Courts may impound insufficiently stamped documents marked in evidence without prior judicial determination.

The petitioner, plaintiff in a partition suit, marked a sale agreement dated 26 September 1990 as Ex.P14.

The defendants later applied under Section 34 of the Karnataka Stamp Act, contending that the agreement, executed on Rs.10 stamp paper and providing for delivery of possession, was insufficiently stamped.

The trial court allowed the application and directed the petitioner to pay Rs.5,82,890 in deficit duty and penalty.

The petitioner challenged that order under Article 227 of the Constitution.

The High Court considered separately the trial court’s authority to impound the agreement after it had been marked and the correctness of the duty and penalty quantified.

Whether the trial court could invoke Sections 33 and 34 of the Karnataka Stamp Act and impound the agreement after it had been marked as an exhibit without objection.

Whether the trial court correctly determined the stamp duty and penalty payable on the agreement, having regard to the law applicable on its execution date.

Sections 33 and 34 of the Karnataka Stamp Act require a court to examine a chargeable instrument and impound it if it is not duly stamped; an instrument chargeable with duty cannot be admitted in evidence unless duly stamped.

Section 35 bars a challenge to an instrument’s admissibility for insufficient stamping once it has been admitted in evidence following a judicial determination; mere marking without judicial consideration does not necessarily attract that bar.

The Court applied the principles in G.M. Shahul Hameed v. Jayanthi R. Hegde, (2024) 7 SCC 719, concerning the court’s continuing authority where admissibility was not judicially determined, and noted that the decision had been followed by coordinate Benches in Smt. Krishnavathi Sharma v. Sri Bhagwandas Sharma & Others and Vincent D’Almeida & Another v. Laxmi Kulavathi & Others.

The agreement had already been marked as Ex.P14 before the defendants filed their application.

Relying on G.M. Shahul Hameed and the subsequent coordinate-Bench decisions, the Court held that the trial court was not precluded from examining the agreement’s stamp-duty compliance merely because it had been marked.

However, the trial court had not considered the relevant provisions as they stood on 26 September 1990 or addressed the parties’ competing submissions on whether the agreement was sufficiently stamped on that date.

The High Court therefore found it appropriate to remit the question of quantum rather than decide it itself.

The High Court confirmed the trial court’s authority to invoke Sections 33 and 34 and impound the agreement after it had been marked as Ex.P14.

It set aside the direction to pay Rs.5,82,890 and remitted the matter to the trial court to determine the stamp duty and penalty payable under the law applicable to the agreement’s execution date, after giving both parties a reasonable opportunity to be heard.

The High Court expressed no opinion on the merits of their competing contentions regarding sufficiency of stamp duty.