2014 Supreme(Kar) 756

IN THE HIGH COURT OF KARNATAKA AT BANGALORE
N. Kumar, J.
Huchamma – Appellant
Vs.
Chandrashekar – Respondent
Writ Petition No. 27694/2012 (GM-CPC)
Decided On: 20.03.2014

Headnote:KARNATAKA STAMP ACT, 1957 - Sections 33 to 35 & 34A r/w Article 5(1)(e): [N. Kumar, J] Insufficiently stamped document - Marking of in evidence - Impounding and levy of duty and penalty - Held, Chapter 4 of the Act deals with instruments not duly stamped and Section 33 provides for examination and impounding of instruments. Once the document is found to be not duly stamped, and it cannot be used for any purpose. However, proviso (a) to Section 34 of the Act provides for payment of duty and penalty on such instrument. The effect of admission of a document which is not sufficiently stamped is dealt under Section 35 of the Act. Therefore, it is seen that Section 33 provides for examination and impounding of an instrument which is not duly stamped. Once on examination it is found that the instrument is not duly stamped, Section 34 comes into operation and places a complete embargo on the admissibility of such document in evidence. However Section 35 of the Act provides that admission of an instrument not duly stamped or insufficiently stamped, in evidence, rightly or wrongly, shall not be called in question at any stage duty or that no stamp duty is paid on such an instrument. Therefore provisions of Sections 33 to 35 of the Act cannot be read in isolation. Section 36 of the Indian, Stamp Act is in pari materia with Section 35 of the Karnataka Stamp Act. A statutory duty is cast on the Court to examine the instrument which is tendered in evidence before it is received, irrespective of a party to the proceedings raising any objection regarding its marking on the ground that it is insufficiently stamped. On such examination if it appears to the Court that such instrument is held to be not duly stamped and ordered to be impounded, then it is inadmissible in evidence, as there is complete prohibition for admitting such insufficiently stamped document in evidence. When in evidence the opposite party has a right to object to the marking of the same. For this purpose it is not necessary for the opposite party to file any application requesting the Court to impound the document and to collect duty and penalty. A mere oral objection at the time of receiving such an instrument as evidence is sufficient. The Court, as observed above, has a duty to examine the document before receiving it in evidence and the opposite party also does not examine the document before receiving it in evidence and the opposite party also does not object to the marking of the document or remains absent at the time of marking f the document and the document is marked rightly or wrongly, then the opposite party is precluded from questioning the same at a subsequent stage of the very same proceedings. A person who does not object to the marking of document before it is marked, forfeits his right to raise such objection in the later stages of the proceedings. But, when such objection is raised before marking of the document and on examination the Court holds that the document is inadmissible in evidence being insufficiently stamped or not duly stamped, the proviso (a) to Sec.34 of the Act comes into operation. It provides for payment of duty chargeable on such instrument or the deficit duty, as the case may be, by the party who is tendering the document together with penalty of TEN times the duty so payable. On such payment of duty and penalty, notwithstanding the fact that the instrument is not duly stamped or insufficiently stamped, it becomes admissible in evidence.

        In the instant case, the Trial Court on the defendant’s objection, has examined the document and directed the plaintiff to pay the deficit duty of Rs. 1,43,800/- and levied a penalty of Rs. 5/- only which is less than what is stipulated under Section 34(a) Proviso. Therefore, the impugned order imposing a penalty of Rs. 5/- cannot be sustained being wholly illegal and without jurisdiction. The Civil Court has no jurisdiction to impose a penalty less than 10 times. Order only to the extent of imposing penalty of Rs. 5/- was set aside. Plaintiff was directed to pay a penalty of Rs. 43,80,500/- and only on such payment the Court can look into it. Else for all practical purposes, though marked, the document is deemed to be unexecuted document in law.

       KARNATAKA STAMP ACT, 1957 - Sections 33 to 35: [N. Kumar, J] Production of insufficient stamped documents - Marking of Objection to be raised before it is marked - When once it is marked without any objection or opposition, Trial Court has no jurisdiction to impound the document - If such an objection is not raised when the document is marked and received as evidence, the opponent will be forfeiting his right to challenge the sufficiency or otherwise of the duty and penalty.

       KARNATAKA STAMP ACT, 1957 - Section 34: [N. Kumar, J] Insufficiently stamped document - Court determining the duty and penalty payable - Held, the party aggrieved by the order can challenge it - Mere marking of the document before the order is challenged, by itself does not take away the right of the party either to challenge the order is passed. Marking of the document pursuant to the impugned order is subject to the result of the proceedings in which it is challenged.