The captioned writ petition is filed by the defendant

questioning the order of the learned Judge passed on IA.No.3

filed under Order 13 Rule 8 of CPC read with Section 151 of

CPC and Sections 33 and 34 of the Karnataka Stamp Act,

1957.

2.

The respondent/plaintiff has filed a recovery suit

based on an agreement to sell. The respondent/plaintiff

claimed that the present petitioner/defendant agreed to sell

the suit schedule property and accordingly executed an

agreement

to

sell

on

04.08.2011

under

which

the

respondent/plaintiff alleges that he has paid an advance

amount of Rs.1 Crore. The respondent/plaintiff has filed a

recovery suit seeking refund of advance amount paid under

3

the agreement to sell and also claimed interest for a sum of

Rs.61,13,333/- with interest at the rate of 24% per annum.

3.

The present petitioner filed an application in

I.A.No.3 by contending that Ex.P-2 (agreement to sell) is not

sufficiently stamped and therefore, same is liable to be

impounded and the Court is required to determine the penalty

and deficit stamp duty. The defendant claimed that the

agreement of sale is written on a Rs.200/- stamp paper while

under the alleged suit agreement, the respondent/plaintiff

claimed that he has paid a sum of Rs.1 Crore and therefore,

contended that the document is insufficiently stamped.

4.

The learned Judge has rejected the application on

the premise that the present suit is not one for specific

performance of contract. The learned Judge was of the view

that the respondent/plaintiff has instituted a suit for recovery

of money and therefore, question of impounding the document

4

and consequently, determining the deficit stamp duty would

not arise for consideration.

5.

It is against this order, the petitioner/defendant is

before this Court.

6.

Heard learned counsel appearing for the petitioner

and learned counsel appearing for the respondent. Perused

the order under challenge.

7.

The learned Judge has proceeded on an assumption

that since it is a recovery suit, question of examining the

payment of stamp duty would not arise for consideration. The

said finding is palpably erroneous. Though it is a recovery

suit, the entire claim of respondent/plaintiff is based on an

agreement to sell. The right to recovery is based on this

document and therefore it is a suit document. Though the

agreement to sell is one without possession, the stamp duty

payable is governed by Article 5(e)(ii) of the Karnataka Stamp

Act, 1957. In terms of Article 5(e)(ii), the respondent/plaintiff

5

has to pay stamp duty at the rate of 10 paisa for every

Rs.100/- or par thereof on the market value equal to the

amount of consideration. The maximum stamp duty payable

is Rs.20,000/-.

8.

In

the

present

case

on

hand,

the

respondent/plaintiff claims that a sum of Rs.1 Crore was paid

as an advance amount under the agreement to sell.

Therefore, the stamp duty has to be determined on a sum of

Rs.1 Crore in terms of Article 5(e)(ii) of the Karnataka Stamp

Act, 1957. It is in this background, this Court would find that

the order of the learned Judge in rejecting the application is

erroneous and the same is not at all sustainable.

9.

For the foregoing reasons, I pass the following:

ORDER

(i) The writ petition is allowed;

(ii) The impugned order dated 30.06.2017

passed in O.S.No.1663/2014 on I.A.No.3 is set

aside;

6

(iii) The learned Judge is directed to

determine the stamp duty and penalty therein in

terms of Article 5(e)(ii) of the Karnataka Stamp

Act, 1957;

(iv) It is open for both the parties to canvass

their arguments on I.A.No.3 afresh if they chose

to.

Sd/-

JUDGE

CA