LexCHILAKURI GANGULAPPA versus REVENUE DIVISIONAL OFFICER, MADANPALLE AND ANR.
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CHILAKURI GANGULAPPA
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v.
REVENUE DIVISIONAL OFFICER, MADANPALLE AND ANR.
MARCH 14, 2001
[K.T. THOMAS AND R.P. SETHI, J.I.]
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Stamp Act, 1899 :
Sections 38( /}, 40( /)and 47A-Pmcedure adopted when insufficiently
stamped document produced in cou11-lnsufficiently stamped agreement to sell c
filed in a civil suit to enforce the san1e-Dociunent 1vas impounded and for-
warded to R.D.O. who imposed penalty-Civil Judge dismissed appeal as
deficient cou1t fees 1vas not deposited till then-Single Judge dismissed revision
petition on same g1vund--On appeal Held, entire proceedings got misdirected
1vhen the docurnent 1vas dispatched to R.D.O. as the same \Vas never presented
for registration-When document is fowul insufficiently stamped cou11 may
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impose penalty and admit the document or forivard the document to the
collector for taking adjudicatory steps, if the pa11y refuses to pay the deficient
stamp duty-Since one of the required proceedings1vere adopted, Muns1:fCouT1
to reconsider the matter and p1vceed as per the required p1vcedure.
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Section 40{l)(b)-Penalty often times is the upper limit and collector
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shall consider all factors while deciding the proper amount.
Appellant had tiled an insufficiently stamped agreement to sell, in a
civil suit before the Munsif Court to enforce the same. The instrument was
impounded and forwarded to the R.D.O., who was empowered by the
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Collector, to take further action under Section 47 A of the Indian Stamp
Act, 1899. A penalty equivalent to ten times of the deficient stamp duty
was imposed. Senior Civil Judge dismissed the appeal against the order as
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not maintainable because the order was not passed by the registering
authority and the procedure requiring payment of deficient stamp duty
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before preferring an appeal was not followed. Single Judge dismissed the
revision petition as the deficient duty remained unpaid and no further time
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was given to deposit the same. Appellants approached this Court after
depositing the deficient stamp duty.
Allowing the appeal, the Court
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419
420
SUPREME COURT REPORTS
[2001] 2 S.C.R.
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HELD : 1. Unfortunately the entire proceedings got misdirected
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from the stage of. the trial court dispatching the document to the R.D.O.
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Section 47A of the Stamp Act, 1899 consists of a procedure when a docu-
ment was found insufficiently stamped after it is presented for registra-
lion. The whole route followed hitherto was wrong as Section 47 A would
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not come into the picture at all since nobody bas a case that the instrument
concerned was ever presented for-registration. [422-H; 423-A-F]
2. It is clear from Sections 38(1) and 40(1) of the Act that the court
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has a power to admit the document in evidence if the party producing the
same would pay the stamp duty together with a penalty amounting to ten
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times' the deficiency of the stamp duty. When the court chooses to admit
the document on compliance of such condition the court need to forward
only a copy of the document to the Collector, together with the amount
collected from the party for taking adjudicatory steps. But if the party
refuses to pay the amount aforesaid the court has no other option except to
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impound the document and forward it to the Collector. On receipt of the
document through either of the said avenues the Collector has to adjudi-
cate on the question of the deficiency of the stamp duty. If the Collector is
of the opinion that such instrument is chargea hie with duty and is not duly
stamped, be shall require the payment of the proper duty or the amount
required to make up the same together with a penalty of an amount not
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exceeding ten times the amount of the proper duty or of the deficient
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portion thereof. However, in the present case this procedure was not fol-
lowed. [424-C-E]
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3. The penalty of ten times the deficiency as indicated under Section
40 (l)(b) is the upper limit and the Collector shall take into account all
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factors concerned in deciding as to what should he the proper amount of
penalty to be imposed. [425-B]
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4. None of the required proceedings had been adopted by any of the
authorities including High Court. The Munsif is directed to consider first
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whether the document is insufficiently stamped and if he finds that ques-
tion in the affirmative be has to adopt further steps. [425-C]
CNIL APPELLATE JURISDICTION: Civil Appeal No. 1800 of 2001.
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