Case Note & Summary
The petitioner, Mr. R. Mahendra Kumar Shah, filed a writ petition under Article 227 of the Constitution of India challenging an order dated 25.11.2015 passed by the Senior Civil Judge at Devanahalli in O.S.No.1252/2006. The trial court had allowed I.A.No.4 filed by the second defendant (respondent No.2) under Section 33 of the Karnataka Stamp Act, 1957 read with Section 151 of the Code of Civil Procedure, 1908, directing the petitioner (plaintiff) to pay deficit stamp duty of Rs.63,800/- along with a penalty of ten times the deficit stamp duty, totaling Rs.7,01,800/-, in respect of an agreement of sale dated 07.11.1997. The petitioner contended that the agreement of sale was not a conveyance and was not chargeable to stamp duty as such. The High Court examined the nature of the document and held that an agreement of sale simpliciter, without delivery of possession, is not a 'conveyance' under Article 5(e) of the Karnataka Stamp Act, 1957, and is chargeable only under Article 20 (Agreement to Sell). Consequently, the trial court's order impounding the document and imposing penalty was without jurisdiction and was set aside. The writ petition was allowed, and the impugned order was quashed.
Headnote
A) Stamp Act - Agreement of Sale - Chargeability - An agreement of sale simpliciter, without delivery of possession, is not a 'conveyance' under Article 5(e) of the Karnataka Stamp Act, 1957, and is chargeable only under Article 20 (Agreement to Sell) - The court held that the trial court erred in treating the agreement as a conveyance and directing payment of deficit stamp duty with penalty (Paras 5-8).
B) Stamp Act - Impounding - Section 33 - When a document is not chargeable to duty, the court cannot impound it under Section 33 of the Karnataka Stamp Act, 1957 - The court held that the impounding order was without jurisdiction as the document was not liable to stamp duty as a conveyance (Paras 5-8).
C) Civil Procedure Code - Interlocutory Application - Section 151 CPC - The trial court's order allowing I.A.No.4 under Section 33 of the Karnataka Stamp Act read with Section 151 CPC was set aside as the document was not chargeable to duty as a conveyance (Paras 5-8).
Issue of Consideration
Whether an agreement of sale simpliciter (without possession) is chargeable to stamp duty as a conveyance under Article 5(e) of the Karnataka Stamp Act, 1957, and whether the trial court was justified in impounding the document and imposing penalty.
Final Decision
The writ petition is allowed. The impugned order dated 25.11.2015 passed by the Senior Civil Judge at Devanahalli in O.S.No.1252/2006 on I.A.No.IV is quashed.
Law Points
- Stamp duty
- Agreement of sale
- Conveyance
- Impounding
- Penalty
- Karnataka Stamp Act
- 1957
- Section 33
- Article 5(e)
- Article 20
- Section 151 CPC
Case Details
2018 LawText (KAR) (07) 41
Writ Petition No.2080 of 2016 (GM-CPC)
Sri. Subramanya.S for petitioner; Sri. B.Prasanna Kumar for respondent No.1
Mr. R. Mahendra Kumar Shah
Mrs. Anuradha Ostwal, Mr. Ashok G. Ostwal, Mrs. Munikrishnamma, Mrs. Manjula, Shri. Chhaganlal Chajed
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Nature of Litigation
Writ petition under Article 227 of Constitution of India challenging an order of the trial court directing payment of deficit stamp duty and penalty on an agreement of sale.
Remedy Sought
Petitioner sought a writ of certiorari to quash the order dated 25.11.2015 passed by the Senior Civil Judge at Devanahalli in O.S.No.1252/2006 on I.A.No.IV.
Filing Reason
The trial court allowed I.A.No.4 filed by defendant No.2 under Section 33 of the Karnataka Stamp Act read with Section 151 CPC, directing the petitioner to pay deficit stamp duty of Rs.63,800/- and penalty of Rs.6,38,000/-, totaling Rs.7,01,800/-, in respect of an agreement of sale dated 07.11.1997.
Previous Decisions
The trial court's order dated 25.11.2015 in O.S.No.1252/2006 allowing I.A.No.4.
Issues
Whether an agreement of sale simpliciter (without possession) is chargeable to stamp duty as a conveyance under Article 5(e) of the Karnataka Stamp Act, 1957?
Whether the trial court was justified in impounding the document and imposing penalty under Section 33 of the Karnataka Stamp Act, 1957?
Submissions/Arguments
Petitioner argued that the agreement of sale is not a conveyance and is not chargeable to stamp duty as such, and the trial court erred in impounding the document and imposing penalty.
Respondents argued in support of the trial court's order.
Ratio Decidendi
An agreement of sale simpliciter, without delivery of possession, is not a 'conveyance' under Article 5(e) of the Karnataka Stamp Act, 1957, and is chargeable only under Article 20 (Agreement to Sell). Therefore, the trial court's order impounding the document and imposing penalty under Section 33 of the Act was without jurisdiction and is set aside.
Judgment Excerpts
The writ petition has been filed by the petitioner – plaintiff assailing the order dated 25.11.2015 passed in O.S.No.1252/2006 whereby the Court below allowing in part I.A.No.4 filed by defendant No.2 for impounding of the document, had directed the plaintiff to pay the deficit stamp duty of `63,800/- alongwith penalty at ten times of the deficit stamp duty totalling to `7,01,800/- in respect of the agreement of sale dated 07.11.1997.
Procedural History
The petitioner filed O.S.No.1252/2006 before the Senior Civil Judge at Devanahalli. During the proceedings, defendant No.2 filed I.A.No.4 under Section 33 of the Karnataka Stamp Act read with Section 151 CPC seeking impounding of an agreement of sale dated 07.11.1997. The trial court allowed the application on 25.11.2015, directing the plaintiff to pay deficit stamp duty of Rs.63,800/- and penalty of Rs.6,38,000/-. Aggrieved, the petitioner filed the present writ petition under Article 227 of the Constitution of India.
Acts & Sections
- Karnataka Stamp Act, 1957: Section 33, Article 5(e), Article 20
- Code of Civil Procedure, 1908: Section 151
- Constitution of India: Article 227
