IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH DAY OF OCTOBER, 2017 BEFORE THE HON’BLE MR. JUSTICE A S BOPANNA WRIT PETITION No.14959/2017 (GM-ST/RN) BETWEEN:
H N VEDAMURTHY S/O H.N.NANJUNDAIAH AGED ABOUT 60 YEARS, R/AT LIG NO.58, HOUSING BOARD CHANNARAYAPATNA HASSAN-570028.
(BY SRI KARUMBAIAH T A, ADV.) AND:
1. STATE OF KARNATAKA REVENUE DEPARTMENT, M.S.BUILDING, DR.B.R.AMBEDKAR ROAD, BANGALORE-01.
2. THE REGISTRAR DISTRICT REGISTRAR OFFICE, HASSAN DISTRICT, HASSAN-570028 3. THE DEPUTY COMMISSIONER HASSAN DISTRICT, HASSAN-570028.
(BY SRI M A SUBRAMANI, HCGP. FOR R1 –R3) ... PETITIONER ... RESPONDENTS THIS PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, WITH A PRAYER TO QUASH ANNEXURE-E THE ENDORSEMENT DATED 21.07.2016 ISSUED BY THE R-2 DIRECT THE RESPONDENTS TO CONSIDER ANNEXURE-D DATED 08.06.2016 PETITIONERS APPLICATION FOR REFUND OF STAMP DUTY AND PENALTY OF RS.1,51,165/- WHICH WAS PAID BY THE PETITIONER BEFORE TRIAL COURT THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R The petitioner is before this Court assailing the endorsement dated 21.07.2017 as at Annexure-E to the petition. The petitioner in that light is seeking issue of mandamus to direct the respondents to refund the stamp duty and penalty of Rs.1,51,165/- paid by the petitioner before the trial Court.
2. The petitioner was before this Court at an earlier point in W.P.No.55221/2015. This Court through the order dated 26.04.2016 had referred to an earlier decision of this Court in the case of United Precision Engineers Pvt Ltd vs. KIOCL Ltd (ILR 2016 Kar 1707) and granted liberty to make appropriate representation. The petitioner has thereafter submitted a representation dated 08.06.2016 as at Annexure-D to the petition seeking refund of the duty and penalty. The respondent through the communication/ endorsement dated 21.07.2016 (Annexure-E) has rejected the claim of the petitioner for refund as the same is not contemplated under Section 38(1) and (2) of the Karnataka Stamp Act (‘the Act’ for short). The petitioner is therefore before this Court in this petition.
3. The case of the petitioner is that in respect of the agreement dated 07.07.2001 the petitioner had approached the Court below in O.S.No.127/2006 seeking specific performance of the said agreement. Since at that stage it was noticed that the agreement had not been duly stamped, the Court below had taken note of the same and on impounding the said document had determined the deficit stamp duty and penalty payable on the said deficit amount which in all amounted to Rs.1,51,165/-. The penalty has been imposed at 10 times, to the tune of Rs.1,37,500/- Though in that regard the petitioner had paid the deficit stamp duty and penalty and the document was available for marking, the matter was thereafter settled between the parties before the Lok Adalat on 20.03.2014. The petitioner in that light has sought for refund of the duty and penalty. Insofar as that aspect of the matter, it is to be clarified that when a document which is not appropriately stamped comes to the notice of the authority/Court as indicated in Section 33 of the Act, such document is required to be impounded. Since in that circumstance irrespective of the fact that the parties have settled the matter before the Lok Adalat, once the Court below has impounded the said document and determined the deficit stamp duty, the refund of such deficit stamp duty would not arise. Therefore to that extent even though the petitioner has sought for refund of the deficit stamp duty paid, the same would not arise.
4. However, what would arise for consideration is only with regard to the quantum of penalty that is required to be levied. When the Court impounds such documents and the deficit stamp duty is determined and the penalty is imposed, the law is well settled that the Court has no discretion, but to impose penalty at 10 times. Therefore, in the instant case, if the determination as made by the Court below and the penalty at 10 times has been recovered and the same has been sent to the Deputy Commissioner as provided under Section 37 of the Karnataka Stamp Act, if any order to vary the quantum of penalty is required to be made, it is for the person who has paid the penalty before the Court to file appropriate application before the Deputy Commissioner seeking variation/reduction only to the extent of the penalty that had been levied by the Court below. This aspect of the matter has been dealt with in the decision of this Court in the case of United Precision Engineers Pvt (cited supra).
5. Learned Government Advocate would however submit that as per the instructions received, the deficit duty and the penalty collected in the proceedings before the Court below has not been dispatched to the respondent as contemplated under Section 37 of the Act. If that be the position, in support of the claim to be made by the petitioner the petitioner is also required to furnish details about the deficit duty and penalty being collected and dispatched from the Court to the office of the Deputy Commissioner in terms of Section 37 of the Act. If the petitioner approaches the Deputy Commissioner seeking variation/modification/ reduction of the penalty, in that circumstance, the Deputy Commissioner shall take note of the representation of the petitioner and take a decision in that regard in accordance with law as such discretion lies with the Deputy Commissioner. In that light if the impugned communication dated 21.07.2016 is taken note in the nature of the request made by the petitioner seeking refund of the deficit stamp duty as well as the penalty in its entirety, the Deputy Commissioner was justified to that extent.
6. However, in view of the clarification that is made hereinabove and if the petitioner produces the document to indicate that the deficit duty and penalty has been dispatched from the Court in terms of Section 37 of the Act, in such event the consideration shall be made as provided under Section 38 of the Act keeping in view the decision of this Court in the case of United Precision Engineers Pvt (cited supra) in so far as considering the quantum of penalty that would be justified. Such consideration shall be made as expeditiously as possible, but not later than two months from the date on which the petitioner furnishes all details and a copy of this order to the Deputy Commissioner.
The petition is accordingly disposed of.
Sd/- JUDGE akc/bms