Judgment:
(Prayer: This writ petition is filed under articles 226 and 227 of constitution of India praying to quash the order dated 7.07.12 passed by the judge of the XIII Addl. City Civil Judge, Mayo hall Banglore by its order dated 7.07.12 in OS No 27376/09 vide Annex-F And direct the learned judge to impund the joint development agreement dated 9.11.05 AW its amendments dated 23.05.98 and 21.12.2000 relied upon by the respondent.)
1. This writ petition is referred to the bench pursuant to an order dated 11.10.2012 passed by a learned single judge of this court.
2. The question that arose before the learned judge in the writ petition is in respect of “impounding an insufficiently stamped document”. According to the defendant, in view of Section 33 of the Karnataka stamp Act, 1957, the moment an insufficiently stamped document is produced before the Court, court has to impound the same. It was contended by the plaintiff that, the question of impounding of an insufficiently stamped document would come into play only when a party intending to rely upon such document tenders in his evidence.
3.The learned City Civil Judge considering the rival contentions relying upon the judgment of this court in Lakshminarayananchar -vs- Narayan and another reported in 1969 (2) MLJ 299 rejected the contention of the defendant holding that, Court can impound the document only when the same is tendered during the course of the evidence.
4. Aggrieved by the same, the defendant has filed the writ petition.
5. The learned single Judge having noticed that, in K.Dinesh –vs- Kumaraswamy another learned single judge in W.P.No.10441/2008 dated 30.08.2010 has ruled that, a document can be impounded in terms of section 33of the Karnataka Stamp Act, the moment it comes to the attention of the court and the court need not wait till the document is tendered in evidence. Considering the conflict of decisions in Lakshminarayanachar and K.Dinesh, he was of the opinion that the member has to be considered by a larger Bench. Accordingly, the matter is listed before us.
6. We have heard the learned counsel appearing for the parties.
7. In order to appreciate the rival contentions and decisions relied upon by the respective parties, we feel it appropriate to consider the provisions of Sections 33 and 34 of the Karnataka Stamp Act, 1957 which reads as hereunder:
Section 33: Examination and impounding of instruments – (1) Every person having by law or consent of parties authority to receive evidence, and every person in-charge of a public office, expect an offer of police, before whom any instrument, chargeable in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instruments is not duly stamped, impound the same,
(2) For that purpose every such person shell examine every instruments so chargeable and so produced or coming before him, in order to ascertain whether it is stamped with a stamp of the value and description requires by the law in force in the State of Karnataka when such instrument was executed or first executed:
Provided that,-
(a) Nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding under Chapter XII or Chapter XXXVI of the code of criminal procedure, 1898:
(b) In the case of a judge of the High court, the duty of examining and impounding any instrument under this Section may be delegated to such officer as the Court appoints in this behalf.
(3) For the purpose of this Section, in cases of doubt, the government may determine:-
(a) what offices shall be deemed to be public office: and
(b) who shall be deemed to be persons in charge of public offices.
34. Instruments not duly stamped inadmissible in evidence, etc. No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped:
Provided that,-
(a) Any such instrument not being an instrument chargeable 9 with a duty not exceeding fifteen naye paise) only, or a mortgage of crop ( Article (35)(a) of the schedule ) chargeable under clauses (a) and (b) of section 3 with a duty of twenty five naye paise shall, subject to all just exceptions, be admitted in evidence on payment of the duty with which the same is chargeable, or in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or when ten times the amount of the proper duty or deficient portion there of exceeds five rupees, of a sum equal to ten times such duty or portion:
(b) Where a contract or agreement of any kind is effected by correspondence consisting of two or more letters any one of the letters bears the proper stamp, the contract or agreement shall be deemed to be duly stamped:
(c) Nothing herein contained shall prevent the admission of any instrument in evidence in any proceeding in a Criminal Court, other than a proceeding under Chapter XII or Chapter XXXVI of the code of Criminal Procedure, 1898;
(d) No thing herein contained shall prevent the admission of any instrument in any court when such instrument has been executed by or on behalf of the Government, or where it bears the certificate of the (Deputy Commissioner, or where it bears the certificate of the (Deputy Commissioner) as provided by section 32 or any other provision of this Act (and such certificate has not been revised in exercise of the powers conferred by the provisions of Chapter VI).
8. This Court while considering the case of Lakshminarayanachar has considered the provisions of section 33 to 37 of the then Mysore stamp Act. In paragraph No.5 of the Judgment, while considering sub-section (1) of Section 33 of the Stamp Act, his Lordship Narayana Pai, J., as he then was has ruled as hereunder:
“5. Under sub-section (1) of section 33,-
“Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an officer of police, before whom any instrument chargeable, in his opinion, with duty, is produced or comes in the performance of his functions shall, if it appears to him, that such instrument is not duly stamped, impound the same”.
There is no doubt that a Civil Court or the Presiding officer of a Civil Court will certainly answer the description of “a person having by law authority to receive evidence.” The Munsiff in this case, therefore, will be entitled to, or more accurately, bound to impound the document if by looking into it, he entertains an opinion that it is liable to stamp duty but that it is either not stamped at all or is insufficiently stamped.”
9. In Dinesh case, the learned single judge of this court while considering the provisions of sections 33 to 38 and 41 of the Karnataka Stamp Act and also other relevant provisions of the Registration Act come to the conclusion that, in view of section 33 of the Karnataka Stamp Act, a court can impound the document without waiting till such document is sought to be produced in evidence.
10. The respondent counsel has also relied upon another judgment of this court reported in 2010 (6) Kar.L.J. 166 (S.Surech- vs- L.Pothe Gowda and Others) wherein the learned single Judge while dealing with section 34 came to the conclusion, under what circumstances a document can be impounded when the same is tendered in the evidence. Considering all the three judgments relied upon by the respective parties and considering the provisions of sections 33 and 34, we are of the view that this court in Lakshminarayanachar case and Dinesh case while considering the provisions of Section 33 has clearly held that, a power is vested in the court to impound the document if it is insufficiently stamped the moment it is produced before the court. Under Section 34 of the Act, when such a document is to be received in evidence, the court has got powers to impound the document before admitting the document.
11. There are two different circumstances under the stamp Act impounding a document; (1) the court has power to impound the document, moment it appears to the Court that such instrument is not duly stamped and (2) or to wait till such document is tendered in the evidence. A combined reading of section 33 and 34 clearly reveal that a discretion is granted to the court either to impound the document under section 33 before the same is tendered in evidence and even if a document is not impounded under section 33 , the Court is bound to impound the document when the same is tendered in the evidence under section 34. In other words, the court cannot say that it will wait till the document is tendered in the evidence. It is only an option given to court exercise the power under section 33 and 34 but the difference between section 33 and 34 is that, section 34 can be enforced by a court when a document has to be received in the evidence but section 33 can be invoke not only by the court, but by every person in-charging of a public office. A person in-charge of a public office has no power to exercise the power vested under section 34 of the Act.
12. Court cannot say that it would impound the document only when the document is tendered in evidence for marking. There may be instances where duty and penalty payable 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 to escape of duty. Therefore, when it is brought to the notice of the court that a document 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.
13. In the circumstances, we answer the reference “ holding that under 33 of the stamp Act, the moment an insufficiently stamped instrument comes to the notice of the court, the same has to be impounded in accordance with section 33, whether the same would be relied upon by the party under section 34 or not”.
14. We further clarify that, on careful reading of the judgment in Lakshminarayanachar’s case also this court has held that the court has power to impound the document under section 33. In this background, we are of the view that, there is no conflict of judgments in interpreting section 33 but the question is when sections 33 and 34 has to be exercised by the court which have been answered in the preceding paragraphs.
15. Accordingly, the writ petition is allowed. The order dated 07.07.2012 passed on I.A.No.9 in O.S.No. 27376/2009 by the city civil judge, mayo Hall, Bangalore is set aside directing the city civil judge, Mayo Hall, Bangalore to impound the document in accordance with section 33 of the stamp Act and proceed with the matter in accordance with law.