- 1 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22ND DAY OF AUGUST, 2025 BEFORE THE HON'BLE MR. JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 15189 OF 2025 (GM-CPC) BETWEEN: SWARNA MERIDIANS APARTMENT OWNER’S ASSOCIATION REGISTERED UNDER KARNATAKA CO-OPERATIVE REGISTRATION ACT VIDE REGISTRATION NO.SOR/BLU/DR/433/09-10 REPRESENTED BY ITS SECRETARY SRI M.S.SRINIVAS RAO S/O M. KRISHNAMURTHY, AGED ABOUT 55 YEARS, RESIDING AT SF 1, SWARNA MERIDIAN HOMES, TOP OF COFFEE DAY, N.S.PALYA, BTM SECOND STAGE, BENGALURU SOUTH – 560 076. …PETITIONER (BY SRI PATIL BHARATI TAMMANAGOUDA, ADVOCATE) Digitally signed by NAGAVENI Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 AND: SRI L.KRISHNA MOORTHY, S/O M.SRINIVASALU NAIDU, AGED ABOUT 66 YEARS, R/O NO.83 A, SARANYA NILAYA, B. T. M II STAGE, DOLLARS COLONY, BENGALURU – 560 076. …RESPONDENT (BY SRI B.S.ANANTHA KRISHNA, ADVOCATE) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE IMPUGNED ORDERS DTD 19.02.2025 ONLY ON EX P 12 OF THE DISTRICT REGISTRAR, REGISTRATION AND STAMPS JAYANAGAR PRODUCED AT ANNX-H AND ALSO SET ASIDE THE ORDER DTD 30.07.2024 PASSED ON COURT QUESTION AT ANNX-G IN OS NO. 8160/2019 ON THE FILE OF THE VI ADDL. CITY CIVIL AND SESSIONS JUDGE (CCH-11) AT BENGALURU. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 3 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA ORAL ORDER The petitioner is before this Court calling in question an order of the concerned Court dated 30-07-2024 passed in OS 8160 of 2019 referring the instrument to the District Registrar for the purpose of determination of duty and penalty if any, to be paid for the said document to be marked in evidence, as also, the order of the District Registrar dated 19-02-2015 determining the amount to be paid, insofar as Ex.P12 is concerned. 2. Heard Sri Patil Bharati Tammanagouda, learned counsel appearing for petitioner and Sri B S Anantha Kirshna, learned counsel appearing for respondent. 3. The learned counsel for the petitioner submits that the instrument that is directed to be assessed for stamp duty cannot even be referred, in the light of it being a supplementary agreement. - 4 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 4. The concerned Court has, by the following order, rendered on cogent reasons, referred the matter for determination of stamp duty. The order reads as follows: “Ex.P10 to Ex.P12 are insufficiently stamped documents. The marking of those documents are delinked, the plaintiff is directed to pay duty and penalty. Unless and until duty and penalty is paid those documents cannot be admitted in evidence.” (Emphasis added) The concerned Court holds that the documents can not be admitted in evidence, unless and until the stamp duty and penalty is paid. 5. In light of the order of the concerned Court, I deem it appropriate to consider the law laid down by the Apex Court with respect to admissibility of unstamped documents, into evidence. 6. The Apex Court in the case of BIDYUT SARKAR v. KANCHILAL PAL,1 holds as follows: 1 2024 SCC OnLine SC 2603 - 5 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 “13. The Trial Court decided all the issues relating to maintainability of the suit, cause of action, limitation, validity of agreement to sell dated 29.03.1999, defendant nos. 2 and 3 being bona fide purchasers or not, readiness and willingness of the plaintiff to perform his part of the contract, in favour of the plaintiff and against the defendants. However, the Trial Court dealt in detail with regard to the admissibility of the agreement to sell dated 29.03.1999 and whether the plaintiff was entitled to get the benefit of section 36 of Indian Stamp Act, 18991. The Trial Court dismissed the suit of the plaintiff on the finding that the agreement to sell dated 29.03.1999 was not admissible in evidence as the defendants had raised objections regarding the same. Once the same was held not admissible, the suit for enforcement of the same was held liable to be dismissed. .... ….. …… 17. Upon considering the submissions, we are of the view that the findings of the High Court regarding the admissibility of the agreement to sell dated 29.03.1999 were neither based on a detailed consideration of the relevant statutory provisions nor supported by established legal principles. It appears that the High Court, without thoroughly examining the applicable legal provisions, cursorily concluded that the document would be admissible simply because the plaintiff had expressed willingness to pay the deficient stamp duty and any penalty imposed by the competent authority or the Collector. However, it is evident that the plaintiff made no concrete effort to initiate or pursue the necessary proceedings before the competent authority or the Collector to determine the deficient stamp duty and penalty. The High Court, therefore, failed to recognize that an insufficiently stamped document can only be admitted into evidence after the deficiency in stamp duty and any applicable penalty has been duly paid and cleared. This lapse of procedure was not properly addressed in the High Court's judgment. .... ….. …… 19. The Trial Court thereafter proceeded to consider the statutory provisions of the Stamp Act namely sections 35, 36, 40 and 42. After discussing the same in detail, it - 6 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 proceeded to hold that the document was inadmissible in evidence, as the plaintiff failed to further pursue the proceedings before the Collector resulting into non- determination of the deficiency and the penalty and consequently, the non-deposit of the deficiency and penalty, which could have been determined by the Collector. The High Court, unfortunately, has not considered the statutory provisions and only proceeded to rely upon the statement of the plaintiff that he had accepted to deposit the deficiency in stamp duty and penalty, if any, imposed by the Collector. It would be worthwhile to mention here that even till date, the plaintiff has not made any efforts before the Collector to get the deficiency and penalty determined on the impounded document and to clear the same. 20. The relevant provisions of the Stamp Act, namely, sections 35, 36, 40 and 42 are reproduced hereunder: “35. Instruments not duly stamped inadmissible in evidence, etc.— No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped: Provided that— (a) any such instrument [shall] be admitted in evidence on payment of the duty with which the same is chargeable, or, in the case of any instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion; (b) where any person from whom a stamped receipt could have been demanded, has given an unstamped receipt and such receipt, if stamped, would be admissible in evidence against him, then such receipt shall be admitted in evidence against him on payment of a penalty of one rupee by the person tendering it; - 7 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 (c) Where a contract or agreement of any kind is effected by correspondence consisting of two or more letters and any one of the letters bears the proper stamp, the contract or agreement shall be deemed to be duly stamped; (d) nothing herein contained shall prevent the admission of any instrument in evidence in any proceeding in a Criminal Court, other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure 1898 (5 of 1898); (e) nothing herein contained shall prevent the admission of any instrument in any Court when such instrument has been executed by or on behalf of [(the) (Government)], or where it bears the certificate of the Collector as provided by section 32 or any other provision of this Act. 36. 36. Admission of instrument where not to be questioned.— Where an instrument has been admitted in evidence, such admission shall not, except as provided in section 61, be called in question at any stage of the same suit or proceeding on the ground that the instrument has not duly stamped. xxxxxxxxx 40. Collectors power to stamp instruments impounded.— (1) When the Collector impounds any instrument under section 33, or receives any instrument sent to him under section 38, sub-section (2), not being an instrument chargeable [with a duty not exceeding ten naye paise] only or a bill of exchange or promissory note, he shall adopt the following procedure:— (a) if he is of opinion that such instrument is duly stamped or is not chargeable with duty, he shall certify by endorsement thereon that it is duly stamped, or that it is not so chargeable, as the case may be; (b) if he is of opinion that such instrument is chargeable with duty and is not duly stamped, he shall require the payment of the proper duty or - 8 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 the amount required to make up the same, together with a penalty of five rupees; or, if he thinks fit, [an amount not exceeding] ten times the amount of the proper duty or of the deficient portion thereof, whether such amount exceeds or falls short of five rupees: Provided that, when such instrument has been impounded only because it has been written in contravention of section 13 or section 14, the Collector may, if he thinks fit, remit the whole penalty prescribed by this section. (2) Every certificate under clause (a) of sub-section (1) shall, for the purposes of this Act, be conclusive evidence of the matters stated therein. (3) Where an instrument has been sent to the Collector under section 38, sub-section (2), the Collector shall, when he has dealt with it as provided by this section, return it to the impounding officer. xxxxxxxxx 42. Endorsement of instruments in which duty has been paid under sections 35, 40 or 41— (1) When the duty and penalty (if any) leviable in respect of any instrument have been paid under section 35, section 40 or section 41, the person admitting such instrument in evidence or the Collector, as the case may be, shall certify by endorsement thereon that the proper duty or, as the case may be, the proper duty and penalty (stating the amount of each) have been levied in respect thereof, and the name and residence of the person paying them. (2) Every instrument so endorsed shall thereupon be admissible in evidence, and may be registered and acted upon and authenticated as if it had been duly stamped, and shall be delivered on his application in this behalf to the person from whose possession it came into the hands of the officer impounding it, or as such person may direct: Provided that— - 9 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 (a) no instrument which has been admitted in evidence upon payment of duty and a penalty under section 35, shall be so delivered before the expiration of one month from the date of such impounding, or if the Collector has certified that its further detention is necessary and has not cancelled such certificate; (b) nothing in this section shall affect the Code of Civil Procedure,1882 (14 of 1882), section 144 clause 3.” 21. According to the language of the section 35 of the Stamp Act, instruments not duly stamped would be inadmissible in evidence, and any instrument chargeable with duty would be admissible in evidence only and only if such instrument is duly stamped. The proviso gives illustration as to how the instrument would become admissible upon payment of duty with which it was chargeable or in case of instruments insufficiently stamped, the payment is made to make up such duty along with penalty mentioned therein. It also refers to exceptions where a document could be admissible in evidence under a given situation. As elaborated in clauses (b), (c), (d) and (e) of the proviso, the instrument in question i.e. agreement to sell dated 23.03.1999 does not fall under any exception. 22. Section 36 of the Stamp Act provides for admissibility of an instrument not being questioned if the same had been admitted in evidence on the ground that it is not duly stamped except as provided under section 61 of the Stamp Act. In the present case, the instrument in question was admitted subject to objection as noted in the deposition of the plaintiff (PW-1) and recorded in the order sheet of the Trial Court dated 07.03.2003. As such section 36 of the Stamp Act will not come to the rescue of the plaintiff. 23. Section 40 of the Stamp Act gives power to the Collector to stamp such instruments which have been impounded. The Collector will determine the proper duty - 10 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 payable on such instrument along with penalty as provided in clause (b) of section 41. 24. Section 42 of the Stamp Act provides that when duty and penalty, if any, leviable in respect of any instrument has been paid under sections 35, 40 or 41 upon endorsement by the Collector that such duty has been paid, instrument shall thereupon be admissible in evidence. 25. In the present case, the agreement to sell dated 29.03.1999 was found by the Trial Court to be insufficiently stamped. Consequently, the matter was referred to the Collector for determination of proper stamp duty and any applicable penalty. As per the provisions of Section 42 of the Stamp Act, such a document can only become admissible in evidence after deficiency in stamp duty and the penalty, if any, have been assessed by the Collector, and the requisite amounts have been paid. Once the deficiency and penalty are cleared, the Collector is required to certify the document by endorsement, indicating that the required duty and penalty have been paid. Only upon such certification can the document be admitted into evidence and acted upon legally. 26. Despite the Trial Court's referral of the matter to the Collector, no determination regarding the deficiency in stamp duty or penalty was made by the Collector under Section 40 of the Samp Act. As a result, the document remains inadmissible in evidence under the express bar imposed by Section 35 of the Stamp Act. Failure to resolve the deficiency in stamp duty prevents the document from being considered as admissible and valid in evidence. Therefore, until the necessary stamp duty and penalty are duly paid and endorsed by the Collector, the instrument remains legally barred from being admitted in evidence. 27. The argument advanced on behalf of the plaintiff- respondent no. 1 is that he would be entitled to get benefit of section 36 of the Stamp Act as the document had been exhibited and admitted in evidence, holds no - 11 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 ground in as much as the document was found to be insufficiently stamped and was marked as exhibit with objection and that objection having not been removed or cured, no benefit of section 36 of the Stamp Act could be extended to the plaintiff-respondent no. 1. 28. In this connection, following cases are cited: Ram Rattan (dead) by L.Rs. v. Bajrang Lal2; Javer Chand v. Pukhraj Surana3; 29. The Trial Court had placed reliance upon the aforesaid two judgments and had also extracted the relevant part from the said judgments. The facts in the 1978 case of Ram Rattan (dead) by L.Rs. (supra) were quite similar wherein an instrument had been exhibited with objection but therein also the said objection had not been removed or cured. This Court held that such an instrument would not be admissible in evidence and section 36 of the Stamp Act would not be attracted. The relevant paras of this judgment are reproduced below: “6. When the document was tendered in evidence by the plaintiff while in witness box, objection having been raised by the defendants that the document was inadmissible in evidence as it was not duly stamped and for want of registration, it was obligatory upon the learned trial Judge to apply his mind to the objection raised and to decide the objects in accordance with law. Tendency sometimes is to postpone the decision to avoid interruption in the process of recording evidence and, therefore, a very convenient device is resorted to, of marking the document in evidence subject to objection. This, however would not mean that the objection as to admissibility on the ground that the instrument is not duly stamped is judicially decided; it is merely postponed. In such a situation at a later stage before the suit is finally disposed of it would none-the-less be obligatory upon the court to decide the objection. If after applying mind to the rival contentions the trial court admits a document in evidence, Section 36 of the Stamp Act would come into play and such admission cannot be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped. The court, and of necessity it would be trial court before which the objection is taken about admissibility of document on the ground that it is not - 12 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 duly stamped, has to judicially determine the matter as soon as the document is tendered in evidence and before it is marked as an exhibit in the case and where a document has been inadvertently admitted without the court applying its mind as to the question of admissibility, the instrument could not be said to have been admitted in evidence with a view to attracting Section 36 (see Javer Chand v. Pukhraj Surana) [AIR 1961 SC 1655]. The endorsement made by the learned trial Judge that “Objected, allowed subject to objection”, clearly indicates that when the objection was raised it was not judicially determined and the document was merely tentatively marked and in such a situation Section 36 would not be attracted. 7. Mr Desai then contended that where an instrument not duly stamped or insufficiently stamped is tendered in evidence, the court has to impound it as obligated by Section 33 and then proceed as required by Section 35 viz. to recover the deficit stamp duty along with penalty. Undoubtedly, if a person having by law authority to receive evidence and the civil court is one such person before whom any instrument chargeable with duty is produced and it is found that such instrument is not duly stamped, the same has to be impounded. The duty and penalty has to be recovered according to law. Section 35, however, prohibits its admission in evidence till such duty and penalty is paid. The plaintiff has neither paid the duty nor penalty till today. Therefore, stricto sensu the instrument is not admissible in evidence. Mr Desai, however, wanted us to refer the instrument to the authority competent to adjudicate the requisite stamp duty payable on the instrument and then recover the duty and penalty which the party who tendered the instrument in evidence is in any event bound to pay and, therefore, on this account it was said that the document should not be excluded from evidence. The duty and the penalty has to be paid when the document is tendered in evidence and an objection is raised. The difficulty in this case arises from the fact that the learned trial Judge declined to decide the objection on merits and then sought refuge under Section 36. The plaintiff was, therefore, unable to pay the deficit duty and penalty which when paid subject to all just exceptions, the document has to be admitted in evidence. In this background while holding that the document Ext. I would be inadmissible in evidence as it is not duly stamped, we - 13 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 would not decline to take it into consideration because the trial court is bound to impound the document and deal with it according to law.” [emphasis added] 30. We find no reason to disagree with the findings of the Trial Court regarding the inadmissibility of the agreement to sell dated 29.03.1999. The document, being insufficiently stamped, was rightfully barred from being admitted as evidence in the absence of the requisite stamp duty and penalty being paid and certified by the Collector. The High Court, in treating this document as admissible without resolving the stamp duty deficiency, overlooked the statutory mandate under the Stamp Act. As the document is foundational to the suit, the failure to comply with the statutory requirements renders the entire claim unenforceable. Consequently, the suit must be dismissed, as it is based on an instrument that is legally inadmissible as evidence. The plaintiff cannot claim relief on the basis of a document that has not satisfied the legal requirements for admissibility.” (Emphasis supplied) The Apex Court in the afore-quoted judgment holds that Section 42 of the Indian Stamp Act,1899 (‘Indian Stamp Act’ for short) provides that only when the duty and penalty in respect of any unstamped instrument has been paid under sections 35, 40 or 41 of the Indian Stamp Act the instrument shall be admissible in evidence. Once the deficiency and penalty are cleared, the Collector is required to certify the document by endorsement, indicating that the required duty and penalty have been paid and only upon such certification - 14 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 can the document be admitted into evidence and acted upon legally. In a subsequent judgment, the Apex Court in the case of SEETHARAMA SHETTY v. MONAPPA SHETTY,2 while discussing the proper procedure for imposing penalties for unstamped documents, under the Karnataka Stamp Act,1957 (‘Karnataka Stamp Act’ for short), before admitting the unstamped documents into evidence, observes as follows: “16. Chapter IV of the Act is both mandatory and regulatory. Section 33 mandates every person having by law or consent of parties authority to receive evidence and every person in charge of public office (for short, ‘Every Person/Court’) when an instrument insufficiently stamped is produced, the person is mandated to impound the insufficiently stamped instrument. In law, the word impound means to keep in custody of the law [(2008) 3 SCC 674]. Having taken legal custody of the insufficiently stamped document, the inter-play available between Sections 33, 34, 37, 38 and 39 of the Act, as the case may be, would start operating. Sub-section (2) of Section 33 of the Act fastens an obligation to examine the instrument on the duty payable, value etc. of the instrument. Unless it is duly stamped, Section 34 of the Act, prohibits Every Person/Court from admitting in evidence or act upon an insufficiently/improperly stamped instrument. The proviso to Section 34 of the Act, subject to deposit, of deficit stamp duty and penalty enables receipt of an instrument in evidence which is otherwise prohibited by Section 34 of the Act. 17. The object of the Act is not to exclude evidence or to enable parties to avoid obligations on technical grounds. Rather, the object is to obtain revenue even from such instruments which are at 2 2024 SCC OnLine SC 2320 - 15 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 the first instance unstamped or insufficiently stamped. The said objective has the twin elements of recovering the due stamp duty and penalty, and also the public policy of binding parties to the agreed obligations. It is apposite to refer to the declaration of law by a seven-judge bench's judgment of this Court on the object of the Indian Stamp Act, 1899. 17.1. In Re: Interplay Between Arbitration Agreements under Arbitration and Conciliation Act, 1996 and Stamp Act, 1899 [(2024) 6 SCC 1], a Seven-Judge Bench of this Court noted that Section 35 of the Indian Stamp Act, 1899 (analogous to Section 34 of the Act) unambiguously requires an instrument chargeable with stamp duty to only be “admitted in evidence” if it is properly stamped. This Court further noted that improperly stamping the instrument does not render that instrument void or invalid. On the contrary, it is a defect which is curable upon payment of requisite stamp duty and penalty. The relevant paragraph reads thus: “54. Section 35 of the Stamp Act is unambiguous. It stipulates, “No instrument chargeable with duty shall be admitted in evidence…” The term “admitted in evidence” refers to the admissibility of the instrument. Sub- section (2) of Section 42, too, states that an instrument in respect of which stamp-duty is paid and which is endorsed as such will be “admissible in evidence.” The effect of not paying duty or paying an inadequate amount renders an instrument inadmissible and not void. Non- stamping or improper stamping does not result in the instrument becoming invalid. The Stamp Act does not render such an instrument void. The non-payment of stamp duty is accurately characterised as a curable defect. The Stamp Act itself provides for the manner in which the defect may be cured and sets out a detailed procedure for it. It bears mentioning that there is no procedure by which a void agreement can be “cured.” - 16 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 17.2. In Hindustan Steel Limited v. Dilip Construction Company [(1969) 1 SCC 597], this Court held that the Indian Stamp Act, 1899 is a fiscal measure intended to raise revenue, and the stringent provisions of the Stamp Act cannot be used as a weapon to defeat the cause of the opponent. The relevant paragraph reads thus: “7. The Stamp Act is a fiscal measure enacted to secure revenue for the State on certain classes of instruments : It is not enacted to arm a litigant with a weapon of technicality to meet the case of his opponent. The stringent provisions of the Act are conceived in the interest of the revenue once that object is secured according to law, the party staking his claim on the instrument will not be defeated on the ground of the initial defect in the instrument. Viewed in that light the scheme is clear.” 17.3. The ratio in District Registrar and Collector v. Canara Bank [(2005) 1 SCC 496] and State of Maharashtra v. National Organic Chemical Industries Limited [2024 SCC OnLine SC 497] and Chiranji Lal v. Haridas, (2005) 10 SCC 746] reiterated that the Indian Stamp Act, 1899 is a piece of fiscal legislation, and not a remedial statute enacted on demand of the permanent public policy to receive a liberal interpretation. The principles for interpreting a fiscal provision/law are fairly settled. There is no scope for equity or judiciousness if the letter of law is clear and unambiguous in method, mode and manner of levy and collection. The decisions further held that the act authorises involuntary extraction of money, and therefore, is in the nature fiscal statute which has to be interpreted strictly. 17.4. Section 37 of the Act stipulates the procedure on how the instrument impounded is dealt with. The plain reading of Section 37(1) of the Act discloses that the person impounding the instrument under Section 33 of the Act and after receiving the penalty under Section 34 of the Act or duty under Section 36 of the Act, shall send to the Deputy Commissioner an authenticated copy of such instrument together with the amount of duty and penalty so levied and collected. Section 37(2) of the - 17 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 Act deals with an instrument not subjected to the procedure of Sections 34 or 36 of the Act. According to Section 37(2) of the Act, the instrument is sent to the Deputy Commissioner for enquiry and decision at his end. The Deputy Commissioner gets jurisdiction under Section 39 of the Act and then decides the duty and also the penalty leviable on the insufficiently stamped instrument. In this background, we take note of the principle laid down on the distinction in the discretion available to Every Person/Court and the discretionary jurisdiction conferred on the District Registrar. See, United Precision Engineers (supra) and Gangappa (supra). The settled distinction and discretion available under Sections 34 and 39 of the Act is no more res integra. 18. The above consideration does not actually address the appellant's argument under Section 37(2) read with Section 39 of the Act. Appellant contends that the respondents by filing an application for impounding the instrument, preferred to have deficit stamp duty and the penalty collected exclusively by the District Registrar because the admissibility or otherwise of the suit document is not yet considered by the trial court for any purpose. From the record, it appears that the instrument is likely to be considered at the interlocutory stage for granting or refusing temporary injunction. Therefore, the option available under Section 33 read with Section 37 of the Act is set in motion, resulting in the instrument being sent to the District Registrar, and calling for a report. …. …. …. 21. As per the steps taken under Sections 33, 34, 35, 37, and 39 under Chapter IV of the Act, the position in law is well-established, and axiomatic by the letter of law and precedents of this Court. However, there are a few misgivings in the sequence of its application. For the benefit of practice and procedure, we sum up the steps as follows. 21.1. Section 33 of the Act is titled examination and impounding of instruments. The object of the provision is to disable persons from withdrawing the instruments produced by them on - 18 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 being told that proper stamp duty and penalty should be paid. 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 as may be imposed collected. In either of the cases, after 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 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. 21.2. Section 34 of the Act is titled instruments not duly stamped inadmissible in evidence. This provision bars the admission of an instrument in evidence unless adequate stamp duty and the penalty are paid. Every person so authorised to collect deficit stamp duty and penalty has no discretion except to levy and collect ten times the penalty of deficit stamp duty. 21.3. Section 35 of the Act is titled admission of instrument where not to be questioned. Section 35 prohibits questioning the admission of an insufficiently stamped instrument in evidence. 21.4. Section 37 of the Act is titled instruments impounded, how dealt with. This Section arises when the party pays the deficit duty and penalty, the Court is to impound the instrument under Section 33 of the Act and has to forward the instrument to the Deputy Commissioner/District Registrar. Subsection (2) of Section 37 of the Act deals with cases not falling under Section 34 and - 19 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 36, and the person impounding an instrument shall send it in original to the Deputy Commissioner. This includes the exigencies set out in paragraph 21.1.1. 21.5. Being a regulatory and remedial statute, a party who follows the regulation, and pays the stamp duty and penalty, as per Sections 34 or 39 of the Act, the legal objection emanating from Section 33 of the Act alone is effaced and the document is admitted in evidence. In other words, the objection under the Stamp Act is no more available to a contesting party. 21.6. Section 39 of the Act is titled deputy commissioner's power to stamp instruments impounded. This Section provides the procedure to be followed by the Deputy Commissioner/District Registrar while stamping instruments that are impounded under Section 33 of the Act. As per Section 39(1)(b) of the Act, the penalty may extend to ten times the stamp duty payable; however, ten times is the farthest limit which is meant only for very extreme situations. Therefore, the Deputy Commissioner/District Registrar has discretion to levy and collect commensurate penalty. 21.7. The above steps followed and completed by paying/depositing the deficit duty and penalty would result in the instrument becoming compliant with the checklist of the Act. The finality is subject to the just exceptions envisaged by the Act addressing different contingencies.” (Emphasis supplied) The Apex Court in the afore-quoted judgment holds that Section 34 of the Karnataka Stamp Act bars the admission of an instrument in evidence unless adequate stamp duty and - 20 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 penalty are paid. The Karnataka Stamp Act, being a regulatory and remedial statute, permits the admission of only those documents which follow the regulations and pay stamp duty and penalty as stipulated under Sections 34 and 39 of the Karnataka Stamp Act. Upon payment of the stamp duty and penalty, the legal objection emanating from Section 33 of the Karnataka Stamp Act alone is effaced and the objection under the Karnataka Stamp Act is no more available to a contesting party. 7. What would unmistakably emerge from a reading of the law laid down by the Apex Court in the afore-quoted judgments is that, insufficiently stamped documents can not be admitted into evidence, until and unless the deficiency is cured, by payment of the adequate stamp duty and penalty, as determined by the Collector/District Registrar. Therefore, the order rendered by the concerned Court does not require any interference of this Court. - 21 - HC-KAR NC: 2025:KHC:32913 WP No. 15189 of 2025 8. Finding no merit in the petition, for this Court to exercise its jurisdiction under Article 227 of the Constitution of India, this petition stands rejected. Sd/- (M.NAGAPRASANNA) JUDGE BKP List No.: 1 Sl No.: 41