The court confirmed that a trial court must rectify incorrect stamp duty calculations and cannot act on insufficiently stamped documents until the required duty is paid.

CAV ORDER

Aggrieved by the order passed in I.A. in O.S.No.110/2013 dated 10.07.2018 by the II Addl. Civil Judge and JMFC., Shivamogga, the plaintiff is before this Court.

2. The suit is filed seeking specific performance. Earlier, on the sale deed i.e., Ex.P.1, the Trial Court had calculated the stamp duty and penalty at Rs.32,890/- on 15.07.2015 and the plaintiff has paid the same. Thereafter, the Trial Court had observed that the sale deed dated 01.03.1999, the sale consideration amount is Rs.80,000/- and it is written on a stamp paper of Rs.20/-. The prevailing rate of stamp duty as on 1999 was 10% of the market value as per Article 20 of the Karnataka Stamp Act, 1957 . The Trial Court had observed that 10% of Rs.80,000/- is Rs.8,000/- which was the stamp duty payable by the plaintiff on 01.03.1999. However, the document was written on a stamp paper of Rs.20/-. Therefore, there is a deficit of Rs.7,980/-. When there is a deficit, the party is liable to pay duty plus 10 times the penalty i.e., 7980/- + Rs. 79,800/- which makes it a total of Rs.87,780/-. The plaintiff has already deposited Rs.32,890/- and the balance will be Rs.54,800/-. The Trial Court further observed that Ex.P3 is the rent agreement for 11 months, where monthly rent was Rs.950/- and advance amount is Rs.10,000/-. Therefore, rent for 11 months is Rs.10,450/-, which makes it a total premium of Rs.20,450/-. As per Article 30 and Article 12 of the Karnataka Stamp Act, 1957 , the stamp duty payable was 5% of the premium amount that is 5% of Rs.20,450/- is 1,023. Since the plaintiff has already paid Rs.50/- as stamp duty, the deficit stamp duty is Rs.973/-. Therefore, duty and penalty is Rs.9,730+973 i.e., Rs.10,703/- on Ex.P.3. Ex.P.4 is the rent agreement dated 26.05.2012, where monthly rent was agreed at Rs.1,500/- with an advance amount of Rs.15,000/-. Therefore, total amount payable for 11 months was Rs.16,500/- along with advance amount of Rs.15,000/- i.e, Rs.31,500/- and as per Article 30 of the Karnataka Stamp Act, 1957 , the stamp duty is 1% of the premium amount. Therefore, 1% of Rs.31,500/- is Rs.315/-. The plaintiff has already paid Rs.20/- towards the stamp paper. Therefore, the deficit duty is Rs.295/- and accordingly, the plaintiff is liable to pay duty and penalty of Rs.295/- + Rs.2,950/- put together Rs.3,245/-. Aggrieved thereby, the plaintiff is before this Court.

3. Learned counsel appearing for the plaintiff/ petitioner submits that already the Trial Court, exercising the powers has already fixed penalty and the duty at Rs.32,890/- which is already paid by him. That order is not questioned by the defendants and the Trial Court cannot review its own order. It is submitted that he is not relying on Ex.P3 and P4. In that case, the question of paying the stamp duty will not arise. He submits that he is not claiming any relief in respect of those documents as such on those documents there cannot be any penalty or any deficit stamp duty. He had relied on the judgment of Hon’ble Apex Court in case of Gangappa and another Vs. Fakkirappa¹ By relying on para Nos.18 to 20, he submits that in a similar set of facts, the Hon’ble Apex Court has confirmed the order of the Trial Court, though 10 times penalty only in that case, 2 times penalty was imposed. Considering the stage of the suit and the case of the party, he submits that the petitioner’s case also falls under the similar lines and he is also entitled for such a relief from this Court. He further submits that the order passed by the Trial Court is not a well considered one.

4. Learned counsel appearing for the defendants/ respondents submits that though the Trial Court had passed the earlier order fixing the amount at Rs.32,890/-, when it is brought to the notice of