Case Note & Summary
The petitioners, Canara Bank, were defendants in an eviction suit filed by the respondent, M/s Shankaranarayana Industries and Plantations Pvt. Ltd., in O.S.No.3445/2012 before the X Additional City Civil and Sessions Judge, Bangalore. During the trial, the petitioners sought to admit a document dated 22.06.1988, which was an agreement to secure a lease. The trial court, by order dated 17.02.2017, refused to admit the document in evidence and ordered its impounding on the ground that it was insufficiently stamped, construing it as a lease deed rather than an agreement to lease. Aggrieved, the petitioners filed a writ petition under Article 227 of the Constitution of India. The High Court examined the contents of the document and held that it was only an agreement to lease, not a lease deed, as it did not create an immediate demise but only a right to obtain a lease in the future. The court noted that the trial court's finding was erroneous and that the document should be admitted in evidence subject to payment of proper stamp duty and penalty, if any. The impounding order was quashed, and the trial court was directed to proceed with the suit in accordance with law.
Headnote
A) Stamp Act - Agreement to Lease vs. Lease Deed - Construction of Document - The court examined whether a document titled 'Agreement to secure lease' is a lease or an agreement to lease - Held that the document is only an agreement to lease and not a lease deed, as it does not create an immediate demise but only a right to obtain a lease in future - The trial court's finding that it is a lease was erroneous (Paras 2-4).
B) Stamp Act - Impounding of Document - Section 33 and 35 of Karnataka Stamp Act, 1957 - The trial court impounded the document on the ground of insufficient stamp duty - Held that since the document is an agreement to lease, it is not chargeable as a lease deed, and the impounding order is unsustainable - The document should be admitted in evidence subject to payment of proper stamp duty and penalty if any (Paras 4-5).
Issue of Consideration
Whether the document dated 22.06.1988 is an Agreement to Lease or a Lease Deed, and whether the trial court was justified in refusing to admit it in evidence and ordering its impounding.
Final Decision
The writ petition is allowed. The impugned order dated 17.02.2017 is quashed. The trial court is directed to admit the document in evidence subject to payment of proper stamp duty and penalty, if any, and proceed with the suit in accordance with law.
Law Points
- Construction of document
- Agreement to Lease vs. Lease Deed
- Impounding of insufficiently stamped document
- Section 35 of Karnataka Stamp Act
- 1957
- Section 33 of Karnataka Stamp Act
Case Details
2019 LawText (KAR) (06) 56
Writ Petition No. 14248 of 2017 (GM-CPC)
Sri. A Ravishankar (for petitioners), Sri. T P Vivekananda (for respondent)
M/s Shankaranarayana Industries and Plantations Pvt. Ltd.
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Nature of Litigation
Civil writ petition challenging an order of the trial court refusing to admit a document in evidence and ordering its impounding.
Remedy Sought
Quashing of the order dated 17.02.2017 passed by the X Additional City Civil and Sessions Judge, Bangalore, in O.S.No.3445/2012.
Filing Reason
The trial court refused to admit the document dated 22.06.1988 in evidence and ordered its impounding on the ground that it was insufficiently stamped, construing it as a lease deed instead of an agreement to lease.
Previous Decisions
The trial court passed the impugned order on 17.02.2017.
Issues
Whether the document dated 22.06.1988 is an Agreement to Lease or a Lease Deed.
Whether the trial court was justified in refusing to admit the document in evidence and ordering its impounding.
Submissions/Arguments
Petitioners argued that the document is only an agreement to secure lease, not a lease deed, and therefore the trial court's finding and impounding order are unsustainable.
Respondent argued that the trial court correctly construed the document as a lease deed and the impounding order is valid.
Ratio Decidendi
A document that does not create an immediate demise but only a right to obtain a lease in the future is an agreement to lease, not a lease deed. Such a document is not chargeable as a lease deed under the Karnataka Stamp Act, 1957, and the trial court erred in refusing to admit it and ordering its impounding.
Judgment Excerpts
The petitioners being the defendants in respondent’s Eviction/Ejectment Suit in O.S.No.3445/2012 is invoking the writ jurisdiction of this Court for assailing the order dated 17.02.2017, whereby, the trial Court after refusing to admit the subject document dated 22.06.1988, has ordered its impounding on the ground that it is unduly stamped.
Learned counsel for the petitioners taking the Court through the contents of the document in question, a copy whereof is at Annexure-D argues that the transaction comprised therein is only an Agreement to secure lease and not the lease as such and therefore, the finding of the court below as to the nature of the document and consequential refusal to admit the same in evidence and further, its impounding is unsustainable.
Procedural History
The respondent filed an eviction suit O.S.No.3445/2012 before the X Additional City Civil and Sessions Judge, Bangalore. During trial, the petitioners sought to admit a document dated 22.06.1988. The trial court passed an order on 17.02.2017 refusing to admit the document and ordering its impounding. The petitioners challenged this order by filing a writ petition under Article 227 of the Constitution of India before the High Court of Karnataka.
Acts & Sections
- Karnataka Stamp Act, 1957: Sections 33, 35
- Constitution of India: Article 227
