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Report No. 67

18.11. Recommendation to transpose section 46 as section 38A.-

In our opinion, section 46 should be transposed after section 38, since its subject-matter is connected with section 38. Accordingly, we recommend that new section 38A should be inserted, incorporating the substance of section 46. Certain verbal changes are needed in section 46, if section 38(2) is revised on the lines discussed above.1

(i) In section 46(1), the words "or authenticated copy", should be added, if section 38(2) is revised.

(ii) Section 46(2) becomes redundant, if section 38(2) is revised.

1. See discussion as to section 38(2)

18.12. Section 39.-

Section 39 deals with the power of the Collector to refund the penalty paid in respect of an instrument, a copy whereof is sent to him under section 38(1), that is to say, an instrument impounded by reason of deficiency in stamp. It needs no change.

18.13. Section 40.-

Section 40 deals with the Collector's power to stamp instruments impounded under the Act. Usually, the impounding of the instrument is by some other officer, who sends it to the Collector under section 38(2). But it court be by the Collector himself, if the document is produced before him in the performance of his ordinary functions. The procedure to be followed by the Collector in both the cases is laid down in section 40. If the Collector is of opinion that the instrument is duly stamped or is not changeable with duty, he certifies accordingly by endorsement under section 40(1)(a). Under section 40(2), this certificate is conclusive evidence of the matters stated therein, for the purposes of the Act. If the Collector thinks that the instrument is chargeable, and not properly stamped, he shall require payment under section 40(1)(b).

18.14. Obscurity as to person who can be required to pay.-

While section 40, sub-section (1)(b), empowers the Collector to "require" the stamp duty or deficiency to be paid, it is silent as to the person or persons who can be required to pay the same. There is no distinct prevision in section 40,..or. anywhere else iri the- Act, empowering the Collector to demand the proper stamp duty and penalty from the person who produces in Court. According to the High Court of Allahabad,1 it is the person who wishes a document to be admitted in evidence in Court, who is primarily the person from whom the requisite duty and penalty should be recovered in the first instance, and if it is due from a third person, he can recover it under section 44.

The Lahore High Court, has dissented from the above view. According to it, the Court or the Collector cannot compel such person (i.e., a person not originally bound to bear the expenses of providing the duty), to pay the duty and penalty. If he chooses to pay, section 44 enables him to recover the same. But the stamp duty and penalty can compulsorily be recovered only from the person liable to pay the proper stamp duty in the first instances. The person not so liable is not subject to compulsory recovery under section 48. It was also observed that if, in a particular case, the Stamp Act did not fix the liability for payment on any particular person, then the Collector should keep the impounded document in his custody, and no person interested in the deed would be able to make any use of it unless and until the necessary duty and penalty were paid.

1. Secretary of State v. Bhasharat Ullah, ILR 30 All 271

18.15. Recommendation.-

The Lahore view appears to us to be more logical, and should be adopted. We shall deal with the matter in detail1 under section 48.

1. To be Considered under section 48.

18.16. Section 41-Introduction.-

Intentional omission to stamp an instrument is dealt with strictly by the Act, particularly section 40; but there may be cases where the omission to duly stamp an instrument has been occasioned by accident, mistake or urgent necessity. To provide for such cases, section 41 enacts that a person may produce the instrument within one year from the date of its execution or first execution, and bring to the notice of the Collector the fact that it is not duly stamped, and offer to pay the deficiency. If the Collector is satisfied that the omission to duly stamp such instrument has been occasioned by one of the causes enumerated above, the Collector may receive such amount (i.e., the amount offered by the person producing the instrument), and proceed as provided in later sections of the Act. No points of substance require to be discussed in connection with section 41. But reading of the section would be facilitated if it is split up into paragraphs. It is also desirable that the fact that the omission was due to accident etc. should be brought in the forefront in the section.1

1. For re-draft of section 41, see discussion as to section 42.

18.17. Section 42.- Section 42 reads thus-

"42(1) When the duty and penalty (if any), leviable in respect of any instrument have been paid under section 35, section 40 or section 41, the person admitting such instrument in evidence or the Collector, as the case may be, shall certify by endorsement thereon that the proper duty or, as the case may be, the proper duty and penalty (stating the amount of each) have been levied in respect thereof, and the name and residence of the person paying them.

(2) Every instrument so endorsed shall thereupon be admissible in evidence, and may be registered and acted upon and authenticated as if it had been duly stamped, and shall be delivered on his application in this behalf to the person from whose possession it came into the hands of the officer impounding it, or as such person may direct:

Provided that-

(a) no instrument which has been admitted in evidence upon payment of duty and a penalty under section 35, shall be so delivered before the expiration of one month from the date if such impounding, or if the Collector has certified that its further detention is necessary and has not cancelled such certificate;

(b) nothing in this section shall affect the Code of Civil Procedure, section 144, clause 3."

18.18. Recommendation.-

In the proviso, clause (b), there is a reference to section 144, clause 3, Code of Civil Procedure, 1882, which related to the return of documents. The matter is now governed by order 13, rule 9, of the Code of Civil Procedure, 1908. Reference thereto should be substituted.

18.19. Transposition of sections 41, 42.-

We are also of the view that section 42 should be placed before section 41, since the action taken under section 41 is independent of the preceding sections. The subject-matter of section 42 is, in some way, connected with sections 35-40.

18.20. Re-drafts.- Accordingly, we recommend that sections 41-42 should be revised as follows:-

Revised sections 41-42, renumbered and transposed

41. Endorsement instruments on which duty has been paid.-(1) When the duty and penalty (if any), leviable in respect of any instrument have been paid under section 35, or section 40, the person admitting such instrument in evidence or the Collector, as the case may be, shall certify by endorsement thereon that the proper duty or, as the case may be, the proper duty and penalty (stating the amount of each) have been levied in respect thereof, and the name and residence of the person paying them.

[Existing section 42(1) in part]

(2) Every instrument so endorsed shall thereupon be admissible in evidence, and may be registered and acted upon and authenticated as if it had been duly stamped, and shall be delivered, on an application in this behalf made by the person from whose possession it came into the hands of the officer impounding it, to that person or according to his directions:

Provided that-

(a) no instrument which has been admitted in evidence upon payment of duty and a penalty under section 35, shall be so delivered before the expiration of one month from the date of such impounding, or if the Collector has certified that its further detention is necessary and has not cancelled such certificate;

(b) nothing in this section shall affect the provisions of rule 9 of Order XIII in the First Schedule to the Code of Civil Procedure, 1908.

[Existing section 42(2) in part]

42(1)(a). If any instrument chargeable with duty and not duly stamped is produced by any person of his own motion before the Collector within one year from the date of its execution or first execution,

(b) such person brings to the notice of the Collector the fact that such instrument is not duly stamped and the omission to duly stamp such instrument was occasioned by accident, mistake or urgent necessity, and offers to pay to the Collector the amount of the proper duty, or the amount required to make up the same, and

(c) the Collector is satisfied that the omission to duly stamp such instrument has been occasioned by accident, mistake or urgent necessity, the Collector may, instead of proceeding under sections 33 and 40, receive such amount and proceed as next hereinafter prescribed.

[Existing section 41]

(2) When the duty leviable in respect of any instrument has been paid under sub-section (1), the Collector shall certify by endorsement thereon that the proper duty has been levied in respect thereof, and the name and residence of the person paying them.

[Section 42(1) in part]

(3) Every instrument so endorsed shall thereupon be admissible in evidence, and may be registered and acted upon and authenticated as if it had been duly stamped, and shall be delivered on his application in this behalf to the person who produced it or according to his directions.

[Section 42(2) in part]



Indian Stamp Act, 1899 Back




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