IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF MARCH, 2019 BEFORE THE HON'BLE MR. JUSTICE B. VEERAPPA WRIT PETITION No.48001/2018 (GM-CPC) C/W WRIT PETITION No.47999/2018 (GM-CPC) IN WP.NO.48001/2018 BETWEEN MRS TASNEEM FATHIMA W/O MD. SHAFIQ ARSHAD AGED ABOUT 43 YEARS RESIDING AT NO.351, 12TH CROSS ROAD, II BLOCK, JAYANAGAR, BENGALURU-560011. ... PETITIONER (BY SRI M.NAGAPRASANNA, SENIOR COUNSEL A/W MISS MADHURI P, ADV.) AND 1. MRS. ZEEBUNDEHKHALEELI AGED ABOUT 51 YEARS W/O MR. WUSOOQKHALEELI D/O MR. AKBAR MIRZA KHALEELI, RESIDING AT D-200, 2320, 119TH STREET, EDMONTON, AB, T6J, 4H1 CANADA.
2. MRS. SABAHBAKHACHE, AGED ABOUT 50 YEARS W/O MR. ANTOINE BAKHACHE, D/O MR. AKBAR MIRZA KHALEELI, RESIDING AT C/O WILSA MALAYSIA 60-F2-2, PLAZA DAMASJALAN SRI. HARTMAS, KL 50480, KUALA LUMPUR, MALAYSIA.
3. MRS. REIHANEH YAVARDHALA AGED ABOUT 47 YEARS W/O MR. M.Y.DHALA, D/O MR.AKBAR MIRZA KHALEELI, RESIDING AT “VILLA NOOR”, NO.4/6, CASUARINA DRIVE, NEELANKARAI, CHENNAI-600041.
4. MISS ESMATHKHALEELI AGED MAJOR, D/O MR. AKBAR MIRZA KHALEELI NO.26/2-1, ABSHOT LAYOUT, SANKEY ROAD, BENGALURU-560052.
5. MRS. GAUHAR TAJ NAMAZIE W/O MR MIRZA GHULAM HUSSAIN NAMAZIE, AGED ABOUT 97 YEARS, 15/1, ALI ASKAR ROAD, BENGALURU-560001.
6. MR. MIRZA ABDUL KARIM NAMAZIE AGED ABOUT 76 YEARS S/O LATE MR. MIRZA GHULAM HUSSAIN NAMAZIE, R/AT NO.81, GRANGE ROAD, SINGAPORE-249586 RESPONDENTS 1 TO 6 ARE REPRESENTED BY THEIR POWER OF ATTORNEY HOLDER MR. AKBAR MIRZA KHALEELI, AGED ABOUT 80 YEARS, S/O LATE MR. MOHAMMED AMEEN KHALEELI, RESIDING AT NO.26/2-1, ABSHOT LAYOUT, SANKEY ROAD, BENGALURU-560052.
7. RUSTUMJI DEVELOPMENTS G-1, RICHMOND TOWERS, NO.12, RICHMOND ROAD, BENGALURU-560025 REPRESENTED BY PARTNER MR.N.H.RUSTUMJI.
8. MR. N.H.RUSTUMJI S/O H.RUSTUMJI AGED ABOUT 74 RESIDING AT 30, NORRIS ROAD RICHMOND TOWN, BENGALURU-560025 9. MR. R.H.RUSTUMJI S/O H.RUSTUMJI AGED ABOUT 72 YEARS, RESIDING AT 30, NORRIS ROAD, RICHMOND TOWN, BENGALURU-560025.
10. MRS. PIRUJARUSTUMJI W/O H.RUSTUMJI, AGED ABOUT 93 YEARS RESIDING AT 30, NORRIS ROAD, RICHMOND TOWN, BENGALURU-560025 11. MRS. FRENYRUSTUMJI W/O R.H.RUSTUMJI AGED ABOUT 72 YEARS RESIDING AT 30, NORRIS ROAD, RICHMOND TOWN, BENGALURU-560025 12. MRS BEROZP .ZAL W/O LATE P.R.ZAL, AGED ABOUT 93 YEARS RESIDING AT NO.14, MAGRATH ROAD, BENGALURU-560025 ... RESPONDENTS (BY SRI P B APPAIAH, ADV. FOR R1 TO R3, SRI GANESH S.V., ADV. FOR SRI S.SHIVASWAMY, ADV. FOR R-4 & R-6, SRI L.M.CHIDANANDAYYA, ADV. FOR R-7 & R-8, (NOTICE TO R-9 TO R-12 IS D/W V/O DTD.19/03/2019), (R-5 IS DEAD)) THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 26.04.2018 PASSED BY XI ADD. CITY CIVIL JUDGE, BENGALURU (CCH-8) IN O.S.NO.6618/2009 (ANNEXURE-D).
IN WP.NO.47999/2018 BETWEEN MOHAMMED SHAFIQ ARSHAD S/O LATE MR.M.RAHMATHULLA KHAN, AGED ABOUT 64 YEARS RESIDING AT NO.351, 12TH CROSS ROAD, II BLOCK, JAYANAGAR, BENGALURU-560011. ... PETITIONER (BY SRI M.NAGAPRASANNA, SENIOR COUNSEL A/W MISS MADHURI P, ADV.) AND 1. MRS. ZEEBUNDEHKHALEELI AGED ABOUT 51 YEARS W/O MR. WUSOOQKHALEELI D/O MR. AKBAR MIRZA KHALEELI, RESIDING AT D-200, 2320, 119TH STREET, EDMONTON, AB, T6J, 4H1 CANADA.
2. MRS. SABAHBAKHACHE, AGED ABOUT 50 YEARS W/O MR. ANTOINE BAKHACHE, D/O MR. AKBAR MIRZA KHALEELI, RESIDING AT C/O WILSA MALAYSIA 60-F2-2, PLAZA DAMASJALAN SRI. HARTMAS, KL 50480, KUALA LUMPUR, MALAYSIA.
3. MRS. REIHANEH YAVARDHALA AGED ABOUT 47 YEARS W/O MR. M.Y.DHALA, D/O MR.AKBAR MIRZA KHALEELI, RESIDING AT “VILLA NOOR”, NO.4/6, CASUARINA DRIVE, NEELANKARAI, CHENNAI-600041.
4. MISS ESMATHKHALEELI AGED MAJOR, D/O MR. AKBAR MIRZA KHALEELI NO.26/2-1, ABSHOT LAYOUT, SANKEY ROAD, BENGALURU-560052.
5. MRS. GAUHAR TAJ NAMAZIE W/O MR MIRZA GHULAM HUSSAIN NAMAZIE, AGED ABOUT 97 YEARS, 15/1, ALI ASKAR ROAD, BENGALURU-560001.
6. MR. MIRZA ABDUL KARIM NAMAZIE AGED ABOUT 76 YEARS S/O LATE MR. MIRZA GHULAM HUSSAIN NAMAZIE, R/AT NO.81, GRANGE ROAD, SINGAPORE-249586 RESPONDENTS 1 TO 6 ARE REPRESENTED BY THEIR POWER OF ATTORNEY HOLDER MR. AKBAR MIRZA KHALEELI, AGED ABOUT 80 YEARS, S/O LATE MR. MOHAMMED AMEEN KHALEELI, RESIDING AT NO.26/2-1, ABSHOT LAYOUT, SANKEY ROAD, BENGALURU-560052.
7. RUSTUMJI DEVELOPMENTS G-1, RICHMOND TOWERS, NO.12, RICHMOND ROAD, BENGALURU-560025 REPRESENTED BY PARTNER MR.N.H.RUSTUMJI.
8. MR. N.H.RUSTUMJI S/O H.RUSTUMJI AGED ABOUT 74 RESIDING AT 30, NORRIS ROAD RICHMOND TOWN, BENGALURU-560025 9. MR. R.H.RUSTUMJI S/O H.RUSTUMJI AGED ABOUT 72 YEARS, RESIDING AT 30, NORRIS ROAD, RICHMOND TOWN, BENGALURU-560025.
10. MRS. PIRUJARUSTUMJI W/O H.RUSTUMJI, AGED ABOUT 93 YEARS RESIDING AT 30, NORRIS ROAD, RICHMOND TOWN, BENGALURU-560025 11. MRS. FRENYRUSTUMJI W/O R.H.RUSTUMJI AGED ABOUT 72 YEARS RESIDING AT 30, NORRIS ROAD, RICHMOND TOWN, BENGALURU-560025 12. MRS BEROZP .ZAL W/O LATE P.R.ZAL, AGED ABOUT 93 YEARS RESIDING AT NO.14, MAGRATH ROAD, BENGALURU-560025 ... RESPONDENTS (BY SRI P B APPAIAH, ADV. FOR R1 TO R3, SRI GANESH S.V., ADV. FOR SRI S.SHIVASWAMY, ADV. FOR R-4 & R-6, SRI L.M.CHIDANANDAYYA, ADV. FOR R-7 & R-8, (NOTICE TO R-9 TO R-12 IS DISPENSED WITH V/O DTD.19/03/2019), (R-5 IS DEAD)) THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 26.04.2018 PASSED BY XI ADDL. CITY CIVIL JUDGE, BENGALURU (CCH-8) IN O.S.NO.6617/2009 (ANNEXURE-D).
THESE WRIT PETITIONS COMING ON FOR ‘PRELIMINARY HEARING’ THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER These writ petitions are filed against the common order dated 26.04.2018 passed on stamp duty in respect of the agreements dated 12.05.1997 and 10.05.1997 filed in O.S.Nos.6617/2009 and 6618/2009 on the file of the 11th Additional City Civil Judge, Bengaluru City directing the plaintiffs to pay the duty and penalty amounting to Rs.11,19,800/- on the agreement dated 10.05.1997.
2. The plaintiffs in both the suits filed the suit for specific performance to direct the defendants to perform the agreement of sale dated 12.05.1997 executed by defendant Nos.1 to 5 and father of defendant Nos.6, and defendant No.7 and construction agreement dated 10.05.1997 executed by defendant No.7 and to construct the multistoried building on the suit schedule ‘B’ property and to deliver the possession of 4000 sq.ft. of super built up area and to declare the cancellation of agreement dated 01.11.1994 by the defendant No.1 to 6 in favour of defendant No.7 as contemplated in the public notice dated 19.10.2006 published in the Times of India daily 21.10.2006 as bad in law and not binding on the plaintiff etc. contending that the defendants have executed the agreements dated 12.05.19997 and 10.05.1997 in favour of the plaintiffs. In spite of repeated demand made, the defendants have not come forward to perform their part of contract. Therefore, the plaintiffs filed suit for relief sough for.
3. Defendants filed written statement and contended that the suits filed by the plaintiffs to enforce the agreements are liable to be rejected on the ground that the same are barred by limitation and the plaintiffs are not entitle for the relief sought for.
4. When the matter was posted for plaintiffs’ evidence, the plaintiffs tendered these documents i.e., the agreements dated 12.05.1997 and 10.05.1997 to mark on behalf. But the trial Court comes to the conclusion that these documents are not duly stamped and therefore, directed the office to calculate the duty and penalty. As per the endorsement dated 17.07.2017, the office has come to the conclusion that the plaintiffs are liable to pay duty and penalty of Rs.11,19,800/- on agreement dated 10.05.1997 and also come to the conclusion that agreement dated 10.05.1997 was duly stamped.
5. Based on the calculation made by the office, the trial Court proceeded to pass the impugned order directing the plaintiffs to pay duty and penalty of Rs.11,19,800/- on the agreement dated 10.05.1997. Hence, the present writ petitions are filed.
6. I have heard the learned counsel for the parties to the lis.
7. Sri.M.Nagaprasanna, learned Senior counsel for the plaintiffs contended that the impugned order passed by the trial Court directing the plaintiffs to pay duty and penalty of Rs.11,19,800/- on the agreement dated 10.05.1997 based on the calculation made by the office is erroneous. He would further contend that the documents which the trial Court has impounded and directed the payment of additional stamp duty and penalty is a Construction agreement in which, builder is the first party and the plaintiff is the second party. To calculate the additional stamp, office of the trial court has invoked Article 5 (f) of the Karnataka Stamp Act, 1957 (hereinafter referred to as ‘the Act’ for short). The said provision is applicable in a case where the land owner entered to a ‘joint development agreement’. In the instant case, the plaintiff is the prospective buyer and a ‘third party’ to a scheme formulated by and between the land owner and the builder to develop the land and to put up construction. Therefore, the said provision is not applicable to the case on hand. He would further contend that the suit one filed for enforcement of the agreements dated 12.05.1997 and 10.05.1997. Utmost, Article 5 (e) (ii) (a) (iv) of the Act would attract but the same is not considered by the trial Court while passing the impugned order.
8. In support of his contention, learned Senior counsel for the petitioner rely upon the order of this Court in the case of Sri.C.S.Mahesh vs. Sri.Nagaprasada Srinivasan and another passed in W.P.Nos.44078- 44079/2016 dated 09.10.2018 and submits that it is the Court alone has to calculate and pass orders and not the office and the trial Court has not decided whether Article 5 (e) (ii) (a) (iv) of the Act applies or not. There is no application of mind by the trial Court. Office has calculated the duty and penalty invoking Article 5 (f) of the Act. The trial Court proceeded to hold the same as correct. Therefore, he sought for allowing the writ petitions.
9. Sri.P.B.Appaiah, learned counsel for respondent Nos.1 to 3, Sri.S.V.Ganesh, learned counsel for respondent Nos.4 and 5 and Sri.L.M.Chidanandayya, learned counsel for respondent Nos.7 and 8 sought to justify the impugned order.
10. Sri.P.B.Appaiah, learned counsel for respondent Nos.1 to 3 contended that careful perusal of paragraph No.2 of the impugned order reveals that the Court has come to the conclusion that the agreements are not duly stamped. Therefore, the trial Court has directed the office to mathematically calculate the duty and penalty. Based on the endorsement, the trial Court has come to the conclusion that the stamp duty has to be paid as per Article 5 (f) of Act amendment with effect from 01.04.1997. The order passed by the trial Court is just and proper. Therefore, this Court cannot exercise its power under Article 227 of the Constitution of India. Hence, he sought to dismiss the petition.
11. Sri.S.V.Ganesh and Sri.L.M.Chidanandayya, learned counsel for the other respondents supported the arguments of Sri.P.B.Appaiah and submitted that the order of the trial court is just and proper and the petitioners are not entitle for any relief.
12. Having heard the learned counsel for the parties, it is not in dispute that the petitioners in both the petitions filed O.S.No.6617/2009 and 6618/2009 for specific performance to enforce the agreements dated 12.05.1997 and 10.05.1997 and raised various contentions. The same is disputed.
13. The defendants filed the written statement. When the matter was posted for plaintiffs’ evidence, the plaintiffs tendered these documents i.e., agreements dated 12.05.1997 and 10.05.1997 to mark on their behalf. The Court has come to the conclusion that these documents are not duly stamped and directed the office to calculate the duty and penalty payable. As per the office endorsement dated 17.07.2017 based on the provisions of Article 5 (f) of the Amendment Act w.e.f. 01.04.1997, the Court has come to the conclusion that the plaintiffs are liable to pay the stamp duty of Rs.11,19,800/- on the agreement dated 10.05.1997.
14. It was a specific case of the plaintiff before the trial Court that the plaintiff filed the suit for relief of specific performance to declare the possession of 4000 sq.ft. of super built up area of undivided share in the schedule ‘B’ property vide agreement dated 12.05.1997 and to enforce the agreement dated 10.05.1997. The suit relates to construction of suit schedule ‘C’ property over schedule ‘B’ property and thereafter, handover the possession of the super built up area. The calculation made by the office is not proper. The Article 5 (a) of the Act deals with Memorandum of an Agreement, Article 5(e) deals with the sale of immovable property wherein part performance of the contract is covered regarding delivery of possession. Article (2)(e)(ii) covers situations, wherein possession of the property is not delivered or agreed to be delivered without executing conveyance. Article 5(f) referred to by the office pertains to giving authority or power to a developer by whatever name called for construction or development of or sale or transfer of any immovable property. The plaintiffs are neither owners having any title over the schedule ‘B’ property nor entered into an agreement with defendant Nos.1 to 6 to develop the property by virtue of Joint Development Agreement dated 01.11.1994.
Therefore, calculation of duty and penalty made by the office is not correct and the plaintiffs are not entitled to pay the stamp duty as per Article 5(f) of the Act.
15. The said contention is resisted by the defendants and contended that the calculation made by the office of this Court is correct.
16. Having heard the learned counsel for parties, the primary issue raised by the trial Court is whether the calculation of duty and penalty made by the office has to be accepted. The office has calculate 6% on Rs.17,00,000/- that will comes to Rs.1,02,000/- and stamp duty is paid on the said document is Rs.200/-. Hence, deficit is Rs.1,01,800/- and penalty 10 times, the office further calculated that it will comes to Rs.10,18,000/-. Thus, in all the deficit stamp duty and penalty comes to Rs.11,18,800/-. Learned Judge while passing the impugned order has not decided whether the relief sought in the present suit is to enforce the agreements dated 10.05.1997 and 12.05.1997 and the duty and penalty comes within the provisions of 5 (e) (ii) (a) (iv) of the Act or under Article 5 (f) of the Act and absolutely no reasons are assigned with reference to the agreements.
17. Learned counsel for the petitioner contending that Article 5 (f) of the Act is not applicable but Article 5 (e) (ii) (a) (iv) of the Act is applicable and the trial Court proceed to hold that if the document is not duly stamped, then the Court has to calculate the deficit stamp duty along with penalty for 10 times of the deficit from the person, who produced document and accordingly, held that the calculation made by the office is proper and correct. Absolutely, there is no application of mind by the trial Court whether provisions of Article 5 (e) (ii) (a) (iv) or 5(f) of the Act applies of the case on hand.
18. In the absence of any specific findings recorded by the trial Court, as per Section 33 of the Act, the impugned order cannot sustained and the matter requires for re-consideration of the trial Court to decide whether the relief sought for in the suit attracts provisions of Article 5 (e) (ii) (a) (iv) of the Act or Article 5 (f) of the Act as contended by the present respondents-defendants before the trial Court. The trial Court to afford an opportunity of hearing to both the parties with regard to the contentions raised by the plaintiffs on duty and penalty on the agreement dated 10.05.1997.
19. In view of the above, the writ petitions are allowed.
The impugned order passed by the trial Court dated 26.02.2018 in O.S.Nos.6617/2009 and 6618/2009 are hereby quashed. The matter is remitted back to the trial Court for re-consideration in the light of the observations made above and to pass appropriate orders in accordance with law.
Sd/- JUDGE VM CT:HR