1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN, JAIPUR BENCH, JAIPUR. JUDGMENT Padam Chand Kothari & Anr. Vs. Smt. Krishna Devi & Ors. (S. B. Civil Writ Petition No.10618/2010) S. B. Civil Writ Petition under Articles 226 & 227 of the Constitution of India. Date of Judgment: August 13, 2010 PRESENT HON'BLE MR. JUSTICE R.S. CHAUHAN Mr.M.M. Ranjan, for the petitioners. BY THE COURT: Aggrieved by the order dated 17.07.2010, passed by the Additional District & Session Judge (Fast Track No.3), Ajmer Camp Kishangarh, whereby the learned Judge instead of impounding the agreement to sell has sent the same to the Collector (Stamps), the petitioners have challenged the same before this Court. The brief facts of the case are that on 11.12.2009 the respondents had filed a suit for specific performance and permanent injunction against the petitioners. In the plaint, the respondents alleged that they had entered into an agreement dated 27.08.2009 with the petitioners to purchase the property described in the plaint. The said agreement was executed on a stamp paper of 2 Rs.100/- According to the agreement, the entire consideration agreed to be paid was Rs.63 lakh; an advance of Rs.6.50 lakh was paid; it was agreed between the parties that Rs.8 lakh will be paid on or about 12.10.2009, and the balance amount will be paid on or before 31.11.2009. On 17.07.2010, the petitioners filed an application under Sections 35 and 36 of the Rajasthan Stamps Act praying therein that the agreement to sell dated 27.08.2009 is insufficiently stamped and as such it is inadmissible in evidence and cannot be exhibited and may be deleted from the record. On the same day, the respondents also filed an application that the agreement to sell may be returned to them. However, vide order dated 17.07.2010, the learned trial court held that the agreement to sell requires stamps of 3% of the total value in agreement, in view of the amendment made in the Rajasthan Stamps Act. But instead of impounding the document, the learned trial court has sent the document to the Collector (Stamps). Hence, this petition before this Court. Mr. M.M. Ranjan, the learned counsel for the petitioners, has contended that under the provisions of Rajasthan Stamp Act, 1998 ('the Act', for short), once it is discovered by a court that an document is insufficiently stamped, it is duty bound to impound the same. Moreover, 3 according to Section 39 of the Act, insufficiently stamped instrument is inadmissible in evidence. It can be admitted in evidence only after the amount required as stamp duty is paid and if the concerned person pays a penalty of ten times the amount of deficiency. Therefore, by sending the agreement to sell directly to the Collector (Stamps), the learned Judge has not imposed the penalty of ten times the amount of deficient on the respondents. Hence, the learned Judge has deprived the State exchequer of its rightful due. Heard the learned counsel for the petitioners and perused the impugned order. Section 37 of the Act is as under : 37 - Examination and impounding of instruments : (1) Every person having by law or consent of parties authority to receive evidence, and every person incharge of a public office, except an officer of a police, before whom any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same. (2) For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him, in order to ascertain whether it is stamped with a stamp of the value and description required by the law in force in the State when such instrument was executed or first executed : 4 Provided that,- (a) nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding under Chapter IX or Part D of Chapter X of the Code of Criminal Procedure, 1973 (Act No.2 of 1974); (b) in the case of a Judge of a High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints in this behalf. (3) For the purposes of this section in cases of doubt,- (a) the State Government may determine what offices shall be deemed to be public offices; and (b) the State Government may determine who shall be deemed to be persons incharge of public offices. (4) When a person incharge of a public office, during the course inspection or otherwise, detects from an instrument or copy thereof or when it appears therefrom to the person referred to in sub-section (1) that the instrument is not duly stamped, such person shall forthwith make a reference to the Collector in that matter. (5) The Collector may, suo moto or on such reference, call for the original instrument for ascertaining whether it is duly stamped and the instrument so produced shall be deemed to have been produced or come before him in the performance of his functions and in case the original instrument is not produced within the period specified by the Collector, he may require the payment of the proper duty or the 5 amount required to make up the same together with the penalty under section 44. Section 39 of the Act is as under : 39 - Instruments not duly stamped inadmissible in evidence, etc : No instrument chargeable with duty under this Act shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped: Provided that, - (a) any such instrument shall, subject to all just exceptions, be admitted in evidence on payment of, - (i) the duty with which the same is chargeable, or in the case of an instrument insufficiently stamped, of the amount required to make up such duty, and (ii) a penalty of one hundred rupees or, ten times the amount of deficient portion thereof, which ever is higher. (b) where a contract or agreement of any kind is effected by correspondence consisting of two or more letters and any one of the letters bears the proper stamp; the contract or agreement shall be deemed to be duly stamped. (c) nothing herein contained shall prevent the admission of any instrument as evidence in any proceeding in a criminal court, other than a proceedings under Chapter IX or Part D of Chapter X of the Code of Criminal Procedure, 1973 (Act No.2 of 1974). (d) nothing herein contained shall 6 prevent the admission of any instrument in any court when such instrument has been executed by or on behalf of the Government or where it bears the certificate of the Collector as provided by section 36 or any other provision of this Act. (e) nothing herein contained shall prevent the admission of a copy of any instrument or of an oral account of the contents of any instrument, if the stamp duty or a deficient portion of the stamp duty and penalty as specified in clause (a) is paid. (f) nothing herein contained shall prevent the admission of any instrument in evidence in any court when stamp duty on such instrument has already been paid in advance in the form of a consolidated lump sum. (g) nothing herein contained shall prevent the admission of any instrument in any court when such document has been executed by or on behalf of the Government or where it bears the Certificate of the Collector as provided by section 36 or any other provision of this Act. A bare perusal of Section 37 of the Act clearly reveals that according to Sub-Clause (1), if in the opinion of a person who is authorised by law to receive evidence it appears that an instrument is not duly stamped, he shall impound the same. However, According to Sub-Clause (4), the authority mentioned in Sub-Clause (1) shall forthwith make a reference to the Collector. According to Sub-Clause (5), the Collector shall hear the reference and may require the payment of the proper duty. Thus, Sub-Clause (4) also 7 requires that the court shall send forthwith the document to the Collector. It is for the Collector to pass the the necessary order. A bare perusal of Section 39 of the Act also shows that an instrument becomes admissible in evidence if the duty is paid by the concerned person to the Government and if he pays ten times the amount of deficient to the Government. However, even under Section 39 of the Act the duty has to be paid before the Collector and even the penalty has to be imposed under Section 37(5) by the Collector. Keeping in mind these two provisions, no illegality has been committed by the learned Judge by sending the agreement to sell to the Collector (Stamps). Afterall it is for the Collector concerned to decide the deficiency of the stamp duty, and it is equally for him to impose the penalty on the respondents. Therefore, the petitioners cannot claim that they have prejudiced by the impugned order. Furthermore, since it is for the Collector to impose the penalty of ten times the amount of deficient, it is too early in a day for the petitioners to claim that the State Exchequer is being deprived of its rightful duty. Moreover, 8 in case the rightful duty is not being paid to the State Exchequer, it is for the State to challenge the order of the Collector. Thus, viewed from any angle, the petitioners possibly cannot clam that their right or interest is being adversely affected by the impugned order. Hence, this Court does not find any illegality or perversity in the impugned order dated 17.07.2010. In this view of the matter, this petition is devoid of any merit. It is, hereby, dismissed. (R.S. CHAUHAN) J. Manoj solanki