IMPORTANT POINT
Agreement to Sell – An agreement to sell coupled with possession is deemed to be a conveyance warranting payment of ad valorem stamp duty.

JUDGMENT :

S.V.N. Bhatti, J.

1. Leave granted.

2. The appellant filed O.S. No. 610 of 2015 for specific performance of the agreement for sale dated 04.11.1996, stated to have been executed by the respondents. The appellant also prayed to set aside the sale deed dated 13.08.2003, which the first and second respondents executed in favour of the third respondent. The appellant claims possession of suit schedule property as part performance under the agreement of sale dated 04.11.1996. An agreement of sale coupled with possession is deemed to be a conveyance warranting payment of ad valorem stamp duty. Admittedly, the suit agreement is written on stamp papers worth Rs.200/-. Article 5(e)(i) of the Schedule of the Act, read with amended Stamp Act No. 8 of 1995, prescribes the duty as payable on a conveyance. The appellant has not produced the original agreement in O.S. No. 610 of 2015. The explanation offered by him is that the agreement is filed in a connected matter between the parties. From the order dated 14.08.2015, it appears that the appellant expressed readiness to pay duty and penalty on the certified copy of the agreement of sale dated 04.11.1996, now filed along with the plaint. The trial court, by order dated 14.08.2015, held as follows :

“In respect of penalty on deficit stamp duty is concerned in reported rulings;

ILR 2013 KAR 2099 (DB) – Degambar Warty and others – V/s. District Registrar, Bangalore Urban District and another.

Wherein in the above said rulings it is held;

“No discretion is granted to the Court to impose a lesser penalty. A power is vested in Civil Court to impound the document.”

In view of the above said settled law, the Civil Court has no discretion to impose lesser penalty below ten times. The proper stamp duty payable on the agreement of sale dated 04-11-1996. The ten times penalty on deficit stamp duty comes to Rs.14,38,000/- Plus deficit stamp duty of Rs.1,43,800/-, in all the plaintiff has to pay deficit stamp duty and penalty of Rs.15,81,800/- on the unregistered agreement of sale dated 04-11-1996.

ORDER

The plaintiff is directed to pay duty and penalty totally Rs.15,81,800/-.

The office is directed to collect the duty and penalty as stated above. Thereafter, as per Sec.37 of the Karnataka Stamp Act, send an authenticated copy of the unregistered agreement of sale dated 04-11-1996 to the concerned District Registrar, together with Certificate and the amount collected as a duty and penalty.”

3. The appellant filed Writ Petition No. 36970 of 2015, assailing the trial court’s order dated 14.08.2015. The appellant argued that the deficit stamp duty should alone be collected at the time of the passing of the judgment and decree, and the levy of penalty is illegal and erroneous. The High Court, through the order impugned in the appeal, rejected.

4. The instant Civil Appeal has been heard with Civil Appeal Nos. 10039-40 of 2024 (@ S.L.P. (C) No. 7249-50 of 2022). After perusing the record, we are of the view that the circumstances in which the decision to pay stamp duty and penalty is rendered are different from the tagged civil appeals. Advocate for the appellant contends that the document should have been sent to the District Registrar to determine deficit stamp duty and penalty under Section 39 of the Act, instead of the court deciding under Section 34 of the Stamp Act. The argument is untenable to the facts and circumstances of this case.

5. In Civil Appeal Nos. 10039-40 of 2024 (@ S.L.P. (C) Nos. 7249-50 of 2022), the steps under Chapter IV of the Act have been summarised in paragraph 21 of the Judgement, and reads thus –

“21.1. Section 33 of the Act is titled examination and impounding of instruments. The object of the provision is to disable persons from withdrawing the instruments produced by them on being told that proper stamp duty and penalty should be paid.

21.1.1. The person who intend to rely on an insufficiently/improperly stamped instrument has option to submit to the scope of Section 34 of the Act,