- 1 - HC-KAR NC: 2025:KHC:40879 WP No. 24862 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF OCTOBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S VISHWAJITH SHETTY WRIT PETITION NO. 24862 OF 2023 (GM-CPC) BETWEEN: SRI N.N. MANJAPPA S/O SRI NANJEGOWDA AGED ABOUT 48 YEARS R/AT NUGGEHALLI VILLAGE NUGGEHALLI HOBLI CHANARAYAPATNA TALUK HASSAN DISTRICT - 573 116. …PETITIONER (BY SRI VENKATESH R BHAGAT, ADV.) AND: SRI NAGAIAH @ N. N. NAGAIAH S/O SRI NANJEGOWDA AGED ABOUT 61 YEARS R/AT NO.8/5, 5TH A CROSS SHARADAMBA NAGAR JALAHALLI, BENGALURU NORTH BENGALURU - 560 013 ALSO AT SAMRUDDI JAYADURGA NILAYA NO.168, 1ST A MAIN ROAD ANNAPOORNESHWARI LAYOUT TOGALAPALYA BENGALURU - 560 058. …RESPONDENT (BY SRI NARASIMHARAJU, ADV.) THIS WP IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE RECORDS PERTAINING TO IMPUGNED ORDER DTD 30.09.2023, ORDER DTD 14.12.2021 AND CLARIFICATION DTD 14.12.2021 AT ANNEXURE-A, A1 PASSED BY THE LEARNED ADDITIONAL SENIOR CIVIL JUDGE AND JMFC, CHANNARAYAPATNA, IN O.S.NO.94/2020. Digitally signed by NANDINI M S Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:40879 WP No. 24862 of 2023 THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S VISHWAJITH SHETTY ORAL ORDER 1. The plaintiff is before this Court in this writ petition filed under Article 227 of Constitution of India seeking for the following reliefs:- "a. Call for the records pertaining to Impugned Order dated 30.09.2023, order dated 14.12.2021 and Clarification dated 14.12.2021 at Annexure-'A', 'A1' passed by the Learned Additional Senior Civil Judge and JMFC, Channarayapatna, in O.S.No.94/2020 and b. Issue Writ or Order or Direction in the nature of Certiorari Quashing the Impugned Order dated 30.09.2023 passed by the Learned Additional Senior Civil Judge and JMFC, Channarayapatna, Hassan in O.S.No.94/2020, directing the Plaintiff to pay the balance deficit Stamp Duty Plus Penalty on the Sale Agreement dated 15.04.2010 consequent upon Order dated 14.12.2021 and Clarification dated 14.12.2021 the Impugned Orders are herewith produced and marked as Annexure-'A, A1' respectively, c. Grant such other order or reliefs as this Hon'ble Court deems fit in the interest of justice and equity". - 3 - HC-KAR NC: 2025:KHC:40879 WP No. 24862 of 2023 2. Heard the learned counsel for the petitioner, learned counsel for the respondent and learned Addl. Government Advocate for the State. 3. The plaintiff had filed O.S.No.94/2020 before the jurisdiction civil Court at Channarayapatna seeking the relief of specific performance of the agreement dated 15.04.2010 and the defendant after entering appearance in the said suit had filed a detailed written statement. The defendant had also raised objection before the Trial Court regarding insufficiency of stamp duty paid on the agreement for sale dated 15.04.2010 and considering the objection raised on behalf of the defendant, the Trial Court vide the order dated 14.12.2021 had directed the plaintiff to pay stamp duty on the agreement for sale dated 15.04.2010 provided under Article 5(e)(i) of the Karnataka Stamp Act, 1957 (for short, the 'Act'). Pursuant to the said order, the document was referred to the competent authority who had determined the deficit stamp duty and penalty payable as Rs.1,29,800/-. It appears that subsequently the plaintiff had paid the deficit stamp duty and penalty before the Trial Court on 09.01.2023 and thereafter further objection was raised by - 4 - HC-KAR NC: 2025:KHC:40879 WP No. 24862 of 2023 the defendant stating that competent authority had erred in holding that the petitioner was liable to pay stamp duty as provided under Article 5(e)(ii) of the Act which the Trial Court in its earlier order had specifically held that the petitioner was liable to pay stamp duty under Article 5(e)(i) of the Act while the Trial Court thereafter had passed the order dated 30.09.2023 and has held that the plaintiff is liable to pay balance deficit stamp duty plus penalty at Rs.3,49,404/- on the agreement for sale dated 15.04.2010 and being aggrieved by the aforesaid two orders dated 30.09.2023 and 14.12.2021 the petitioner / plaintiff is before this Court. 4. Learned counsel for the petitioner submits that in the schedule of the plaint there are two items of property and the said two items of property are schedule properties in the agreement for sale dated 15.04.2010. The petitioner was in permissible possession of item no.2 of suit schedule property and agreement schedule property. Since the possession of the said property was not handed over to the petitioner under the agreement for sale, he is not liable to pay stamp duty as provided under Article 5(e)(i) of the Act. The competent - 5 - HC-KAR NC: 2025:KHC:40879 WP No. 24862 of 2023 authority has therefore rightly held that the petitioner is liable to pay stamp duty as provided under Article 5(e)(ii) of the Act. The Trial Court has failed to appreciate this aspect of the matter and has erred in passing the impugned order directing the petitioner to pay stamp duty and penalty on the instrument as provided under Article 5(e)(i) of the Act. 5. Per contra, learned counsel for the respondent submits that the order dated 14.12.2021 was not challenged by the petitioner earlier and competent authority had no jurisdiction to hold that the petitioner is liable to pay stamp duty as provided under Article 5(e)(ii) of the Act when the Trial Court had specifically held that the petitioner was liable to pay stamp duty as provided under Article 5(e)(i) of the Act. He has placed reliance in the case of J. PRAKASH AND SMT. M.T. KAMALAMMA AND OTHERS - 2008(2) KLJ 202 and also the judgment of this Court in the case of J. RAMAPPA V. J.VENKATARAMANA SETTY in W.P.No.100282/2021 disposed of on 05.10.2023. and has prayed to dismiss the petition. - 6 - HC-KAR NC: 2025:KHC:40879 WP No. 24862 of 2023 6. Article 5(e) of the Act reads as follows: 5. Agreement or (its records or) Memorandum of an Agreement (a) xxx (b) xxx (c) xxx (d) xxx [(e) If relating to sale. of immovable property wherein part performance of the contract (i) possession of the property is delivered or is agreed to be delivered [before] executing the conveyance [(ii) possession of the property is not delivered Explanation-I.-When a reference, of a Power of Attorney granted separately by the seller to the purchaser in respect of the property which is the subject matter of such agreement, is made in the agreement, then the possession of the property is deemed to have been delivered for the purpose of this clause. Explanation-II.- For the purpose of clause (h) where Same duty as a conveyance (No. 20) on the market value of the property. [Provided that, where a deed of cancellation of earlier agreement is executed by and between the same parties in respect of the same property and if proper stamp duty has been paid on such agreement, then the duty on such "deed of cancellation" shall not exceed rupees five hundred.] Ten paise for every one hundred rupees or part thereof on the market value equal to the amount of consideration subject to a maximum of rupees twenty thousand but not less that rupees five hundred: - 7 - HC-KAR NC: 2025:KHC:40879 WP No. 24862 of 2023 subsequently conveyance or mortgage as the case may be, is executed between the same parties in pursuance of such agreement or its records or memorandum, the stamp duty, if any, already paid and recovered on the agreement or its record or memorandum shall be adjusted towards the total duty leviable on the conveyance or mortgage, as the case may be. (b)Where such agreement or memorandum of an agreement doesnot resate to monetary transactions or transactions not susceptible to valuation in terms of money Fifty Rupees 7. From a reading of the aforesaid provision of law it is very clear that, if the possession of property is delivered or is agreed to be delivered before executing the conveyance which relates to the sale of immovable property in part performance of the contract, then the stamp duty payable would be as provided under Article 20 of the Act treating the document as if it is a conveyance and stamp duty would be payable on the market value of the property. If the possession of the property is not delivered in part performance of the contract then the - 8 - HC-KAR NC: 2025:KHC:40879 WP No. 24862 of 2023 stamp duty payable would be as provided under Article 5(e)(ii) of the Act. 8. A reading of the agreement for sale dated 15.04.2010 would go to show that, the petitioner was already in possession of item no.2 of the suit schedule property which is also item no.2 in the schedule to the agreement for sale dated 15.04.2010 and he was running a business in the said property in the name of 'N.M.Timber'. Therefore, it is apparent that the petitioner was not put in possession of item no.2 of the suit schedule property in part performance of the agreement for sale dated 15.04.2010 nor it is agreed under the said agreement that in part performance of the said agreement the petitioner will be put in possession of the property. This aspect of the matter has not been properly appreciated by the Trial Court and it had erred in holding vide its order dated 14.12.2021 that the petitioner / plaintiff was liable to pay stamp duty on the aforesaid agreement for sale as provided under Article 5(e)(i) of the Act. 9. Undisputedly, the petitioner is not in possession of item no.1 of the suit schedule property and therefore insofar - 9 - HC-KAR NC: 2025:KHC:40879 WP No. 24862 of 2023 said item of land, stamp duty is liable to be paid only as provided under Article 5(e)(ii) of the Act. Pursuant to order dated 14.12.2021 passed by the Trial Court, instrument was referred to the competent authority for the purpose of determination of stamp duty payable and the competent authority vide Annexure-D dated 31.10.2022 had held that the petitioner is liable to pay deficit stamp duty and penalty of Rs.1,29,800/- and the stamp duty was rightly levied by the competent authority on the petitioner as provided under Article 5(e)(ii) of the Act. 10. Since the Trial Court vide its order dated 14.12.2021 has held that the petitioner was liable to pay stamp duty as provided under Article 5(e)(i) of the Act, the defendant once again had raised objection before the Trial Court contending that competent authority was not justified in holding that the petitioner was liable to pay stamp duty as provided Article 5(e)(i) of the Act. It is under these circumstances, the Trial Court vide the order impugned dated 30.09.2023 has held that the petitioner is liable to pay stamp duty as provided under Article 5(e)(i) of the Act and - 10 - HC-KAR NC: 2025:KHC:40879 WP No. 24862 of 2023 accordingly had directed him to pay balance stamp duty and penalty of Rs.3,49,404/-. 11. In my considered opinion since the possession of item no.2 of the suit schedule property was handed over to the petitioner much prior to the date of execution of the agreement for sale and since the possession of property was not delivered under the agreement nor it was agreed to be delivered before executing the agreement in part performance of the contract, the Trial Court was not justified in holding vide the orders impugned in this petition that the petitioner is liable to pay stamp duty on the instrument as provided under Article 5(e)(i) of the Act. Since possession of the property is not delivered in part performance of the contract nor is not agreed to be delivered before executing conveyance in part performance of the contract, the petitioner is liable to pay stamp duty only as provided under Article 5(e)(ii) of the Act. 12. In the case of J.PRAKASH (supra) which arises from a suit filed for specific performance of agreement, the defendant had agreed to pay the plaintiff in possession of the property in part performance of the contract and it is under - 11 - HC-KAR NC: 2025:KHC:40879 WP No. 24862 of 2023 these circumstances, it was held that the plaintiff was liable to pay stamp duty as provided under Article 5(e)(i) of the Act. 13. In the case of J. RAMAPPA (supra) which also arises from a suit for specific performance, the plaintiff contended that he was put in possession under a family settlement deed. In the said case, the agreement for sale contained a recital indicating that the plaintiff was in possession of the property. Settlement deed was dated 20.04.1994 and agreement for sale was dated 10.09.2000. After execution of settlement deed and before execution of sale agreement, no independent documentary evidence was available on record to substantiate that the plaintiff was put in possession of suit schedule property much prior to execution of sale agreement. Therefore, this Court had held that possession of the property in the said case was under agreement for sale and accordingly held that the petitioner is liable to pay stamp duty on the sale agreement dated 15.04.2010 as provided under Article 5(e)(i) of the Act. Therefore, the judgments in the case of J.PRAKASH (supra) and J.RAMAPPA (supra) cannot be made applicable to the facts and circumstances of the present case. - 12 - HC-KAR NC: 2025:KHC:40879 WP No. 24862 of 2023 14. Accordingly, the following:- ORDER (i) Writ petition is partly allowed. (ii) The impugned order dated 30.09.2023 vide Annexure-A passed by the Court of Addl. Senior Civil Judge & JMFC, Channarayapatna in O.S.No.94/2020 is set-aside. (iii) The impugned order dated 14.12.2021 vide Annexure-A1 passed by the Court of Addl. Senior Civil Judge & JMFC, Channarayapatna in O.S.No.94/2020 is set-aside insofar as it relates to holding that petitioner / plaintiff is liable to pay stamp duty as provided under Article 5(e)(i) of the Act and it is upheld insofar as it relates to impounding instrument and directing the petitioner / plaintiff to pay stamp duty on the agreement for sale dated 15.04.2010. (iv) Since the petitioner undisputedly has paid deficit stamp duty and penalty pursuant to determination of stamp duty and penalty payable on the instrument by the District Registrar, Hassan in compliance of the order dated 14.12.2021 passed by the Trial Court, the Trial Court is directed to proceed with the - 13 - HC-KAR NC: 2025:KHC:40879 WP No. 24862 of 2023 suit in accordance with law and dispose of the same as expeditiously as possible. Sd/- (S VISHWAJITH SHETTY) JUDGE NMS List No.: 1 Sl No.: 27