- 1 - HC-KAR NC: 2026:KHC:4592 WP No. 26962 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF JANUARY, 2026 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 26962 OF 2025 (GM-CPC) BETWEEN: 1. SRI S MANJUNATH S/O LATE B. SRINIVAS AGED 47 YEARS R/AT NO.65, SIDDANNALANE, CUBBONPET, J.M.ROAD BENGALULRU 560002 …PETITIONER (BY SRI. NARAYAN M.NAIK, ADVOCATE) AND: 1. SMT SHANTHA BAI W/O SRI N RADHAKRISHNA AGED ABOUT 60 YEARS R/AT NO 855, 1ST FLOOR, 61ST CROSS, 58TH MAIN ROAD 1ST STAGE, KUMARASWAMY LAYOUT BENGALULRU 560078. …RESPONDENT (BY SRI.D.GANGADHARA, ADVOCATE FOR C/RESPONDENT) THIS WP IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE ORDER DTD 5.07.2025 IN OS NO. 813/2020 PASSED BY THE HONBLE VI ADDL CITY CIVIL AND SESSION JUDGE AT BENGALURU CCH-11 PRODUCED AT ANNX-A SAME IS PASSED ARBITRARY AND AGAINST TO THE LAW WITHOUT FOLLOWING THE PROCEDURE AND NOT SUSTAINABLE UNDER THE LAW AND ETC., Digitally signed by SHARADAVANI B Location: High Court of Karnataka - 2 - HC-KAR NC: 2026:KHC:4592 WP No. 26962 of 2025 THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR ORAL ORDER This petition by the plaintiff in O.S.No.813/2020 is directed against the impugned order dated 05.07.2025, whereby the trial Court directed the petitioner to pay deficit stamp duty of Rs.8,550/- and its 10 times penalty of Rs.85,500/- on document produced as Ex.P12 by the petitioner during the course of evidence. 2. Heard learned counsel for the petitioner and lc for the caveator/respondent and perused the material on record. 3. A perusal of the material on record will indicate that the petitioner/plaintiff instituted the aforesaid suit against the respondent/defendant for eviction/ejectment of the respondent/defendant from the suit schedule property and for other reliefs. The said suit having been contested by the respondents/defendants, the petitioner adduced oral and documentary evidence during the course of which, a lease deed dated 13.12.2013 was marked by the petitioner as Ex.P12. - 3 - HC-KAR NC: 2026:KHC:4592 WP No. 26962 of 2025 Subsequently, the trial Court proceeded to impound the said document and directed the petitioner to pay Rs.8,550/- towards deficit stamp duty and Rs.85,500/- towards 10 times penalty by passing the impugned order, which reads as under: ORDER ON STAMP DUTY AND PENALTY Heard the arguments of learned counsel for plaintiff and Learned Counsel for Defendant on the stamp duty on impounded document marked as ExP- 12 which is lease deed dated 13.12.2013. The said document was tendered in evidence and it has been impounded for the purpose of determining stamp duty and penalty. 2. It was directed to the office to calculate stamp duty and penalty on the lease agreement. As per office note, lease amount is 8,75,000 and under Article 30 (i)(ii) of Karnataka ₹ Stamp Act, proper stamp duty payable on the said document is 8,750 and already stamp duty of Rs.200 is paid on the ₹ said document and balance duty will be 8,550 and its 10 ₹ times penalty is 85,500/- and plaintiff is liable to pay the ₹ stamp duty and penalty of 94,050/- on the said document. 3. It is contended by Learned Counsel for Plaintiff that, once the document is marked, it cannot be ordered to pay the stamp duty and penalty and lease deed can be marked for collateral purpose. He has further submitted in his arguments that, since ExP-12 and release date dated 13.12.2013 produced by the defendant are one and same, and it was made in two sets and defendant is party to the agreement and he being lessee also liable to pay duty and penalty on the said document. - 4 - HC-KAR NC: 2026:KHC:4592 WP No. 26962 of 2025 4. My predecessor in office has observed in the order sheet dated 19.04.2025 that, defendant also relied upon the lease deed dated 13.12.2013 which was intended to rely upon in the cross examination of PW-1 by way of confrontation and at this stage, the Court did not admit the document as it was insufficiently stamped and lease deed relied by the defendant is also noticed by the Court which is insufficiently stamped and posted the matter for hearing on stamp duty and penalty. 5. Learned Counsel for Defendant has relied upon the decision of Hon'ble Supreme Court reported in G.M. Shahul Hameed V/s Jayanti.R.Hegde 2024 INSC 493 in which insufficiently stamped GPA admitted in evidence and marked as exhibit and there was no objections from other side. In the said decision, Hon'ble Supreme Court has held as under: The presiding officer of a court being authorised in law to receive an instrument in evidence, is bound to give effect to the mandate of section 33 and 34 and retains the authority to impound an instrument even in the absence of any objection from any party to the proceedings. Such an absence of any objection would not clothe the presiding officer of the court with power to mechanically admit a document that is tendered for admission in evidence. The same limitation would apply even in case of an objection regarding admissibility of an instrument, owing to its insufficient stamping, being raised before a court of law. Irrespective of whether objection is raised or not, the question of admissibility has to be decided according to law. The presiding officer of a court when confronted with the question of admitting an instrument chargeable with - 5 - HC-KAR NC: 2026:KHC:4592 WP No. 26962 of 2025 duty but which is either not stamped or is insufficiently stamped ought to judicially determine it. Application of judicial mind is a sine qua non having regard to the express language of section 33 and 34 and interpretation of pari materia provisions in the Indian Stamp Act, 189911 by this Court. However, once a decision on the objection is rendered – be it right or wrong – section 35 would kick in to bar any question being raised as to admissibility of the instrument on the ground that it is not duly stamped at any stage of the proceedings and the 1899 Act, party aggrieved by alleged improper admission has to work out its remedy as provided by section 58 of the 1957 Act. 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 - 6 - HC-KAR NC: 2026:KHC:4592 WP No. 26962 of 2025 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 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/s 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.” (emphasis ours) (1978) 3 SCC 236 Page 12 6. Hon'ble Supreme Court has held that where a document has been inadvertently admitted without the court applying its mind as to the question of admissibility, then instrument could not be said to have been admitted in evidence with a view to attracting section 36 and it is further held that endorsement made by the learned trial judge that objected allowed subject to objection clearly - 7 - HC-KAR NC: 2026:KHC:4592 WP No. 26962 of 2025 indicates that, when the objection was raised, it was not judicially determined and document was merely tentatively marked in such a situation section 36 would not be attracted. It is also held that, in exercise of its inherent powers under section 151 of CPC, the court has to do the justice as well as to prevent abuse of process of Court which inadvertently it became a party for not applying judicial mind as required in terms of section 33 and 34 of 1957 Act. 7. In another decision relied by Learned Counsel for Defendant reported in State of Maharashtra V/s National Organic Chemical Industries Limited, but the principles laid down in the said decision are not applicable to the facts of this case. He has relied upon one more decision reported in ICICI V/S State of Maharashtra and others 1999 AIR SCW 4742 in which an agreement of lease was executed by the respondents and it is held that, an agreement does not create a lease nor does it demise any legal interest in and agreement is not chargeable as lease under section 36. In the said decision, it is held that the licensee has been put in possession only for the purpose of constructing a building or buildings and under this document, no interest in the land is conveyed in favour of the appellants and the agreement does not create a lease nor does it demise any interest in land in favour of appellants. 8. In one more decision decision reported in Smt. Nagarathnamma V/s M.Bantaiah and Others ILR 2010 KAR 4030; K.Amarnath V/s Smt. Puttamma ILR 199 KAR 4634 and K.B.Jayaram and Another vs. Navineeth amma and Others, ILR 2003 KAR 879,in which it is held as under: Under section 34 of the Act, no instrument chargeable under the Act can - 8 - HC-KAR NC: 2026:KHC:4592 WP No. 26962 of 2025 be admitted in evidence, unless it is duly stamped. Even if the instrument is used for collateral purpose, it does not escape the stamp duty under section 34 of the Act, if the party wants to use the instrument for admitting in evidence. Section 34 forbids the user of any instrument for any purpose whatsoever by the Court. 9. Hence it is clear from said decisions that even the document used for collateral purpose, there is no escape from the payment of the stamp duty under section 34 of the Stamp Act. He has also relied upon another decision reported in Dandamudi Ramesh @ Ramarao and another V/s Sharanappa and another ILR 2017 KAR 3421 in which it is held as under: 10. Section 33 of the Act casts a duty upon the authorities concerned, including the Courts, to impound a document, where the instrument produced is insufficiently stamped. Section 34 makes the instruments not duly stamped inadmissible in evidence. An instrument not duly stamped shall be admitted in evidence on payment of the duty with which the same is chargeable or in the case of an instrument insufficiently stamped of the amount required to make up such duty together with penalty. 11. He has also relied upon in the decision reported Yashchandra Dead by Lrs V/s State of Madhya Pradesh and others AIR 2017 SC 4572 in which it is held that, unregistered document cannot be looked into for deciding whether it creates any right title or interest. 12. He has also relied upon a decision of Hon’ble High Court reported in Anil V/s Babu LAWS (KAR)-2016-4-6 in which it is held as under: - 9 - HC-KAR NC: 2026:KHC:4592 WP No. 26962 of 2025 The authorities empowered under the Stamp Act are permitted under Section 33 of the Act to examine whether an instrument is sufficiently stamped or not, by way of an exception. Section 33 confers the power on the impounding officer to ascertain and form an opinion as to whether the instrument produced before him is duly stamped. If, in the opinion of the impounding officer, the instrument is not duly stamped, he is bound to impound it. 13. It is clear from the proposition of law down in the decisions referred supra, it is clear that ,even though document is admitted, the court has power directing the plaintiff to pay the stamp duty on the impounded document. So I hold that, plaintiff is liable to pay the stamp duty and penalty on the impounded document and contention of plaintiff is not at all acceptable. So I proceed to pass the following; O R D E R Plaintiff is hereby directed to pay the stamp duty of Rs.8,550/- and its 10 times penalty of Rs.85,500/- on the impounded document." 4. Learned counsel for the petitioner submits that while the petitioner is ready and willing to pay the deficit stamp duty of Rs.8,550/-, the petitioner is not liable to pay 10 times penalty of Rs.85,500/-, which was liable to be paid by the respondent and not the petitioner. - 10 - HC-KAR NC: 2026:KHC:4592 WP No. 26962 of 2025 5. Per contra, learned counsel for the respondent submits that the petitioner having produced the said document, the petitioner would be liable to pay the said duty and penalty and not the respondent and as such, the trial Court was fully justified in passing the impugned order, which does not warrant interference by this Court in the present petition. 6. A perusal of the material on record including the impugned order will indicate that the trial Court has come to the correct conclusion that the petitioner was liable to pay duty and penalty on Ex.P12 produced and marked on behalf of the petitioner/plaintiff during the course of evidence before the trial Court. However, the trial Court failed to consider and appreciate that upon the petitioner paying the duty and penalty, the petitioner would be entitled to seek refund of the penalty in excess of Rs.5/- by approaching the competent authorities under Section 38(1) of the Karnataka Stamp Act, 1957, which reads as under: 38. [Deputy Commissioner's] power to refund penalty paid under sub-section (1) of section 37.- (1) When a copy of an instrument is sent to the [Deputy Commissioner] under sub-section (1) of Section 37, - 11 - HC-KAR NC: 2026:KHC:4592 WP No. 26962 of 2025 he may, if he thinks fit, refund any portion of the penalty in excess of five rupees which has been paid in respect of such instrument. 7. Under identical circumstances, this Court in the case of Sri.K.M. Prakash v. Smt.N.Uma in W.P.No.10510/2025 dated 20.01.2026 held as under: "In this petition, petitioner seeks the following reliefs: a) To set aside the order dated 20.02.2023 in O.S.No. 30 of 2019 pending on file of the Hon'ble 1st Additional Civil Judge and JMFC at Kolar at [Annexure-E] and b) Call for the records c) Such other writ direction/order that this Hon'ble Court may deem fit, just and expedient in the circumstances of the case, in the interest of justice and equity. 2. 2. A perusal of the material on record would indicate that the petitioner/plaintiff instituted the aforesaid suit against the respondent/defendant for specific performance and other reliefs in relation to the suit schedule immovable property pursuant to the alleged sale agreement dated 05.08.2013. The said suit having been contested by the respondent/defendant, the trial court passed an order dated 07.12.2022 impounding of the said document and securing a report from the jurisdictional Sub-Registrar who calculated/quantified the deficit stamp duty of Rs.24,900/- (Rupees Twenty Four Thousand and Nine Hundred only), as a result of which, the Trial Court called upon the petitioner/plaintiff to pay deficit stamp duty of - 12 - HC-KAR NC: 2026:KHC:4592 WP No. 26962 of 2025 Rs.24,900/- (Rupees Twenty Four Thousand and Nine Hundred only) and ten times penalty i.e., (Rs.24,900 X 10) =Rs.2,49,000/- (Rupees Two Lakhs and Forty Nine Thousand only). Aggrieved by the impugned order passed by the Trial Court directing payment of deficit stamp duty and ten times penalty, the petitioner is before this Court by way of the present petition. 3. Learned counsel to the petitioner does not dispute that as per the recitals contained in the alleged sale agreement, possession of the suit schedule property is said to have been delivered in favour of the petitioner/ plaintiff by the respondent/defendant. He would however contend that the Trial Court committed an error in imposing ten times penalty upon the petitioner in relation to the said document and the impugned order to the extent that the direct payment of ten times penalty may be set aside. 4. Per contra, learned counsel for the respondent submits that if the petitioner is aggrieved by the impugned order passed by the Trial Court directing imposition of ten times penalty, the only option available to the petitioner is to pay both deficit stamp duty and penalty, in terms of Section 34 of the Karnataka Stamp Act, 1957 and thereafter, seek refund of the penalty in terms of Section 38(1) of the Karnataka Stamp Act, 1957 and the impugned order passed by the Trial Court does not warrant interference by this Court in the present petition. 5. A perusal of the impugned order would indicate that after receiving a report from the jurisdictional Sub-Registrar, the Trial Court has proceeded to impose deficit stamp duty of Rs.24,900/- (Rupees Twenty Four Thousand and Nine Hundred only) and further directed the petitioner to pay ten times penalty in a sum of - 13 - HC-KAR NC: 2026:KHC:4592 WP No. 26962 of 2025 Rs.2,49,000/- (Rupees Two Lakhs and Forty Nine Thousand only). As rightly contended by the learned counsel for the respondent, the Trial Court does not have jurisdictional authority of law to reduce the quantum of penalty payable by the petitioner on the alleged sale agreement and in view of the provisions contained in Sections 34, 37 and 38(1) of the Karnataka Stamp Act, 1957 I deem it just and appropriate to dispose of this petition without interfering with the impugned order and by reserving liberty in favour of the petitioner to claim refund of Rs.2,49,000/- (Rupees Two Lakhs and Forty Nine Thousand only) penalty paid in excess of Rs.5/- (Rupees Five only) on the alleged sale agreement by approaching the jurisdictional Sub-Registrar. 6. In view of the above, I pass the following: ORDER i) Writ Petition is hereby disposed of. ii) Petitioner is directed to pay deficit stamp duty of Rs.24,900/- (Rupees Twenty Four Thousand and Nine Hundred only) and ten times penalty in a sum of Rs.2,49,000/- (Rupees Two Lakhs and Forty Nine Thousand only) in O.S.No.30 of 2019 pending before the Civil Judge, Kolar. iii) In pursuance of such payment being made by the petitioner, the petitioner is reserved liberty to approach the jurisdictional/competent registration /stamp Authorities and seek refund of entire penalty including and in excess of Rs.5/- (Rupees Five only) in terms of Section 38(2) of the Karnataka Stamp Act, 1957. - 14 - HC-KAR NC: 2026:KHC:4592 WP No. 26962 of 2025 iv) In the event, the petitioner make such an application/representation for refund of penalty as stated supra, the competent authority shall consider the same and pass appropriate orders, in accordance with law, after providing sufficient and reasonable opportunity to the petitioner." 8. Under these circumstances, though the impugned order passed by the trial Court cannot be said to suffer from any illegality or infirmity insofar as it relates to calling upon the petitioner/plaintiff to pay deficit stamp duty and 10 times penalty, the impugned order would have to be necessarily modified by reserving liberty in favour of the petitioner to approach the competent/appropriate authorities to seek refund of penalty in excess of Rs.5/- in terms of Section 38(1) of the Karnataka Stamp Act. 9. Insofar as the contention of the petitioner that it is the respondent, who is liable to pay stamp duty and penalty and not the petitioners in the light of the judgment of this Court in the case of Krishnavathi Sharma v. Bhagwanta Sharma [W.P.7879/2024 dated 29.10.2024] is concerned, it is necessary to state that upon the petitioner approaching the - 15 - HC-KAR NC: 2026:KHC:4592 WP No. 26962 of 2025 competent authorities and seeking refund of the penalty in excess of Rs.5/- paid by him before the trial Court pursuant to the impugned order, in the event the authorities call upon the petitioner to pay penalty in excess of Rs.5/-, the petitioner would be entitled to take appropriate action to seek recovery of the same from the respondent in accordance with law. 10. Under these circumstances, I deem it just and appropriate to dispose of this petition by suitably modifying the impugned order and by issuing certain directions. 11. In the result, the following: ORDER i) Petition is hereby disposed of. ii) The impugned order dated 05.07.2025 in O.S.No.813/2020 passed by the VI Addl. City Civil and Sessions Judge, Bengaluru is hereby modified. iii) In the first instance, the petitioner is directed to pay duty deficit stamp duty in a sum of Rs.8,550/- and 10 times penalty of Rs.85,500/- in the suit before the trial Court. - 16 - HC-KAR NC: 2026:KHC:4592 WP No. 26962 of 2025 iv) Upon the petitioner making such payment, the petitioner shall be at liberty to approach the competent/appropriate authorities to seek refund of the penalty in excess of Rs.5/- in terms of Section 38(1) of the Karnataka Stamp Act. v) Subsequent to such determination/adjudication of duty in excess of Rs.5/- by the competent/appropriate authorities, liberty is reserved in favour of the petitioner to take appropriate action against the respondent for recovery of the said sum in accordance with law. vi) In the event the petitioner take such action against the respondent, the respondent would be entitled to contest and defend all such action in accordance with law. vii) All rival contentions on all aspects of the matter are kept open and no opinion is expressed on the merits/demerits of the rival contentions. Sd/- (S.R.KRISHNA KUMAR) JUDGE VM List No.: 1 Sl No.: 10