Case Note & Summary
The matter arose from a civil revision petition filed under Article 227 of the Constitution of India challenging an order of the Principal Junior Civil Judge, Chirala dated 02.07.2025 in I.A.No.595 of 2025 in O.S.No.28 of 2010. The petitioner, Padarthi Anjamma, was the plaintiff in a suit for permanent injunction against the respondents, seeking to restrain interference with her peaceful possession of the plaint schedule property. During trial, she filed a document styled as "Hamee Patramu" dated 29.07.2004 and an additional chief affidavit. She then filed I.A.No.595 of 2025 under Section 151 CPC seeking to send the document for impounding and to pay stamp duty and penalty herself, contending that the document coupled with possession required stamp duty and penalty under Section 38 of the Stamps and Registration Act, 1908. The respondents opposed the application, asserting that the court was not competent to impound the document and determine stamp duty and penalty, that the document was insufficiently stamped on a non-judicial stamp paper worth only Rs.20, that the property mentioned differed from the plaint schedule property, and that the document contained a recital of receipt of Rs.40,000 with entrustment of property, making it a conveyance requiring registration. The Trial Court dismissed the application, holding that direct deposit of stamp duty and penalty in court was contrary to the procedure under the Indian Stamp Act, 1899, and that the Collector was the proper authority to decide duty and penalty, especially when factual issues existed about property details and consideration. Aggrieved, the petitioner filed the civil revision petition. Her counsel argued that she was willing to pay the requisite duty and penalty and that the proper course was to refer the document to the District Collector or competent stamp authority, but the Trial Court wrongly dismissed the application. The High Court examined Sections 33, 38 and 40 of the Indian Stamp Act, 1899. It held that Section 33 requires impounding of instruments not duly stamped, Section 38 requires sending impounded instruments to the Collector when not admitted under Sections 35 or 37, and Section 40 empowers the Collector to determine proper duty and impose penalty. The Collector alone has the expertise to assess stamp duty based on property value and penalty based on the age of the document. The court found that the document was aged about 20 years and suffered from both insufficient stamp duty and non-registration. Even if the stamp defect were cured by impounding before the Collector, the document remained a compulsorily registrable conveyance under the Indian Registration Act and could not be admitted in evidence without registration. Therefore, the Trial Court was right in rejecting the application, and the High Court dismissed the civil revision petition with no costs, also closing miscellaneous applications.
Headnote
A) Civil Procedure - Inherent Powers - Section 151 CPC - Interlocutory Application for Direct Court Payment of Stamp Duty and Penalty Not Maintainable - Code of Civil Procedure, 1908, Section 151; Indian Stamp Act, 1899, Sections 33, 38 and 40 - Petitioner in a pending suit for permanent injunction sought impounding of an unstamped and unregistered Hamee Patramu dated 29.07.2004 by depositing stamp duty and penalty directly in court; the Trial Court dismissed the application on the ground that the proper procedure is reference to the Collector and the High Court affirmed that a court cannot receive direct payment as it lacks expertise to determine the correct duty and penalty. Held: the dismissal was justified as the petitioner did not follow the statutory procedure under the Indian Stamp Act, 1899 (Paras 5-9, 11-12). B) Stamp Law - Impounding of Instruments and Recovery of Duty and Penalty - Collector is Competent Authority - Indian Stamp Act, 1899, Sections 33, 38 and 40 - Section 33 requires impounding of instruments not duly stamped, Section 38 requires sending impounded instruments to the Collector when not admitted under Sections 35 or 37, and Section 40 empowers the Collector to determine proper duty and impose penalty up to ten times the deficient duty; the Collector alone can assess stamp duty based on property value and penalty based on document age. Held: the Court below rightly rejected the request to allow direct payment because the document was aged about 20 years and involved factual issues about property identity and consideration (Paras 10-11). C) Registration Law - Compulsorily Registrable Conveyance - Unregistered Document Inadmissible Despite Curing Stamp Defect - Indian Registration Act, 1908 - The Hamee Patramu contained a recital of receipt of Rs.40,000 and entrustment of property, amounting to a conveyance and was compulsorily registrable; even if stamp duty defect were cured by impounding, the document would remain unregistered and cannot be admitted in evidence. Held: a document suffering from both insufficient stamp duty and non-registration cannot be validated merely by payment of duty and penalty; the registration defect is incurable by the petitioner in this proceeding (Para 12). D) Constitutional Law - Supervisory Jurisdiction under Article 227 - Interference with Trial Court Order - Constitution of India, Article 227 - High Court's power under Article 227 is discretionary and is to be exercised only to correct jurisdictional errors or patent illegality; since the Trial Court's order was reasoned and based on correct statutory procedure, no interference was warranted. Held: Civil revision petition dismissed with no costs (Paras 12-14).
Issue of Consideration
Whether the Trial Court was justified in dismissing the interlocutory application under Section 151 CPC seeking to impound an insufficiently stamped 'Hamee Patramu' dated 29.07.2004 and allowing the petitioner to pay stamp duty and penalty directly in court, instead of referring the document to the Collector under the Indian Stamp Act, 1899, especially when the document was also unregistered and compulsorily registrable under the Indian Registration Act, 1908.
Final Decision
Civil Revision Petition No.2439 of 2025 was dismissed. The High Court upheld the Trial Court's order dated 02.07.2025 in I.A.No.595 of 2025 in O.S.No.28 of 2010. No costs were awarded, and miscellaneous applications pending, if any, were closed.
Law Points
- Collector alone is competent authority to determine stamp duty and penalty under Indian Stamp Act
- 1899
- court cannot receive direct payment of stamp duty and penalty
- proper procedure is impounding under Section 33 and sending to Collector under Sections 38 and 40
- unregistered compulsorily registrable document cannot be admitted in evidence even after stamp duty payment
- inherent powers under Section 151 CPC cannot be used to bypass statutory procedure of Indian Stamp Act
- Article 227 supervisory jurisdiction is discretionary and not to interfere with reasoned orders of trial court
