IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF MARCH, 2019 BEFORE BETWEEN:
THE HON' BLE MR. JUSTICE B. VEERAPPA WRIT PETITION No.65132/2016(GM-CPC) 1. SAVIK VIJAI ENGINEERING PVT LTD A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956, HAVING ITS REGISTERED OFFICE AT 816/K, 16TH CROSS, 7TH BLOCK WEST, JAYANAGAR, BANGALORE 560 082.
REPRESENTED HEREIN BY ITS MANAGING DIRECTOR, MR. B. GOPALA KRISHNA.
2. B. MUTHU KUMARESAN AGED ABOUT 44 YEARS, S/O B. BALAVENKATARAMANA CHETTY, RESIDING NO.39, ITI LAYOUT, VIDYAPEETA ROAD, BANASHANKARI 3RD STAGE, BANGALORE 560 085.
3. V.K. VENKATESH AGED ABOUT 30 YEARS, S/O V. KRISHNAIAH SHETTY RESIDING AT NO.36, SAJJAN RAO ROAD, V.V. PURAM, BANGALORE 560 004.
4. MOHAMMED YACOOB AGED ABOUT 63 YEARS S/O P. ABDUL AZEEZ RESIDING AT NO.20, VENKATAPPA ROAD, TASKER TOWN, BANGALORE 560 001.
5. ABDUL KHALAK, AGED ABOUT 47 YEARS S/O LATE ALTAF RAOOF, RESIDING AT NO.11, SARAKKI 2ND PHASE, J.P. NAGAR, BANGALORE 560 078.
PETITIONER Nos.3 TO 5 ARE DELETED VIDE ORDER DATED 22.01.2018 (BY SRI DIWAKAR, ADVOCATE) AND:
BCL FINANCIAL SERVICES PRIVATE LIMITED A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956, HAVING ITS REGISTERED OFFICE AT 113, EMBASSY CENTRE, NO.11,CRESCENT ROAD, HIGH GROUNDS, BANGLAORE 560 001 REPRESENTED HEREIN BY ITS MANAGING DIRECTOR, MR. SUDARSHAN L. MANGALORE.
... PETITIONERS ... RESPONDENT THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 22.3.2016 PASSED IN I.A.NO.16 IN O.S.NO.1075/1995 BY THE 14TH ADDITIONAL CITY CIVIL AND SESSIONS JUDGE AT BANGALORE AND CONSEQUENTLY ALLOW THE APPLICATION FILED BY THE PETITIONER UNDER SECTION 34 READ WITH SECTION 37 OF THE KARNATAKA STAMP ACT.
THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER This writ petition is filed by the defendants against the order dated 22.3.2016 passed on I.A.16 in O.S.No.1075/1995 by the 14th Additional City Civil and Sessions Judge at Bangalore dismissing the application filed by them under Section 34 r/w 37 of the Karnataka Stamp Act.
2. The plaintiffs filed a suit for recovery of money for a sum of `2,10,17,100/- together with interest reserving liberty to the plaintiffs, in the event of the defendants defaulting in payment of the amounts claimed in prayer (i) to apply the Hon’ble Court for the sale of mortgaged immoveable properties described in schedule A to D by public auction or private treaty and to apply the sale proceeds realized thereon, etc., raising various contentions. The defendants filed their written statement denying the plaint averments in part and admitting the claims in part and sought for dismissal of the suit.
3. During the evidence of P.W.1, memorandum of understanding between the parties has been marked as Ex.P.1. Subsequently, the defendants filed an application I.A.16 under Section 34 r/w Section 37 of the Karnataka Stamp Act to impound the document Ex.P.1. The trial Court considering the application and objections, by the impugned order dated 22nd March, 2016 dismissed the application holding that at the time of marking the documents, during the evidence of P.W.1, memorandum of understanding has been marked as Ex.P.1 and at the time of marking the said documents, the defendants had not raised any objections. The judgment relied upon by the learned Counsel for the defendants is not applicable. Therefore, dismissed the application. Hence, the present writ petition is filed.
4. Respondents served and unrepresented.
5. Heard the learned Counsel for the petitioners.
6. Sri Diwakar, learned Counsel for the petitioners contended that Ex.P.1 is an unregistered document which ought not to have been marked in the evidence of P.W.1. and the trial Court ought to have impounded the document under Section 34 of the Karnataka Stamp Act directing the plaintiff to pay the stamp. In support of his contentions, he relied upon the judgments of this Court in the case of Miss Sandra Lesley Anna Bartels – vs. P. Gunavath reported in AIR 2013 Karnataka 52 and Shivaputrappa and Another –vs- Smt. Ningamma and Others reported in ILR 2014 Kar. 4705 and sought to allow the writ petition.
7. Having heard the learned Counsel for the petitioners, it is not in dispute that the respondent plaintiff filed a suit for recovery of a sum of `2,10,17,100/-. It is also not in dispute that during the course of evidence of P.W.1, the memorandum of understanding entered into between the parties has been marked as Ex.P.1. At that time, the defendants though represented through their Counsel did not object for marking of the said document. Once the document is marked without objection, no subsequent objection regarding its marking cannot be gone into and as such, the documents will have to be looked into while deciding the case on merits. My view is fortified by the dictum of this Court in the case of Smt. Savithramma R.C. –vs- M/s. Vijaya Bank and Another reported in ILR 2015 Kar 1984 wherein at paragraphs 3, 6, 7 and 8 it has been held as under:
3. The Trial Court is right to the extent that, once the document is marked without objection, no subsequent objection regarding its marking can be gone into and such document will have to be looked into while deciding the case on merits. This, however, does come in the way of the court discharging the statutory duty contemplated under Sec. 33 of the Act. Section 33 of the Karnataka Stamp Act, 1957, which deals with Examination and impounding of instruments reads as under:
33. Examination and impounding of instruments.– (1) Every person having by law or consent of parties authority to receive evidence, and every person in-charge of a public office, except an officer of police, before whom any instrument, chargeable in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same.
(2) For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him, in order to ascertain whether it is stamped with a stamp of the value and description required by the law in force in the State of Karnataka when such instrument was executed or first executed:
Provided that,— (a) nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898;
(b) in the case of a Judge of the High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints in this behalf.
(3) For the purposes of this section, in cases of doubt, the Government may determine,— (a) what offices shall be deemed to be public offices; and (b) who shall be deemed to be persons in-charge of public offices.
6. From the aforesaid statutory provisions and the decisions, it is clear that a duty is cast upon every Judge to examine every document, which is produced or comes before him in the performance of his functions. On such examination, if it appears to the Judge that such instrument is not duly stamped, an obligation is cast upon him to impound the same. This duty is to be performed by the Judge irrespective of the fact whether any objection to its marking is raised or not. Hence, there is a need for diligence on the part of the Court having regard to the statutory obligation under Section 33 of the Karnataka Stamp Act. Section 34 of the Karnataka Stamp Act mandates that an instrument, which is not duly stamped shall not be admitted in evidence. If any objection is taken to the admissibility of the evidence, it shall be decided then and there. If this document is found to be insufficiently stamped, then in terms of the proviso (a) to Section 34, the Court shall call upon the person, who is tendering the said document to pay duty and ten times penalty and thereafter admit the document in evidence. If duty and penalty is not paid, the document shall not be admitted in evidence. If such an objection is not taken at the time of admitting the said instrument in evidence, and the insufficiently stamped document is admitted in evidence then section 35 of the Act provides that such admission shall not be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped. It has nothing to do with impounding the document. A duty is cast upon every Judge to examine every document that is sought to be marked in evidence. The nomenclature of the document is not decisive. The question of admissibility will have to be decided by reading the document and deciding its nature and classification. The tendency to mark documents without inspection and verification should be eschewed. Even while recording ex parte evidence or while recording evidence in the absence of the Counsel for the other side, the Court should be vigilant and examine and ascertain the nature of the document proposed to be marked and ensure that it is a document which is admissible. The Court should not depend on objections of the other Counsel before considering whether the document is admissible in evidence or not. Section 33 of the Stamp Act casts a duty on the Court to examine the document to find out whether it is duly stamped or not, irrespective of the fact whether an objection to its marking is raised or not. Section 37 of the Act provides what the Judge has to do when he has collected duty and penalty under Section 34 of the Act and what he has to do, if the case does not fall under Section 34 of the Act. Section 37 of the Karnataka Stamp Act reads thus:
37. Instruments impounded how dealt with.-
(1) When the person impounding an instrument under section 33 has by law or consent of parties authority to receive evidence and admits such instrument in evidence upon payment of a penalty as provided by section 34 or of duty as provided by section 36, he shall send to the Deputy Commissioner an authenticated copy of such instrument, together with a certificate in writing, stating the amount of duty and penalty levied in respect thereof, and shall send such amount to the Deputy Commissioner or to such person as he may appoint in this behalf.
(2) In every other case, the person so impounding an instrument shall send it in original to the Deputy Commissioner.
7. If the Judge has acted under Section 34 of the Act and collected duty and penalty and admitted the document in evidence, then under sub-Section (1) of Section 37, he shall send to the Deputy Commissioner an authenticated copy of such instrument together with a Certificate in writing stating the amount of duty and penalty levied in respect thereof and shall send such amount to the Deputy Commissioner or such person as he may appoint in this behalf. If the Judge does not act under Section 34 of the Act, but the document is insufficiently stamped and admitted in evidence though objection regarding admissibility cannot be raised subsequently that does not take away his obligation to impound the document under Section 33 of the Act. If the document is insufficiently stamped and if the Court has admitted such instrument in evidence without collecting duty and penalty, then the Judge shall proceed under Section 33 of the Act and impound the document. After impounding the document, he shall proceed under Section 37(2) of the Act and shall send the impounded instrument in original to the Deputy Commissioner to be dealt with under Section 39 of the Act. Therefore, impounding the document should not be confused to admission of document without objection regarding admissibility or on such objection being taken after collecting the duty and penalty.
8. In the instant case, though the Trial Court has said that the documents are duly stamped, it has not discussed about the nature of the documents in order to find out whether it is duly stamped. Only after the said exercise, the Trial Court could have come to the conclusion whether the duty paid on the instrument is sufficient or not. Therefore, the Trial Court is directed to undertake the above exercise and pass appropriate orders and to proceed under Section 33 of the Act read with Section 37(2) of the Stamp Act, if the documents are found to be insufficiently stamped.
8. The two judgments relied upon by the learned Counsel for the petitioners stated supra are that before marking of the document, if any document comes to the notice of the Court, the same has to be impounded in accordance with the provisions of Section 33(1) of the Karnataka Stamp Act and whether it can be relied upon by a party under Section 34 of the Stamp Act or not and another judgment is to the same effect that as and when party wants to introduce or tender such document in evidence, the Court has no option but to direct the office to calculate the stamp duty or deficit thereof payable with penalty of ten times and fix the date for payment of the amount the person who wants to produce the document to calculate the stamp duty or insufficient stamped and in any event the party in person wants to produce and fails to pay the stamp duty, in such case the Court can impound the document and shall forward the original document to the District Registrar as required under Section 37(2) of the Act.
9. Admittedly, in the present case, in the evidence of P.W.1, memorandum of understanding has been marked and at the time of marking of the said document, the defendants had not raised any objections. The judgments relied upon by the learned Counsel for the petitioners have no application to the facts and circumstances of the present case. Hence, the petitioners have not made out any good ground to interfere with the impugned order passed by the trial Court in exercise of powers under Article 227 of the Constitution of India.
10. For the aforesaid reasons, the impugned order passed by the trial Court rejecting the application is just and proper. However, it is made clear that the document insufficiently stamped and admitted in evidence though objection was not raised, subsequently it does not take away the obligation to impound the document under Section 33 of the Karnataka Stamp Act. If it is insufficiently stamped and the Court has admitted the document, while calculating the duty and penalty, the Court can proceed under Section 33 of the Stamp Act at the time of adjudication of the suit. However, that does not come in the way of the trial Court discharging statutory duty as contemplated under Sections 37(2) and 39 of the Karnataka Stamp Act.
11. With the above observations, writ petition is disposed of.
Sd/- Judge Nsu/-