IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF OCTOBER, 2019 BEFORE THE HON’BLE MR. JUSTICE KRISHNA S.DIXIT WRIT PETITION NOS.47864-47865 OF 2019 (GM-CPC) BETWEEN:
1. SRI S.NARAYAN S/O.LATE KARIBASAPPA SHETRU AGED ABOUT 67 YEARS 2. SRI S.VENKATESH S/O.KARIBASAPPA AGED ABOUT 50 YEARS BOTH ARE RESIDING AT #66, 4TH ‘N’ BLOCK, 59TH ‘B’ CROSS RAJAJINAGARA BANGALORE-560 010 ... PETITIONERS (BY SRI ASHOK HARANAHALLI, SENIOR COUNSEL A/W SRI MADHUSUDHAN M.N., ADVOCATE) AND:
1. DR.K.A.RAMEGOWDA S/O.K.R.ANJANEYA GOWDA AGED ABOUT 48 YEARS R/AT NO.50/2, 18TH CROSS MALLESWARAM BANGALORE-560 055 2. SRI K.SATISH S/O.K.R.KRISHNE GOWDA AGED ABOUT 45 YEARS R/AT NO.18, 5TH CROSS KATRIGUPPE MAIN ROAD VIVEKANANDA NAGAR BANGALORE-560 085 3. SRI T.N.BRAMARESH S/O.LATE NARASIMHALU NAIDU AGED ABOUT 52 YEARS R/AT NO.96, DR.RAJKUMAR ROAD RAJAJINAGAR BANGALORE-560 010 4. M/S.CORPORATION BANK MALLESWARAM BRANCH NO.64, VASTHRA BHAVAN 18TH CROSS, MALLESWARAM BANGALORE-560 055 ... RESPONDENTS (BY SRI JAI PRAKASH RAO, ADVOCATE FOR C/R3; NOTICE TO R1, R2 & R4 IS DISPENSED WITH V/O DATED 17.10.2019) THESE WRIT PETITIONS ARE FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 07.09.2019 (ANNEXURE-L) PASSED BY THE COURT OF XXXV ADDITIONAL CITY CIVIL JUDGE, BENGALURU ON IA.NOS.IV & V IN OS.NO.5285/2014 AND ETC.
THESE WRIT PETITIONS COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER The petitioners being plaintiffs in a specific performance suit in OS.No.5285/2014 are invoking the writ jurisdiction of this Court for assailing the order dated 07.09.2019, a copy whereof is at Annexure – L, whereby the learned XXXV Additional City Civil Judge, Bengaluru having favoured the respondents’ applications in I.A.No.4 filed under Section 33 and I.A.No.5 filed under Sections 33 and 37 r/w Schedule I Article 5(e)(i) of the Karnataka Stamp Act, 1957 (for short ‘the Act’), has not only ordered impounding of subject document but has proceeded to process it under Section 34 of the Act for the purpose of determining and recovering the deficit stamp duty and ten times penalty admissible thereon.
2. The respondent No.3 having entered caveat through his counsel resist the writ petitions, notice to other respondent-defendants having been dispensed with in terms of petitioners memo since they are neither necessary nor proper parties to adjudication here.
3. Having heard learned Sr. Counsel appearing for the parties and having perused the petition papers, this Court grants indulgence in the matter because:
a) the law relating to stamp duty is a fiscal legislation and therefore the provisions of the Act need to be strictly construed before fastening any liability on the parties to the transactions as comprised in the instruments; Section 33 provides for impounding of instruments that are not duly stamped; there is no much dispute that the instrument in question is not duly stamped as prescribed under Article 5(e)(i) of Schedule I to the Act as if it is a conveyance attracting levy under Article 20 since the instrument mentions delivery of possession; therefore the impugned order to the extent it directs impounding of the instrument for the purpose of determination and recovery of deficit stamp duty along with penalty cannot be faltered;
(b) admittedly, the impugned instrument is not produced in evidence, the trial of the suit being yet to commence; thus levy of penalty in terms of Sec.34 cannot be resorted to till after the instrument in question is sought to be admitted to evidence; the contention of the contesting respondent that once the document is impounded u/s.33 of the Act, the instrument needs to be further treated u/s.34 regardless of the instrument being tendered in evidence cannot be countenanced without manhandling the scheme emerging under Chapter IV of the Act; such a contention is not supported by the Division Bench decision of this Court in MISS. SANDRA LESLEY ANNA BARTELS VS. MISS. P.GUNAVATHY, ILR 2013 KAR 368, para 12 whereof reads as under:
“12. Court cannot say that it would impound the document only when the document is tendered in evidence for marking. Three may be instances where duty and penalty may be very high and the party may not choose to rely upon such insufficiently stamped document in order to avoid stamp duty and penalty. In such circumstances, it would result in loss of revenue to the exchequer. The power of impounding a document is to collect stamp duty and penalty whenever there is an escape of duty. Therefore, when it is brought to the notice of the Court that a document is insufficiently stamped, the Court exercising its power under Section 33 of the Act has to pass an order at the first instance for impounding the document. Though there is a discretion vested in the Court to exercise powers under Sections 33 and 34 of the Act, no Court can hold that it would wait till the document is tendered in evidence. In such circumstances, there may be chances of loss of revenue to the exchequer”.
(c) in the aforesaid decision the ratio as propounded at the Bar is not laid down; what is laid down is that when a document is liable to be impounded on being produced before the Court in terms of Sec.33, of the Act the impounding cannot be deferred till after the document is sought to be produced in evidence; the exercise to be undertaken u/s.33 and its purpose are bit different from what they are under Sec.34 and even the stages are different; accepting the contention of the respondent would vitiate the difference maintained by the Legislature between section 33 and section 34; it has been a settled principle of law of precedent that a case is an authority for the proposition that actually lays down in a given fact matrix and not for all that logically flowing from what is laid down. Lord Halsbury more than a century ago, in the celebrated case of Quinn v Leathem (1901) A.C. 495, 506: has observed as under:
“Now before discussing the case of Allen v. Flood, (1898) A.C. 1 and what was decided therein, there are two observations of a general character which I wish to make, and one is to repeat what I have very often said before, that every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides. I entirely deny that it can be quoted for a proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical Code, whereas every lawyer must acknowledge that the law is not always logical at all.”
In the above circumstances, these writ petitions succeed in part; the impugned order to the extent of ordering impounding of the document and of taking action pursuant thereto under Section 33 of the Act is upheld; however, the remainder portion thereof determining the deficit duty and penalty is liable to be set at naught, and accordingly it is.
All contentions of the parties are kept open.
KTY Sd/- JUDGE