Chilakuri
Gangulappa Vs. Revenue Divisional Officer, Madanpalle & Anr [2001] Insc 140
(14 March 2001)
K.T.
Thomas & R.P. Sethi Thomas, J.
Leave
granted.
L...I...T.......T.......T.......T.......T.......T.......T..J
When a
document was found to be insufficiently stamped the further proceedings were,
unwittingly, diverted through a wrong track. After it covered a long distance
everybody concerned realised that the lis was proceeding through a wrong
course. It has now to be reversed and put in the proper track.
Appellant
filed a civil suit before the Munsif Court, Madanapalle
(Andhra Pradesh) as early as 1988. The main relief claimed in the suit is
enforcement of an agreement executed on 26.6.1986 for sale of an immovable
property.
When
the agreement was produced in court it was found to be insufficiently stamped
and the learned Munsif impounded it and forwarded the instrument to the Revenue
Divisional Officer (RDO) for the purpose of taking further action on it(the
Collector must have delegated his powers to the R.D.O. in that behalf). He
called for a report from a subordinate revenue officer regarding the real
market value of the property which is mentioned in the document.
On the
strength of the said report the R.D.O. found that the market value of the
property was Rs.64,880/- and hence the agreement of sale should have been
stamped with an additional duty of Rs.3,895/-. As the instrument was stamped
only with a stamp of Rs.5/- the R.D.O. imposed a penalty equivalent to ten
times of the deficiency which amounted to Rs.38,950/-. The order of the R.D.O.
was passed on 4.7.1998.
Appellant
challenged the said order by filing an appeal before the Senior Civil Judge
purportedly under Section 47A(4) of the Indian Stamp Act, 1899. (The said
section is included in the Stamp Act as per a State amendment carried out by
the State of Andhra
Pradesh). Learned
Senior Civil Judge found that the appeal was not maintainable for two reasons.
First is that the order challenged before him was not passed by the registering
authority nor the procedure laid down in Section 47A of the Stamp Act was
followed. He also found that appellant did not pay the amount of Stamp duty
before preferring an appeal which is a condition precedent for filing such
appeal. On both premises the appeal was dismissed as not maintainable. The
Senior Civil Judge pronounced the judgment on 12.3.1999.
Appellant
filed a revision petition before the High Court challenging the judgment of the
Civil Judge. A Single Judge of the High Court of Andhra Pradesh pointed out that
as per the proviso to Section 47A of the Act no appeal shall be preferred
unless and until the difference, if any, in the amount of duty is paid by the
person liable to pay the same, after deducting the amount already deposited by
him. Even though the appellant made a plea before the High Court for giving him
some time to pay the amount learned Single Judge found that no such time can be
granted at that stage since he has already preferred the appeal. Learned Single
Judge did not consider whether an appeal would otherwise have been maintainable
before the Civil Judge.
Hence
the revision petition was dismissed with the following observations:
Deposit
of amount is a condition precedent for filing the appeal. The Court has no
power to grant any relaxation to any party in the matter of deposit of amount
as required under the proviso. In fact, a duty is cast on the petitioner to
deposit the amount in accordance with the proviso at the time of filing of the
appeal. If any appeal is filed without deposit of the amount in accordance with
the proviso, that appeal is clearly not maintainable. For these reasons, I do
not find any merit in the petition. In the facts and circumstances of the case,
I do not want to go into the question whether the learned Senior Civil Judge
had the jurisdiction to hear the appeal or not.
It is
the aforesaid order which the appellant has challenged in this Court by special
leave. When petition for special leave was moved learned counsel for the
appellant submitted on 22.11.1999 that the appellant was ready and willing to
deposit the differential amount in court. In fact notice was issued to the
respondent on the strength of the above submission.
The
R.D.O. noted that the document was executed on a stamp paper worth Rs.5/-
whereas the consideration involved was Rs.20,000/-. He also noted that the
market value of the property was Rs.64,880/-. On its basis the R.D.O. directed
the appellant to remit the stamp duty and penalty of Rs.42,845/-.
Unfortunately
the entire proceedings got misdirected from the stage of the trial court
dispatching the document to the R.D.O. Section 47A of the Stamp Act (as amended
by the State of Andhra Pradesh) consists of a procedure when a document was
found insufficiently stamped and when that document is presented for
registration. Sub-section (1) of that section says that where the registering
officer while registering any instrument has reason to believe that the market
value of the property which is a subject matter of such instrument has not been
truly set forth in the instrument, or that the value arrived at by him as per
the guidelines prepared by the Government, he may keep such instrument pending
and refer the matter to the Collector for determination of the market value of
the property.
Sub-section
(2) of Section 47A of the Act says that the Collector shall have the power to
determine the market value of the property which is the subject matter of such
instrument and the duty payable thereon. Sub-section (3) empowers the Collector
to take action, suo motu, within two years from the date of the registration.
Sub-section (4) has to be read in this context. Any person aggrieved by the
order of a Collector under sub-section (2) or sub-section (3) may appeal to the
appellate authority specified in sub- section (5). All such appeals shall be
preferred within such time and shall be heard and disposed in such manner, as
may be prescribed by rules made under this Act. There is a proviso to
sub-section (2) which contains a bridle on the appellate provision envisaged in
sub-section (4). Hence that proviso has to be read:
Provided
that no appeal shall be preferred unless and until the difference, if any, in
the amount of duty is paid by the person liable to pay the same, after taking
the amount already deposited by him.
We extracted
the relevant sub-sections of Section 47A for the purpose of showing that the
whole route followed hitherto was wrong as Section 47A would not come into
picture at all since nobody has a case that the instrument concerned was ever
presented for registration. In the context of this instrument being presented
before the Civil Court the relevant provision to be
noticed is Section 40 of the Stamp Act. Sub-section (1) of that Section says
that when the Collector impounds an instrument under Section 33, or receives
any instrument sent to him under Section 38(2) he shall adopt the procedure
laid down in the sub-section.
In
this context Section 38 is to be looked into. It is extracted below:
38.
Instruments impounded how dealt with.-
(1)
Where 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 35 or 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)
When such instrument has been impounded only because it has been written in
contravention of section 13 or section 14, the Collector may refund the whole
penalty so paid.
It is
clear from the first sub-section extracted above that the court has a power to
admit the document in evidence if the party producing the same would pay the
stamp duty together with a penalty amounting to ten times the deficiency of the
stamp duty. When the court chooses to admit the document on compliance of such
condition the court need forward only a copy of the document to the Collector,
together with the amount collected from the party for taking adjudicatory
steps. But if the party refuses to pay the amount aforesaid the Collector has
no other option except to impound the document and forward the same to the
Collector.
On
receipt of the document through either of the said avenues the Collector has to
adjudicate on the question of the deficiency of the stamp duty. If the
Collector is of the opinion that such instrument is chargeable with duty and is
not duly stamped he shall require the payment of the proper duty or the amount
required to make up the same together with a penalty of an amount not exceeding
ten times the amount of the proper duty or of the deficient portion thereof.
In the
present case, an argument is raised that the instrument is not actually an
agreement of sale as envisaged in the Schedule to the Stamp Act(subject to
amendment made by the State of Andhra Pradesh)
but it is only a deed of compromise entered into by two disputing persons. We
refrain from expressing any opinion on the said plea as it is open to the
parties to raise their contentions regarding the nature of the document before
the trial court. In the present case the trial court should have asked the appellant,
if it finds that the instrument is insufficiently stamped, as to whether he
would remit the deficient portion of the stamp duty together with a penalty
amounting to ten times the deficiency. If the appellant agrees to remit the
said amount the court has to proceed with the trial after admitting the
document in evidence. In the meanwhile, the court has to forward a copy of the
document to the Collector for the purpose of adjudicating on the question of
deficiency of the stamp duty as provided in Section 40(1)(b) of the Act. Only
if the appellant is unwilling to remit the amount the court is to forward the
original of the document itself to the Collector for the purpose of
adjudicating on the question of deficiency of the stamp duty. The penalty of ten
times indicated therein is the upper limit and the Collector shall take into
account all factors concerned in deciding as to what should be the proper
amount of penalty to be imposed.
Inasmuch
as none of the above proceedings had been adopted by any of the authorities
including High Court we set aside the impugned orders. We direct the Munsif to
consider first whether the document is insufficiently stamped and if he finds
that question in the affirmative he has to adopt the next step indicated above.
This
appeal is accordingly allowed.
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