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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.

L...I...T.......T.......T.......T.......T.......T.......T..J

   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

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reasons.   First is that the order challenged before him was 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

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instrument pending and refer the matter to the Collector for 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  taking  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)  When such instrument has been impounded  only because  it has been written in contravention of section  13 or section 14, the Collector may refund the whole penalty so paid.

   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.