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CASE NO.:

Appeal (civil) 1800 of 2001

PETITIONER:

CHILAKURI GANGULAPPA

Vs.

RESPONDENT:

REVENUE DIVISIONAL OFFICER, MADANPALLE AND ANR.

DATE OF JUDGMENT: 14/03/2001

BENCH:

K.T. Thomas & R.P. Sethi.

JUDGMENT:

THOMAS, J.

Leave granted.

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When a document was found to be insufficiently stamped

the further proceedings were, unwittingly, diverted through

a wrong track. After it covered a long distance everybody

concerned realised that the lis was proceeding through a

wrong course. It has now to be reversed and put in the

proper track.

Appellant filed a civil suit before the Munsif Court,

Madanapalle (Andhra Pradesh) as early as 1988. The main

relief claimed in the suit is enforcement of an agreement

executed on 26.6.1986 for sale of an immovable property.

When the agreement was produced in court it was found to be

insufficiently stamped and the learned Munsif impounded it

and forwarded the instrument to the Revenue Divisional

Officer (RDO) for the purpose of taking further action on

it(the Collector must have delegated his powers to the

R.D.O. in that behalf). He called for a report from a

subordinate revenue officer regarding the real market value

of the property which is mentioned in the document.

On the strength of the said report the R.D.O. found

that the market value of the property was Rs.64,880/- and

hence the agreement of sale should have been stamped with an

additional duty of Rs.3,895/-. As the instrument was

stamped only with a stamp of Rs.5/- the R.D.O. imposed a

penalty equivalent to ten times of the deficiency which

amounted to Rs.38,950/-. The order of the R.D.O. was

passed on 4.7.1998.

Appellant challenged the said order by filing an appeal

before the Senior Civil Judge purportedly under Section

47A(4) of the Indian Stamp Act, 1899. (The said section is

included in the Stamp Act as per a State amendment carried

out by the State of Andhra Pradesh). Learned Senior Civil

Judge found that the appeal was not maintainable for two

reasons. First is that the order challenged before him was

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not passed by the registering authority nor the procedure

laid down in Section 47A of the Stamp Act was followed. He

also found that appellant did not pay the amount of Stamp

duty before preferring an appeal which is a condition

precedent for filing such appeal. On both premises the

appeal was dismissed as not maintainable. The Senior Civil

Judge pronounced the judgment on 12.3.1999.

Appellant filed a revision petition before the High

Court challenging the judgment of the Civil Judge. A Single

Judge of the High Court of Andhra Pradesh pointed out that

as per the proviso to Section 47A of the Act no appeal

shall be preferred unless and until the difference, if any,

in the amount of duty is paid by the person liable to pay

the same, after deducting the amount already deposited by

him. Even though the appellant made a plea before the High

Court for giving him some time to pay the amount learned

Single Judge found that no such time can be granted at that

stage since he has already preferred the appeal. Learned

Single Judge did not consider whether an appeal would

otherwise have been maintainable before the Civil Judge.

Hence the revision petition was dismissed with the following

observations:

Deposit of amount is a condition precedent for filing

the appeal. The Court has no power to grant any relaxation

to any party in the matter of deposit of amount as required

under the proviso. In fact, a duty is cast on the

petitioner to deposit the amount in accordance with the

proviso at the time of filing of the appeal. If any appeal

is filed without deposit of the amount in accordance with

the proviso, that appeal is clearly not maintainable. For

these reasons, I do not find any merit in the petition. In

the facts and circumstances of the case, I do not want to go

into the question whether the learned Senior Civil Judge had

the jurisdiction to hear the appeal or not.

It is the aforesaid order which the appellant has

challenged in this Court by special leave. When petition

for special leave was moved learned counsel for the

appellant submitted on 22.11.1999 that the appellant was

ready and willing to deposit the differential amount in

court. In fact notice was issued to the respondent on the

strength of the above submission.

The R.D.O. noted that the document was executed on a

stamp paper worth Rs.5/- whereas the consideration involved

was Rs.20,000/-. He also noted that the market value of the

property was Rs.64,880/-. On its basis the R.D.O. directed

the appellant to remit the stamp duty and penalty of

Rs.42,845/-.

Unfortunately the entire proceedings got misdirected

from the stage of the trial court dispatching the document

to the R.D.O. Section 47A of the Stamp Act (as amended by

the State of Andhra Pradesh) consists of a procedure when a

document was found insufficiently stamped and when that

document is presented for registration. Sub-section (1) of

that section says that where the registering officer while

registering any instrument has reason to believe that the

market value of the property which is a subject matter of

such instrument has not been truly set forth in the

instrument, or that the value arrived at by him as per the

guidelines prepared by the Government, he may keep such

instrument pending and refer the matter to the Collector for

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determination of the market value of the property.

Sub-section (2) of Section 47A of the Act says that the

Collector shall have the power to determine the market value

of the property which is the subject matter of such

instrument and the duty payable thereon. Sub-section (3)

empowers the Collector to take action, suo motu, within two

years from the date of the registration. Sub-section (4)

has to be read in this context. Any person aggrieved by

the order of a Collector under sub-section (2) or

sub-section (3) may appeal to the appellate authority

specified in sub- section (5). All such appeals shall be

preferred within such time and shall be heard and disposed

in such manner, as may be prescribed by rules made under

this Act. There is a proviso to sub-section (2) which

contains a bridle on the appellate provision envisaged in

sub-section (4). Hence that proviso has to be read:

Provided that no appeal shall be preferred unless and

until the difference, if any, in the amount of duty is paid

by the person liable to pay the same, after deducting the

amount already deposited by him.

We extracted the relevant sub-sections of Section 47A

for the purpose of showing that the whole route followed

hitherto was wrong as Section 47A would not come into

picture at all since nobody has a case that the instrument

concerned was ever presented for registration. In the

context of this instrument being presented before the Civil

Court the relevant provision to be noticed is Section 40 of

the Stamp Act. Sub-section (1) of that Section says that

when the Collector impounds an instrument under Section 33,

or receives any instrument sent to him under Section 38(2)

he shall adopt the procedure laid down in the sub-section.

In this context Section 38 is to be looked into. It is

extracted below:

38. Instruments impounded how dealt with.-

(1) Where the person impounding an instrument under

section 33 has by law or consent of parties authority to

receive evidence and admits, such instrument in evidence

upon payment of a penalty as provided by section 35 or of

duty as provided by section 37, he shall send to the

Collector an authenticated copy of such instrument, together

with a certificate in writing, stating the amount of duty

and penalty levied in respect thereof, and shall send such

amount to the Collector, or to such person as he may appoint

in this behalf.

(2) In every other case, the person so impounding an

instrument shall send it in original to the Collector.

It is clear from the first sub-section extracted above

that the court has a power to admit the document in evidence

if the party producing the same would pay the stamp duty

together with a penalty amounting to ten times the

deficiency of the stamp duty. When the court chooses to

admit the document on compliance of such condition the court

need forward only a copy of the document to the Collector,

together with the amount collected from the party for taking

adjudicatory steps. But if the party refuses to pay the

amount aforesaid the Collector has no other option except to

impound the document and forward the same to the Collector.

On receipt of the document through either of the said

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avenues the Collector has to adjudicate on the question of

the deficiency of the stamp duty. If the Collector is of

the opinion that such instrument is chargeable with duty and

is not duly stamped he shall require the payment of the

proper duty or the amount required to make up the same

together with a penalty of an amount not exceeding ten times

the amount of the proper duty or of the deficient portion

thereof.

In the present case, an argument is raised that the

instrument is not actually an agreement of sale as envisaged

in the Schedule to the Stamp Act(subject to amendment made

by the State of Andhra Pradesh) but it is only a deed of

compromise entered into by two disputing persons. We

refrain from expressing any opinion on the said plea as it

is open to the parties to raise their contentions regarding

the nature of the document before the trial court. In the

present case the trial court should have asked the

appellant, if it finds that the instrument is insufficiently

stamped, as to whether he would remit the deficient portion

of the stamp duty together with a penalty amounting to ten

times the deficiency. If the appellant agrees to remit the

said amount the court has to proceed with the trial after

admitting the document in evidence. In the meanwhile, the

court has to forward a copy of the document to the Collector

for the purpose of adjudicating on the question of

deficiency of the stamp duty as provided in Section 40(1)(b)

of the Act. Only if the appellant is unwilling to remit the

amount the court is to forward the original of the document

itself to the Collector for the purpose of adjudicating on

the question of deficiency of the stamp duty. The penalty

of ten times indicated therein is the upper limit and the

Collector shall take into account all factors concerned in

deciding as to what should be the proper amount of penalty

to be imposed.

Inasmuch as none of the above proceedings had been

adopted by any of the authorities including High Court we

set aside the impugned orders. We direct the Munsif to

consider first whether the document is insufficiently

stamped and if he finds that question in the affirmative he

has to adopt the next step indicated above.

This appeal is accordingly allowed.