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2003 Supreme(Kar) 136

Karnataka High Court
K.B.Jayaram - Appellant
Versus
Navineethamma - Respondent
Decided On : 02-10-03
M.F.A. : 5071 of 2002

Advocates:
Paras Jain, V.B.SHIVA KUMAR

Headnote:Insufficiently stamped documents

       KARNATAKA STAMP ACT, 1957 - Article 5(e) r/w 20 & sections 33 & 34 and Civil Procedure Code, 1908, Order 43, Rule 1&2 -Temporary injunction - insufficiently stamped document relied upon - directed to pay deficient stamp duty and penalty - plaintiffs failed to comply - temporary injunction vacated - held, the court below instead of taking the indulgent view, should have demanded to pay deficient stamp duty and penalty and then had to consider the issue of temporary injunction.

       [Tirath S. Thakur, J.] - The expression "for any purpose" appearing in the section is wide enough to include within its amplitude use of the document for the purposes of issue or refusal of injunctions prayed for in a suit for specific performance or similar other reliefs. There is nothing in the scheme of Section 34 or the Stamp Act to show that a document which is either unstamped or under stamped can be made use of for purposes of issue of an injunction or for grant of any other interlocutory order.

       Consequence of relying upon insufficiently stamped documents

       Order 43, Rule 1 & 2 - Order 43, Rule 1&2 and Karnataka Stamp Act, Article 5(e) r/w 20 & sections 33 & 34 -Temporary injunction -insufficiently stamped document relied upon -directed to pay deficient stamp duty and penalty -plaintiffs failed to comply - temporary injunction vacated -held, the court below instead of taking the indulgent view, should have demanded to pay deficient stamp duty and penalty and then had to consider the issue of temporary injunction; since this error is for the advantage of the appellants, the order of the Trial Court cannot be interfered with at the instance of the appellants.

       [Tirath S. Thakur, J.] - The Court below would have been justified in first insisting upon the payment of the stamp duty and the penalty on the agreement to sell before it could issue an injunction in favour of the appellants on that basis. Instead of doing so, the Court below appears to have taken an indulgent view by which it has issued an injunction but made its continuance subject to the payment of the stamp duty and penalty on the same by the appellants. The error committed by the Court below is thus for the benefit of the appellants. The Court may well have been justified in ignoring the document so long as it was not properly stamped and the penalty on the same not paid. In the circumstances, therefore, no fault can be found with the impugned order. The direction contained in the same for payment of stamp duty was perfectly in tune with the provisions of the Act.

TIRATH S. THAKUR, J.

( 1 ) IN a suit for specific performance of an agreement to sell, the plaintiffs-appellants herein rely upon an unstamped agreement executed between them and the defendants. The document allegedly executed on 24-8-1998 inter alia stipulates that the possession of the property covered by the same has been transferred to the plaintiffs. That appears to be the version of the plaintiffs also as according to them, the possession of the entire property covered by the agreement of sale stands transferred to them by the defendants-vendors thereof. What is significant is that the document was executed after the amendment to the Karnataka Stamp Act, 1957, whereby an agreement relating to sale of immovable property wherein possession of the property is delivered or is agreed to be delivered, would attract the same stamp duty as is payable on a conveyance at No. 20 of the schedule on the market value of the property. It follows that the agreement to sell relied upon by the plaintiffs-appellants was required to be stamped in accordance with the provisions of Article 5 (e) as amended r/w Article 20 of the Stamp Act. The agreement to sell does not however bear any stamp whatsoever. In the course of the proceedings before the trial court, when the plaintiffs asked for an injunction restraining the defendants from alienating the suit property, the Court noticed the deficiency in the stamp and directed the plaintiffs to pay the same and the penalty in accordance with the law on or before 12-4-2002. Subject to the said payment, defendants 1 to 13 respondents herein were restrained from alienating the suit property to any third party pending disposal of the suit. Time for payment of the court fee and penalty was at the request of the plaintiffs-appellants extended by various orders passed from time to time up to 21-9-2002. since the requisite amount of stamp duty and penalty was not paid despite these extensions, the Court below appears to have declined further extension and vacated the interim injunction. In the present appeal, the appellants have questioned the order passed by the Trial Court in so far as it made the continuance of the injunction against the defendants-respondents herein dependant upon the payment of stamp duty and the penalty in accordance with the provisions of the Stamp Act.

( 2 ) APPEARING for the appellants, Mr. Shiva Kumar argued that the Court below was in error in directing payment of Stamp Duty and penalty on the document at an interim stage of the proceedings limited to the grant of an injunction against the defendants. He urged that the question whether any Stamp Duty was payable on the document with or without penalty could arise for consideration of the trial Court at the appropriate stage when the plaintiff would rely upon the said document for the grant of a decree for specific performance. That stage could at the earliest be the beginning of the trial after issues were framed in the case but not earlier. In as much as the trial Court had made the payment of stamp duty and penalty a condition precedent for the grant or continuance of an interim order of injunction, it has committed an error that required correction in appeal.

( 3 ) SECTION 34 of the Karnataka Stamp Act, 1957, inter alia provides that no instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped. Proviso to S. 34 makes such documents admissible in evidence upon payment of penalty. What is important is that S. 34 stipulates a specific prohibition against instruments chargeable with duty being admitted in evidence for any purpose whatsoever. It is also evident from a careful reading of the provision that no such document as is required to be stamped shall be acted upon registered or authenticated b










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