IN THE SUPREME COURT OF PAKISTAN 
         (Appellate Jurisdiction) 
 
PRESENT: 
 
 
MR. JUSTICE EJAZ AFZAL KHAN. 
 
 
MR. JUSTICE SARDAR TARIQ MASOOD 
 
 
 
 
  
CIVIL APPEALS NO. 613 AND 614 OF 2014. 
(Against the judgment dated 31.10.2013 in W. P. 
No. 2545 of 2000 and C. R. No. 566-D of 2000 
passed by the Lahore High Court, Rawalpindi 
Bench, Rawalpindi).  
 
M/s Lagarge Pakistan Cement Company.               …Appellant(s) 
 
 
 
Versus 
District Collector, Chakwal, District Chakwal, etc.   …Respondent(s) 
 
 
 
 
 
For the appellant(s): 
Mr. Waseem Sajjad, Sr. ASC. 
 
For the respondent(s): 
Mr. Mudassar Khalid Abbasi, AAG, Pb. 
 
 
 
 
With Syed Naveed Alam, AC. Kalar Kahar. 
 
Date of hearing:  
26.04.2016. (Judgment Reserved) 
 
 
 
 
 
J U D G M E N T   
 
 
EJAZ AFZAL KHAN, J.- These appeals with the leave of 
the Court have arisen out of the judgment dated 13.11.2013 whereby 
Writ Petition No. 2645 of 2000 and C. R. No. 566-D of 2000 were 
dismissed.  
2. 
 
Facts of the case in brief are that appellant obtained a 
loan of two billion Japanese Yen which at the relevant time was 
equal to Rs.64,52,72000/-. To secure the loan obtained the appellant 
hypothecated the machinery etc. and mortgaged the land 
mentioned in the mortgage-deed. On 09.05.1998 respondent No. 1 
issued a notice to the appellant stating therein that stamp-duty in the 
sum of Rs.4,49,31,530/- has been evaded in the registration of 
mortgage- deed, therefore, it is liable to pay ten times penalty along 
with the actual stamp-duty which shot up to Rs.49,42,46,830/-. The 
appellant challenged the notice by filing a writ petition which was 
disposed of with the direction to respondent No. 1 to decide the 
CIVIL APPEALS NO. 613 AND 614 OF 2014 
 
2 
matter afresh after hearing the appellant. The respondent after 
hearing the appellant maintained the order passed earlier. The 
appellant to assail the order of District Collector filed Writ Petition No. 
2645 of 2000. In the meantime, when a decree passed by the Civil 
Court was set aside by the Court of appeal the appellant also filed a 
C. R. No. 566-D of 2000. The writ petition as well as civil revision was 
dismissed by the High Court. The appellant filed petitions for leave to 
appeal before this Court which were granted by holding as under:-  
 
“Making reference to the registered mortgage deed dated 
29.5.1996 and the leviable duty thereon in terms of Article 40 
of the Stamp Act 1899, learned Sr. ASC for the petitioners 
contends that the payment of stamp-duty and registration 
fee on the mortgage deed was made strictly in accordance 
with law, but due to erroneous interpretation of relevant 
provision of the Stamp Act, 1899, (as applicable in the year 
1996), the Collector had illegally calculated further liability of 
Rs.4,49,31,530/- against the petitioner with additional sum 
equal to five times of the purported payable duty as 
penalty, without taking into consideration the fact that the 
question of payment of penalty was not at all involved in the 
present case as there was no concealment or misstatement 
of facts from the side of the petitioner at the time of 
execution and registration of mortgage deed dated 
29.5.1996. He further adds that since possession of mortgage 
property was not given to the mortgagee, as evident from its 
contents, the leviable stamp-duty in terms of Article 40 of the 
Stamp Act was as on a Bond (Article No: 15) for the amount 
secured by such bond and not as payable (article No:23) on 
a conveyance deed.  
 
2. 
Contention raised need consideration. Leave to 
appeal is accordingly granted in these two connected 
petitions. The appeal paper books may be prepared on the 
basis of available record within two months. Additional 
documents, if any, within one month. Since government 
revenue is involved in these cases office is directed to fix the 
appeals arising out of these petitions for hearing within six 
CIVIL APPEALS NO. 613 AND 614 OF 2014 
 
3 
months. In the meantime, the interim order dated 9.1.2014 
shall continue to remain in force.” 
 
3. 
 
Learned ASC appearing on behalf of the appellant 
contended that when possession of the property or any part thereof 
comprised in such deed is not given or agreed to be given by the 
mortgagor, the case of the appellant would be covered by Article 
40(b) and not 40(a) of the First Schedule of the Stamp Act, 1899, 
therefore, the amount of stamp-duty shall be charged as on a bond 
covered by Article 15.  Learned Sr. ASC next contended that 
Collector under Section 48 of the Stamp Act could have recovered 
the duties, penalties and other sums required to be paid, under 
Chapter IV of the Stamp Act if the instrument had been produced in 
evidence and impounded on account of being deficiently stamped 
in view of the provisions contained in Sections 33 and 38 of the 
Stamp Act. But where, he added, it was neither produced nor 
impounded, the Collector could not recover duties, penalties or 
other sums as is evident from the language used in Section 48 of the 
Act.  To support his contention, learned Sr. ASC placed reliance on 
the cases of Hanuman Prasad. Vs. The State of Rajasthan (AIR 1958 
Rajasthan 291), Thakar Das and others. Vs. The Crown (AIR 1932 
Lahore 495), Dairy Farm. Vs. Emperor (AIR 1942 Lahore 257), 
Chandrahasji Maharaj. Vs. Chief Controlling Revenue Authority (AIR 
1986 Madhya Pradesh 132), Lala Uttam Chand. Vs. Perman Nand and 
others (AIR 1942 Lahore 265), Abdur Rehman. Vs. Raabia Bibi (PLD 
1984 Lahore 407), Imtiaz Rafi Butt. Vs. The Lahore Development 
Authority (PLD 1996 Lahore 663). The learned Sr. ASC lastly argued 
that where there is nothing on the record to show that the appellant 
willfully under-stamped the deed to evade the payment of the 
CIVIL APPEALS NO. 613 AND 614 OF 2014 
 
4 
proper stamp-duty, it cannot be subjected to any penalty. Learned 
ASC to support his contention placed reliance on the cases of Smt. 
Kamla Devi. Vs. The Chief Controlling Revenue Authority, Delhii (AIR 
1966 Punjab 293) and Messrs Humayun Ltd. Vs. Pakistan and others 
(PLD 1991 SC 963).   
4. 
 
The 
learned 
Assistant 
Advocate 
General, 
Punjab 
appearing on behalf of the respondent contended that where the 
mortgagor covenanted in the mortgage-deed that in the event of 
default on its part in payment of the mortgage money or part 
thereof, in accordance with the provisions of the agreement, the 
lender shall have the right to sell without intervention of the Court, 
title as well as possession of the property has been transferred to the 
mortgagee, therefore, the case would fall within the purview of the 
Article 40(a) of the First Schedule of the Stamp Act. The learned AAG 
next contended that the words “or comes in the performance of his 
functions” used in Section 33 of the Stamp Act are wide enough to 
cover the situation emerging in this case, and that the view taken by 
the learned Single Judge of the High Court being in conformity with 
the provisions of the Act is not open to any exception.  
5. 
 
We have gone through the record carefully and 
considered the submissions of the learned Sr. ASC for the appellant 
as well as the learned AAG for the respondent. 
6. 
 
Before we appreciate the arguments addressed at the 
bar it is worthwhile to refer to the relevant Articles 15 and 40 of the 
First Schedule of the Stamp Act which run as under :-  
“ 
Sr. 
No. 
Description of Instrument 
Proper 
Stamp-
duty 
15. 
Bond as defined by section 2(5) not being a 
DEBENTURE (No. 27) and not being otherwise 
 Fifteen 
rupees. 
CIVIL APPEALS NO. 613 AND 614 OF 2014 
 
5 
provided for by this Act, or by the Court Fees Act, 
1870— 
(i) 
 where the amount or value secured does not 
exceed five hundred rupees  
Fifteen 
rupees. 
(ii) 
where it exceeds five hundred rupees, for every 
additional amount of five hundred rupees or part 
thereof.  
See ADMINISTRATION BOND (No. 2). 
BOTTOMERY BOND (No. 16) 
CUSTOMS BOND (No. 26) 
INDEMNITY BOND (No. 34) 
RESPONDENTIA BOND (No.56), 
SECURITY BOND (No. 57), 
Exemption  
Bond when executed by any person for the 
purpose of guaranteeing that the local income 
derived from private subscription to a Charitable 
dispensary or hospital or any other object of 
public utility shall not be less than a specified sum 
per mensem.    
Fifteen 
rupees. 
 
 
 
 
 
       AND 
 
Sr. 
No. 
Description of Instrument 
Proper Stamp-
duty 
40. 
MORTGAGE 
DEED 
not 
being 
an 
AGREEMENT RELATING TO DEPOSIT OF 
TITLE-DEEDS, PAWN OR PLEDGE (No. 6), 
BOTTOMERY BOND (No. 16) MORTGAGE 
OF A CROP (No. 41) RESPONDENTIA 
BOND (No. 56), OR SECURITY BOND (No. 
57).  
 
(a) 
When possession of the property or any 
part of the property comprised in such 
deed is given by the mortgagor or 
agreed to be given;  
 
The same duty 
as 
on 
a 
Conveyance(N
o. 
23) 
for 
a 
consideration 
equal 
to 
the 
amount 
secured by such 
deed.  
(b) 
When a possession is not given or agreed 
to be given as aforesaid; 
 
The same duty 
as on a Bond 
(No. 15) for the 
amount 
secured by such 
deed. 
 
 
 
 
 
 
 
 
 
 
 
“ 
 
7. 
 
A glance at the table would reveal that where 
possession is not given or agreed to be given, the stamp-duty shall 
be charged on the amount secured by such deed as is provided by 
Article 15 of the First Schedule of Stamp Act. The question thus arises 
whether possession in this case has been given to the mortgagee. 
CIVIL APPEALS NO. 613 AND 614 OF 2014 
 
6 
The answer to the question is an emphatic no as the words used in 
Clause 4(vii) of the agreement that “the mortgagor shall not without 
the prior written consent of the lender part with possession of the 
mortgage property” unmistakably show that possession has not been 
given to the lender. The argument of the learned AAG addressed on 
the strength of Clause 3 of the agreement is misconceived as the 
lender’s right to sell the mortgage property without intervention of 
the Court would accrue only, if the mortgagor defaults in payment of 
mortgage money and not otherwise. It, therefore, follows that the 
case of the appellant is covered by Article 15 and not Article 40(a) of 
the First Schedule of the Stamp Act. It thus has to be charged 
accordingly.       
8. 
 
The other question emerging for the consideration of this 
Court is as to when the Collector can recover duties, penalties and 
other sums required to be paid, under Chapter IV of the Stamp Act. 
Sections 33, 38 and 48 of the Act provide the answer which read as 
under :-  
“33. Examination and impounding of instruments: (1) Every 
person having by law or consent of parties authority to 
receive evidence, and every person in charge of a public 
office, except an officer of 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 this 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 Pakistan when such instrument was executed or first 
executed:  
Provided that – 
CIVIL APPEALS NO. 613 AND 614 OF 2014 
 
7 
(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 XII of Chapter XXXVI of the Code of 
Criminal Procedure, 1898;  
 
(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 Provincial Government may determine what 
offices shall be deemed to be public offices; and  
 
(b)   the Provincial Government may determine who 
shall be deemed to be persons incharge of public 
offices.  
 
38. Instruments impounded how dealt with: (1)  When the 
person impounding an instrument under Section 33 has by 
law or consent of parties authority to receive evidence and 
admits such instrument in 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 instrument, together with a certificate in 
writing, stating the amount of duty and penalty levied in 
respect thereof, and shall send such amount to the 
collector, or to such person as may appoint in this behalf. 
 
(2) 
In every other case, the person so impounding an 
instrument shall send it in original to the collector. 
 
48. Recovery of duties and penalties: All duties, penalties 
and other sums required to be paid under this chapter may 
be recovered by the Collector by distress and sale of the 
movable property of the person from whom the same are 
CIVIL APPEALS NO. 613 AND 614 OF 2014 
 
9 
instrument in question came before the Collector not once but thrice 
in the performance of his functions after its registration. The last 
argument of the learned Sr. ASC for the appellant that where there is 
nothing on the record to show that the appellant willfully under- 
stamped the deed to evade the payment of the proper stamp-duty 
it cannot be subjected to any penalty, does not deserve unqualified 
acceptance when provisions contained in Articles 40 and 15 of the 
First Schedule of the Act being clear and unambiguous do not admit 
of more than one interpretation. The judgments rendered in the 
cases of Smt. Kamla Devi. Vs. The Chief Controlling Revenue 
Authority, Delhii and Messrs Humayun Ltd. Vs. Pakistan and others 
(supra) are not applicable when the appellant through the civil suit 
and the writ petitions tried to justify what was unjustifiable. However, 
in the circumstances of the case, we hold that five times penalty is 
too harsh and that two times penalty of the deficient portion of the 
duty would be sufficient to meet the ends of justice.  
10. 
 
The short and long of what has been discussed above, 
Civil Appeal No. 613 of 2014 is partially allowed and the impugned 
judgment is modified to the extent hinted to above while Civil 
Appeal No. 614 of 2014 is dismissed.   
JUDGE 
 
JUDGE 
 
Announced in open Court at Islamabad on  05.05.2016. 
 
JUDGE 
‘Not Approved For Reporting’ 
M. Azhar Malik