The court affirmed that compliance with statutory obligations under the Stamp Act is crucial, and failure to pay required duties and penalties may result in dismissal of associated suits.

CAV ORDER

(PER: HON'BLE MR JUSTICE R DEVDAS)

This writ petition filed under Articles 226 and 227 of the Constitution of India seeks to quash the impugned order dated 28.02.2019 passed by the learned Senior Civil Judge and JMFC, Doddaballapur in O.S.No.71/2012.

2. It is necessary to notice the fact that the impugned order was passed on 28.02.2019 directing the petitioner/plaintiff to pay stamp duty of Rs.38,06,250/- and ten times penalty amounting to Rs.3,80,62,500/-, totaling to Rs.4,18,68,750/-, within two months from the date of the order failing which, it was ordered that the plaintiff is not entitled to get any other relief as per law. However, this writ petition is filed on 31.01.2023, nearly 4 years after the impugned order was passed. However, it should also be noticed that after the impugned order was passed on 28.02.2019, calling upon the petitioner/plaintiff to pay the deficit stamp duty along with penalty, on non-payment of the deficit stamp duty and penalty, the suit in O.S.No.71/2012 was dismissed on 24.10.2019. The suit is one for specific performance of the Memorandum of Agreement dated 08.08.2009. The said order of dismissal of the suit was questioned by the petitioner/plaintiff in Civil Revision Petition No.299/2021, before this Court. This Court, by order dated 11.08.2022, dismissed the CRP on the ground that the order dated 28.02.2019, which is impugned herein remained unchallenged by the plaintiff and the same had reached finality. This Court held that the application filed by the defendants in I.A.No.9, seeking dismissal of the suit for non payment of stamp duty and penalty was rightly allowed by the trial court, having regard to the fact that the plaintiff failed to pay the stamp duty and penalty despite sufficient time being granted and nearly 10 months had elapsed after the order was passed on 28.02.2019.

3. In this background, learned counsel for the petitioner/plaintiff submits that the right of the plaintiff to have his suit decided on merits cannot be curtailed because of non payment of the stamp duty and penalty. At any rate, when the plaintiff seeks to pay the stamp duty and penalty, this Court should consider the challenge raised to the impugned order dated 28.02.2019.

4. Learned counsel for the petitioner/plaintiff would also argue that the petitioner has raised several relevant grounds, including the fact that Section 46A of the Karnataka Stamp Act bars recovery of stamp duty not levied or short levied, after lapse of five years from the date of commencement of the Karnataka Stamp (Amendment) Act, 1980 or the date on which the duty became payable, whichever is later. It is contended that under the Memorandum of Agreement dated 08.08.2009 physical possession was not delivered to the plaintiff and therefore invocation of Article 5(1)(e) of the Karnataka Stamp Act seeking payment of 7% stamp duty on the basis of Conveyance, is contrary to law. It is contended that the trial court has erred in not taking into consideration the amendments brought to the Karnataka Stamp Act on 01.03.2014 and 01.04.2016. According to the learned counsel for the petitioner the amendments create a liability on the agreement holder to whom possession was delivered even prior to the parties entering into an agreement of sale and therefore, such provision being penal in nature are prospective in nature. It is therefore contended that when the petitioner/plaintiff sought for determination of the stamp duty payable, the trial court should have referred the matter to the competent authority. In this regard, reliance is sought to be placed on a decision of the Hon’ble Supreme Court in the case ofChilakuri Gangulappa VS. Revenue