1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. CHAMBER SUMMONS NO.1729 OF 2008 IN SUIT NO.1820 OF 1984 M/s. Omprakash & Co. ..Plaintiff. Vs. Mrulidhar Ramchandra Kowli and others ..Defendants. .... Mr. D.D. Madon, Senior Advocate with Mr. H.N. Thakore i/b Thakore Jariwala & Associates for the Plaintiff. Mr. S.M. Shettigar for Defendants 1, 2 and 4. .... CORAM : DR. D.Y. CHANDRACHUD, J. 20th August, 2009. P.C. : 1. Counsel appearing for Defendants, 1, 2 and 4 states that Defendants 3, 5 and 6 are dead. On the request of counsel appearing for the Plaintiff, Defendants 3, 5 and 6 are deleted from the array of parties to the Chamber Summons. 2. The Chamber Summons seeks to impugn an order dated 18th November, 2008 passed by the Prothonotary and Senior Master. By the 2 order impugned, the Prothonotary and Senior Master has directed, in exercise of the powers delegated by proviso (b) to sub section (2) of Section 33 of the Bombay Stamp Act that a document styled as a “Deed of admission of new partner and retirement of partners” dated 12th September, 2002 be forwarded to the District Collector under Section 37(2) for taking action under Section 39 of the Act. 3. While considering a Chamber Summons in a suit for specific performance a Learned Single Judge of this Court, by an order dated 27th February, 2007 recorded that the Applicant had tendered a deed of admission of a new partner-cum-retirement of partners dated 12th September, 2002. The deed was typed on a plain paper and was unstamped. The Learned Judge observed that the deed was required to be stamped appropriately under Article 47 of the Bombay Stamp Act, 1958 and that prima facie since the deed was a composite deed of retirement of one partner and the formation of a new partnership by the addition of new partners, prima facie it would attract stamp duty both under clauses (1) and (2) of Article 47. The Learned Single Judge was of 3 the view that the document tendered was required to be impounded. By virtue of the powers conferred by proviso (b) to sub section (2) of Section 33 the duty of examining and impounding the instrument was entrusted to the Registrar – Judicial to “do the needful”. The direction as regards the Registrar – Judicial was substituted on 27th September, 2007 by the Prothonotary and Senior Master who was required to take necessary steps. 4. The Prothonotary and Senior Master heard the parties and passed an order on 18th November, 2008. The Prothonotary held, taking into account the nature of the document and the observations of the Court in respect of the document in question, that an officer in the execution department should forward the document in question to the District Collector under Section 37(2) for taking action under Section 39 of the Act. 5. On behalf of the Applicant in support of the Chamber Summons, it has been urged that the Prothonotary was obligated by the order of the 4 Learned Single Judge dated 27th February, 2007 to discharge the duty of examining and impounding the document. It was urged that the Prothonotary had not examined the document and had merely relied upon the order of the Learned Single Judge. On the other hand, the Learned Single Judge had recorded only a prima facie opinion and therefore it was necessary for the Prothonotary to examine the document independently. 6. Section 33 of the Bombay Stamp Act provides that every person having by law or consent of parties authority to receive evidence and every person in charge of a public office, 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 instrument. Under Sub Section (2) of Section 33 the instrument is required to be examined in order to ascertain whether it is stamped with a stamp of the value and description required by the law for the time being in force in the State when such instrument was executed. Under proviso (b) it has been laid 5 down that in the case of a Judge of a High Court, the duty of examining and impounding any instrument under the Section may be delegated to such officer as the Court may appoint in this behalf. 7. It was in terms of sub section (1) of Section 33 that the Learned Single Judge of this Court before whom the instrument in question was produced came to the view that the deed which was a composite deed for the retirement of a partner and the formation of a new partnership and was required to be stamped appropriately under Article 47 of the Stamp Act. The Learned Single Judge was of the prima facie view that stamp duty would be attracted under clauses (1) and (2) of Article 47. The Court held that the document tendered was required to be impounded. However, in terms of proviso (b) the duty of examining and impounding the document was entrusted to the Prothonotary and Senior Master. Now admittedly, the document in question has been typed on a plain paper and has not been stamped. The document is a composite deed of the admission of a new partner and the retirement of partners from the partnership. Article 47(1) provides for the stamp duty payable on an 6 instrument of partnership while Article 47(2) provides for the stamp duty on the dissolution of a partnership or on retirement of a partner. The crux of the dispute between parties in the present case is as to whether the instrument is liable to be stamped as a conveyance under Sub clause (1) of Clause (2) of Article 47. That, in turn would depend on whether on the retirement of a partner, any property is taken as his share by a partner other than a partner who brought in that property as his share of contribution in the partnership. 8. The contention of the Applicant is that what was allotted to the retiring partner was the development rights in respect of certain properties which could not be regarded as “property being taken as his share” by a partner. On this aspect of the matter it is not necessary for the Court to express an opinion one way or the other. This is so having regard to the scheme of the Stamp Act. Section 37 of the Act provides for how instruments which are impounded are to be dealt with. Under Sub Section (1) of Section 37 when the person impounding an instrument under Section 33 has by law or by consent of parties authority to receive 7 evidence and admits such instrument in evidence upon the payment of a penalty as provided by Section 34 or of duty as provided by Section 36, he has to send to the Collector an authenticated copy of such instrument, together with a certificate in writing stating the amount of duty and penalty levied on the instrument together with the amount so collected. In the present case, the Learned Single Judge of this Court did not exercise the power under sub section (1) of Section 37, for the instrument has not been admitted in evidence nor has the quantum of duty or penalty been adjudicated upon. Sub section(2) of Section 37 then provides that in every other case, the person impounding the original instrument has to prepare an authentic copy thereof and to submit it to the Collector for the purpose of taking action under Section 39(1)(a) or under Section 41(1). Under Section 39(1)(a) the Collector upon impounding an instrument has to certify whether it is duly stamped or is not chargeable to duty. In other words, under sub section (2) of Section 37 the instrument so impounded is remitted to the Collector for the purpose of taking further action thereon. 8 9. What the Prothonotary has done at this stage, is to impound the instrument in pursuance of the order of the Court which took the view that at least prima facie that the instrument was required to be impounded. The fact that the instrument is chargeable with duty is not in dispute. Nor for that matter is it disputed that the instrument has been unstamped. The dispute which is raised is on whether the instrument is liable to be adjudicated to duty under sub clauses (1) or (2) of clause [2] of Article 47. That is a matter which appropriately has to be left to the Collector to decide. The Prothonotary has not passed a detailed order but the extent of reasoning has to be read in the context of the facts of each case. The Prothonotary has adverted to the prima facie view of the Learned Single Judge and to the nature of the instrument. An instrument which was unstamped was required to be stamped. In these circumstances, the instrument has been impounded and has been remitted to the Collector for adjudication of the stamp duty. No fault can be found with the order passed by the Prothonotary. The Chamber Summons shall have to be dismissed. 9 10. However, while dismissing the Chamber Summons, it would be appropriate to direct that the Collector to whom the instrument has been forwarded shall adjudicate upon the stamp duty payable on the instrument after furnishing to the Plaintiff an opportunity of being heard. Counsel appearing on behalf of the First and Second Defendants states that his clients are respectively 81 and 71 years of age and he has requested the Court to expedite the process before the Collector so that the suit can proceed. The Collector is requested to take an expeditious decision. The observations contained in the order passed by the Learned Single Judge on 27th February, 2007 are prima facie observations and the Collector shall independently decide the issue. The Chamber Summons is accordingly dismissed. *****