:50 SUPREME COGRT REPORTS [1962] SUPP.

THE BOARD OF REVENTE, U. P. AND

OTHEHS

t'.

SARDARXI VIDYAWATI AND ANOTHER

(S. K. DAS, A. K. SARKAR, K. SFnBA R, w, K. N.

WANCrroo and N'. RA.JAGOP.U.A AYY A :\GAR, J, J.)

Stamp Dulylmpoundinq of document - llcferrn•:clleVl!n?t-! /Joard, if mlUif lu11r the pflrly f1[f~/rirrp1/ - /nrlirzn Stamp Act, 1899 (2 of !89Y), ss. 33, 5G(2).

The respondents sought permission of the Court to with. dra\v certain moneys on furnishing security which \\as granted.

A security bond was executed by the respondents by v..hich a house v•as given as security.

The Inspector of Stan1p; rcpnrtd that the security bonrl ,, as inc:ufficicntly starnpt:d and therefore it should he in1p0undcrl anrl a deficit stamp duty of Rs. 4B2;1 I !and a penalty of Rs. 4,82G:I ~!-should he le\'icd. 'I'hereupor1 thr: ])cputy Con11nissionrr, acting as Collector, called for objcr.tinns. 'J'hc judicial officr hefurf! \\'horn the security bond , .. , as filed in1pnundcrl the bond and for\\'ardcd it to the Deputy Comrnissioner.

Afi.cr further ohjcctLJns herc filed by the respondents before the Stan1p Offirrr, the latter submitted a report to the l)tputy Co1nmissiuner upholding the order of the Inspector of Stamps.

Therc:upon the Deputy Commissioner passed an order ''realise". rhe responrlnents filed a re.vision petition against the order of the Deputy Commissioner before the Board of Re\'en1H~ and \\hile that petirion 'vas pending the Deputy Commission,.r referred the 1nat1er to the Boarrl of Revenue under s. j() (2) of the Stamp ;\ct and the Board of Ile.venue passed an order upholding the orrh.:r of the Deputy Cuminissioner. 'J'hc respondent:.; then filer! ; i \\rit petition-under Art. 226 of the (on!'-titution before the High Court. 1, heir 1nin contention \\'as that they were 11nt ghen a hearing f":ither hy the Board of Revcnur: <ir the J)cputy Commissioner. '!'he ptition \Va!! heard by a Single Judge vvhn dismissed the petition on the ground that ncith~:r t!ie Stan1p i\ct nor the Rules franied thcreundr-r providr-d that a hearing should be given to the aggrieved person.

Thrt>aficr the appeal Court creatl"d the m; i.ttcr as a rcfer('ne hrfore the R("venue Boar<l 11ndCr s. 51) (2) of the 1\ct and h~Jd that the Act or Rules did not require. tl:at a hearing sliculd be given by the authorities acting under s. :)G but that although they \\'Crc acting only ad1ninistrativcly they \\'ere hound to give a hear~ ing according to the principle~ of natural justice. 'fh(' appeal was allowed.

3 S.C.R.

SUPREME COURT REP0RT3 51

Held, that it is clear that s. 56 (2) deals with cases where there is a doubt in the mind of the Collector in regard to an instrument as to its construction and the provisions of the Act applicable to it.

Sucb doubt itself shows that the point rais. ed for the Collector's decisions is a difficult point of law and from the very nature of the duty to be performed in such circumstances it appears clear that the Chief Controlling Revenue Authority has to decide the matter judicially and would thus be a quasi-judicial tribunal.

w Where .the provisions of the Act are silent, the duty to act judicially may be inferred from the provisions of the statute or may be gathered from the cumulative effect of the - nature of the rights affected, the manner of the disposal provided the objective criterion to be adopted and the phraseology used and other indicia afforded by the statute.

The questions before the Board under s. 56 (2) being one of construction of an instrument and the application of the Act to it being a pure questions of law which may result in payment of large amounts by the executani of the document, the Board should give, for the determination of such question, a hearing and it should act judicially in determining a pure question of law.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 29 of 1958.

Appeal from the judgment and order dated May 3, 1956, of the Allahabad High Court in Special Appeal No. 48of1954.

Veda Vya.sa and 0. P. Lal. for the appellant.

A. N. Goyal, for the respondents.

1962. February 6, The Judgment of the Court was delivered by

WANCHOO, J.-This is an appeal on a certificate granted by the Alla.habad _High Court. The brief facts necessary for present purposes are these.

Certain decretal moneys were deposited in the then

- Chief Court of Oudh at Lucknow. The respondents applied to the Chief Court for permission to withdraw the mone, i.s on furnishing security and were permitted to do so. Thereupon a registered security bond was [executed and registered. in Simla in 1949 by which

196t

The Board of Revenue, U.P. v. .

Sardarni Vidyawati

Wanc~OD J'.

The Board or RttJtT---Ue, u. P.

Sard, rni Vid;-awali

11'o'1thoo J,

a house there was given in security for withdrawal of the money.

Befere, however, the mon<'V cotild be withdrawn, th'3 Inspector of Stamps reported on March 15, 1!)50, that tho so called security bnnd

wits in reality a mortgage deed without possession and waa insufficiently stamped. He therefore reported that it should be impounded and the deficit stamp duty of Rs. 482/11 /- and a penalty amounting to Rs. 4,826/14/· should be levied with respect to that document. Thereupon on April ~.

1950, the Deputy Commissioner, Kheri, acting as Collector passed the following order :-

"In case the parties have any objection, they put it in writing which will be referred to the Board of Rcv('nue." It seems that on July 5, J!l;)O, t-he respondents objected that the document wail not a mortgagedeed and that no duty or penalty was paynblo, and further that as the dooument had not been till then accepted by the court, it was only a tentatin• document. On August 3, 1950, the judidal oft1c('I' before whom the security bond was filed impounderl it under s. 33 of the Indian Stamp Act, Xo. II of 1898, (hereinafter referred to as the Act).

and apparently forwarded it to the Deputy Commis sioner, Kheri, under s. 38 of the Act.

It. seems thereafter that in November 1950 the respondents filed further objectionR before Stamp Officer (Treasury Officer), Kheri, from whom the Deputy Comm is sioncr who acts as a Collector for the purposPs of the Act had called for a report. In December 19.'iO,

the Treasury Officer made a report to t.he Ptfe, t that. the view of the Inspoctor of St.ampH was correct. and duty and penalty as reported by the latter were due. The respondents' case was that the Treasury Officer did not give them any hearing bcfor<' making tho said report. It eeems that on thiR report tlw Deputy Commissioner made the order "Realist,". He also is said to have given no hearing to the respondenta. In anuary 1951, the respond@ts filed a

. .: --

revision against the order of the Deputy Commissioner before the Board of Revenue. It appears however that in March 1951 the Deputy Commissioner referred the matter to the Board of Revenue under s. 56(2) of -the Act. In July 1951 the Board of Revenue disposed of the maUer and upheld the order of the Collector. But the respondents' complaint waR that the Board of Hevenue also did not give them a hearing. Consequently they filed a writ petition in the High Court in November 1951.

That" petition was dismissed by the learned Single Judge on the ground that neither the Act nor the Rules made thereunder provided that any hearing should be given to the person who was liable to pay the deficit stamp duty and the penalty. He further held that in any case the Collector had given an opportunity to the respondents to urge their objections in writing, and that the Board of Revenue had also considered the grounds taken by the respondents in their .revision-petition and there was no provision in the law requiring the Board of Revenue to give a personal hearing or a hearing through counsel in a case of this kind. ·

The respondents then went in appeal. The appeal court seems to have treated the matter before the Board as if it were a reference under s. 56(2) of the Act. As •the learned Single Judge has pointed out, though the order of the Collector of December 1950 would usually be final. it appeared that he had chosen to make a reference to the Board of Revenue under s. 56(2). We must therefore proceed on the assumption that this case has been disposed of by the Board under s. 56(2) and not by the Collector under s. 40( 1) or by the Board under s. 56(1).

The appeal court under ss. 40 and 56 leave the entire matter to the opinion of the person before whom the insufficiently stamped document is produced and do not lay down any procedure for calling upon the party concerned to show cause why the document be not held to be

The Board ()f Re1enue, U.P.

Sariarni Vidyaw1t i

Wanchoo J.

i9Gl

T•,, Boe.rd of lfern;111, l./. P. v.

S111dami l'idy-awotl

54 SlJPHE:IIE COURT REi'ORTS [I !J62] SUPP.

insufJiciently stnmpecl and there was n<> provision

undr the Act or the Rules which re4uired the authorifies concerned to gini imy h"aring to tlw person executing the documtmt.

The appeal cour1, therefore hel<l that tho authoritit" cunc, rncd when acting either under s. 40 or s. ;)li were not acting judicially or quasi judicially. Tho :ippcal cuurL further helcl th"'t e\"cn thvugh tlw authorities were acting mt, fl!ly a<lmiuistratindy under s. 40 and s. 56(2) they were bound to give a bearing a"corcling to the principle:'! of natural justice, in accordance with the decision of tl:iat court in Special Appral No. 2\J l of I 9ii5, Gluinshyamdas Uuµta v. 'l'h'!- Board of 11 iyh Schlj()l and I 11te1111r:di<lte Lducati<m,

U. P.

They thercforn set asicl" the order of the Board of Hevcnuc on the ground that. uo hearing had been giveu to the rcspondent8. Thereupon on application for leave to appeal to this Court; was made to the High Court, which was allowed ; und that is how the mD, Lter has come before us.

The main rontention of the appellant before us is that. thn High Court having heir! that, the Boarrl was acting nwrely administr:itivcly when proceeding under s.5fi (2) of the Act went wrong in holding that it was bound under the principles of natural justice to give a heari1ig to the rcspondnnts. In effect the appel11111t in this cast' impugned the correctness of the view taken in Special Appeal No. 291 of 1955 (supm).

That casp, has come up before us in appeal (C. A. 132 of 1959 Board of High School anrl lnlermed£ate Aduwtian v. G. IJ. G?Jpla), judgment in which is being deliv<red today.

We have in that Cll8e held that t.he examinations' committee is under a duty tu act jullicially when proceecling under r. I( I) of Chap. VI of the Hegulations framed under the C. P. Intermediate Education Act, (No. II of 1921 ), and have not upheld the view taken by the High Court that it acts administratively. A similar question arises in the present

appeal, viz., whether the Board of Revenue when dealing with a proceeding under s. 56(2) of the Act acts administratively or quasi-judi0ially. We must make it clear that we are proceeding in this appeal on the basis that the matter before the Board was under s.56( 2) on a reference by the Collector and not under s.56(1) on the application filed by the respondents inviting it to exercise its power of control thereunder. The contention on behalf of the respondents is that when the Board is acting under s. 56(2) of the Act it is acting quasi-judicially.

Let us therefore first look to the scheme whiuh leads up to the reference under s. 56(2) of the Act. That sub-section provides that if any Collector, acting under s. 31, s.40 or s.41, feels don ht as to the amount of duty with which any instrument is chargeable, he may draw up a statement of the case, and refer it, with his own opinion thereon, for the decision uf the Chief Controlling Revenueauthority. Section 31 deals with the case when auy instrument is brought to the Collector, and the person bringing it applies to have the opinion of that officer as to the duty (if any) with which it is charg0able. It is then the duty of the Collector either to determine the duty (if any) with which, in his judgment tho instrument is chargeable or to refer the case to the Chief Controlling Revenue-authority nnder s.56(2) if he has any doubt in the matter.

Section 40 deals with the case where an instrument is impounded under s.33 or the Collector receives any instrument sent to him under s.38(2), (subject to certain exceptions) and gives power to the Collector either to certify that the instrument is duly stamped or that it is not chargeable at all, or if he is .of opinion that the instrument is chargeable with duty and is not duly stamped to require the payment of proper duty or to make up the same together with a penalty. But if the Collector is doubtful in the ma.tter he has been given power under s.56(2} to

/9C2

The B 06111 •f

lttvenu~, U.P.

Sarda.rni Vidyawari

Tf anchoo J,

Thi l1oarti of Ret'1!1uc. u.r.

S'J"dorni Viclyawati

lt 'n:uhoo ,/.

56 SUPREME COURT REPORTh (1962) SUPP.

refer the question to the Chief Ccntrolling Revenueauthority. Lastly under s.-11, if any instrument chargeable with duty and not d:uy stamped (subjrct to certain cxceptious) is producea by any perEOn

of his own motion before the Collector within one year from the date of its uxecution of first execution, and such person biings to the notice of the Collector the fact that such i11su ument is not duly stamped and offers to pay to the Collector the amount of the proper duty, or the amount to make up the same, and the Collector is satisfied that the omission to duly stamp such instrument has been occasioned by accident, mistake or urgent necessity, he may, inst-0ad of proceeding undt•r ,;s.33 and 4(1, receive such amuuut and under s.42 certify by endorsement thereon that the p1oper duty has been paid. But even in such a case it the Collector is doubtful in the matter, he has been given the power to make a reference to the Chief Controlling Hevenue-authority. It is clear therefore that s .. :J6(2) deals with cases wlwro there is a doubt in the mind of the Collector in rogard to an i11strnme11t which comes up before him under the above provisions of the Act as to the construction of the instrument and

the provisions of the Act applicable to it. Such doubt itself shows that the point raised for the Collector's decision is a difficult point of Jaw and from tho very nature of the duty to be performed in such circumstances it appears olear that the Chief Controlling He venue-authority has to decide the matter judicially and would thus be a quasijudicial tribunal.

As pointed out by us in l'.A. l ::2 of JO;'i!J, the question whether an authority, like the Hoard of Hevenue, acts judicially i~ to be gathcr2d from the express provisions of the Act in tho first instance.

Wllcre however the provisions of the Act arc silent, the duty to act judicially may he inferrnd from the provisione of the statute or may bo gathered from the cummulative effect of the naturo of the

rights affected, tho manner of the disposal provided, the objective criterion to be adopted, the phraseology used and other indicia nfiorded by the statute. It is true that in the present case the Act and the Rules framed thereunder do not provide for a hearing by the Board of Revenue, when it is dealing with a matter under s.56(2) of the Act.

But the question that is before the Board of Revenue under s.55(2) is of the construction of an instrument and the application of the Act to it. In many cases the decision of the Board, if it goes against the person executing the instrument, may result in payment of large amounts as deficit stamp duty and even larger amounts as penalty.

The question is purely a question of law in the circumstances. It seems to us, considering the nature of the duty cast on . the Board of Revenue under s.56(2) requiring it to construe instruments submitted to it thereunder and the application of the Act to them which may result in payment of heavy amounts of deficit duty and even heavier amounts as penalty, that the legislature intended that the Board of l{evenue should hear the person executing the document before saddling him with large pecuniary liability. The question before the Board under s.56(2) being one of construction of an instrument and the application of the Act to it being a pure question of law which may result in payment of large amounts by the executants of the document, it would not in our opinion be improper to hold that for the determination of such a question the legislacure intended that the party affected by the decision of the Board of Revenue should be given a hearing, and that the Board should act judicially in deciding a pure question of law. The fact that tbe decision will depend upon the opinion of the Board cannot in any way make any difference for the determination of questions of law must always depend upon the opinion arrived at judicially of the person or authority who has to determine it, and the.t will not

The Boord oj lfevem1e, U. P. ,., Sardarni Vidyowati

Jf anchoo J.

Jf62

The /!-; o, d rd R , rnw", U. I'.

v. 8 ·.rJarr:i, f'it/_JO/r~I!

IV ancoo J

nccessnrily mean that tho pcrwn determining' it

cannot. po~:; ibly be required to act judicially be cause he has lo act upon l1is opinion. Further, s.5i c11forc<s the above conclusion. That section providrs that the Chief Controllii1g H.evrnueauthority may state any case rtforn'd lo it. under s.56(2), er litherwi8e coming lo its notice, ancl rrfer such case, with its own opini<m thereon to the High Court,· and every such case shall be decidl'd by not lest:

than three .Judges of the High Court lo which it fr referred.

This proYision shows ti.mt questions referred to the Board under s.56(2) may he sul'h complicatPd question~ of Jr, w that the Board may not be able t-0 make up its mind and mn, y be in doubt and in such a rn1se the Board has the power to n:for the matter to the High Court along with its opinion, and the question has to he decided by u Bench of three Judges, where undoubtedly the hearing could not but be judicial. If therefore the bearing under s.5i is judicial it would in our opinion be proper to infer that the hearing under s.56(:!) which deals with similar questious must also Le judicial.

We are therefore of opiuio11 that, eonsidering the totality of circumota11ces and the nature of the matter to be determined Ly the Board of Reveuue under s.56(2), the Board has to act judicially when proceeding under s.5G(2) and must therefore on principles of natural justice give a hearing to the other party, namely, the exccutimt of the instru mcnt. The Board of Hcvcnue therefore acts as a quasi-judicia! body under s. 56(2) and the respondents wore entitled to a hearing. 'Ye therefore uphold the order of tho High Court, though on a different ground.

'l'l•<i appeal is hereby dismissed with costs.

A ppenl dismissed.