V.V.S RAMA SHARMA & ORS. versus STATE OF U.P. & ORS.

Citation: [2009] 5 S.C.R. 1159 · Decided: 15-04-2009 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2009] 5 S.C.R. 1159 
V.V.S. RAMA SHARMA & ORS. 
A 
v. 
STATE OF U.P. & ORS. 
(Criminal Appeal No. 730 of 2009) 
APRIL 15, 2009 
8 
[S.8. SINHA AND DR. MUKUNDAKAM SHARMA, JJ.] 
Code of Criminal Procedure, 1973- ss. 482- Quashing 
of FIR registered u/ss. 420 and 409 /PC and u/ss. 64 and 69 
of Stamp Act - Allegation that LIC. officers not purchasing c 
insurance stamps from Treasury office of State but from 
stamp vendors, outside of State causing loss to State 
.... 
Government - High Court rejecting quashing of FIR - Held: 
High Court ought to have quashed the criminal proceedings 
"- Provisions of Stamp Act and Constitution of India indicates D 
untenability of the allegation made in FIR - Act of LIC officers 
purchasing insurance stamps from outside the State not 
inconsistent with any provisions of Stamp Act or any other 
rules - Allegation in FIR even if proved by prosecution did . 
not constitute any offence - Hence, order of High Court set E 
aside - Stamp Act, 1899 - ss. 64 and 69 - U.P. Stamp Rules 
- r. 115A - Penal Code, 1860 - ss. 420 and 409 - Constitution 
of India, 1950 - Entry 91 of List, Schedule VII. 
Appellants were working as officers in the Life 
F 
Insurance Corporation of India. The branch officers of LIC 
used to purchase insurance stamps in large quantity for 
execution of insurance policies from the Treasury in any 
district as well as from authorised licenced stamps 
vendors. It is alleged that the Divisional Office of the LIC, 
Varanasi did not purchase the insurance stamps from the G 
Treas~ry office of U.P. but from the Stamp Vendors, 
outside of State causing loss of Rs. 1,67,21,520.001· to the 
State Government. FIR was registered against the 
1159 
H 
1160 
SUPREME COURT REPORTS [2009) 5 S.C.R. 
~-
A appellants u/ss. 420 and 409 IPC and u/ss. 64 and 69 of 
the Stamp Act, 1899 in relation to stamp purchase. 
... 
Appellants filed writ petitions for quashing the FIR but the 
same were dismissed. Hence the present appeal. 
B 
Allowing the appeal, the Court 
HELD: The Stamp Act, 1899 being a central 
legislation is covered under Entry 91 of List I (Union List) 
of the 7th Schedule of the Constitution of India. Rule 
making power has been given to the States under ss. 74 
c and 75 of the Stamp Act which deals with •power to make 
rules relating to sale of stamps' and •power to make rules 
generally to carry out Act' respectively. The scope of 
such rule making power of the State are only upto the 
extent as provided under the central law i.e. Stamp Act 
... 
D [Para 20) [1170-D-E] 
1.2. The Stamp Rules were framed by the U.P. 
Government in the year 1942. A perusal of the statement 
of object of the said Rules shows that such Rules was 
E framed in exercise of the powers conferred by the Stamp 
Act and in pursuance of the powers conferred by the 
notification of the Government of India, Finance 
Department (Central Revenues) No. 9/Stamps, dated the 
13th November, 1937, and in supersession of all previous 
notifications of the Government of India and the Provincial 
F Government in this behalf. Undoubtedly, when these 
Rules were framed the present constitutional scheme 
was not in place. [Para 21) (1170-F-H; 1171-A] 
1.3. Under Entry 44 of List Ill of the Constitution of 
G India, 1950, the power to levy stamp duty on all 
documents, is concurrent. But the power to prescribe the 
rate of such levy is excluded from Entry 44 of List Ill and 
Is divided between Parliament and the State Legislatures. 
If the Instrument falls under the categories mentioned in 
H 
V.V.S. RAMA SHARMA & ORS. v. STATE OF U.P. & 1161 
)( 
ORS. 
Entry 91 of List I, the power to prescribe the rate will A 
~, 
belong to Parliament, and for all other instruments or 
documents, the power to prescribe the rate belongs to 
the State Legislature under Entry 63 of List II. Therefore, 
the meaning of Entry 44 of List Ill is that excluding the 
-f 
power to prescribe the rate, the charging provisions of a B 
law relating to stamp duty can be made both by the Union 
and the State Legislature, in the concurrent sphere, 
subject to Article 254 in case of repugnancy. In the instant 
case, Entry 91 of List I of the 7th Schedule would be 
applicable and the States do not have the power to c 
circumvent a central law. [Para 22] [1171-A-D] 
1A. In the instant case, the sole allegation in the FIR 
against appellants is that they purchased the insurance 
stamps from outside the State of UP. However, the said D . 
act of the appellant c

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