dedol-hf/india-case-legal-rag huggingface dataset:
on  the  duties of the executing court.  It is only  in  the
executing  court where payment towards satisfaction  of  the
decree, the execution of which had been taken out, could  be
made,  unless  the  court passing the decree  has  also  the
jurisdiction  to  execute it.  As already  indicated,,  this
jurisdiction is not possessed by the Registrar.  That  being
so, in our opinion, the requisition of the Registrar to  the
executing court to stop execution  proceedings and  his  act
in  accepting the  first   instalment  were  in  excess   of
the  jurisdiction conferred on him and the  executing  court
was  entitled to ignore it.  Moreover, the  Registrar  could
not  alter or amend the decree passed by the  Arbitrator  at
this stage.
     All  the courts below have interpreted the  section  to
mean that the Registrar as the court passing the
746
  decree  has the same power as the court executing  it.  We
are  unable  to  agree in this view in view  of  the   clear
language employed in the section.  The analogy of  decisions
given in respect of civil courts is not available in  inter-
preting  this Act.    Under the Civil   Procedure  Code  the
parent  court,  i.e., the court passing the  decree,  always
retains  jurisdiction tO execute  the decree even if it  has
been  transferred to one or more courts for the  purpose  of
execution.  Primarily it is the function of the court  pass-
ing the decree to execute it but when it is found that it is
not possible for it to effectively execute it provision  has
been  made  in the Code authorising it to send it  to  other
courts  the purpose of execution; but none of  these  provi-
sions in any way affect the jurisdiction of the court  pass-
ing the decree to execute it whenever it thinks fit to do so
and  the order transferring execution to other  courts  does
not take away its jurisdiction in the matter. The   position
however in the case of the Registrar is entirely  different.
He  himself has been given no jurisdiction   to execute  his
own  decree.  The only power conferred  on him is to get  it
realized  through a civil court or a  revenue court and  the
only  authority conferred on him is to issue  a  certificate
for that purpose.
    The High Court in this case has, in our opinion  given a
decision  contradictory to its own findings.  It   has  been
held  that  the first appellate court was in  error  in  the
view  that the default clause in the decree  stood  condoned
by  the  payment of the first instalment  by  the  judgment-
debtor  in  the  office of the Registrar  and  it  has  been
positively  found  that once a default  has  been  made  the
Registrar  had no jurisdiction to  condone it and  that  the
decree-holder  was entitled to  execute the decree  for  the
full  decretal amount with  interest.  Having  reached  this
conclusion the High  Court still maintained the decision  of
the two courts  below adjourning the execution  proceedings.
The logical result of the High Court's decision is that  the
certificate  stands and the execution application has   been
properly  made  and the decree-holder is  entitled   to  the
relief claimed but in spite of it it has been held
747
that the Registrar can stay the proceedings.  It seems to us
that  the act of the Registrar in asking the civil court  to
stay  execution  proceedings pending before it  is  a  clear
encroachment on the powers of the executing court and is  in
excess of his statutory powers and should.have been  ignored
by the courts.
    As a fresh certificate was issued by the Nazim in  order
to cure a defect that might be said to exist in the original
certificate because of its having been sent by the  Madadgar
Nazim, it is unnecessary to consider the contention  of  the
learned   counsel  that there was no proper  certificate  in
this case and the proceedings  in execution therefore   were
without  jurisdiction.
    The result therefore is that this appeal is allowed, the
decisions  of all the three courts below are set  aside  and
the  executing court is directed to proceed with the  execu-
tion of the decree from the stage at which it was interfered
with  by the letter received from the office of  the  Regis-
trar.   In the circumstances of this case we will make no  o
rder as to costs of the proceedings throughout.
                        Appeal allowed.
PETITIONER:
CHIEF CONTROLLING REVENUE AUTHORITYANDSUPERINTENDENT OF STAM
        Vs.
RESPONDENT:
MAHARASHTRA SUGAR MILLS LTD.
DATE OF JUDGMENT:
27/05/1950
BENCH:
KANIA, HIRALAL J. (CJ)
BENCH:
KANIA, HIRALAL J. (CJ)
FAZAL ALI, SAIYID
SASTRI, M. PATANJALI
MAHAJAN, MEHR CHAND
MUKHERJEA, B.K.
CITATION:
 1950 AIR  218            1950 SCR  536
 CITATOR INFO :
 MV         1952 SC 252  (89)
 R          1968 SC 497  (7,8,9)
ACT:
Indian Stamp Act (II of 1899), ss. 57, 59 (2)--Reference
to  High Court--Nature of power to refer--Duty to  refer  on
request of party affected--Order  directing  Chief  Control-
ling   Authority  to  refer--Whether   "matter    concerning
revenue"   --Jurisdiction   of   Original   Side   of   High
Court--Government of India Act, 1935, s. 266 (1).
HEADNOTE:
    The  power conferred on the Chief Revenue  Authority  by
Sec. 57 of the Indian Stamp Act, to make a reference to  the
High  Court is not intended for the benefit of  the  Revenue
Authority  a1one,  but enures also for the  benefit  of  the
party affected by the assessment.  It  is therefore  coupled
with  a duty  to make a reference when he is called upon  to
do so by the party effected, and if he declines to do so, it
is within the power of the Court to direct him to  discharge
that duty and make a reference to the Court.
    Alcock Ashdown & Co. Ltd. v. Chief Revenue Authority (50
I.A.  227) and Julius v. Bishop of Oxford (5 A.C.  214)  ap-
plied.
537
    The order of a High Court to a revenue officer to do his
duty would not be the exercise of original jurisdiction in a
matter concerning the revenue within the meaning of Sec. 226
of  the Government of India Act, 1935, and the  jurisdiction
of  the High Court to direct the Chief  Controlling  Revenue
Authority to make    a reference under Sec. 57 of the  Stamp
Act  was not barred by Sec. -226 of the Government of  India
Act.
The  fact  that the proceedings had  passed  beyond  the
stage  of enforcing payment does not prevent the High  Court
from  directing the Revenue Authority to make  a  reference,
for, if the opinion of the Court on the reference is against
the  Revenue Authority he will have to refund  whatever  has
been recovered in excess, under Sec. 59 (2) of the Act.
JUDGMENT:
    APPEAL  from  the High Court of  Judicature  at  Bombay:
Civil Appeal No. XII of 1950.
    This was an appeal from a judgment and order of the High
Court of Bombay (Chagla, Acting' C.J. and Bhagwati J.) dated
2nd  September, 1947, in Appeal No. 60 of 1946.   The  facts
are fully set out in the judgment.
    C.K. Daphtary,  Advocate-General of Bombay (M. M. Desai.
with him) for the appellant.
M.C.  Setalvad, Attorney-General for India (S.S.  Ragne-
kar, with him) for the respondent.
    1950.  May 27.  The judgment of the Court was  delivered
by
    KANIA  C.J.--This  is an appeal from a judgment  of  the
High  Court at Bombay and it relates to the jurisdiction  of
the Court to direct the Chief Controlling Revenue  Authority
and  the Superintendent of Stamps at Bombay to state a  case
for  the opinion of the Court under section 57 of the  Stamp
Act.
The   respondent company,  for  its  business,  borrowed
money  from  the Central Bank of India Ltd. at  Bombay.   In
order to secure the loan a document was executed on the 22nd
of March,  1945,  with a stamp of Rs. 16-8-0, on the footing
that  it was a, deed of hypothecation without possession  of
the  goods. When the deed was sent to the Sub-Registrar  for
registration he impounded the same and sent it to the  Stamp
Office. The Assistant Superintendent of Stamps
538
wrote  to  the respondent that the document was  a  mortgage
with  possession, chargeable with duty under article 40  (a)
of  the  Schedule and inquired why it was not  duly  stamped
before  execution.   The respondent's  solicitors  in  their
reply  contended  that the document was not, and  was  never
intended by the parties to be,  a mortgage  with possession.
They pointed out that no possession of the property had been
given or was intended to be given, except in certain contin-
gencies and therefore the document was properly stamped.  In
reply the Assistant Superintendent intimated that the  docu-
ment was chargeable with duty of Rs. 56,250 and a penalty of
Rs.  5,000 had been imposed.  The respondents were asked  to
pay  the  amount  forthwith.  On the 27th  July,  1945,  the
respondent filed a suit against the Central Bank  contending
that  the document was not a mortgage with  possession.   It
was alleged that since a doubt had arisen as to whether  the
document gave effect to the common intention of the  parties
the  Court's  directions were sought for and  if  the  Court
found that the document as framed did not give effect to the
said  common intention of the parties the instrument may  be
rectified.  On 9th August, 1945, the respondent's solicitors
informed  the  Assistant  Superintendent that such  a   suit
had  been  filed  and  requested that the demand for payment
of  stamp  duty and penalty  may not be  pressed  under  the
circumstances.    In the further correspondence,  on  behalf
of the appellant,  the  demand was reiterated and resort  to
the  coercive procedure of section 48 of the Stamp  Act  was
threatened.   The Collector thereafter sent a letter to  the
respondents  on the 17th January, 1946,  demanding  payment.
On the 25th of January, 1946, the suit filed by the respond-
ent  was disposed of by the Court and the  rectification  as
prayed was ordered. The respondent's solicitors  immediately
intimated  the result of the suit to the Assistant  Superin-
tendent  and sent a copy of the deed showing the  rectifica-
tions  made in the original document.  A similar letter  was
also sent to the Collector of  Bombay.  On the 1st February,
1946, the respondent's solictors enquired of
539
the Assistant Superintendent of Stamps whether he was agree-
able to make a reference under section 56 (2) to the  appel-
lant,  as  the question of liability to pay the  stamp  duty
and.  penalty  involved important questions   of   law.    A
petition  on behalf   of  the respondent to  the   appellant
was  also filed on  the 5th of February  in  which  it   was
prayed that either the order of the Assistant Superintendent
of  Stamps be rescinded or in the alternative a case may  be
referred  under section 57 of the Stamp Act for the  opinion
of  the High Court.  This petition was rejected on  the  4th
July, 1946.  The respondent there- upon filed a petition  in
the  High  Court on the 19th of July, 1946, praying  that  a
writ  of certiorari may be issued against the appellant,  or
an  order  may be made against him under section 45  of  the
Specific  Relief Act, to cancel the levy of the  stamp  duty
and penalty as claimed on behalf of the appellant or in  the
alter- native the appellant may be ordered under section  57
of  the Stamp Act to refer the matter to the High Court  for
its opinion.  The matter came for hearing before Mr. Justice
Blagden who did not grant the first relief but directed  the
appellant to state a case under section 57 of the Stamp  Act
to the Court for its opinion.  The appellant filed an appeal
but failed. He has now come in appeal to this Court.
     Two  points have been urged on behalf of the  appelant.
The  first  is whether under section 57 of  the   Stamp  Act
there is an obligation on the appellant to state a case, and
if  not  whether the High Court had jurisdiction to  give  a
direction to that effect. The second point is whether having
regard  to the terms of section 226 (1)of the Government  of
India  Act, 1935, the High Court had jurisdiction  to  order
the appellant to state the case, it being a matter  relating
to  the revenue. Under this head it is also argued that  the
matter had proceeded beyond the stage of assessment  and,had
reached the stage of recovery.  Therefore, the High
Court  of  Bombay had no jurisdiction to pass the  order  it
did.  The material part of section 57 of the Stamp Act  runs
as follows:
"57. (1) The Chief Controlling Revenue-authority
   70
540
may state any case referred to it under section 56,
sub-section (2), or otherwise coming to its notice, and
refer such case, with its own opinion thereon-
*          *            *            *
    (b) if it arises in the province of Bombay, to the  High
Court at Bombay;  ........  "
            Section 226 (1) of the Government of India Act-
            1935, runs as follows :--
            "226. (1) Until otherwise provided by Act of the
appropriate  legislature,  no  High  Court  shall  have  any
original   jurisdiction   in  any  matter   concerning   the
revenue,  or  concerning  any act ordered  or  done  in  the
collection  thereof  according  to the  usage  and  practice
of  the  country or the law for the time  being  in  force."
On   behalf   of  the  appellant  it   is   contended   that
the  very  words  of  section  57  of  the  Stamp  Act  show
that  it  is  a  power given to the  appellant  to  state  a
case  and  it is not an obligation. The  section  is  framed
and  worded  only  to  give  the  benefit  thereof  to   the
appellant and it is not for the' benefit of any other party.
The word "may" used in the section was deliberately used for
that purpose.  It was pointed out that under section 56  (2)
of  the  Stamp  Act if the Collector felt doubt  as  to  the
amount of duty with which the instrument was chargeable  "he
may  draw up a statement of the case and refer it  with  his
opinion  for the decision of the Chief  Controlling  Revenue
Authority."   Similarly under section 60 if any  Court  felt
doubt  as  to the amount of duty to be paid  it  was   given
power to draw up a statement of case for the opinion of  the
High  Court.   It was argued that both these  sections  gave
only power to the Collector and the   Court to make a refer-
ence for their own benefit. Section   57, it was argued, was
on  the same lines for the benefit   of the  appellant.   In
none of these, any other party   had any right to insist  on
a reference.  It was pointed   out that under the Stamp  Act
a  Collector could certify   that the document was  properly
stamped,  although    it was not sufficiently stamped  on  a
true  construction,   and when such a certificate was  given
the  Controlling   Authority could do nothing.  He  had  not
even the
541
power to refer that case to the Court to levy a higher stamp
duty.   For these reasons, it was contended that the  scheme
of the Stamp Act was materially different from the scheme of
the Income Tax Act.
    In our opinion the appellant's contentions are  unsound.
The first contention that section 57 of the Stamp Act  gives
only a discretion and does not cast a duty on the  appellant
to  make a reference overlooks the fact that  the  appellant
has  not to make a reference only when he is in doubt  about
his  decision  or conclusion.  In his conclusion  the  party
liable  to pay the assessed stamp duty is materially  inter-
ested.   The appellant's decision is not  necessarily  based
only  on the reading of the entries in the Schedule  to  the
Stamp Act.  As in the present case, the question under  what
item stamp duty is leviable may depend on the true construc-
tion of a document.  It may also involve the decision of the
question,  as in the present case, as to what is the  effect
of  the Court's order directing a rectification of  the  in-
strument.   It does not appear, on principle, sound to  hold
that  these  difficult questions should be  left  under  the
Stamp Act to the final decision of the appellant, and if the
party affected by the assessment has a grievance there is no
relief  at all in law for him.  The construction of a  docu-
ment is not always an easy matter and on the ground that  it
is a substantial question of law, parties have been  permit-
ted  to take the matter up to the highest Court.  If so,  it
appears difficult to start with the assumption that  because
this  is a Revenue Act the decision of the appellant  should
be  considered final and conclusive. The provisions of  sec-
tion 56 (2) and section 60 giving power to the Collector and
the  Court to send a statement of case to the appellant  and
the  High  Court respectively, in our  opinion,  instead  of
helping the appellant, go against his contention.  In  those
two sections this power is given when the referring authori-
ty  has  a doubt to solve for himself.  The absence  of  the
words  "feels doubt as to the amount of duty to be  paid  in
respect  of an instrument" in section 57 supports  the  view
that  the reference contemplated under that section  if  not
for the benefit of the appellant only but enures
542
also  for the benefit of the party affected by  the  assess-
ment.  In our opinion, the power contained in section 57  is
in the nature of an obligation or is coupled with an obliga-
tion and under the circumstances can be demanded to be  used
also by the parties affected by the assessment of the  stamp
duty.
    Our  attention has been drawn in this connection to  the
decision  of the Judicial Committee of the Privy Council  in
Alcock,  Ashdown  &  Co. Ltd. v.  Chief  Revenue  Authority,
Bombay  (1).  In that case a question arose about an  asses-
see's right to ask the Commissioner of Income Tax to state a
case  for the opinion of the Court under section 51  of  the
Indian  Income  Tax  Act, 1918. The material  part  of  that
section was in these terms :--
    "51. (1) If, in the course of any assessment under  this
Act  or any proceeding in connection therewith other than  a
proceeding  under  Chapter VII, a question has  arisen  with
reference to the interpretation of any     of the provisions
of  this  Act or of any rule thereunder, the  Chief  Revenue
Authority may, either on its own motion or on reference from
any  Revenue officer subordinate to it, draw up a  statement
of the case, and refer it, with its own opinion thereon,  to
the High Court, and shall so refer any such question on  the
application of the assessee, unless it is satisfied that the
application is frivolous or that a reference is unnecessary.
   (3)The High Court upon the hearing of any such case shall
decide  the questions raised thereby, and shall deliver  its
judgment thereon containing the grounds on which such  deci-
sion is rounded, and shall send to the Revenue authority  by
which the case was stated a copy of such judgment under  the
seal  of the Court and the signature of the  Registrar,  and
the Revenue-authority shall dispose of the case accordingly,
or, if the case arose on reference from any  Revenue-officer
subordinate to it, shall forward a copy of such judgment  to
such  officer who shall dispose of the case  conformably  to
such judgment".
In that case, after the assessment was made and
(1) 50 I.A., 227.
543
the proceedings went to the Commissioner of Income Tax,  the
assessee requested that a case may be stated for the opinion
of  the Court under the aforesaid section,  but the  Commis-
sioner  refused  to do so.  Thereupon, a Rule  was  obtained
from the High Court calling upon the Chief Revenue  Authori-
ty, Bombay, to show cause why a case should not be so  stat-
ed.  It was argued before the High Court that the Court  had
no  jurisdiction to order the Commissioner to state  a  case
for its opinion.  When the matter reached the Privy  Council
the  objection  to the jurisdiction was  put  more  broadly.
Before  the High Court the only question raised was  whether
the  Authority had a duty, in the circumstances, to state  a
case.  The point raised before the Judicial Committee of the
Privy  Council  took  the form of saying that  even  if  the
Authority  had  a duty, the Court could not require  him  to
exercise  it; and for this purpose reliance was placed  upon
the  well-known  general purview of the  Indian  Legislation
which  excludes matter of revenue from the consideration  of
the  ordinary civil Courts, the principle being  exemplified
in  the case of Spooner v. Juddow (1 ) and upon section  106
(2)of  the Government of India Act, 1915.  The  judgment  of
the  Board consisting of Viscount Haldane,  Lord  Phillimore
and  Lord Carson was delivered by Lord Phillimore.   In  the
judgment  it  is  stated as follows :--" It  is  said  that,
though under this section, the Chief Revenue Authority  may,
if he thinks fit, draw up a statement of the case and  refer
it  to the High Court he is not bound to do so even  on  the
application of the person to be assessed, if he is satisfied
that  the application is frivolous or that the reference  is
unnecessary  and that the Authority has in the present  case
shown  that he is satisfied that the application was  frivo-
lous and the reference was unnecessary."  This argument  was
rejected  by the High Court.  Their Lordships of  the  Privy
Council agreed with the view of the High Court that this was
too  narrow a construction of the section.   They  observed:
"Take  first  the case which is last in the clause.  If  the
assessee  applies  for a case the Authority  must  state  it
unless he can
(1) (1850) 4 Moo. I.A. 353.
544
say that it is frivolous or unnecessary.  He is not to  wait
for  the court to order him to do it  will be a  misfeasance
and  a breach of the statutory duty if he does not do  it  "
The judgment did not end by relying only on that portion  of
section  51 (1)of the Indian Income Tax Act, 1918.  It  pro-
ceeds to state as follows :--"Put that case aside.  The rule
here is supported upon the earlier part of the section.   No
doubt that part does not say that he shall state a case,  it
only  says that he may.  And as the learned counsel for  the
respondent  rightly  urged,  'may' does  not  mean  'shall'.
Neither are the words 'it shall be lawful' those of  compul-
sion.  Only the capacity or power is given to the Authority.
But when a capacity or power is given to a public  authority
there  may  be circumstances which couple with the  power  a
duty to exercise it.  To use the language of Lord Cairns  in
the case of Julius v. Bishop of Oxford (1):  ' There may  be
something  in the nature of the thing empowered to be  done,
something  in the object for which it is to be  done,  some-
thing in the conditions under which it is to be done,  some-
thing in the title of the person or persons for whose  bene-
fit the power is to be exercised, which may couple the power
with a duty,  and make it the duty of the person in whom the
power is reposed to exercise that power when called upon  to
do  so.'   In their Lordships' view, always  supposing  that
there is a serious point of law to be considered, there does
lie a duty upon the Chief Revenue Authority to state a  case
for the opinion of the Court, and if he does not  appreciate
that  there is such a serious point, it is in the  power  of
the Court to control him and to order him to state a case."
     This reasoning and conclusions, although they have  not
now  the compelling force they had before the 26th of  Janu-
ary,  1950, are entitled to great respect. Apart from  that,
we  entirely agree with that line of reasoning and the  con-
clusion.  In our opinion, in 'the present case the power  to
make a reference under section 57 is not only for the  bene-
fit of the appellant.
(1.) 5 A.C. 214, 222.
545
It  is coupled with a duty cast on him, as a public  officer
to  do the right thing and when an important  and  intricate
question of law in respect of the construction of a document
arises,  as  a  public servant it is his duty  to  make  the
reference.   If he omits to do so it is within the power  of
the  Court to direct him to discharge that duty and  make  a
reference to the Court.
    Mr. Daphtary on behalf of the appellant tried to distin-
guish this case on the ground that the scheme of the  Income
Tax Act was different from the scheme of the Stamp Act.   In
our  opinion, the observations quoted above and the  princi-
ples underlying the same are applicable to the duty cast  on
the  appellant under section 57 of the Stamp Act  and  minor