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Jai Narayan And Others v. Yasin Khan And Others
Factual and Procedural Background
This opinion arises from a reference made by the Chief Controlling Revenue Authority under Section 55 of the Hyderabad Stamp Act (corresponding to Section 57 of the Indian Stamp Act). The chain of events in the text is as follows:
- On 22-6-1349 F., a Division Bench of the High Court impounded a document of award in the case titled "Jainarayan v. Yasin Khan" and fixed the full stamp duty and a ten-times penalty (amounting to Rs. 6,435/-), forwarding the document to the Inspector-General of Registration and Stamp for collection.
- Because the parties were residents of Raichur, the Inspector-General sent the document to the Collector, Raichur. The Collector reported that the High Court had no power to assess the stamp duty and penalty while impounding the document, and requested to be allowed to assess the duty.
- The Inspector-General initially concluded that the High Court had fixed the amount but that the Collector had full authority to assess duty and penalty and could differ and record reasons.
- The Inspector-General and the Collector both considered the document to be a partition deed and proposed substantial duty assessments (different figures appear in the file: an initial note that it should be on stamp paper of Rs. 205/-, while the Collector opined it should be on stamp paper of Rs. 262-8-0 leading to a proposed collection of Rs. 2,625/-).
- The Assistant Home Secretary later gave an opinion (dated 19-2-1357 F.) that the correct approach produced a different figure (a stamp of Rs. 325 ought to have been used, with a balance of Rs. 320 and a discretionary five-times penalty), and the Hon'ble Minister (Chief Controlling Authority) referred the matter to the High Court under Section 55 — producing this reference.
- The reference solicited the High Court's opinion as to the nature of the document (partition-deed, award, or instrument of dissolution of partnership) and as to the duty and penalty payable; the Court also considered whether it was competent to hear the reference in view of the prior Division Bench decision.
Legal Issues Presented
- Whether the document in question is a partition-deed, an award, or an instrument relating to the dissolution of a partnership.
- What stamp duty and penalty are payable on the document.
- Whether this Bench of the High Court is competent to hear the reference in view of the prior Division Bench decision of 22-6-1349 F., which had impounded the document and assessed penalty.
Arguments of the Parties
Applicant (Jainarayan) — arguments presented by Shri Subbarayudu
- The Division Bench erred in determining the nature of the document and in fixing the penalty; ascertainment of nature and fixation of penalty is within the discretion of the Collector and the High Court's decision was in excess of jurisdiction. Reliance was placed on Agar Chanel v. Balak Rai (1887 All WN 21).
- Even if the High Court's decision were valid, assessment and decisions relating to the nature of the document are not final and can be upset by the Taluqdar (i.e., the Collector) exercising his discretion.
- The document is neither a partition-deed nor an award but an instrument relating to dissolution of partnership; the Inspector-General and Revenue Authorities erred in treating it as a partition deed.
State (represented by Shri Gopal Rao Tuljapurkar)
- The Court is not competent to hear the reference in view of the Division Bench's decision.
- The Division Bench was competent to determine the nature of the document and fix the penalty; its decision is final and should not be interfered with. The State maintained the document is a partition-deed.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Agar Chanel v. Balak Rai, 1887 All WN 21 | Relied upon by the applicant to support the proposition that ascertainment of the nature of the document and fixation of penalty is within the Collector's discretion and that the High Court exceeded its jurisdiction. | The Court recorded that the applicant relied on this authority but proceeded to analyse statutory provisions; the Court ultimately found force in the argument that assessment of penalty is for the Collector (based on the Stamp Act provisions), thus addressing the contention rather than relying on the precedent as controlling authority. |
| Kersaji Dhanjibhai v. Barjorji Bhikhaji, AIR 1943 Bom 345 | Invoked to argue that "property" in the definition of instrument of partition means present divisible property, and that outstandings (Asamis) are not property capable of being partitioned until realised. | The Court considered this authority but rejected its applicability to the present facts, holding that outstandings (Asamis) are also property capable of being partitioned and therefore the document could be an instrument of partition. |
| Choturam v. Ganesh, 3 Bom LR 132 | Authority holding that a document dividing outstandings can be an instrument of partition. | The Court accepted this precedent to support the proposition that outstandings may constitute property for partition purposes and thus that the document in question could properly be characterised as a partition-deed. |
| Christie v. Commr. of Inland Revenue, (1866-67) 2 Ex. 46 | English practice where dissolution of partnership effected by document effecting assignment of partner's share was charged to stamp duty as a "conveyance". | The Court cited this to show that a document used in dissolution of partnership may also be chargeable under other heads (e.g., as a conveyance/partition), supporting the view that being part of a dissolution scheme does not preclude classification as a partition instrument if terms so indicate. |
| Phillips v. Commrs. of Inland Revenue, (1866-67) 2 Ex. 399 | Similar English authority illustrating that documents of partnership dissolution may nonetheless be stamped under other heads if their terms fit those heads. | Used to reinforce the Court's point that an instrument forming part of a dissolution may still fall within the definition of an instrument of partition and be liable under that head of duty. |
Court's Reasoning and Analysis
The Court structured its analysis in stages: (A) competence to hear the reference in view of the earlier Division Bench decision; (B) the legal power to impound and to assess duty and penalty under the Hyderabad Stamp Act; (C) the nature of the document; and (D) the quantum of duty and penalty payable.
A. Competence to hear the reference and effect of the prior Division Bench decision
The Court observed that the earlier Division Bench decided the matter on an appeal, not under Section 55 (reference). It examined the relevant statutory provisions (Sections 31, 33, 35, 38, 40, 42 of the Hyderabad Stamp Act, corresponding to specified sections of the Indian Stamp Act) to determine the effect of the Division Bench judgment.
The Court concluded that, while the High Court has the power to impound documents and determine their nature under Section 33, the power to assess and finally fix duty and penalty lies with the Collector (Section 38 read with Section 40). The earlier Division Bench had not only impounded but also assessed the penalty and forwarded amounts for collection. The Court held that the portion of the earlier judgment that assessed the penalty was not warranted by the Stamp Act and that the Collector — being the final authority — is not bound by a judicial assessment of penalty and may exercise his discretion to reach a different conclusion. Therefore the prior assessment does not preclude this Bench from hearing the reference.
B. Statutory framework applied
The Court analysed key statutory provisions: Section 31 (Collector's power to determine duty on application), Section 33 (power to examine and impound instruments believed not duly stamped), Section 35 (admissibility on payment of penalty), Section 38 (duty of the officer who impounds and the process of sending instrument to Collector), and Section 40 (Collector's procedure on receipt/impounding, including power to require duty and a penalty of five rupees or, at his discretion, up to ten times the proper duty).
From these provisions the Court derived the controlling principle that the officer or Court may impound and decide admissibility subject to payment, but the Collector alone (on receipt of the impounded instrument) adopts the procedure and assesses duty and penalty; endorsements by the Collector are conclusive evidence.
C. Nature of the document
The Court examined the terms of the document (as summarised in the impugned instrument): it contained paragraphs fixing shares, noted that parties were members of a divided Hindu family with partition of property save for an ancestral shop ("Gopinath Jainarayan"), and provided for adjustment of shares and division of profits, losses and outstandings (Asamis) accrued over prior years. The Division Bench had described it as an "award."
The Court referred to the statutory definition of an instrument of partition (Section 2 clause 15) which expressly includes "an award" directing a partition. It considered the contention that outstandings are not "property" for partition and therefore such an instrument could not be a partition-deed; the Court rejected that contention, holding that outstandings (Asamis) are property capable of partition. The Court relied on Choturam v. Ganesh (3 Bom LR 132) to support that view and expressly disagreed with Kersaji Dhanjibhai v. Barjorji Bhikhaji (AIR 1943 Bom 345).
The Court further observed that an instrument may simultaneously effect partition and be part of a scheme for dissolution of partnership; that does not prevent classification as an instrument of partition if its terms fall within that definition. The English authorities (Christie and Phillips) were cited to illustrate that documents executed in the course of partnership dissolution may be chargeable under other heads (such as conveyance) depending on their terms.
On the whole, and having regard to the terms of the impugned instrument, the Court concluded that it is a partition-deed and hence chargeable as an instrument of partition under the Stamp Act.
D. Calculation of duty and assessment of penalty
Applying Article 32 of the Hyderabad Stamp Act (corresponding to Article 45 of the Indian Stamp Act) — which fixes duty as on bond No. 16 (No. 15 Indian Act) for the amount of the value of the separated share(s) and instructs exclusion of the larger share from the total before calculating duty — the Court examined the shares shown in the document:
- Mohanlal's share: Rs. 30,451-11-0
- Madanlal's share: Rs. 22,006-11-9
- The other portion after deducting these two amounts: Rs. 126,996-11-5
Using Article 32's rule (exclude the larger portion and compute duty on the remainder), the Court found that the amount on which duty should be charged is Rs. 52,458-6-9. Consequently, the document ought to have been stamped on stamp paper of Rs. 262-8-0, whereas it was actually written on a stamp paper of Rs. 5/-. The deficit duty therefore amounted to Rs. 257-8-0.
With respect to penalty, Section 40(2) gives the Collector discretion to impose either a minimum penalty (five rupees) or, if he thinks fit, a penalty not exceeding ten times the proper duty or the deficient portion thereof. The Revenue authorities had proposed a ten-times penalty; the Court observed that the Collector had not given reasons for imposing ten-times penalty. After careful consideration of the facts (noting, for example, that there was no finding of a deliberate motive to deprive the State and that the parties may have mistakenly believed a Rs. 5 stamp sufficient in view of prior partition), the Court held that ten-times was excessive.
To serve the ends of justice, the Court fixed the penalty equal to the deficit duty — namely Rs. 257-8-0 — rather than ten times the duty.
Holding and Implications
HOLDING: The Court held that the impugned document is a partition-deed and is chargeable as an instrument of partition. The proper stamp duty deficit is Rs. 257-8-0, and the appropriate penalty to be levied in the circumstances is fixed at an amount equal to the deficit duty — Rs. 257-8-0. The reference was answered accordingly.
The Court further held that the earlier Division Bench's assessment of the penalty went beyond what the Stamp Act permits (the Collector is the competent authority to assess duty and penalty under Sections 38 and 40), and thus that prior judicial assessment of penalty does not prevent this Bench from hearing the reference; the Collector is not bound by the Court's assessment and may exercise his statutory discretion.
Implications:
- Direct effect on parties: The petitioner is required to pay the deficit stamp duty of Rs. 257-8-0 and a penalty of Rs. 257-8-0 (i.e., the penalty fixed by the Court equal to the deficit duty).
- Procedural and administrative implication: The Court clarified the statutory allocation of functions under the Stamp Act — the power to impound and to determine the character of an instrument rests with courts/officers competent to receive evidence, but the final assessment of duty and penalty (and endorsement) is for the Collector pursuant to Sections 38 and 40.
- No broader constitutional or novel precedent was expressly stated as being set beyond this statutory construction and application to the facts; the opinion focused on the direct effect for the parties and the proper application of the statutory provisions.
Disposition: Opinion given accordingly; reference answered.
Manohar Pershad, J.:— This is a reference by the Chief Controlling Revenue Authority under Section 55 of the Hyderabad Stamp Act, corresponding to Section 57 of the Indian Stamp Act. The facts which have given rise to this reference are as follows:
On 22-6-1349 F., a Division Bench of this Court impounded a document of award filed in the case of — ‘Jainarayan v. Yasin Khan’, and forwarded the same to the Inspector-General of Registration and Stamp for collecting the full stamp duty and ten times penalty of Rs. 6435/- from the party concerned. Since the parties are the residents of Raichur, the Inspector General of Registration and Stamps sent the document to the Collector, Raichur, who after instituting the requisite inquiry reported that the High Court had no power to assess the stamp duty and penalty while impounding the documents and that the order of the Court infringes the provisions of the Stamp Act. He, therefore, requested the Inspector General of Registration and Stamps to allow him to assess the stamp duty. The Inspector General of Registration and Stamps after hearing the case came to the following conclusion:
“In my opinion the case is clear. The High Court has fixed the amount of stamp duty and penalty. This action of the High Court in fixing the amount is neither a violation nor is it an order to the Collector for compliance; on the other hand, it is helpful to the Officer to collect the amount. According to Section 38 of the Stamp Act, the Collector has got full authority to assess the duty and ten times penalty. If he differs from the opinion of the High Court, he can give the reasons in his judgment.”
2. With regard to the main issue of the document in question, the Inspector-General of Registration and Stamps was of the opinion that it was a partition deed and as such it ought to have been written on a stamp paper of Rs. 205/- whereas it has been written on a stamp paper of Rs. 5/- and with this view he submitted the case to the then Hon'ble Minister for Stamps (The Chief Controlling Authority for stamp duty) from the Home Department for final orders. The Home Department called for the views of the Collector in the matter, who was also of the opinion that the document in question is a partition deed and ought to have been written on a stamp paper of Rs. 262-8-0 instead of on a stamp paper of Rs. 5/- and consequently Rs. 2625/- should be collected. After the receipt of this opinion of the Collector, the Home Department again called for the views of the Inspector General of Registration and Stamps. The Inspector General of Registration and Stamps agreeing with the above opinion of the Collector, further suggested that the penalty on the amount should be collected in I.G currency, or if preferred in O.S currency equivalent to I.G
3. The Assistant Home Secretary before whom the matter was for consideration, heard the case on 19-2-1357F., and gave the following opinion:
“that (a share of) Rs. 64991/- was liable to stamp duty after deducting the larger share from the total amount, and for this a stamp of Rs. 325/- ought to have been used, but a stamp of Rs. 5/- has been used and therefore, a balance of Rs. 320/- in respect of the stamp duty should be collected. In addition to this, five times penalty on the above amount should further be collected in view of the fact that the levy of penalty is entirely within the discretion of the authority.”
4. On this the Hon'ble Minister (the Chief Controlling Authority for stamp duty) endorsed that the case should be referred to the High Court under Section 55 of the Hyderabad Stamp Act, and hence this reference. Shri Subbarayudu, the learned advocate for applicant, has advanced three arguments: His first contention is that the Division Bench of this Court has erred in determining the nature of the document and fixing the penalty thereon. The ascertainment of the nature of the document and the fixation of the penalty, he contends, is within the discretion of the Collector. In other words, it is contended that the decision of the High Court is in excess of jurisdiction and that therefore it should be declared to be a nullity. Reliance was placed on the case of — ‘Agar Chanel v. Balak Rai’, 1887 All WN 21 (A).
5. His second contention is that even assuming that the High Court's decision was valid, the assessment and the decision relating to the nature of the document are not final and are liable to be defeated by the Taluqdar exercising his discretion.
6. His third contention is that the document in question is neither a partition-deed nor an award but an instrument relating to the dissolution of partnership and the Inspector General of Registration and Stamps and the Revenue Authorities have erred in holding that the document is a partition deed.
7. Shri Gopal Rao Tuljapurkar, who appeared on behalf of the State, urged that this Court is not competent to hear the reference in view of the decision of the Division Bench of this Court. His second contention is that the Division Bench of this Court was competent to determine the nature of the document and fix the penalty and that decision is final and cannot be interfered with. With regard to the question of the nature of the document it is contended that it is a partition-deed and not an instrument relating to the dissolution of partnership. The other parties are not represented before us.
8. The points to be determined in our opinion are:
1. What is the nature of the document? Whether it is a partition-deed or an award or an instrument relating to the dissolution of partnership as argued by the learned advocate for Jainarayan; and
2. What is the duty and penalty to be levied? Before dealing with these points, we would like to decide the question whether this Court is competent to hear the reference in view of the decision of the Division Bench of this Court dated 22-6-1349F.
9. We may at the outset point out that the Division Bench of this Court decided the case on an appeal filed by Jainarayan and not on a reference under Section 55 of the Stamp Act. The question that falls for consideration is: What is the effect of the decision of the Division Bench and whether it is within the competence of this Bench to hear the reference. In order to decide this question a reference to Sections 29, 31, 33, 36, 38 and 40 of the Hyderabad Stamp Act, corresponding to Sections 31, 33, 35, 38, 40 and 42 of the Indian Stamp Act, is necessary.
10. Section 31 which runs thus refers to adjudication as to proper stamp duty:
“When any instrument, whether executed or not and whether previously stamped or not, is brought to the Collector, and the person bringing it applies to have the opinion of that officer as to the duty (if any) with which it is chargeable, and pays a fee of such amount (not exceeding five rupees and not less than eight annas) as the Collector may in each case direct, the Collector shall determine the duty (if any) with which, in his judgment, the instrument is chargeable.”
11. Section 33 provides for the examination and the impounding of the documents which are not duly stamped and it is to the following effect:
“(1) Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an officer of police, before whom any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same.
(2) For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him, in order to ascertain whether it is stamped with a stamp of the value and description required by the law in force in British India when such instrument was executed or first executed:
Provided that—
(a) nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898;
(b) in the case of a Judge of a High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints in this behalf.
(3) For the purposes of this Section, in cases of doubt,—
(a) the collecting Government may determine what offices shall be deemed to be public offices; and
(b) the collecting Government may determine who shall be deemed to be persons in charge of public offices.”
12. Section 35 refers to the admissibility of the document.
13. Section 38 provides that where a document is admitted in evidence under S. 35 upon payment of penalty, the Court shall send an authenticated copy of such document to the Collector. It is as follows:
“When the person impounding an instrument under S. 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 S. 35 or of duty as provided by S. 37, he 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 shall send such amount to the Collector, or to such person as he may appoint in this behalf.”
14. Section 40 relates to the powers of the Collector to stamp instruments impounded and is to the following effect:
“When the Collector impounds any instrument under S. 33, or receives any instrument sent to him under S. 38, sub-s. (2), not being an instrument chargeable with a duty of one anna (or half an anna) 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 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 S. 13 or S. 14, the Collector may, if he thinks fit, remit the whole penalty prescribed by this section.”
15. Section 42 relates to the endorsement of instruments on which duty has been paid under Ss. 35, 40 and 41.
16. Thus it would follow from the above discussion that according to S. 33 of the said Act every person having by law or consent of the parties authority to receive evidence before whom any instrument chargeable, in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same.
17. It is not disputed that the High Court before whom the document in question had come up for consideration in appeal had the power to determine the nature of the document and impound the same under S. 33. The argument is that the High Court could only impound the document and determine its nature but could not assess the penalty. We find sufficient force in this argument. Section 38 provides that when the person impounding an instrument under S. 33 admits such instrument in evidence upon payment of penalty as provided by S. 35 or a duty as provided by S. 37, he shall send an authenticated copy 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 such person as he may appoint in this behalf. Clause (2) of this Section provides that the person so impounding an instrument shall send it in original to the Collector.
18. 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 may impound the document but after impounding the same, the Court or the Officer has to send the original document to the Collector under S. 38, Cl. (2) and it is only then that the Collector adopts the procedure laid down in S. 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-s. (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 Cl. (b). 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.
19. In the previous judgment, the Division Bench of this Court not only impounded the document but assessed the amount of the penalty and sent it to the Collector for realising the amount. This last portion of the judgment which relates to the assessment of the penalty is, in our opinion, not warranted by the provisions of the Stamp Act. Further the Collector who is the final authority in this regard is not bound by the assessment made by the Court and such assessment is liable to be defeated by him (the Collector) exercising his discretion. We are, therefore, of the opinion that the previous judgment of this Court relating to the assessment is no bar to our hearing the reference and deciding the question.
20. The next question that has to be considered is what is the nature of the document. The document has been described as an award. The Division Bench of this Court also has held it to be an award. In para 1 the shares are defined. In para 2 it is stated that the said persons are members of a divided Hindu family and partition of the property has taken place except the ancestral shop at Raichur named ‘Gopinath Jainarayan’, in which the shares of the persons are also fixed. The concluding para of this refers to the adjustment of shares held by each of the persons, and the profits and loss which have not been apportioned for the last 8 years. In the other paras of the document there is a mention of the Asamis (outstandings) given to the shares of each person.
21. In Section 2, Clause 2 of the Stamp Act, (S. 2(15) of the Indian Act—Ed.) an instrument of partition is defined as:
“Any instrument whereby co-owners of any property divide or agree to divide such property in severalty,……………and it includes also ‘an award’ by an arbitrator directing a partition.”
22. The contention of the petitioner is that in this very document it has been stated that partition has already taken place and the family is separate and therefore there was no question of another partition-deed being executed. We do not accept the contention in toto.
23. It is true that in this document it is stated that the family is separate, but there is also mention of the fact that the shop is ancestral and through this document the outstanding (Asamis) of the said shop have been divided and given to the shares of the respective persons. In other words, through this document, a division of the Asamis is made.
24. Relying on — ‘Kersaji Dhanjibhai v. Barjorji Bhikhaji’, AIR 1943 Bom 345 (B), it was contended that the word ‘property’ used in Section 2, Clause 15 means “present” divisible property and outstandings cannot be said to be property capable of being partitioned within the meaning of the Stamp Act until realised, as such the document in question cannot be called an instrument of partition. We are afraid we cannot accept this contention either. Asamis (outstandings) is also property capable of being partitioned. The mere fact that the amounts have not been realised, would not take it out of the definition of property. In — ‘Choturam v. Ganesh’, 3 Bom LR 132 (C), the Bombay High Court has held a document dividing outstandings to be an instrument of partition. In the result, we do not agree with the view expressed in — ‘AIR 1943 Bom 345 (B)’. It is further contended by the petitioner that I from the very terms of the document it cannot be deemed to be a partition-deed but one relating I to the dissolution of the partnership. We do not agree with this contention. We may point out I that an instrument of partition among partners is not the less such an instrument merely because it is part of a scheme for the dissolution of the partnership. In such a case the document may bel both an instrument of partition and an instrument for the dissolution of the partnership. Section 6 of the Stamp Act, enacts that when an instrument is so framed as to come within two or morel of the descriptions in Sch. 1, & the duties chargeable thereunder are different, the document will be chargeable only with the higher of such duties. It is therefore no argument to say that the instrument in question is one relating to the dissolution of the partnership if according to the terms of the deed it falls equally under the definition of an instrument of partition. Even according to the English practice where a dissolution of partnership is carried out by a document which in form effects an assignment of a partner's share to another partner, the document is charged to stamp duty as a ‘conveyance’ vide ‘Christie v. Commr. of Inland Revenue’, (1866-67) 2 Ex. 46 (D) and — ‘Phillips v. Commrs. of Inland Revenue’, (1866-67) 2 Ex. 399 (E). This shows that the fact of its being part of a scheme for the dissolution of a partnership does not prevent its being chargeable to stamp duty under other heads as well, if the terms of the document fall under some other head. So far as the question of the payment of the stamp duty and the penalty to be levied is concerned, whether it is an instrument relating to the dissolution of the partnership or partnership-deed, it does not become material. Thus having regard to the terms of the document we are of the opinion that it is a partition-deed and is liable to be charged to stamp duty as or instrument of partition. The next question is what is the proper stamp duty payable on such a document? Under Article 32, Hyderabad Stamp Act, corresponding to Article 45, Indian Stamp Act, duly payable is the same as payable on a bond No. 16 of the Hyderal bad Stamp Act corresponding to No. 15 of the Indian Stamp Act for the amount of value of the separated share or shares of the property. In the document the share of Mohanlal is shown as Rs. 30,451-11-0 and Madanlal's share Rs. 22,006-11-9 and the other portion after deducting these two amounts will be Rs. 126996-11-5. According to Article 32 of the Schedule to the Hyderabad Stamp Act, the above-mentioned larger portion has to be excluded from the total amount and the prescribes stamp duty has to be collected on the remaining portion of the property amounting to Rs. 52,458-6-9. In view of this, the document in question ought to have been written on a stamp paper of Rs. 262-8-0 whereas it has been written on a stamp paper of Rs. 5/-. In the result the deficit duty of Rs. 257-8-0 has to be paid.
25. After this the question of penalty to be levied remains to be decided. The Revenue Authority is of opinion that ten times penalty should be collected. Under S. 40(2) the Collector has been given a discretion to charge a penalty of five rupees or if he thinks fit ten times the amount. But we find that he has not given any reasons for charging ten times. Thus after giving a careful consideration we are of the opinion that ten times penalty is too high inasmuch as we do not find that the document in question was written on Rs. 5/- stamp paper with a motive to deprive the State. As the partition had already taken place, parties might have well thought that Rs. 5/- stamp would be sufficient. In this view of the matter, in our opinion, it will serve the ends of justice if a penalty of equal amount, that is, Rs. 257-8-0, is collected: that is the petitioner will have to pay Rs. 257-8-0 by way of deficit stamp duty and Rs. 257-8-0 by way of penalty.
26. Opinion given accordingly.
D.R.R
27. Reference answered accordingly.
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