Full Judgment Text
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CASE NO.:
Appeal (civil) 1800 of 2001
PETITIONER:
CHILAKURI GANGULAPPA
Vs.
RESPONDENT:
REVENUE DIVISIONAL OFFICER, MADANPALLE AND ANR.
DATE OF JUDGMENT: 14/03/2001
BENCH:
K.T. Thomas & R.P. Sethi.
JUDGMENT:
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
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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
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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 deducting 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) In every other case, the person so impounding an
instrument shall send it in original to the Collector.
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
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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.