1. The plaintiff in O.S No. 10 of 1964 filed a suit for recovery of an amount of Rs. 500 on the foot of a document dated 25th February, 1964. The plaintiff was Balaji Chit Fund, Jangaon and apparently the defendant was a subscriber. The document in question recited that the defendant received a sum of Rs. 6,000 promising to pay the same in fortnightly instalments of Rs. 250. The present suit is for the recovery of two instalments payable by the defendant. Originally the lower Court treated this as an agreement of loan under Article 6(2)(B) of the Indian Stamp Act and recovered an amount of Rs. 10-12 P. and a penalty of Rs. 101-25 P. in all Rs. 111-37 P. on 24th April, 1964.
2. Then the Assistant Court-fee Examiner, who appears to have been sent by the High Court thought that the document in question is a bond within the meaning of section 2(5) of the Indian Stamp Act, 1899 (hereinafter called the Act) and that it should bear a stamp duty of Rs. 90 and that therefore stamp duty of Rs. 90 plus penalty of Rs. 900 being ten times the stamp duty payable, should be recovered from the plaintiff before the document could be received in evidence. According to the report of the Examiner, therefore, the plaintiff has still to pay Rs. 878.63 before the document could be admitted in evidence. This is clear from a copy of the Check Slip No. 465 which was served on the plaintiff's Vakil, Sri B. Sri Hari who filed his written objections to the same. The Munsif-Magistrate, Jangaon, purporting to follow a Full Bench decision of the Hyderabad High Court in Jai Narayan v. Yasin Khan . A.I.R 1955 Hyd. 17. F.B., held that the question as to the nature of an impounded document and the amount of stamp duty and penalty recoverable thereon is within the Collector's discretion and the decision of the Court is not a bar for the exercise of the discretion vested in the Collector under the provisions of section 38 of the Act. Therefore the lower Court felt that the question as to the nature of the document in the instant case and the stamp duty and penalty payable thereon are matters within the discretion of the Collector. Therefore it directed that the suit document in original be sent under section 38(2) of the Act to the Collector, Warangal for adjudication by him in accordance with the provisions of the Act.
3. The plaintiff filed this Civil Revision Petition questioning the legality of the order and the jurisdiction of the lower Court to send the document to the Collector for determining the nature of the document and the stamp duty and penalty payable thereon. It is contended by Mr. Dasaratharamaiah, the learned Counsel for the petitioner, that the lower Court had already decided that the document is an agreement of loan and collected the stamp duty and penalty thereon under section 38(1) of the Act, which is as follows:—
“38. (1) When the person impounding an instrument under section 33 has by law or consent of parties authority to receive evidence and admits such instrument in evidence upon payment of a penalty as provided by section 35 or of duty as provided by section 37, he shall send to the Collector an authenticated cony of such instrument together with a certificate in writing, stating the amount of duty and penalty levied in respect thereof, and shall send such amount to the Collector, or to such person as he may appoint in this behalf.”
4. Section 38(1) refers to a case where the stamp duty and penalty as provided by section 35 have been collected by the Court or authority who receives and admits the document in evidence. That sub-section requires that the authority shall send to the Collector an authenticated copy of such instrument together with a certificate in writing stating the amount of duty and penalty levied in respect thereof and send such amount to the Collector or to such person as the Collector may appoint in that behalf. sub-section (2) of section 38 refers to every other case, i.e, every case where the document is impounded, but the stamp duty and penalty are not collected and that sub-section requires that such a document so impounded shall be sent in original to the Collector.-Sub-section (1) of section 39 says that when a copy of an instrument is sent to the Collector under section 38, sub-section (1), 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. So that section 39(1) does not give power to the Collector to again decide the nature of the document and the amount of stamp duty and penalty payable thereon and levy the stamp duty and penalty as per his own decision, apparently because the Court has already decided that very question and collected the stamp duty and the penalty under section 38(1). Sub-section (1) of section 39 merely empowers the Collector, if he thinks fit, to refund any portion of the penalty in excess of Rs. 5 which has been paid under section 38(1). Section 40 of the Act refers to cases where the Collector impounds an instrument under section 33 or receives any instrument sent to him under section 38(2) not being an instrument chargeable with a duty not exceeding ten naye paise only or a bill of exchange or promissory note. Under that section “if he (the Collector) 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,” but “if he (the Collector) 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 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.” Sub-section (2) of section 40 provides that every certificate under clause (a) of sub-section (1) of section 40 shall for the purposes of the Stamp Act be conclusive evidence of the matters stated therein. Sub-section 3 of section 40 provided that 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 (Section 40), return it to the impounding Officer. It is only necessary to refer to the relevant part of section 35 which is as follows
“35. 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.
5. Provided that—
(a) any such instrument not being an instrument chargeable with a duty not exceeding ten naye paise only, or a bill of exchange or promissory note, shall, subject to all just exceptions, 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 a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceed five rupees, of a sum equal to ten times such duty or portion;”
6. It is not necessary to refer to the other provisos to this section for the purposes of deciding this case.
7. It will be seen from the above that the Collector will have the power to decide the nature of the document impounded only if it is sent to him under section 38(2) i.e, when the Court itself does not decide the question of the stamp duty payable on the document and does not collect the stamp duty and penalty under subsection (1) of section 38. The provisions of the Act above referred to do not perusade me to hold that even in a case where the Court impounds a document and collects the necessary stamp duty and penalty as required by section 35 of the Act, the Collector will still have power under section 40 of the Act to again consider the nature of the document and determine the amount of the stamp duty and penalty payable on the document. What all sub-section (1) of section 39, which has already been referred to, enables the Collector to do is to refund any portion of the penalty in excess of Rs. 5 which had been paid in respect of an instrument which was impounded. In my view the decision in Jai Narayan v. Tasin Khan, does not apply to the facts of this case. That was a case under the Hyderabad Stamp Act which arose under reference made under section 55 of that Act. Earlier a Bench of the same High Court by its order dated 22-6-1349 Fasli impounded the document as an award and forwarded the same to the Inspector-General of Registration and Stamps for collecting the full stamp duty and ten times penalty of Rs. 6,435. The Inspector-General of Registration and Stamps before whom the case went at some stage stated that the action of the High Court in fixing the amount is neither a violation nor is it an order to the Collector for compliance, but that, on the other hand, it was helpful to the Officer to collect the amount and that according to section 38 of the Act the Collector has got full authority to assess the duty and ten times penalty and that if he differs from the opinion of the High Court, he can give the reasons in his judgment. No doubt the Full, Bench of the Hyderabad High Court observed:
“Thus it is clear that it is the Collector alone who has the power to assess the penalty, though it is true that the Court or any other Officer having the authority by law impound the document but after impounding the same, the Court or the Officer has to send the original document to the Collector under section 38, Clause (2) and it is only then that the Collector adopts the procedure laid down in section 40. If the Collector is of opinion that the instrument is duly stamped, he shall certify with an endorsement thereon that it is duly stamped or that it is not chargeable. Such endorsement is conclusive evidence under sub-section (2). If he is of opinion that such instrument is chargeable with duty and is not duly stamped he shall require the penalty as provided in Clause (6). When the duty and penalty are paid, he certifies by an endorsement thereon that the proper duty and penalty have been levied thereon and the instrument thereof shall be admissible in evidence.”
8. From the facts it appears to me that that was a case where the High Court impounded a document and sent it to the Collector under sub-section (2) of section 38 without levying penalty and stamp duty under sub-section (1) of section 38. It cannot be gainsaid that if a document is sent to the Collector under section 38(2) it is the Collector that decides the nature of the document and the amount of the fee payable and levy the fees and the penalty from the party concerned. Clearly to my mind the decision of the Full Bench of the Hyderabad High Court was one under subsection (2) of section 38 and not at all under sub-section (1) of section 38, under which the present case falls, because in the present case as already noted the lower Court has decided the nature of the document and the amount of the stamp duty payable and collected it along with ten times the stamp duty as penalty. The lower Court has no jurisdiction to review that order and direct that document to be sent to the Collector again under sub-section (2) of section 38 to be dealt with under section 40 of the Act. This Civil Revision Petition therefore is allowed and the order of the lower Court is set aside as being without jurisdiction. No order as to costs.
9. Revision dismissed.