IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13TH DAY OF FEBRUARY 2019 BEFORE THE HON'BLE MRS. JUSTICE K.S.MUDAGAL MISCELLANEOUS SECOND APPEAL NO.187 OF 2012 BETWEEN:
1. SRI K.V.RAJU S/O VENKATARAYA AGED ABOUT 60 YEARS R/AT B.G.NAGARA, BELLUR CROSS NAGAMANGALA TALUK MANDYA DISTRICT 2. SMT.K.R.PARVATHI W/O K.V.RAJU MAJOR R/AT B.G.NAGARA, BELLUR CROSS, NAGAMANGALA TALUK MANDYA DISTRICT … APPELLANTS (BY SRI N. SHANKARANARAYANA BHAT, ADV.) AND:
SMT.KAMALAMMA W/O GOVINDAPPA AGED ABOUT 47 YEARS R/AT NO.682, 9TH CROSS ROAD BAGALAKUNTE NAGASANDRA POST BANGALORE – 560 073 ... RESPONDENT (BY SRI SUNIL KUMAR P.BANGARI, ADV. FOR SRI M.N.MADHUSUDHAN, ADV.) THIS MSA IS FILED UNDER SECTION 43 RULE-1(u) OF CPC, AGAINST THE JUDGMENT AND DECREE DATED 15.09.2012 PASSED IN R.A.NO.51/2011 ON THE FILE OF ADDITIONAL DISTRICT JUDGE, MANDYA, ALLOWING THE APPEAL FILED AGAINST THE JUDGMENT AND DECREE DATED 9.2.2011 PASSED IN O.S.NO.31/2007 ON THE FILE OF CIVIL JUDGE (SR.DN.), NAGAMANGALA, REMANDING BACK THE MATTER TO THE COURT BELOW FOR DISPOSAL IN ACCORDANCE WITH LAW.
THIS APPEAL COMING ON FOR FINAL HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT This appeal of the defendants arises out of the judgment and decree dated 15.09.2012 passed by the Additional District Judge, Mandya in R.A. No.51/2011.
2. By the impugned judgment and decree, the First Appellate Court reversed the judgment and decree dated 09.02.2011 passed by the Senior Civil Judge, Nagamangala in O.S.No.31/2007 dismissing the suit of the present respondent for specific performance of agreement of sale.
3. Respondent filed O.S.No.31/2007 before the learned Senior Civil Judge, Nagamangala against the present appellants seeking specific performance of agreement of sale dated 23.08.2006. For the purpose of convenience, parties will be referred to hereafter with their ranks before the trial Court.
4. The subject matter of the suit were the agricultural lands bearing Sy.No. 73/P-P2 measuring 3 acres, Sy. No. 232/P-2 measuring 1 acre 14 guntas, Sy.No.232/7P measuring 1 acre 14 guntas. In all 7.14 guntas situated in Vaderahalli Village, Bellur Hobli, Nagamangala Taluk.
5. Plaintiff contended that defendants No.1 and 2 executed agreement of sale dated 23.08.2006 agreeing to sell property for consideration of Rs.9,88,000/-. She further contended that the defendants received Rs.9,00,000/- earnest money and in part performance of agreement put her in possession of the property. She further contended that, the defendants failed to receive balance of Rs.88,000/- and execute sale deed within the period stipulated in the agreement despite demand. Thus, she sought for decree of specific performance of agreement of sale.
6. Defendants contested the suit denying the execution of the documents, receipt of the part consideration as alleged and putting her in possession. They further denied any demand for execution of the registered sale deed and contended that the document set up by the plaintiff is forged one.
7. On the basis of such pleadings, the Trial Court framed the following issues:
“1. Whether the plaintiff proves that defendant No.1 and 2 have entered into an agreement to sell the properties belonging to them which are the suit schedule properties measuring 7 acres as per annexure –A for consideration of Rs.9,88,000/- and received advance sale consideration of Rs.9,00,000/- on 23-08-06?
2. Whether the plaintiff further proves that defendant No.1 and 2 failed to execute the sale deed in favour of the plaintiff within 9 months from the date of agreement by receiving the balance consideration of Rs.88,000/-?
3. Whether the plaintiff further proves that she is all along ready and willing to perform her part of the contract and to tender the balance of sale consideration amount to the defendant?
4. Whether there is a cause of action for this suit?
5. Whether the defendants prove that suit schedule properties is the Hindu Undivided Family properties of Sri K.V. Ramachandrarao? and others?
6. Whether the defendants further prove that the agreement to sell which is at annexure-A is a forged document?
7. What decree or order?”
8. The parties adduced evidence. In support of her claim, plaintiff examined her power of attorney holder as P.W.1 and got marked Exs.P.1 to P.5. Defendants did not adduce any evidence. Defendants took up the contention that the said agreement of sale Ex.P.2 is insufficiently stamped and un-
registered, therefore, cannot be considered as evidence.
9. Records show that defendants filed application before the Trial Court for impounding the agreement of sale in question on the ground that the same is insufficiently stamped and unregistered. The Trial Court vide order dated 03.11.2009 held that the document is insufficiently stamped and that cannot be admitted in evidence. The Trial Court allowed the application of the defendants and ordered for impounding the agreement of sale dated 23.08.2006 until the plaintiff pays duty and penalty as per provisions of Karnataka Stamp Act, 1899 (‘the Act’ for short). The trial Court further directed that plaintiff shall pay duty and penalty within fifteen days from the date of the said order, failing which, office shall proceed in accordance with Section 37 of the Act.
10. The records further show that plaintiff’s application to extend the time of payment of duty and penalty was dismissed. Then the Trial Court proceeded to dispose of the suit on available evidence and dismissed the suit holding that since duty and penalty was not paid as per its order, Ex.P.2 agreement of sale cannot be looked into and ultimately suit is liable for dismissal.
11. The plaintiff challenged the said judgment and decree in R.A.No.51/2011 before the Additional District Judge, Mandya. The First Appellate Court by the impugned judgment and decree, held that as per Section 34 of the Act and as per the judgment of this Court in Dr. S. Vidhya –vs- R.S. Venkata Reddy, ILR 2010 KAR 5706, the Court has to decide quantum of the deficit stamp duty and penalty payable and then call upon the party to deposit the same.
12. The First Appellate Court observed in paragraphs 21 and 22 of its judgment that, the Trial Court referring the document to Deputy Commissioner, without calculating and deciding duty and penalty payable and dismissing the suit on the ground of non-payment of duty and penalty, is unsustainable. Thus, First Appellate Court set aside the judgment and decree of the Trial Court and remanded the matter to decide the duty and penalty payable and then proceed with the case.
13. Plaintiff claimed that defendants executed the agreement of sale dated 23.08.2006 agreeing to sell the suit property for a consideration of Rs.9,88,000/-, received advance consideration of Rs.9,00,000/- and put her in possession of the property in part performance of the agreement.
14. The trial Court vide order dated 03.11.2009 held that the document is insufficiently stamped and exercising the powers under Section 33 of the Act impounded the document and directed the plaintiff to pay the deficit duty and penalty without deciding what is the deficit duty and what shall be the penalty.
15. The trial Court further ordered that if the deficit duty and penalty is not paid within 15 days, office shall proceed in accordance with Section 37 of the Act thereby the trial Court implied that the document shall be sent to the Deputy Commissioner for collecting the duty and penalty. However, the fact remained that the trial Court had not decided what was the deficit duty payable and how much penalty it has to be imposed.
16. Section 33(1) of the Act states that the Court or any person authorized to receive evidence before whom an insufficiently stamped document is brought shall impound such document. Section 33(2) of the Act imposes a duty on the Court to decide what is the duty payable and if insufficient duty is paid, what is the deficit and what is the penalty payable.
17. This Court in K. Amarnath vs.
Puttamma [2000(4) Kar.L.J. 55] held that whenever a document insufficiently stamped comes before the Court, the Court has to impound the same, decide the duty and penalty and if such penalty is not deposited, to refer the document to the Deputy Commissioner for collecting the duty and penalty. Paragraph 11 of the said judgment reads as follows:
“11. A combined reading of Sections 33, 34, 35, 37 and 41 of the Karnataka Stamp Act requires the following procedure to be adopted by a Court while considering the question of admissibility of a document with reference to the Stamp Act: (a) when a document comes up before the Court, it has to examine and determine whether it is properly stamped. When the other side objects to it, the Court should consider such objection and hear both sides; (b) after hearing, if the Court comes to the conclusion that the document has been duly stamped, it shall proceed to admit the document into evidence; (c) on the other hand, if the Court comes to the conclusion that the document is not stamped or insufficiently stamped, it shall pass an order holding that the document is not duly stamped and determine the Stamp duty/deficit stamp duty and penalty to be paid and fix a date to enable the party who produces the document to pay the Stamp duty/deficit stamp duty plus penalty; (d) if the party pays the duty and penalty the Court shall certify that proper amount of duty and penalty has been levied and record the name and address of the person paying the said duty and penalty and then admit the document in evidence as provided under Section 41(2); and the Court shall send an authenticated copy of the instrument to the District Registrar together with a certificate and the amount collected as duty and penalty, as provided under Section 37(1); (e) if the party does not pay the duty and penalty, the Court will have to pass an order impounding the document and send the instrument in original, to the District Registrar for being dealt with in accordance with law as per Section 37(2) of the Karnataka Stamp Act.
(Emphasis supplied) 18. In view of the aforesaid judgment, the trial Court committed error in not deciding the sum of deficit duty and penalty payable on the same. The Trial Court committed error in referring the document to the Deputy Commissioner for collection of duty and penalty without deciding that. Further, the trial Court committed error in dismissing the suit, on the ground that the plaintiff has failed to pay the duty and penalty in compliance with Sections 34 and 37 of the Act when it failed in its duty to decide the deficit duty and penalty. Therefore, the First Appellate Court was justified in allowing the appeal and remanding the matter.
19. Having regard to the long pendency of case and to avoid further delay, a direction is required to be issued to the trial Court to determine the duty and penalty and dispose of the matter in a time bound manner. The appeal is dismissed.
20. The impugned judgment and order of the first Appellate Court dated 15.09.2012 passed in RA No.51/2011 is hereby confirmed.
21. The trial Court shall secure the agreement of sale dated 23.08.2006 from the office of the Deputy Commissioner if already sent and decide the deficit duty and penalty payable on the said document and then proceed with the matter. To avoid further loss of time, the parties shall appear before the trial Court on 05.03.2019 without any further notice.
22. The exercise of deciding the duty and penalty shall be completed within two months from the date of receipt of a copy of this order. The plaintiff shall pay the deficit duty and penalty decided by the trial Court within 30 days from the date of such decision.
Sd/- JUDGE HR/akc