IMPORTANT POINT
Deficient stamp duty – Non-payment of stamp duty is a curable defect – Inadmissibility of insufficiently stamped instruments and impounding thereof, is a statutory mandate.

ORDER :

1. A suit for partition and recovery of mesne profits filed in the year 2008 stands unresolved due to the issue of insufficient stamp duty on two documents produced in evidence. The Trial Court rejected two applications filed by the 1st defendant to reject certain documents as inadmissible in evidence and impound those as per the Karnataka Stamp Act, 1957 (for short, ‘the Act’). The High Court in a petition under Article 227 reversed the order and issued directions to pay the deficient stamp duty and exempted penalty. The 1st defendant is in appeal on the ground of the High Court having travelled beyond its jurisdiction and asserting the mandatory nature of penalty imposition, which power is on the Deputy Commissioner under the Act.

2. The plaintiffs are the two sons of the first wife, and the second wife of a businessman. The 1st defendant is the first wife of the deceased businessman and defendant Nos.2 and 3 are also her sons. The 1st plaintiff produced a number of documents which were sought to be marked when the defendants objected to it on the ground inter alia of the documents being compulsorily registrable and insufficiency of stamp duty. The order of the Trial Court which declined impounding of the documents was challenged before the High Court. The High Court permitted the stamp duty to be paid in accordance with the Act on the lease deed dated 19.01.2008 and the lease agreement dated 15.02.2008; exempting the penalty under the Act. The plaintiff was also permitted to recover the stamp duty from the lessee in accordance with law.

3. Mr.Nachiketa Joshi, learned Senior Counsel appearing for the appellant, the first defendant, argued that the High Court has completely misread the provisions of the Act. The High Court cannot by itself direct payment of the stamp duty and absolve a penalty which is mandatory under the Act. It is the competent authority under the Act which has to take a decision on the valuation to determine the deficient stamp duty and also decide on the penalty payable.

4. Mr.Balaji Srinivasan, learned Counsel appearing for the plaintiffs submits that the plaintiffs/ respondents herein are entitled to the protection under Section 35 . Though the documents were produced earlier there was no objection raised. It is also lamented that the suit of 2008 is kept pending only for reason of insufficiency of stamp duty and the consequent plea is that the suit may be expedited while the proceeding under the Act be independently taken up.

5. Mr.Ravi Prakash, learned Senior Counsel appearing for the Indian Overseas Bank, the lessee as per the deed of 19.01.2008, through an impleading application allowed by us, joins issue on the recovery directed of the stamp duty.

6. We are not called upon to look into the inter se disputes as raised in the suit. The only question arising is of the insufficiency of stamp duty with respect to two documents of lease dated 19.01.2008 and 15.02.2008. Any document insufficiently stamped which is produced before any person in charge of a public office or an authority competent to receive evidence, has to be impounded mandatorily, as per Section 33 of the Act. The second proviso to Section 33 provides that in case of a Judge of the High Court, the duty of examining and impounding an instrument under this provision may be delegated to such officer as the Court may appoint in this behalf. In the present case, the learned Judge has found the documents to be insufficiently stamped and impounded it himself; which is permissible since the second proviso only en