The central legal point established in the judgment is the discretionary power of the competent authority to impose penalties for deficiency in stamp duty, the requirement of rational exercise of discretion in imposing penalties, and the petitioner's lack of awareness of the amendment in the Stamp Act.

Judgment

Mrs. Ritu Tagore, J.

Short prayer in this revision petition is to reduce the amount of penalty, imposed to the extent of ten times the deficiency of stamp duty, as ordered in the impugned order dated 10.10.23 (Annexure P-3) passed by learned Civil Judge (Junior Division), Hoshiarpur in a case titled ‘Sham Lal vs. Satwinder Singh and another’.

2. Learned counsel submits that petitioner had no intention to avoid payment of stamp duty, however, was ignorant of the amendment in Stamp Act, which required affixing stamp duty on the sale consideration. Learned counsel pleads that order of imposing a penalty of ten times on the original amount is too harsh, and requests a reduction in the same. In support of his arguments, learned counsel placed reliance on ’Amit Kumar vs. Neha Bhatia and others’ 2023 (1) PLR 343 and ’Trustees of H.C. Dhanda Trust vs. State of Madhya Pradesh and others’ 2020 (9) SCC 510.

3. I have heard learned counsel for the petitioner and have gone through the paper book.

4. It is a matter of record that petitioner filed a suit for confirmation of possession by way of specific performance of agreement to sell dated 25.10.2014 for the land as detailed in the plaint against defendants. He pleaded that father of defendants had executed an agreement to sell the suit land for total consideration of Rs.18,00,000/- and received a sum of Rs.17,50,000/- under the agreement, and delivered the possession of the suit land to him. It is further pleaded that petitioner is ready and willing to execute the sale deed upon payment of the balance consideration, stamp duty and other miscellaneous charges, but defendants are not ready to execute the sale deed. The subsequent transfer-deeds executed by father of the defendants and defendant No.2 in favour of defendant No.1 have also been challenged being null and void with a prayer to set aside the same.

5. It is further a matter of record that during the course of arguments on exparte injunction application, learned trial Court found agreement to sell dated 25.10.2014 under-stamped in view of provisions of Indian Stamp (Punjab Amendment) Act, 2001, Punjab Act No.14 of 2001 Entry No.5 Clause (cc) of Schedule I-A as applicable to Punjab, and ordered to impound the agreement to sell and directed the petitioner to make good the deficiency of stamp duty along with a penalty ten times the value of deficient amount.

6. While interpreting Sections 33, 35, 38 and 39 of the Indian Stamp Act, 1899, Hon’ble the Supreme Court in Trustees of H.C. Dhanda Trust (supra) held that imposition of penalty to the extent of ten times deficiency in the stamp duty is not mandatory and discretion lies with the competent authority. Relevant discussion is in paragraph No.17 and 18 of the judgment, which are extracted as under:-

“17. The amount of penalty thus can be an amount not exceeding ten times. The expression “an amount not exceeding ten times” is preceded by expression “if he thinks fit”. The statutory scheme, thus, vests the discretion to the Collector to impose the penalty amount not exceeding ten times. Whenever statute transfers discretion to an authority the discretion is to be exercised in furtherance of objects of the enactment. The discretion is to be exercised not on whims or fancies rather the discretion is to be exercised on rational basis in a fair manner. The amount of penalty not exceeding ten times is not an amount to be imposed as a matter of force. Neither imposition of penalty of ten times under Section 40 (1) (b) is automatic nor can be mechanically imposed. The concept of imposition of penalty of ten times of a sum equal to ten times of the proper duty or deficiency thereof has occurred in other provisions of the Act as well. We may refer to Section 35 (a) in this context which is as follows:

35. Instruments not duly stamped inadmissible in evidence, etc.-

No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties