- 1 - HC-KAR NC: 2026:KHC:3939 WP No. 2200 of 2020 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22NDDAY OF JANUARY, 2026 BEFORE THE HON'BLE MS. JUSTICE TARA VITASTA GANJU WRIT PETITION NO.2200 OF 2020 (GM-CPC) BETWEEN: 1. SMT. TULASAMMA W/O LATE B GOVINDARAJU, AGED ABOUT 77 YEARS, HOUSE WIFE, 2. SRI. G. RAVIKUMAR, S/O LATE B. GOVINDARAJU, AGED ABOUT 57 YEARS, AGRICULTURIST AND BUSINESSMAN, R/O OPP: ABC, JAYANAGARA, CHIKMAGALUR CITY. 3. SRI. G. RAMESHA, S/O LATE B.GOVINDARAJU, AGED ABOUT 51 YEARS, 4. SRI. G. SHANKAR KUMAR, S/O LATE B. GOVINDARAJU, AGED ABOUT 48 YEARS, 5. SRI. G. GOPINATH, LATE B GOVINDRAJU, AGED ABOUT 42 YEARS, RESPONDENT NOS.1, 3, 4 AND 5 ARE AGRICULTURISTS AND BUSINESSMEN AND RESIDENTS OF HALE BANDI MATT ROAD, ADJACENT TO MARKET ROAD, - 2 - HC-KAR NC: 2026:KHC:3939 WP No. 2200 of 2020 CHIKMAGALURCITY – 577101 …PETITIONERS (BY SRI. YASHWANTH NETHAJI, FOR SRI. K. V. NARASIMHAN,ADVOCATE) AND: 1. SMT. M. S. SEETHALAKSHMI, D/O LATE M. L. SRINIVASA SHETTY, AGED ABOUT 84 YEARS, R/O CHITRADURGA, NATIVE PLACE, SBM ROAD, CHIKMAGALUR – 577101. 2. SRI. M. S. PRASANNA, S/O LATE M. L. SRINIVASA SHETTY, MAJOR, 3. SRI. M. S. SATHYANARAYANA, S/O LATE M. L. SRINIVASA SHETTY, MAJOR, 4. SRI. M. S. RAMAKRISHNA, S/O LATE M. L. SRINIVASA SHETTY, MAJOR, 5. SRI. M. S. DASHARATHA, S/O LATE M. L. SRINIVASA SHETTY, MAJOR, 6. SMT. M. S. SHANTHAKUMARI, D/O LATE M. L. SRINIVASA SHETTY, MAJOR, 7. SMT. K. L. SATHYABHAMA, D/O LATE M. L. SRINIVASA SHETTY, MAJOR, 8. SRI. M. S. JAIPRAKASH, - 3 - HC-KAR NC: 2026:KHC:3939 WP No. 2200 of 2020 S/O LATE M. L. SRINIVASA SHETTY, MAJOR, RESPONDENT NO.1 TO 8 ARE BUSINESSMEN,RESIDENT OF S. B. M. ROAD, NEAR COURT COMPLEX, CHIKMAGALURU CITY – 577101. 9. SMT. PREMA, W/O SRI. V. MANOHAR, AGED ABOUT 46 YEARS, 10. SMT. BHAGYALAKSHMI W/O SRI. V. SHANKAR, AGED ABOUT 45 YEARS, RESPONDENT NO.9 AND 10 ARE BUSINESSMEN, RESIDENT OF MARKET ROAD, CHIKMAGALUR – 577101. 11. SMT. PARVATHI, W/O SRI. MUTTAIAH, AGED ABOUT 35 YEARS, HOUSEWIFE, R/O GANDHI NAGARA, CHIKMAGALUR-577101. 12. SRI. VIMAL KUMAR, S/O SRI. NENMAL, AGED ABOUT 50 YEARS, BUSINESSMAN, R/O HOUSE NO.3, 1STFLOOR, SHANTHI KUNJ BUILDING, S. M. STREET, CHIKMAGALUR – 577101 …RESPONDENTS (BY SRI. N.SHANKAR NARAYANA BHAT, ADVOCATE FOR R9 TO R12;R1, R4, R5, R7, R8 ARE SERVED; V/O DATED 02.04.2025, R1, R4 TO R8 ARE LRS OF R2; V/ODATED 20.06.2025, NOTICE TO R6 AND LRS OF R3 ARE DISPENSED WITH) - 4 - HC-KAR NC: 2026:KHC:3939 WP No. 2200 of 2020 THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI OR ANY OTHER ORDER OR DIRECTION QUASHING THE ORDER AT ANNEXURE-H DATED 25.11.2019 PASSED BY THE LEARNED I ADDL. SENIOR CIVIL JUDGE AT CHIKMAGALUR IN O.S.NO.34/2017, ETC THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MS. JUSTICE TARA VITASTA GANJU ORAL ORDER 1. The present petition seeks to challenge an order dated 25.11.2019 in O.S.No.34/2017, passed by the learned I Additional Senior Civil Judge and JMFC, at Chickmagaluru, [hereinafter referred to as the “Impugned Order”].By the Impugned Order, the petitioners/plaintiffs have been directed to pay a sum of Rs.25,900/- as deficit stamp duty and penalty of ten times. The Impugned Order arises out of an order dated 04.10.2019 passed by the District Registrar, Chickmagaluru District, to whom the matter had been referred by the learned Trial Court. The Registrar had reached a conclusion that the stamp duty was payable under Article 5(e)(i) of the Schedule to the Karnataka Stamp Act, 1957. - 5 - HC-KAR NC: 2026:KHC:3939 WP No. 2200 of 2020 2. The learned counsel for the petitioners/plaintiffs submits that it is an undisputed fact that the possession of the suit schedule property was not delivered to them under the terms of the Agreement to Sell. Thus, it is contended that Article 5(e)(i) of the Schedule to the Karnataka Stamp Act, would not be applicable. Learned counsel seeks to rely upon Clause 3 of the Agreement to Sell dated 05.02.1997 to show that possession was delivered previous to signing the Agreement to Sell as well as their amended plaint, as explained in paragraph 3 of the plaint. 2.1. In addition, the learned counsel for the petitioners/ plaintiffs seeks to rely upon two judgments of the Coordinate benches, wherein it is set out that, where possession has been delivered prior to the Agreement to Sell, the conveyance is considered executed. Therefore, the stamp duty was not to be paid in terms of Article 5(e)(i) of the Schedule to Karnataka Stamp Act. 3. The learned counsel for the respondents/defendants submits that the provision of Article 5(e)(i) of the Schedule to - 6 - HC-KAR NC: 2026:KHC:3939 WP No. 2200 of 2020 Karnataka Stamp Act, would be applicable, because the possession was already handed over. 4. Article 5 (e)(i)&(ii) of Schedule to Karnataka Stamp Act provides for the stamp duty on an Agreement to Sell, relating to the sale of immovable property, wherein, in part performance of the contract, the property has either been delivered or the possession has not been delivered. 5. It is apposite to set out Article 5(e)(i) and (ii) of the Schedule to Karnataka Stamp Act, below: [(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 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.] [(ii) possession of the property is not delivered [Fifty paise] for every one hundred rupees or part thereof on the market value equal to the amount of consideration [but not less than rupees Five hundred]: [Provided that the duty paid power of attorney under Articles 41(e) or 41(eb), as the case may be, is adjustable towards the duty payable on agreement for sale under Article 5(e) or instrument of sale or transfer, as the case may be, executed between the same parties and in respect of same property.] - 7 - HC-KAR NC: 2026:KHC:3939 WP No. 2200 of 2020 6. A plain reading of the statute only provides for two options. That the (i) possession of the property in issue is delivered/agreed to be delivered before executing the conveyance or (ii) that the possession of the property is not delivered. 7. This Court has perused the amended plaint filed by the petitioners/plaintiffs along with the present petition. The plaintiffs, although acknowledge the original ownership of the processors-in-interest of defendants No.1 to 7, also sets out that during the life time of the vendor - M.S. Sudarshan, the petitioners and their family members were in possession of the entire property and that the possession continues even today. It further sets out that during his lifetime, an Agreement to Sell was executed by the said Mr. M.S.Sudarshan on 05.02.1997 for sale of the suit property. Paragraphs 2, 3 and 4 of the amended plaint are set out below: “2. The plaintiff No.1 is the wife and 2 to 5 are the sons of the late B. Govindaraju, and as per knowledge of the plaintiffs, the defendants are the legal heirs of deceased M.S. Sudharashan S/o M.L. Srinivsashetty. 3. One Mr. M.S. Sudharshan S/o M.L. Srinivsashetty, SBM Road, Chikmagalur was the owner of the property totally measuring 36.3+31.3x67+62 in Assessment No. 10444/7539 (Old 3337/3339) present No. 16681/10444 - 8 - HC-KAR NC: 2026:KHC:3939 WP No. 2200 of 2020 ID No. 16-1- 501-5 situated at western side of Market road (Dr. Ambedkar veedi) in Chikmagalur city and the khatha was standing in the name of sri M.S. Sudharshan. During the life time of M.S. Sudharshan and also B. Govindaraju, the said B. Govindaraju and his family members were in possession of the entire property, even today, the plaintiff No. 1 to 5 (Wife and sons of Late B. Govindaraju) are in possession of the "B" Schedule property measuring 13 +31.3 x 30 + 62 and with permission of M.S. Sudharshan, the said B. Govindaraju constructed a shed house on the said property, and obtained the KEB connection and using the same for residential purpose and car parking and office work, after his (B. Govindaraju) death, the plaintiff No. 1 to 5 are using the same extent measuring 13-31.3 x 30+62 of the said property. By consent of the plaintiffs, and the defendant No. 1 to 8 the defendant No. 9 and 10 occupied the "C" Schedule property measuring 23 1/4 x 37 as tenant and even today the defendant No.9 &10 are in possession of the 'C' Schedule property. 4. During the life time of M.S. Sudharshan and said B. Govindaraju, the said M.S. Sudharshan published to sell the said property subsequently dated: 05-02- 1997. executed a sale agreement in favour of said B. Govindaraju, with respect to the "A" schedule property and M.S. Sudharshan admit the possession of the plaintiffs in the said agreement and on the same day M.S. Sudharshan received a sum of Rs.25,000-00 as advance amount from B. Govindaraju and the prise was fixed a sum of Rs. 120-00 per sq. feet, and on 28.02.1997 once again M.S. Sudharshan received a sum of Rs.25,000-00 from B. Govindaraju, and on 30.03.1997 once again received a Rs. 1,00,000/- and on 05.04.1997 once again M.S. Sudarshan received a sum of Ra 1,11,000/- from B. Govindaraju, totally M.S. Sudharshan received a sum of Ra. 1.61.000-00 and he agreed and undertaken to execute a sale deed after vacating the prohibitory order passed in O.S. No. 248/1973 on the file of the Hon'ble City Civil Court at Bangalore or settle the matter. unfortunately the said M.S. Sudharshan died on 7-3-2000 and B. Govindaraju died on 14-11-1997.” [Emphasis Supplied] - 9 - HC-KAR NC: 2026:KHC:3939 WP No. 2200 of 2020 8. A perusal of the Agreement to Sell dated 05.02.1997 also shows that the possession of the suit property was already with the purchasers, i.e. the petitioners/plaintiffs. Clause 3 of the Agreement to Sell in this behalf, is set out below: “3. The possession of the property is already with the purchaser. The said possession is again confirmed and ratified by this agreement.” 9. Concededly, the statute does not have a residual clause for Article 5(e) nor provides for a scenario where the property was previously handed over to the purchasee prior to the Agreement to Sell was to be entered into. This aspect has also been dealt by the Co-ordinate bench in Writ Petition No.200287/2025(GM-CPC) in the following manner: “6. The Karnataka Stamp Act, 1957 is a fiscal legislation and this Court cannot supplement any omission in the legislation to provide for an entry, which is not provided in the Stamp Act. A perusal of the agreement of sale shows that there was a prior lease agreement executed by the defendant in favour of the plaintiff in respect of the suit property which was duly registered and possession of the suit property was delivered to the plaintiff under the said lease agreement. It is thereafter that the sale agreement was executed by the defendant in favour of plaintiff. There is no mention of the defendant handing over possession of the suit property or treating that the property delivered under the lease agreement as delivery of possession of suit property under the agreement of sale. There is no merger of the rights of lessee with that of an agreement holder. Hence, the claim of the defendant that the rights of a lessee as merged - 10 - HC-KAR NC: 2026:KHC:3939 WP No. 2200 of 2020 with the rights of a purchaser, is unacceptable. The rights of a lessee can merge when there is a transfer of the property in the manner provided under Section 54 of the Transfer of Property Act. It is apparent that possession of the suit property was delivered to the plaintiff not under the agreement of sale but was under a prior lease and hence, the plaintiff was not required to pay the stamp duty as prescribed under Article 5(e)(i) of the Karnataka Stamp Act, 1957. The Trial Court has rightly considered the same and has rightly held that the plaintiff is not liable to pay the stamp duty. It however held that the plaintiff is bound to pay deficit duty of Rs.300/- and imposed penalty of ten times the duty and directed the plaintiff to pay Rs.3,300/- as the deficit stamp duty and penalty. Therefore, though the Trial Court should not have imposed ten times the duty as penalty, yet the impugned order does not merit and interference at the instance of the defendant in the suit. Hence, the writ petition is dismissed.” [Emphasis Supplied] [ 10. A similar view has also been taken in Writ Petition No.25611/2022(GM-CPC). The relevant extract is below: “4. A conjoint and harmonious reading of the aforesaid clauses will lead to the inescapable/ unmistakable conclusion that possession of the suit schedule property was not handed over to the petitioners-plaintiffs under the sale agreement. This inference is reinforced by the specific averments made in the plaint, where the petitioners have not stated that possession of the suit schedule property was handed over in his favour under the said sale agreement. Under these circumstances, apart from the fact that the impugned order passed by the trial Court is an unreasoned, unspeaking, laconic and cryptic order without any application of mind and without assigning valid and cogent reasons as to how the possession has been handed over in favour of the petitioner, l am of the considered opinion that the relevant aforesaid clauses/covenants in the sale agreement clearly establish that possession was not - 11 - HC-KAR NC: 2026:KHC:3939 WP No. 2200 of 2020 handed over and consequently, the petitioners are not liable to pay stamp duty as per Article 5(e)(i) read with 20 of Karnataka Stamp Act and the stamp duty of Rs.200/- paid under article 5(e)(ii) was correct and proper and as such the impugned order passed by the trial Court deserves to be set aside.” [Emphasis Supplied] 10.1 This is also clarified by the petitioners/plaintiffs in their plaint wherein they state that they were in possession of the property previously. 11. Given the undisputed facts for the learned Trial Court to impose stamp duty as well as penalty under Article 5(e)(i) of the Schedule to the Karnataka Stamp Act, which clearly provides that the possession is delivered or agreed to be delivered before executing the conveyance, is not in order. 12. The learned counsel for the petitioners/plaintiffs submits that the petitioners have paid the stamp duty in terms of Article 5(e)(ii) to Schedule of the Karnataka Stamp Act, as it was applicable at the time the Agreement to Sell was entered. This aspect of the matter will be examined by the learned Trial Court, in accordance with law. - 12 - HC-KAR NC: 2026:KHC:3939 WP No. 2200 of 2020 13. In view of the aforegoing, the Impugned Order dated 25.11.2019 in O.S.No.34/2017, passed by the learned I Additional Senior Civil Judge and JMFC, at Chickmagaluru, is set aside. The parties shall appear before the Trial Court on the date already fixed. The Petition is accordingly disposed of. All pending applications stand closed. (TARA VITASTA GANJU) JUDGE BMV* List No.: 2 Sl No.: 4 Digitally signed by TARA VITASTA GANJU Location: HIGH COURT OF KARNTAKA