Code of Civil Procedure, 1908 – s.151 – Karnataka Stamp Act, 1957 – ss.33-35, 58 – GPA insufficiently stamped, admitted in evidence and marked as exhibit – No objection from the appellant – Trial Court if can recall such process of admission and marking of the instrument in exercise of its inherent power saved by s.151 or the remedy available under the 1957 Act was required to be pursued by the appellant to fasten the respondent with the liability to pay the deficit duty and penalty: Held: The presiding officer of a court being authorised in law to receive an instrument in evidence, is bound to give effect to the mandate of ss.33 and 34 and retains the authority to impound an instrument even in the absence of any objection from any party to the proceedings – Irrespective of whether objection is raised or not regarding admissibility of an instrument, owing to its insufficient stamping, the question of admissibility has to be decided according to law – The presiding officer of a court when confronted with the question of admitting an instrument chargeable with duty but which is either not stamped or is insufficiently stamped ought to judicially determine it – Application of judicial mind is a sine qua non having regard to the express language of ss.33 and 34 – However, once a decision on the objection is rendered- right or wrong, s.35 would kick in to bar any question being raised as to admissibility of the instrument on the ground that it is not duly stamped at any stage of the proceedings and the party aggrieved by alleged improper admission has to work out its remedy as provided by s.58 of the 1957 Act – On the date the GPA was admitted in evidence and marked as an exhibit, the Trial Court did not deliberate on its admissibility, much less applied its judicial mind, resulting in an absence of judicial determination – Trial Court not having ‘decided’ whether the GPA was sufficiently stamped, s.35 of the 1957 Act cannot be called in aid by the respondent – For s.35 to come into operation, the instrument must have been “admitted in evidence” upon a judicial determination – The words “judicial determination” have to be read into s.35 – Once there is such a determination, whether the determination is right or wrong cannot be examined except in the manner ordained by s.35 – However, in a case of “no judicial determination”, s.35 is not attracted – No error in the order dated 19.10.2010 passed by the Trial Court in exercise of its inherent power saved by s.151, CPC to do justice as well as to prevent abuse of the process of court and allowing the interlocutory applications filed by the appellant and directing the respondent to pay the deficit stamp duty with penalty – Impugned order of the High Court set aside. [Paras 14, 18, 4, 22] Karnataka Stamp Act, 1957 – s.35 – When not attracted – Discussed.
Karnataka Stamp Act, 1957 – s.33 – Examination and impounding of instruments – Duty of the court:
Held: s.33 has been inserted in the statute with a definite purpose – The revenue would stand the risk of suffering huge loss if the courts fail to discharge the duty placed on it per provisions like s.33 – The legislature has reposed responsibility on the courts and trusted them to ensure that requisite stamp duty, along with penalty, is duly paid if an unstamped or insufficiently stamped instrument is placed before it for admission in support of the case of a party – It is incumbent upon the courts to uphold the sanctity of the legal framework governing stamp duty, as the same are crucial for the authenticity and enforceability of instruments – Allowing an instrument with insufficient stamp duty to pass unchallenged, merely due to technicalities, would undermine the legislative intent and the fiscal interests of the State – The courts ought to ensure that compliance with all substantive and procedural requirements of a statute akin to the 1957 Act are adhered to by the interested parties – This duty of the court is paramount, and any deviation would set a detrimental precedent, eroding the integrity of the legal system. [Para 21]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Divya Pandey. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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