Karnataka Stamp Act,1957 – ss.33, 34 and 38 – Appellantsplaintiffs entered into agreements to sell with respondent-defendant – Appellants filed suits for specific performance of contract – Principal Civil Judge impounded agreements to sell filed by the plaintiffs in the suits with direction to the plaintiff to pay deficit duty and penalty – Agreements to sell in question were admitted in evidence on payment of deficit duty and penalty which was double the deficit duty in both the suits – Respondent filed writ petition – High Court directed the court below to levy the penalty at 10 times of the deficit duty – Propriety of – Held: Sections 33 and 34 clearly indicate that penalty imposed has to be 10 times – High Court correctly interpreted the provisions of s.33 in the impugned judgment –There is no discretion vested with the authority impounding the document in the matter of collecting duty u/s.33 – However, in the present case the order of the trial court was passed as early as on 22.04.2013, i.e. more than five years ago – In view of impounding the documents and imposition of penalty, the suit must not have proceeded further, and it must be at the threshold stage – Asking the appellant to deposit 10 times of penalty and thereafter to invoke the jurisdiction of Deputy Collector u/s.38 to refund penalty shall be a proceeding again taking considerable time – In the facts of the present case, ends of justice be served in closing the matter by confirming the payment of deficit duty with the double penalty as imposed by the trial court.
Karnataka Stamp Act,1957 – ss.38, 39 – Discretion to Deputy Commissioner – Scope of – Discussed.
Karnataka Stamp Act,1957 – ss.33 and 39 – Contradistinction between – Object of – Discussed.
Disposing of the appeal, the Court
HELD: 1.1 The statute envisages that when the 10 times of the amount of the proper duty or deficient portion thereof exceeds five rupees, a sum equal to 10 times of such duty or portion is the penalty. The language of Section 34, Karnataka Stamp Act,1957 provides a flat rate of penalty when the amount of proper duty exceeds five rupees i.e. 10 times of such duty or portion. There is a clear contrast in the language of Section 34 and Section 39 of the 1957 Act. Section 39(1)(b) indicates that if the Deputy Commissioner is of opinion that such instrument is chargeable with duty and is not duly stamped shall require the payment of the proper duty with a penalty of five rupees. The latter part of the provision states “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”. Thus, discretion has been conferred on the Deputy Commissioner which is apparent from the words “if he thinks fit”. Deputy Commissioner has discretion of imposing penalty of 10 times or lesser of the amount of duty or portion thereof. There is clear contradistinction between the power under Section 33 and 39. The object and purpose for such contradistinction in the provision and power is not far to seek. Section 33 applies to every person having by law or consent of parties authority to receive evidence, and every person in-charge of a public office. Thus, Section 33 covers a host of authorities, persons before whom instruments are filed. The legislative scheme does not indicate any distinction between a court receiving an insufficiently stamped instrument in evidence and other authorities. All have to impose penalty of 10 times of the duty or deficit portion, if it exceeds rupees five. This provision is for purpose of maintaining a uniformity in imposing a fixed penalty of
10 times without adverting to any adjudicatory process regarding quantifying the quantum of penalty. The statute gives discretion to Deputy Commissioner who is the authority envisaged by the Act in-charge of the revenue administration of a District. [Paras 12-14] [609-F-H; 610-B-G]
1.2 The amount of duty and penalty is required to be sent to Deputy Commissioner under Section 37. Deputy Commissioner under Section 38 is empowered to refund any portion of the penalty in excess of five rupees which has been paid in respect of such instrument. Section 38 sub-section (1) again uses the expression “if he thinks fit”. Thus, in cases where penalty of 10 times has been imposed, Deputy Commissioner has discretion to direct the refund of the penalty in facts of a particular case. The power to refund the penalty under Section
38 clearly indicates that legislature have never contemplated that in all cases penalty to the extent of 10 times should be ultimately realised. Although the procedural part which provides for impounding and realisation of duty and penalty does not give any discretion under Section 33 for imposing any lesser penalty than
10 times, however, when provision of Section 38 is read, the discretion given to Deputy Commissioner to refund the penalty is akin to exercise of the jurisdiction under Section 39 where while determining the penalty he can impose the penalty lesser than 10 times. [Paras 15, 16] [611-A-F]
1.3 The High Court correctly interpreted the provisions of Section 33 in the impugned judgment. There is no discretion vested with the authority impounding the document in the matter of collecting duty under Section 33. The word used in the said proviso is ‘shall’. Sections 33 and 34 clearly indicate that penalty imposed has to be 10 times. [Paras 18, 21] [612-F-G; 613-G]
1.4 The order of the trial court was passed as early as on 22.04.2013 that is more than five years ago. In view of impounding the documents and imposition of penalty, the suit must not have been proceeded further, and it must be at the threshold stage; asking the appellant to deposit 10 times of penalty and thereafter to invoke the jurisdiction of Deputy Collector under Section 38 to refund penalty shall be a proceeding again taking considerable time. In the facts of the present case, ends of justice would be served in closing the matter by confirming the payment of deficit duty with the double penalty as imposed by the trial court which shall obviate the proceeding of approaching the Deputy Commissioner for reduction of penalty under Section 38, which in the facts of the present case and for the reasons noted by the trial court was a relevant consideration for refund/reduction of the penalty. [Paras 19, 20] [612-H; 613-D-E]
Digambar Warty and Others v. District Registrar, Bangalore Urban District and another ILR 2013 KAR 2099 – approved.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.