collector of Stamps for further action as contemplated under Section 40 onwards. In the provisions contained in Sections 40, 41, 42 and other provisions of this Chapter i.e. Chapter IV, it is nowhere provided that if during these proceedings the document has become infructuous or that it is no longer required for any purpose, the proceedings initiated on a report from an officer exercising jurisdiction under Section 33(1) and submitted to the Collector of Stamps under Section 38(2), could be dropped. It is, therefore, plain that the view the learned member of the Board has chosen to take has no justification in law.
13. It was contended by the learned, Deputy Advocate General that the date on which the document was impounded is the date which will be relevant for the purposes of these proceedings under Section 38. In fact, the relevant date will be the date when the inadequately stamped documents were presented in the office of the Municipal Committee and 'the Administrator accepted those documents. There is nothing in the provisions contaised in the Stamp Act to indicate that even if these documents are such which are no longer required for any purpose or in any proceedings the action taken under Section 33 coupled with Section 38(2) can be dropped. The scheme of Chap. IV of the Stamp Act does not justify the view. Apparently, as the documents when produced before the Municipal Committee were inadequately stamped. it had resulted in a loss of revenue; may be that they were detected or noticed by a competent authority under Section 33(1) at a laterstage. But in the present case, even when they were impounded under Section 33(1), it isnot the case stated by the Chief Controlling Revenue Authority that the documents wereno longer required for any purpose nor it is the contention of the learned counsel has the non-applicant. Once the document has been impounded under Section 33(1) and a report under Section 38(2) is submitted to the Collector of Stamps, the Collector of Stamps is only expected to proceed in accordance with further provisions of this Chapter and there is no provision in this Chapter for dropping the proceedings on the ground as indicated by the learned member of the Board of Revenue.
14. iN our opinion, therefore, the answer to the question is :
The question as to whether the document has become infructuous or is no longer required for any purpose is not relevant and it could not be said that it is not proper or legal to recover short-paid stamp duty on such document.
15. As regards the other contentions which the learned counsel for the non-applicant wanted to raise, if they have not been disposed of by the Chief Controlling Revenue Authority, it may be competent for him to consider those questions and decide them. In the circumstances of the case, parties are directed to bear their own costs.