Case Note & Summary
The petitioners, legal representatives of the original plaintiff Abdul Majeed, filed a writ petition under Articles 226 and 227 of the Constitution of India challenging the order dated 3.9.2015 passed by the Civil Judge (Sr.Dn.) at Chittapur in O.S.Nos.83/2011 and 77/2011. The original plaintiff had filed a suit for specific performance of contract and perpetual injunction against the respondent/defendant based on an unregistered agreement of sale dated 2.4.2002. The respondent had also filed a suit for declaration and injunction in O.S.No.77/2011, and both suits were clubbed and tried together. During the trial, the petitioners filed an application under Section 37 read with Section 34 of the Karnataka Stamp Act, 1957 and Section 151 of the Code of Civil Procedure, 1908, seeking to collect the stamp duty and penalty on the unregistered agreement of sale so that it could be admitted in evidence. The trial court rejected the application on the ground that an unregistered agreement of sale is not admissible in evidence, and therefore, the question of collecting stamp duty and penalty does not arise. The High Court, after hearing the parties, set aside the trial court's order. The court held that under Section 37 read with Section 34 of the Karnataka Stamp Act, 1957, the court has the power to collect the deficit stamp duty and penalty and then admit the document in evidence. The court noted that the document was an agreement of sale, not a conveyance, and could be admitted for the purpose of proving the contract. The court directed the trial court to collect the stamp duty and penalty as per law and then proceed with the trial. The writ petition was allowed, and the impugned order was quashed.
Headnote
A) Stamp Act - Admissibility of Unregistered Agreement - Sections 34, 37 Karnataka Stamp Act, 1957 - The trial court rejected the plaintiffs' application to collect duty and penalty on an unregistered agreement of sale, holding that such an agreement is not admissible in evidence. The High Court reversed, holding that under Section 37 read with Section 34 of the Act, the court can collect duty and penalty and then admit the document in evidence for collateral purposes or for specific performance. (Paras 1-5) B) Civil Procedure - Suit for Specific Performance - Unregistered Agreement - The plaintiffs filed a suit for specific performance based on an unregistered agreement of sale dated 2.4.2002. The defendant filed a suit for declaration and injunction. Both suits were clubbed. The High Court held that the trial court erred in rejecting the application, as the document could be admitted after payment of duty and penalty. (Paras 2-5)
Issue of Consideration
Whether an unregistered agreement of sale can be admitted in evidence upon payment of stamp duty and penalty under the Karnataka Stamp Act, 1957, in a suit for specific performance.
Final Decision
The writ petition is allowed. The impugned order dated 3.9.2015 passed by the Civil Judge (Sr.Dn.) at Chittapur in O.S.Nos.83/2011 and 77/2011 is quashed. The trial court is directed to collect the stamp duty and penalty as per law on the agreement of sale dated 2.4.2002 and then proceed with the trial.
Law Points
- Section 37 read with 34 of Karnataka Stamp Act
- 1957
- Section 151 CPC
- Admissibility of unregistered agreement of sale
- Collection of stamp duty and penalty
