- 1 - NC: 2025:KHC:9443 WP No. 6482 of 2020 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE M.G.S. KAMAL WRIT PETITION NO. 6482 OF 2020 (GM-CPC) BETWEEN: 1. MR TOMOICHI IKEDA MANAGING COORDINATOR INFORMATION SYSTEM DIVISION TOYOTA KIRLOSKAR MOTOR PRIVATE LIMITED, PLOT NO.1 BIDADI INDUSTRIAL AREA RAMANAGAR DISTRICT-562 109 REP. BY HIS PA HOLDER MR.C. AROKIAPPA AGED ABOUT 41 YEARS. 2. M/s.TOYOTA KIRLOSKAR MOTOR PVT. LTD. A COMPANY REGISTERED UNDER THE PROVISIONS OF COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT PLOT NO.1 BIDADI INDUSTRIAL AREA RAMANAGARA DISTRICT-562 109 KARNATAKA REPRESENTED BY ITS DEPUTY MANAGER LEGAL AND COMPANY SECRETARY SHRI VINAY BHAGAWAN B., AGED ABOUT 36 YEARS …PETITIONERS (BY SRI. P.N.HEGDE, ADVOCATE) AND: MR RAMESH BAGRECHA AGED ABOUT 50 YEARS S/O PARASMAL BAGRECHA R/A NO.124, 9TH MAIN 6TH CROSS, RMV EXTENSION Digitally signed by SUMA B N Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:9443 WP No. 6482 of 2020 BANGALORE- 560 080. …RESPONDENT (V/O DATED 12.10.2023 NOTICE TO RESPONDENT HELD SUFFICENT) THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER AT ANNEXURE-A DATED 04.01.2020 PASSED BY THE LEARNED LXIX ADDL. CITY CIVIL AND SESSIONS JUDGE, BANGALORE ON I.A. FILED U/S 152 OF THE CODE OF CIVIL PROCEDURE IN O.S.NO.8453/2016 AND DIRECT THE TRIAL COURT TO CORRECT THE MISTAKE IN ORDER DATED 20.07.2018 OR IN THE ALTERNATIVE, ISSUE A WRIT IN THE NATURE OF CERTIORARI QUASHING THE ORDER AT ANNEXURE-D DATED 20.07.2018 PASSED BY THE LEARNED LXIX ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BANGALORE IN O.S.No.8453/2016 AND CONSEQUENTLY RE- CALCULATE THE STAMP DUTY AND PENALTY PAYABLE ON THE AGREEMENT DATED 05.12.2013. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE M.G.S. KAMAL ORAL ORDER Petitioners before this Court are plaintiffs in O.S.No.8453/2016. The said suit is filed by them against the respondent/defendant for the relief of refund of interest free refundable security deposit. Petitioners/plaintiffs have relied upon a document namely Lease and Security Deposit Agreement dated 05.12.2013. When the petitioners/plaintiffs - 3 - NC: 2025:KHC:9443 WP No. 6482 of 2020 sought to produce the said document in evidence same was objected to by the defendant from being marked on the ground that the same was insufficiently stamp and was not registered. Petitioners/plaintiffs stated to have filed a memo showing readiness and willingness to pay deficit stamp duty and penalty on the said agreement. Taking said memo on record, trial Court by order dated 20.07.2018 directed the petitioners/plaintiffs to pay an aggregate sum of Rs.2,62,900/- being the stamp duty and penalty payable on said document. 2. It appears that subsequently petitioners/plaintiffs had also filed an application under Section 152 of CPC seeking correction of arithmetical and clerical mistake purportedly crept in the said order. The said application came to be rejected by order dated 04.01.2020 on the ground of trial Court not having jurisdiction to correct its own error. 3. It is these two orders dated 20.07.2018 and 04.01.2020 which are put in question in this writ petition. 4. Learned counsel for the petitioners/plaintiffs submit that petitioners/plaintiffs however had paid stamp duty and penalty as directed by the trial Court vide order dated - 4 - NC: 2025:KHC:9443 WP No. 6482 of 2020 20.07.2018 under protest without prejudice to their right to seek refund of the same. He however submits that now the suit itself having been decreed in favour of the petitioners/plaintiffs, all that is required to be considered is the actual amount of interest and penalty payable by the petitioners/plaintiffs. He submits that since the petitioners/plaintiffs had voluntarily agreed to pay the duty and penalty by filing a memo, and there being an error having crept in while calculating the same, the trial Court ought to have passed appropriate orders on the application filed by the petitioners/plaintiffs under Section 152 CPC seeking correction of arithmetical and clerical error. That the trial Court erred in rejecting the said application on the ground of it not having jurisdiction to correct its own error. 5. Heard and perused the records. 6. There is no dispute with regard to the fact that the document referred to as "Lease and Security Deposit Agreement" dated 05.12.2013 was insufficiently stamped. Objections for marking of the said documents were raised by the defendant at the time of evidence of the petitioners/plaintiffs. However, since the petitioners/plaintiffs - 5 - NC: 2025:KHC:9443 WP No. 6482 of 2020 themselves voluntarily agreed to pay the duty and penalty by filing a memo, the trial court has proceeded to calculate the same and has directed the petitioners/plaintiffs to pay Rs.2,62,900/- being stamp duty and penalty under Section 30(3) of the Stamp Act. Though the calculation of ten times of penalty appears to have been made by the trial Court under Section 34(2) of the Stamp Act, according to the petitioners/plaintiffs, the same would amount to a sum of Rs.5,000/- and not Rs.2,62,900/- as ordered by the trial Court. 7. Exercise of power by the trial Court to impose duty and penalty is traceable to the proviso to Section 34 of the Stamp Act. This presupposes impounding of the document when tendered in evidence in exercise of power under Section 34. In the instant case, the trial Court has proceeded itself to determine the Stamp duty and penalty payable on the said instrument, upon the memo filed by the petitioners/plaintiffs voluntarily agreeing to pay the stamp duty which memo has been accepted by the trial Court and it has calculated duty and penalty payable as above. As such, it cannot be strictly construed that the trial Court has exercised its power under Section 34 of the Stamp Act and has invoked its jurisdiction - 6 - NC: 2025:KHC:9443 WP No. 6482 of 2020 under the proviso to said section. The other course available for the trial Court is to send the document to the District Registrar under Section 37(2) of the Stamp Act for being dealt with in accordance with law as provided thereunder. 8. In the instant case, since the petitioners/plaintiffs have not disputed or denied payment of stamp duty and since the document in question has not been impounded by the trial Court in exercise of its power under Section 34 of the Act and it is only the question of calculating the actual and correct duty and penalty, payable by the petitioners/plaintiffs, the trial Court could either have recalculated itself or send the document under Section 37(2) of the Stamp Act to the District Registrar. 9. The Apex Court in the case of Seetharama Shetty Vs.Monappa Shetty reported in AIR 2024 SC 5327 has held as under:. "21.1.1. The person who intends to rely on an insufficiently/ improperly stamped instrument has option to submit to the scope of Section 34 of the Act, pay duty and penalty. The party also has the option to directly move an application under Section 39 of the Act before the District Registrar and have the deficit stamp duty and the penalty are paid, the impounding effected under Section 35 of the Act is released and the instrument available to the party for relying as evidence. In the event, a party prefers to - 7 - NC: 2025:KHC:9443 WP No. 6482 of 2020 have the document sent to the deputy commissioner for collecting the deficit stamp duty and penalty, the Court/ Every Person has no option except to send the document to the District Registrar. The caveat to the above is that, before the Court/Every Person exercises the jurisdiction under Section 34 of the Act, the option must be exercised by a party." 22. Reverting to the circumstances of the case by keeping in perspective the steps summarized in the preceding paragraph, we notice that, before the stage of admission of the instrument in evidence, the respondent raised an objection on the deficit stamp duty. Therefore, it was the respondent who required the suit agreement to be impounded and then sent to the District Registrar to be dealt with under Section 39 of the Act. In this case, the respondent desired the impounding of the suit agreement and collect the deficit stamp duty and penalty. The trial court is yet to exercise its jurisdiction under Section 34 of the Act. On the contrary, the trial court has called for a report from the District Registrar, so for all purposes, the suit instrument is still at one or the other steps summed up in paragraph 21. Therefore, going by the request of the respondent, the option is left for decision of the District Registrar. Contrary to these admitted circumstances, though the suit instrument is insufficiently stamped, still the penalty of ten times under Section 34 of the Act is imposed through the impugned orders. The imposition of penalty of ten times at this juncture in the facts and circumstances of this case is illegal and contrary to the steps summed up in paragraph 21. The instrument is sent to the District Registrar, thereafter the District Registrar in exercise of his jurisdiction under Section 39 of the Act, decides the quantum of stamp duty and penalty payable on the instrument. the appellant is denied this option by the impugned orders. It is trite law that the appellant must pay what is due, but as is decided by the District - 8 - NC: 2025:KHC:9443 WP No. 6482 of 2020 Registrar and not the Court under Section 34 of the Act." 10. In view of the aforesaid peculiar fact situation of the matter and in view of the aforesaid Judgment of the Apex Court, petition is allowed. Impugned order to the extent calculating the stamp duty and penalty and directing the petitioners/plaintiffs to pay the same is set aside. Trial Court is directed to forward the document in question to the concerned District Registrar with a direction to determine the stamp duty and penalty payable thereon and thereafter adjust the amount paid by the petitioners/plaintiffs and if any excess remains, it shall be refunded to the petitioners/plaintiffs. SD/- (M.G.S. KAMAL) JUDGE SBN List No.: 1 Sl No.: 15