GULAM HUSSAIN Vs. RENT CONTROLLER HYD

JUDGEMENT

(1.) This is an application to issue a writ of Certiorari to quash the order of the 1st respondent, Additional Rent Controller Hydarbad in R. C. No. 390 of 1968. The question, Which is of day to day importance, that arises for consi eratiou in this writ petition is 'Whether the Court has Power under Section 38 of the STAMP ACT, 1899 to levy the penalty after impounding the document when such a document is sought to be tendered in evidence." For a better appreciation of the question involved, the nece ssaryfacts may be stated. The pentioner took a house on rent from respondents 4 and 5 who field an eviction petition before the 1st respondent, which is pending. In compliance with the order of the 1st respondent the landlords produced the rental deed in original which was found to be insufficiently stamped. The landlords did not seek to tender the same in evidence. From the record it appears that the writ-petitioner, i. e,, the tenant, alone wanted to tender the rental deed in evidence, The learned Rent Controller first decided that the tenant was liable to pay the dificit stamp duty: The Rent Controller also directed the petitioner to pay a penalty of Rs-3,600 subject to the admisstbility of the deed in evidence as the petitioner alone wanted to tender the rent deed in evidence. The matter was carried in appeal (R.A. No 324 of 1973) before the Chief Justice City Small Cause Court, Hyderabad, which was dismissed, The petitioner has field this writ petition seeking a writ of Certiorari to quash the order of the lst respondent. Sri N. Bhaskara Rao, the learned counsel for the petitioner contended that the 1st respondent has no jurisdiction to levy penalty after impounding and that his duty was to send the document to the Collector under section 38 (2) of the STAMP ACT, 1899 for the purpose of levying penalty and it is the Collector that has power to levy the penalty. Section 38 of the Indian STAMP ACT, 1899 is in the following terms:- 38. Instruments impounded how dealt with (1) When the person impounding an instrument under section 33 has by law or consent of parties authcrity to receive evidence and admits such instrument 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 instruments together with a certificate in writing, stating the amount of duty and penalty levied in respect thereof, and shall send 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 can be seen that section 38 (1) of the said Act appliej to cases where the stamp duty and penalty provided by secticn 35 have been collected by the authority or Court who receives the document and admits the lame in evidence. It is also required that the authorities shall send an authenticated copy of such instrument together with a certificate stating the amount of duty and penalty levied and send the amount collected to the Collector, Sub-section (2) of Section 38 refers to every other case, viz., where the document is impounded but the stamp duty and penalty are not collected. Relying on a judgment of the Hyderabad High Court in JAI NARAYAN V. YAS1N KHAN] the learned counsel for the petitioner saught to contend that it is the Collector alone who has power to assess the penalty and the Court has the power only to impound. In that case the facts are different. It appears a Division Bench of the High Cour.t impounded the document of award and forwarded the same to the Inspector General of Registration and Stamps for collecting the full stamp duty and ten times penalty of Rs. 6435/- The Inspector General of Registration sent the document to the concerned Collector who after eaquiry reported that the High Court had no power to assess the stamp duty and penalty. The Inspector General of Registration agreed with the opinion of the Collector. In view of the earlier order of the Division Bench, the matter was referred to the High Court under section 55 of the Hyderabad STAMP ACT, 1899. The Full Bench considered the scope of section 38 (2) and held that the High Court could only impound the document but could not assess the penalty and that under sub-section (2) of section 38 the document shall be sent to the Collector who alone has power to assess the penalty. It can thus be seen that when the Division Bench impounded the document and levied the penalty. It did not amount to the course of action contemplated under section 35 of the STAMP ACT, 1899. Therefore, the decision of the Full Bench of the erstwhile Hyderabad High Court cannot throw much light on the question to be resolved. A combined reading of sections 35 and 38 makes it abundantly clear that the Court which impounded the document can admit the same in evidence on payment of the duty together with the penally by the party who seeks the document to be admitted in evidence. In BALAJI CHIT FUND V. BALAJI SATYANARAYANA]' Chandrasekhara Sastry,J while considering the scope of sections 35 and 38 of the STAMP ACT, 1899 referred to the decision of the Hyderabad High Court Cited supra, and held thus :-

(2.) Therefore, the contention of the learned counsel that the Collector lone has power to assess the penalty and that the Court under t,o circumstances has such power, has to be rejected. In T. K KANTHARAJ V. MD. NAJEER KHAN) a similar question came up for consideration. The party therein field two documents one being a sale deed and the other an agreement to pay hire. He did not wish to rely on the sab-deed. The trial Court however found the sale-deed to be insufficiently stamped and impounded the sane and also directed the party to pay the penalty to be fixed by the Court in due course. The concerned party preferred a revision to the High Court. It was contended before the High Court by the petitioner that the document impoon ed should be lent by the Court "the Commissioner under section 38 (2) unless the Court which impounded the instrument admitted the same in evidence, in which case it could do on so payment of the duty together with penalty as provided under section 35 of the Act. In other words the contention was that it is only if a document is asked to be admitted in evidence that it becomes eligible to such duty and penality and not otherwise.The learned Judge accepted this contention and held that. it is not disputes that in this case the document in respect of which the petitioner was required by the Court to pay such duty and penality was not sought to be produced in evidence. That document was merely produced before Court and the petitioner did not seek to get that document admitted in evidence so far. This was therefore plainly a case to which sub-section (2) of sec. 38 applies so that the Court should have sent the document in original to the Deputy Commissioner for necessary action under section 40 of the Act In my opinion, the stage when the lower Court could direct the petitioner to pay any duty and penalty was never reached in this case". In BALAKRISHNA V. BOARD OF REVENUE] Full Bench of the Madhya Pradesh High Court held thus:-

(3.) In the instant case the petitioner asked the Court to call for the document and sought to tender the same in evidence. The 1st respondent held that having regard to the above circumstances and since the respondent alone wants to tender the lease deed in evidence, he should pay the stamp duty and penalty of Rs, 3,608-00 subject to admissibility of the lease-deed in evidence for want of registration as the lease deed was executed for an indefinite period and appears to be compulsorily registerable. In view of the fact that the petitioner wanted to tender the document in evidence, the 1st respondent exercised his jurisdiction under section 35 read with section 38 of the STAMP ACT, 1899 and impounded the document and alto levied the penalty. The principles laid dcwn in the decisions of the Mysore and Madhya Pradesh High Courts, apply to the facts of this Case. The learned counsel lastly contended that even assuming that the 1st respondent hat power to impound and also levy the penalty, he can do so only at the time of admission of the document. The learned counsel further contended that in this case the stage of admitting the document bat not arisen yet and therefore the 1st repondent had no power to levy the, penalty. I am unable to uphold this contention. As observed by the Mysore High Court in T. K. KANTHARAJ V. MD. NAZER KHAN] if a a document is asked to be admitted in evidence, it becomes exigible to such duty and penalty and that stage has been reached in this case. In BALAKRISHNA V. BOARD OF REVENUE] the Full Bench, after having considered the scheme of the STAMP ACT, 1899, observed in Paragraph 11 as follows: "Once an instrument chargeable with duty is tendered in a civil court, it shall impound it, if, after examining it, the court is of the opinion that it is not duly stamped: Section 33 of the Act. The Court has. however, power under Section 35 of the Act to admit it barring certain instruments in evidence on payment of duty with which the instrument is chargeable, or the amount required to make up the deficiency, together with a penalty limits of which are prescribed in the section. There is no third course open to the Court, once it finds that an instrument tendered in evidence is not duly stamped. The next step, which the Court has then to take, is provided in section 38. If the Court has admitted in evidence an instrument upon payment of penalty and/or duty, it shall send to the Collector an authentic copy of such instrument together with a certificate stating the amount of duty and penalty levied in respect of that instrument, and shall send such amount to the Collector. This is provided in sub-section (1) of Section 38", Therefore, the admission of a document as contemplated under Section 35 and 38 arises only after payment of the penalty and duty by the party who seeks to tender the document in evidence. The question of collecting the duty and penalty after the admission is not contemplated under the Act. Therefore, I see no illegality in the impugned order, The writ Petition is accordingly dismissed. No costs. Advocate's fee Rs. 150/- S.S.R.S. W.P. Dismissed