- 1 - HC-KAR NC: 2025:KHC:1056 WP No. 35580 of 2018 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13TH DAY OF JUNE, 2025 BEFORE THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI WRIT PETITION NO. 35580 OF 2018 (GM-CPC) BETWEEN: S.R.KAMALAMMA W/O R.RAMU, AGED ABOUT 57 YEARS HOMEMAKER, R/O ‘SRI NAGALAKSHMI NILAYA’, J.C.NAGAR, 1ST CROSS, MARANAVAMIBYLU SHIVAMOGGA-577 201 …PETITIONER (BY SRI. UMESH MOOLIMANI, ADVOCATE FOR SRI.S.V.PRAKASH, ADVOCATE) AND: 1. SUVARNAMMA W/O LATE S.D.ANANDAPPA, AGED ABOUT 61 YEARS R/O MANJUNATHANAGARA, WARD NO.4, PURLE VILLAGE, NIDIGE POST, SHIVAMOGGA TALUK & DISTRICT-577 201 2. JAYALAKSHMI D/O LATE S.D.ANANDAPPA AGED ABOUT 54 YEARS TAILOR, R/O ‘ANANDA NILAYA’ 4TH CROSS, SESHADRIPURAM, SHIVAMOGGA-577 201 3. VIJAYALAKSHMI TAILOR, AGED ABOUT 52 YEARS Digitally signed by SUVARNA T Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:1056 WP No. 35580 of 2018 R/O ANANDA NILAYA 4TH CROSS, SESHADRIPURAM, SHIVAMOGGA CITY-577 201 …RESPONDENTS (BY SRI.PRAKASH SHETTY, ADVOCATE FOR SRI.RAVI L. VAIDYA, ADVOCATE FOR R2 R1- SERVED AND UNREPRESENTED) THIS WP IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA, PRAYING TO SET ASIDE THE ORDER DATED: 10.07.2018 PASSED BY THE LEARNED II ADDITIONAL CIVIL JDUGE AND JMFC, SHIVAMOGGA IN O.S.NO.110/2013 VIDE ANNEXURE-F. THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED ON 21.01.2025, COMING ON FOR PRONOUNCEMENT OF ORDER THIS DAY, THE COURT PRONOUNCED THE FOLLOWING: CORAM: HON'BLE SMT. JUSTICE LALITHA KANNEGANTI CAV ORDER Aggrieved by the order passed in I.A. in O.S.No.110/2013 dated 10.07.2018 by the II Addl. Civil Judge and JMFC., Shivamogga, the plaintiff is before this Court. 2. The suit is filed seeking specific performance. Earlier, on the sale deed i.e., Ex.P.1, the Trial Court had calculated the stamp duty and penalty at Rs.32,890/- on 15.07.2015 and the plaintiff has paid the same. Thereafter, the Trial Court had observed that the sale deed dated 01.03.1999, the sale consideration amount is Rs.80,000/- and it is written on a - 3 - HC-KAR NC: 2025:KHC:1056 WP No. 35580 of 2018 stamp paper of Rs.20/-. The prevailing rate of stamp duty as on 1999 was 10% of the market value as per Article 20 of the Karnataka Stamp Act, 1957. The Trial Court had observed that 10% of Rs.80,000/- is Rs.8,000/- which was the stamp duty payable by the plaintiff on 01.03.1999. However, the document was written on a stamp paper of Rs.20/-. Therefore, there is a deficit of Rs.7,980/-. When there is a deficit, the party is liable to pay duty plus 10 times the penalty i.e., 7980/- + Rs. 79,800/- which makes it a total of Rs.87,780/-. The plaintiff has already deposited Rs.32,890/- and the balance will be Rs.54,800/-. The Trial Court further observed that Ex.P3 is the rent agreement for 11 months, where monthly rent was Rs.950/- and advance amount is Rs.10,000/-. Therefore, rent for 11 months is Rs.10,450/-, which makes it a total premium of Rs.20,450/-. As per Article 30 and Article 12 of the Karnataka Stamp Act, 1957, the stamp duty payable was 5% of the premium amount that is 5% of Rs.20,450/- is 1,023. Since the plaintiff has already paid Rs.50/- as stamp duty, the deficit stamp duty is Rs.973/-. Therefore, duty and penalty is Rs.9,730+973 i.e., Rs.10,703/- on Ex.P.3. Ex.P.4 is the rent agreement dated 26.05.2012, where monthly rent was agreed - 4 - HC-KAR NC: 2025:KHC:1056 WP No. 35580 of 2018 at Rs.1,500/- with an advance amount of Rs.15,000/-. Therefore, total amount payable for 11 months was Rs.16,500/- along with advance amount of Rs.15,000/- i.e, Rs.31,500/- and as per Article 30 of the Karnataka Stamp Act, 1957, the stamp duty is 1% of the premium amount. Therefore, 1% of Rs.31,500/- is Rs.315/-. The plaintiff has already paid Rs.20/- towards the stamp paper. Therefore, the deficit duty is Rs.295/- and accordingly, the plaintiff is liable to pay duty and penalty of Rs.295/- + Rs.2,950/- put together Rs.3,245/-. Aggrieved thereby, the plaintiff is before this Court. 3. Learned counsel appearing for the plaintiff/ petitioner submits that already the Trial Court, exercising the powers has already fixed penalty and the duty at Rs.32,890/- which is already paid by him. That order is not questioned by the defendants and the Trial Court cannot review its own order. It is submitted that he is not relying on Ex.P3 and P4. In that case, the question of paying the stamp duty will not arise. He submits that he is not claiming any relief in respect of those documents as such on those documents there cannot be any penalty or any deficit stamp duty. He had relied on the judgment of Hon’ble - 5 - HC-KAR NC: 2025:KHC:1056 WP No. 35580 of 2018 Apex Court in case of Gangappa and another Vs. Fakkirappa1. By relying on para Nos.18 to 20, he submits that in a similar set of facts, the Hon’ble Apex Court has confirmed the order of the Trial Court, though 10 times penalty only in that case, 2 times penalty was imposed. Considering the stage of the suit and the case of the party, he submits that the petitioner’s case also falls under the similar lines and he is also entitled for such a relief from this Court. He further submits that the order passed by the Trial Court is not a well considered one. 4. Learned counsel appearing for the defendants/ respondents submits that though the Trial Court had passed the earlier order fixing the amount at Rs.32,890/-, when it is brought to the notice of the Trial Court that a lesser amount is collected contrary to the provisions of the Karnataka Stamp Act, 1957. Considering the same, the Trial Court felt that the earlier calculation that is arrived at by the Trial Court was not correct and directed the party to pay the amount. He submits that even an unstamped document, even for a collateral purpose cannot be looked into and the Trial Court had rightly imposed the 1 (2019) 3 SCC 788 - 6 - HC-KAR NC: 2025:KHC:1056 WP No. 35580 of 2018 penalty on Ex.P3 and directed him to pay the deficit stamp duty on Ex.P3 and P4 and there is no illegality with the order. 5. Having heard the learned counsels on either side, perused the material placed on record. The suit is filed seeking specific performance. Ex.P1 is the sale deed. The sale consideration amount is Rs.80,000/- and the sale deed is dated 01.03.1999. Even as per the submission of the learned counsel for the petitioner, the stamp duty is 10% on the market value as per Article 20 of the Karnataka Stamp Act, 1957 as on 1999. 10% of Rs.80,000/- is Rs.8,000/- and it was written on a stamp paper of Rs.20/- and the deficit is Rs.7,980 and Rs.7,980/- + 10 times penalty is Rs.79,800/- which comes to Rs.87,780/-. As far as this calculation is concerned, there is no dispute and there is no necessity to send the same for calculation to the Registrar. It is the contention that already, the Trial Court had determined the stamp duty at Rs.32,890/- as the said order was not questioned by any of the parties, the Trial Court cannot pass another order. This submission of the learned counsel for the petitioner, this Court is not able to appreciate. When there - 7 - HC-KAR NC: 2025:KHC:1056 WP No. 35580 of 2018 is a mistake in the calculation of the amount, it is the duty of the Court to rectify the said mistake. 6. A Co-ordinate Bench of this Court in the case of Sri.Zafarulla Khan Vs. Smt.R.K.Sujatha and Others arising out of WP.No.47225/2016 dated 29.08.2023 had discussed in detail on a similar issue and the order reads thus: “13. From the aforesaid law enunciated by the Apex court reiterating the principles laid down in its earlier Judgment in the case of Hindustan Steel Ltd., (supra) it is clear that merely because an insufficiently stamped instrument is admitted in evidence unopposed would not be a bar in the court or the authority to exercise and discharge its duties namely to impound and seek payment of stamp duty. Lest there would be bar in acting upon such insufficiently stamped instrument. 15. As noted above, even Section 34 of the Act, 1957 apart from placing a complete embargo on the `admissibility' of an instrument not duly stamped also puts an embargo on `acting upon' the same. A close reading of Section 35 of the Act, 1957 reveal that only "admission" of an instrument insufficiently stamped cannot be called in question. There is however no reference in Section 35 with regard to "acting upon" on such instrument. As observed by the Apex Court in the case of Hindustan Steel Ltd., which is referred to in paragraph 51 of its Judgment is M/s.N.N.Global Mercantile (P) Limited (supra) court is prohibited from both "admitting" an insufficiently stamped instrument in evidence and `acting upon it'. It further clarifies that a document can be admitted yet not acted upon. Thus, mere act of admitting a document, though sufficient enough to prevent questioning/or reopening the same in terms of Section 35 of the Act, the same however cannot prevent from `being not acted upon' unless the defect is cured in the manner known to law. - 8 - HC-KAR NC: 2025:KHC:1056 WP No. 35580 of 2018 16. Thus, in view of the law laid down by the Apex Court in M/s.N.N.Global Mercantile (P) Limited (supra) the Stamp Act being a fiscal measure intended to raise revenue and the stringent provisions of the Act are meant to protect the interest of the revenue and that upon endorsement being made under Section 41 of the Act, 1957 the document admitted in evidence can be acted upon. As already noted though the document in question has been admitted in evidence the same does not purport to authorize the court to act upon the same without compliance of payment of required stamp duty. 17. It may not be out of place to refer to some of the decisions of this court on the aforesaid issue; (i) In the case of Savik Vijai Engineering Private Limited and others Vs BCL Financial Services Private Limited, in W.P.65132/2016 decided on 21.03.2019 this court while relying upon the Judgment in the case of Savithramma (supra) held that the document insufficiently stamped and admitted in evidence though objection was not raised, subsequently it does not take away the obligation to impound the document under Section 33 of the Act. (ii) Similarly in the case of Sri.R.Mahesh and anr Vs B.P.Venugopal reported in AIR 2019 Kant 198, ILR 2018 Kar 3029 dealing with identical situation, Coordinate Bench of this court has held at paragraph 14 that ………."A mere marking of the document would not suffice to escape from the rigour of the Act. It is obvious that there has been no judicial application of mind before admitting the document. The marking of document is a ministerial act and on the contrary, the admission of a document is a judicial act. Admittedly no objections has been raised at the time of marking of document. That by itself will not absolve the court of its responsibility to examine the admissibility aspect of the same or the power to secure the interest of the State Exchequer by calling for and impounding the document for the limited purpose of calculating and collecting stamp duty. This - 9 - HC-KAR NC: 2025:KHC:1056 WP No. 35580 of 2018 view of the court is further fortified by scheme of the Act as set out in Section 36, 41 and 42 of the Act. Further relying upon the observation of the Apex Court in the case of Hindustan Steels Ltd., (Supra) and in the light of provisions of Section 58 of Act 1957 has held that "…….in respect of a document which is already marked the court is entitled to subsequently hold it to be a document which is not stamped or insufficiently stamped and it shall also determine the amount of duty with which such instrument is chargeable." (iii) In the case of S.Byregowda and anr Vs Saramma Joseph Tannickal in W.P.Nos.49650- 49651/2017 decided on 12.09.2019 following the principles in the case of R.Mahesh (supra) has directed document to be impounded with liberty to pay the deficit duty and penalty. 18. In the light of the provisions of Act, 1957, principles of law enunciated by the Apex Court and the consistent decisions of Co-ordinate Benches of this court referred to hereinabove, it can safely be said that even if an insufficiently stamped instrument is admitted in evidence unopposed, the embargo placed under Section 35 of the Act, 1957 regarding questioning the admissibility cannot be read to mean that the same would enable the court to "act upon" such insufficiently stamped instrument without curing the defect of payment of stamp duty. The requirement of payment of stamp even as contemplated under Section 17 of the Act, 1957, is before or at the time of execution and a duty is casted upon the Court under Section 34 to ensure payment of stamp duty. The only remedy is to cure the defect by payment of stamp duty and penalty if any in accordance with law and such an act would not amount to recall or review or reopening of the order admitting the document. 19. In the light of the law enunciated by the Apex Court in the case of M/s.N.N.Global Mercantile (P) Limited - 10 - HC-KAR NC: 2025:KHC:1056 WP No. 35580 of 2018 (supra) and for the aforesaid reasons and analysis writ petition is allowed. Impugned order dated 01.08.2016 in O.S.No.1342/2006 on the file of I Additional Senior Civil Judge, Bangalore Rural District, Bangalore is set aside. Matter is remitted to the trial court for adjudication on the memo dated 24.04.2014 filed by the petitioner and to pass appropriate orders in the light of the observations made hereinabove. Such order shall be passed within a period of eight weeks from the date of receipt of the certified copy of this order.” 7. The Co-ordinate Bench of this Court in the above cited judgment had set aside the order of the trial Court and directed to consider the memo with regard to the deficit stamp duty and penalty. 8. Coming to the facts of the present case, there is no dispute about the fact that the Court had wrongly calculated the stamp duty and penalty at Rs.32,890/- instead of Rs.87,780/-. It is the duty of the Court to see that proper stamp duty is paid. The Stamp Act being a fiscal measure intended to raise revenue and by the order impugned Court had not gone into the admissibility of the document. The judgment that is relied on by the learned counsel for the petitioner do not apply to the facts and circumstances of this case and in the considered opinion of - 11 - HC-KAR NC: 2025:KHC:1056 WP No. 35580 of 2018 this Court, the Trial Court has every jurisdiction/obligation to direct the plaintiff to pay the deficit stamp duty. Then coming to Ex.P3 and P4 when the documents are marked, the plaintiff cannot say that he is not seeking any relief. Even for collateral purpose also, an unstamped document cannot be looked into and the Trial Court had rightly passed an order. Hence, this Court finds no reasons to interfere with the well considered order passed by the trial Court. Accordingly, this Court is passing the following: ORDER i. Accordingly, the writ petition is dismissed. ii. All I.As., in this writ petition, shall stand closed. SD/- (LALITHA KANNEGANTI) JUDGE BN/MEG