SRI ASHOK P NARANG v. SRI GOKULA, Karnataka High Court, Judgment, Law, casemine.com

Factual and Procedural Background

The petitioners, plaintiffs in O.S. No.795/2011 before the Principal Civil Judge, Bengaluru Rural District, challenged the civil Court's order dated 22.03.2021. The civil Court had rejected the petitioners' application (I.A. No.III) under Section 151 of the Code of Civil Procedure, 1908 (CPC). The petitioners filed suit for permanent injunction relying on a sale agreement dated 8.1.2001 (Exhibit P1), which was subject to payment of stamp duty and penalty. The civil Court directed its office to calculate the deficit stamp duty and penalty, which was assessed at Rs.10,67,000/-. Subsequently, the petitioners sought return of the agreement to pay the stamp duty to the Registrar and then return it to the Court. The civil Court rejected this application, holding that insufficiently stamped documents produced in judicial proceedings must be impounded and cannot be returned.

Legal Issues Presented

Whether a civil Court can return an insufficiently stamped document to the party for payment of stamp duty and penalty after impounding it in judicial proceedings.

The applicability of Sections 34 and 37(2) of the Karnataka Stamp Act, 1957, regarding the procedure for insufficiently stamped documents presented for registration.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Digambar Warty v. District Registrar, Bengaluru Urban District, ILR 2013 KAR 2099	Procedure for dealing with insufficiently stamped documents under the Karnataka Stamp Act	Supported the Court's view that insufficiently stamped documents must be impounded and proper statutory procedure followed.
United Precision Engineers Pvt. Ltd. v. KIOCL Ltd., ILR 2016 KAR 1707	Reinforcement of the impounding and procedural requirements for insufficiently stamped documents	Reinforced the principle that courts cannot return such documents but must follow the prescribed statutory process.

Precedent

Rule or Principle Cited For

Application by the Court

Digambar Warty v. District Registrar, Bengaluru Urban District, ILR 2013 KAR 2099

Procedure for dealing with insufficiently stamped documents under the Karnataka Stamp Act

Supported the Court's view that insufficiently stamped documents must be impounded and proper statutory procedure followed.

United Precision Engineers Pvt. Ltd. v. KIOCL Ltd., ILR 2016 KAR 1707

Reinforcement of the impounding and procedural requirements for insufficiently stamped documents

Reinforced the principle that courts cannot return such documents but must follow the prescribed statutory process.

Court's Reasoning and Analysis

The Court examined the civil Court's order rejecting the petitioners' application to return the insufficiently stamped sale agreement. It relied on settled legal principles that once an insufficiently stamped document is produced in judicial proceedings, the Court must impound the document. The Court referred to Sections 34 and 37(2) of the Karnataka Stamp Act, 1957, which prescribe the statutory procedure for handling such documents. The Court also cited authoritative precedents that support the impounding and non-return of such documents. Based on this analysis, the Court found no irregularity in the impugned order and upheld the civil Court's rejection of the application.

Holding and Implications

The petition is rejected.

The Court's decision directly upholds the civil Court's order refusing to return the insufficiently stamped document for payment of stamp duty and penalty. The ruling confirms that impounding such documents and following statutory procedures under the Karnataka Stamp Act is mandatory. No new precedent was established; the decision affirms existing law and procedure, affecting only the parties by denying the petitioners' request.

SRI ASHOK P NARANG v. SRI GOKULA

The petitioners, who are the plaintiffs in O.S. No.795/2011 on the file of the Principal Civil Judge, Bengaluru Rural District, Bengaluru [for short, 'the civil Court'], have filed this petition impugning the civil Court's order dated 22.03.2021. The civil Court by this impugned order has rejected the petitioners' application [I.A. No.III] under Section 151 of the Code of Civil Procedure, 1908 [for short 'CPC'].

2. The petitioners have filed this suit in O.S. No.795/2011 for permanent injunction against the respondents and in support of their prayer for permanent injunction, they rely upon a sale agreement dated 8.1.2001. This agreement is marked as Exhibit.P1 subject to payment of duty and penalty and the civil Court has called upon its office to calculate the deficit stamp duty and the penalty. The office has calculated the deficit stamp duty and the penalty in a sum of Rs.10,67,000/-.

3. After this order, the petitioners have filed their application in I.A. No.III under Section 151 of CPC for return of the agreement to the petitioners to enable them to pay the stamp duty with the concerned Registrar and then return the same to the Court. The civil Court has rejected the petitioners' application opining that once an insufficiently stamped document is produced in judicial proceedings, the concerned Court will have to impound the document and the same cannot be returned.

4. The civil Court's reasoning must be examined in the light of the settled law that once an insufficiently stamped document is presented for registration, the Courts must impound such document and have recourse to the procedure contemplated under Sections 34 and 37[2] of the Karnataka Stamp Act, 1957. A useful reference in this regard could be made to the decision of this Court in 'Digambar Warty v. District Registrar, Bengaluru Urban District' reported in ILR 2013 KAR 2099 and 'United Precision Engineers Pvt. Ltd., v. KIOCL Ltd.,' reported in ILR 2016 KAR 1707. This Court must opine that the impugned order does not suffer from any irregularity and the petition is liable to be rejected. The petition stands rejected accordingly. SD/- JUDGE AN/-

WP 18636 of 2021

SRI ASHOK P NARANG v. SRI GOKULA

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

SRI ASHOK P NARANG v. SRI GOKULA

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