The court confirmed that a document evidencing possession transfers its status from an agreement to a conveyance, thus imposing requisite stamp duty as per statutory provisions.

1. Yesterday, when the matter was taken up for hearing, Shri Ashok Kutumbale, who is otherwise holding the Office of Additional Advocate General, appeared in the matter and there was no representation from the side of the State Government, therefore, we recorded the proceedings and referred the copies of the same to the Advocate General for making appropriate arrangements for representation of the State in the matter where the duty and penalty is recoverable on a document and the amount is to go to the coffers of the State Government.

2. Today, Shri A. S. Kutumbale is not appearing in the matter, but Shri Amit Purohit appears for the petitioner, Shri B. I. Mehta appears for respondent No.1 while Smt. Rashmi Pandit appears under the authorization by the Advocate General for the State Government.

3. The petitioner / plaintiff Umesh Kumar being aggrieved by the order dated 28-3-2008 passed by the learned District Judge, Mandleshwar on 28-3-2008 impounding the document in question and requiring the plaintiff to pay the duty and penalty on the document in dispute in light of the explanation appended to Art.23 of the Indian Stamp Act in its application to the State of Madhya Pradesh, requiring the plaintiff to pay 7'% stamp duty on the face value of the document and pay ten times penalty.

4. The short facts necessary for disposal of the present writ petition are that plaintiff Umesh Kumar filed a civil suit for specific performance of the contract / agreement dated 2nd January, 2001 with a further submission that possession of the property was handed over to him and a document evincing the agreement between the parties and delivery of possession was executed on 2-6-2001. The defendant, after putting in his appearance in the matter, raised various pleadings. The trial Court framed certain issues and thereafter, required the parties to lead their evidence.

5. The plaintiff produced the document dated 2-6-2001 before the Court with a submission that the same be admitted in evidence, but defendant raised an objection submitting inter - alia that the document contained a recital the possession was delivered to the plaintiff, therefore, the document would be a conveyance and under Clause 23 of the Schedule appended to the Indian Stamp Duty, 1899, the document was required to be executed upon appropriate stamps and as the document was not on appropriate stamps, it was liable to be impounded with a further direction to the plaintiff to pay duty and penalty, in accordance with S.33, S.35 and S.38 of the Indian Stamp Act . The plaintiff, however, submitted before the Court that the document in question was a simple agreement and in accordance with Art.5 of the Indian Stamp Act , appropriate stamp duty has been paid, therefore, the document was admissible in evidence. After hearing the parties and after going through the contents of the documents, the trial Court observed that as the document recited that possession of the property was handed over to the plaintiff the document would become a conveyance and the plaintiff was required to pay 7'% the stamp duty on market value of such document. The Court accordingly, impounded the document and observed that the plaintiff was to pay 7'% stamp duty on the face value of the document (on Rs. 3,01,000/-) and pay 10 times penalty and if the said amount was deposited in the Court within one month from the date of the order, the document would become admissible in evidence. Being aggrieved by the said order, the plaintiff has approached to us under Art.227 of the Constitution of India.

6. Yesterday, the matter was argued before us and today arguments have been reiterated to submit that the document was appropriately stamped and penalty was no