INDIAN STAMP ACT, 1899

Facts: Eleven Agreements for sale were executed in favour of the Petitioner herein. In each of these agreements a part of land was sought to be purchased by the Petitioner. The Petitioner had also paid earnest money of varying amounts against the total consideration which are agreed to in each of the agreements and paid a sum of Rs 10,000/- as stamp duty on each of them. The Deputy Registrar impounded all these documents as he felt that the documents were not sufficiently stamped and sent for adjudication. Courts below rightly held that subject-matter of documents fell under Section 33. Subsequent conduct of parties in cancelling agreements for sale cannot be reason for not taking action under Section 33/38. Action necessitated when documents produced before Deputy Registrar and he found same to be deficient. Subsequent cancellation of agreements for sale would be of no avail. Stamp duty payable reduced by High Court. Even High Court reduced penalty to 15% of deficit stamp duty, thereby giving sufficient succour to appellant/petitioner. Aggrieved with the aforesaid outcome, present Special Leave Petitions are filed.

Held: The stamp duty is payable on 50% of the value of consideration of the sale agreement. It is manifest, therefore, that the stamp duty paid on the document was deficient which was rightly impounded by the Deputy Registrar and sent for adjudication. the subsequent conduct of the parties in cancelling the agreements cannot be a reason for not taking action under Section 33/38 of the Act. That action was necessitated when the documents were produced before the Dy. Registrar and he found the same to be deficient. Therefore, it is rightly held by the Courts below that the subject matter of the documents fell under Section 33 of the Act. The subsequent cancellation would be of no avail. In any case, keeping in view this aspect the High Court reduced the penalty to 15 percent of the deficit stamp duty, thereby giving sufficient succour to the Appellant. The reference to provisions of Section 2, Section 3 and Section 10 of the Indian Stamp Act ignores that there is a State amendment thereto and applicability of this provision demolishes the aforesaid plea comprehensively.

Facts: Respondent is said to be a member of the Scheduled Tribe intended to transfer a house and land. A sum fixed by way of consideration towards the aforementioned transfer was paid to the respondent by the appellant. Possession of the said property had also been delivered. Indisputably for the purpose of effecting transfer of the said land, permission of the Collector was required, which was applied for but rejected. Appellant herein filed a suit for recovery. The registered instrument as a sale-deed has been relied upon. Present appeal is filed to challenge judgment of High Court which ultimately calls for interpretation of Sections 33 and 35 of Indian Stamp Act.

Held: Section 33 of Stamp Act casts statutory obligation on all authorities to impound a document. Court being an authority to receive a document in evidence is bound to give effect thereto. Unregistered deed of sale was an instrument which required payment of stamp duty applicable to a deed of conveyance. Adequate stamp duty admittedly was not paid in present case. Court was empowered to pass an order in terms of Section 35 of Stamp Act. Impugned order of High Court does not calls for interference.

Facts: X was tenant of Respondent. Respondent let out the premises to Appellant to carry out the business. Appellant and Respondent executed an agreement whereby landlord tenanted the shop to Appellant on payment of advance amount. Respondent filed suit of eviction on ground of bona fide requirement. Appellant produced a photocopy of agreement which was admitted as secondary evidence in the Trial Court. On appeal High Court held that photocopy of agreement cannot be admitted as evidence and that such a document can neither be impounded nor accepted in secondary evidence . Hence, present appeal

Held: Section 37 of the Act would be attracted where although the instrument bears a stamp of sufficient amount but such stamp is of improper description, as in the present case where the proper stamp duty of Re.1/- under the Act has not been paid but a notarized stamp of Rs.4/- was affixed on the document. The sufficient amount of the stamp duty has been paid but the duty paid by means of affixture of notarized stamp is of improper description. The power under Section 37 and Rule 19, even after framing the rules by the State Government, could only be exercised for a document which is an instrument as described under Section 2(14). An instrument is held to be an original instrument and does not include a copy thereof. Therefore, Section 37 and Rule 19 would not be applicable where a copy of the document is sought to be produced for impounding or for admission as evidence in a case.

Facts: The petitioner entered into an agreement of sale with R-4 for purchase of a shed. Stamp duty of ` 55,900/- was paid at the time of agreement. Thereafter, R-4 executed a sale deed and an amount of ` 40,000/- was collected towards stamp duty. The petitioner claimed exemption from stamp duty of 50% by relying on Government order in view of the purchase being for industrial unit. The matter was referred to the District Registrar who clarified that the agreement of sale is not covered by G.O. The petitioner was asked to pay the deficit stamp duty and registration fee within seven days. Accordingly, the petitioner paid the said amount. Thereafter, the petitioner filed an application before the R-1 under Section 45 of the Indian Stamp Act, 1899 claiming refund of excess amount collected by R-2 on the documents submitted by him. The petitioner placed reliance on the same G.O. The application of the petitioner was dismissed by R-1. Challenging the same, the present Writ Petition was filed.

Held: Section 45 makes it clear that the power can be exercised by the authority only when the excess stamp duty was paid under Sections 35 or 40 of the Act and in the instant case the stamp duty was not paid in the circumstances mentioned in the said sections. Section 35 of the Act deals with the instruments chargeable with duty admitted in evidence. Section 40 of the Act deals with the impounded documents. In the instant case those two situations did not arise. The deficit stamp duty was asked to be paid under Section 41 of the Act. Hence, as rightly pointed out by the first respondent, on intimation of deficit stamp duty the petitioner voluntarily paid the stamp duty under Section 41 of the Act and accordingly it does not come under the ambit of Section 45(2) of the Act. If the petitioner was aggrieved of the demand of deficit stamp duty, he should have availed the remedies at that point of time by challenging the order of R-2, but after paying the amount voluntarily he cannot seek refund of the stamp duty under Section 45(2) of the Act. In the circumstances, the order of dismissal passed by the first respondent is valid in law.

Facts: Appellant company intended to sell its cement division on 'slump-sale' basis. Application filed by the Appellants for adjudication of the Collector to pre-assess the stamp duty payable on the instrument of sale in terms of Section 31 of the Act. Collector formed a Valuation Committee and submitted an independent report. Stamp duty assessed by the Collector paid by the Appellant. An endorsement on the deed of conveyance was made by R-2 by way of a certificate in terms of Section 32 of the Act whereupon the instrument was duly stamped. State sought revision of the Order before the Board of Revenue. Appellant questioned the jurisdiction of the Board in a Writ Petition, which was dismissed by single judge of the High Court.

Held: No, Revisional power is to be exercised by the Board to satisfy itself in regard to the amount with which the instrument is chargeable with duty. In absence of a finality clause in section 32, parties have a right to approach the Revisional Authority. Merely because one of the parties accepted the Order, the Revisional Authority would not lose its jurisdiction to revise the stamp duty payable. When Order of statutory authority is capable of being challenged by way of revision, the revised Order shall be final and not the Order of the original authority. Legal fiction created under Sub-section (3) of Section 32 of the Act, therefore, does not state that the endorsement by way of a certificate would be final or binding on the parties. The revisional power contemplates a power to give final determination over the order of the Collector, i.e., an order passed in terms of Section 31 of the Act irrespective of the fact as to whether an endorsement had been made thereupon or not.

Facts: A sale deed of agricultural plots owned by the petitioners was executed in favour of vendees and the deed was registered. According to the petitioners, the sale deed had been obtained from them by playing fraud and no consideration was paid to them. They accordingly filed for cancellation of the sale deed. The suit held the sale deed cancelled. Proceedings under Section 47A of the Stamp Act were initiated against the vendees. On the valuation of the property, there was a deficiency in paid stamp duty. The ADM directed for the payment of deficiency in stamp duty by the vendee. The vendees did not deposit the amount. The petitioners came to know about the attachment and proposed auction of their land, they moved an application before the Tehsil authorities. The Naib Tehsildar returned the recovery certificate and submitted that the recovery of the deficiency In stamp duty could not be made by attachment and sale of the property of the petitioners. Some audit objection was raised and the Board of Revenue sent a reminder to recover the deficiency in stamp duty. It is in these circumstances that the petitioners, who are the owners of the property and were vendors of the sale deed have filed the writ petition for quashing of the recovery proceedings initiated against them.

Held: The purpose of enacting Section 29 (c) is that he may recover the amount from the grantee and not from the grantor. This also appears to be logical as the vendee who acquires title over the property by the deed of conveyance should be held liable to pay the requisite stamp duty. In the case of a sale deed of immovable property, the liability to pay the stamp duty is that of the vendee. Therefore, the proceedings initiated against the petitioners, who are the vendors and not vendees of the sale deed is wholly illegal and has to be set-aside. The proceedings initiated against the petitioners in pursuance of recovery certificate for realisation of deficiency of stamp duty on the sale deed are quashed.

Facts: Plaintiff filed the suit for recovery based on two separate promissory notes executed by the defendant in favour of the plaintiff's transferor. Each of those promissory notes bore the Indian Stamp sufficient for validation of the stamp if they were executed In India. The defendant resisted the suit. On the main plea, it was held that the suit promissory note was executed at Katta Kachavaram in the former Hyderabad State and though it was stamped with the requisite Indian Revenue Stamp, it was not executed In conformity with the provisions of the Stamp Act in force in the Hyderabad State" and that It was unenforceable: by reason of non-compliance with the requirements of Section 19 of the Indian Stamp Act. As a result of this finding, the trial Court dismissed the suit. The conclusion reached by the lower Court has been assailed before this court.

Held: The promissory rote was executed in Hyderabad and was affixed with the requisite stamp according to the Hyderabad Stamp Act after Hyderabad became part of the Indian Union. The word "India" was substituted in Section 19 in April 1956. On the date of the transfer in favour of the petitioner in the present cases, the position was that Hyderabad was part of India within the meaning of Section 19. On the date of the transfer in favour of the plaintiff, the stamp affixed on the suit promissory note was the proper stamp as per the provisions of the Indian Stamp Act. We are of opinion that the suit promissory note is a foreign bill drawn or made out of India and that it has been affixed with the proper stamp. In this view the suit brought upon the promissory note in question is maintainable. The stamp Act commences to operate on foreign bills and notes when they are brought into India and subsequently sought to be acted upon, and that it was irrelevant, therefore, that the note had already been stamped with at Indian stamp outside India.

Facts: The appellant filed a suit on a duly completed policy of fire insurance and an unstamped letter of cover in respect of the same kind of insurance issued by the respondent, to recover from it the loss suffered as a result of the destruction of the insured goods by fire. The respondent admitted liability on policy but with regard to the letter of cover it contended that the letter was not admissible in evidence for want of stamp. The issue depends on some of the provisions of the Stamp Act, 1899. The learned trial Judge held that the instrument was not a letter of cover but it was in reality a policy of insurance because it contained a contract of insurance. It is not in dispute that if this view is correct, then on payment of the duty and the penalty the instrument would be admissible in evidence under s. 35. The Appellate Bench of the High Court, however, was unable to accept the view of the trial court and held such letter of cover is not chargeable with duty as such under the Act. Hence, this appeal.

Held: Respondent in respect of same insurance had issued unstamped letter of cover and resisting suit on ground that letter of cover is inadmissible. It is admissible in evidence on payment of requisite duty and penalty under Section 35. Appellant already paid duty and penalty as per Section 35. The contention that an instrument which is exempted from duty by is not chargeable with duty under section 3 and a letter of cover is so expressly exempted. No doubt, if an instrument is exempted by the Schedule from duty, then it cannot be chargeable, the exemption is to apply only if the letter of cover is used for compelling the delivery of the policy mentioned in it. It was said that if an instrument is made to bear a stamp, it is not thereby made chargeable to stamp duty. It was only to indicate the amount of the duty. If the letter of cover was not chargeable to duty but has only to bear a stamp as the respondent contends, section 17 would not apply to it. A letter of cover is an instrument chargeable to duty under the Act and so admissible in evidence on payment of the requisite duty and penalty under section 35 of the Stamp Act as it is neither an instrument chargeable to duty not exceeding ten naye paise nor a bill of exchange or a promissory note.

Facts: Plaintiff as lessor against the defendants lessees land claiming royalty and commission on coal raised from the land. By the terms of the lease, the commission and royalty is payable. The document was stamped with a revenue stamp. The defendants contended that they were liable only for Bach coal as was raised and actually dispatched by rail or sold or otherwise transferred locally. They further contended that as the stamp on the lease was Rs. 20 only in respect of commission the plaintiff was precluded by section 26 of the Stamp Act from claiming any commission beyond that which was proportionate to the amount of the stamp and could not, core the defeat by payment of a penalty under section 35 of the Act in each a case.

Held: The Stamp Act is purely fiscal and insists that certain documents shall pay a contribution to the State according to the purpose for which they were executed. In regard to certain documents which create a right to money it prescribes that unless the stamp is proportionate to the valuation of the claim the document shall be inadmissible in evidence, and where the intention of the parties is that the valuation shall be unlimited it enacts by section 26 that the claimant will be entitled to realise a sum proportionate to the stamp fee paid, subject to certain exceptions in the case of royalties on coal. It follows that wherever the claim exceeds the amount proportionate to the stamp the document is not duly stamped for the purpose for which it was executed within the meaning of section 35 of the Stamp Act, and the provisions of the section would apply thereto. There is nothing in the words of section 35 of the Stamp Act which necessarily excludes its operation from cases covered by section 26 of the Act. Where a mining lease bears a stamp of a certain value, the lessor's right to recover royalty is not confined to the amount covered by the stamp: if it is found that he is entitled to a greater amount he can be given a decree for the sum to which he is entitled on compliance with the provisions of section 35 of the Stamp Act.

Facts: Petitioners purchased agricultural plots under a sale deed. After the execution of the sale deed, before the Registrar the sale deed was left for necessary formalities. When the Petitioners went to take back the document, they were informed that the same had been forwarded by the sub-Registrar to the Collector for adjudication of the proper stamp duty payable on the same. On the receipt of the document, the Collector directed the Tehsildar concerned to make the necessary enquiries in respect of the correct valuation of the plots mentioned in the document. According to the report, the market value of the land was liable to be determined by multiplying the land revenue by 400 times. On this basis the Tehsildar reported that the market value of the land came to Rs. 82,576/- and, therefore, the market value described in the sale deed i.e. Rs. 6,000/-was too inadequate. This report of the Tehsildar was placed before the Collector, who agreed with the same and made an order under Section 40(1)(b) of the Stamp Act holding that the instrument was chargeable with additional stamp duty and penalty. Against the said order, the present writ petition was filed.

Held: The principles of natural justice apply to quasi judicial as well as administrative bodies. From a reading of Sections 38, 39 and 40 of the Stamp Act, it would be found that the power, which is exercised by the Collector in adjudicating upon the stamp duty on a document, is a judicial one. The adjudication involves the determination of rights inasmuch as he determines the liability of the parties to the document to pay the stamp duty. As the rights are involved, it is necessary that before either enhancing the stamp duty or imposing penalty, the person affected must be given an opportunity of being heard. Denial to give opportunity may cause serious prejudice to his interest. It may be true that the principles of natural justice do not apply to a case where the legislature expressly or impliedly excludes the giving of opportunity. But, in the present case, we cannot find any provisions in the Act or the Rules which could justify the exclusion of the opportunity to such a person. In the absence of opportunity having been given to the Petitioners, the order of the Collector was invalid.

Facts: Appellants were officers of L.I.C. at relevant time. Various branch offices of the LIC in the course of their business have to purchase large quantity of adhesive stamps for affixation on their policies and for issuing receipts etc.The LIC used to purchase the same from the Treasury in any district as well as from authorised licensed stamp vendors. F.I.R was lodged againt the appellants alleging that L.I.C. has not purchased insurance stamps from Treasury Offices of U. P. But same was purchased from Stamp Vendors outside State of U. P. causing loss to State exchequer. The appellants herein approached the Allahabad High Court for quashing of the aforesaid FIR. However, the High Court dismissed the petition holding that the FIR prima facie discloses the commission of cognizable offence and there was no ground of interference. Aggrieved by the said orders of the High Court, the appellants have preferred the present appeal.

Held: It is the case of the appellant that purchasing of stamps assumes urgency. Said act of appellants cannot be said to be inconsistent with any provisions of Stamp Act or any other Rules. So allegation made in F.I.R., even if proved by prosecution, does not constitute any offence. Registration of F.I.R. shows complete non-application of mind. Act of respondent is nothing but clear case of its mala fide intention to harass appellants. Rule 115A of U. P. Stamp Rules itself declares that stamps are property of Central Government. Section 69 of Stamp Act has also no application as the appellants are neither the stamp vendors nor doing any unauthorised sale of the insurance stamps. There is no prohibition under the law and in the Stamp Act which mandates that the LIC will purchase the insurance stamps only from a particular district or from a particular State. The State of U.P. has sought to invoke Section 64(c) of the Stamp Act to contend that the action of appellants was `calculated to deprive the Government of any duty or penalty', but there is no denial of the fact that appellants were indeed paying the duties, and by no means `depriving the government of any duty or penalty'. That being the legal position, it is legally untenable to contend that the insurance stamps must be purchased from the State of U. P. only.

Facts: The petitioner has filed the present petition for impugning an order passed by the respondent (Collector of Stamps) pursuant to a Show Cause Notice calling upon the petitioner as to why proceedings not be initiated against it. It is the petitioner's case that the proceedings are wholly without jurisdiction because the instrument in question (share certificates) was executed/issued in the State of Haryana and in the State of Himachal Pradesh, and the stamp duty as applicable in the aforesaid States was paid by affixing adhesive stamps.

Held: The said show cause notice, as and when issued, would be pre-cursor to an opinion that may be formed under Section 70 of the Act. Respondent forms an opinion after considering the petitioner's response to the show cause notice that would be issued pursuant to the impugned order, that the petitioner is liable for penalty and prosecution under Section 62 of the Act, he would then sanction prosecution under Section 70 of the Act, which would be subsequently tried. The petitioner would have an opportunity to persuade the respondent not to issue an order sanctioning prosecution pursuant to the show cause notice that may be issued. The petitioner would have a second opportunity to challenge such an order, if passed, by approaching the Chief Controlling Revenue Authority under Section 70(2) of the Act for seeking stay of such prosecution. The petitioner would have yet another opportunity to canvass its case in a trial before a Magistrate as contemplated under Sections 71 and 72 of the Act.

Facts: In dealing with litigation arising out of Golden Forest India Limited (GIFL) going into liquidation, the Supreme Court constituted the GFIL Committee (Committee) to take over the assets of GIFL and dispose of the same for paying the debts of various investors and creditors. The Committee published an advertisement for the auction of certain properties of GIFL, in which the Applicant were successful bidders in respect of five properties. Bid amounts were received and the Court confirmed sale of the properties in favour of the then Director of the Applicant, granting time to pay the balance amount of 75 per cent towards the sale price. It also directed that on deposit of the full amount, the Committee would ensure that the properties in question are put in possession of the Applicants. The Committee failed to hand over possession and the High Court directed it to refund the amount deposited by the Applicants, till the Committee was in a position to hand over possession of the properties. Committee's appeal against the same was disposed of, with the direction to refund the entire amount deposited by the Applicants with interest; Applicants would take up matter with State government for refund of stamp duty amount paid. Subsequently, after further legal proceedings, the Committee refunded sale consideration to the Applicants, interest accruing and TDS on the interest. Applicants' claim for refund of stamp duty was rejected by SDM for it being barred by limitation. Hence, the present application for refund of the stamp duty paid by Applicants.

Held: Applicants are entitled to claim refund of entire stamp duty amount from the State Exchequer as sale of properties by Committee to Applicants was not accomplished and failed due to reasons beyond the control of the parties; a right to claim refund of amount paid towards the stamp duty accrued to the applicants; the transaction was monitored by Court, so no party was in a position to take any steps without the permission of the Court; Applicants performed their part of the contract and ensured that transaction in question is accomplished as was originally intended but for the reasons to which they were not responsible, the transaction could not be accomplished. It is a settled principle of law based on principle of equity that a person cannot be penalized for no fault of his and the act of the court would cause no prejudice to any of his right. Applicants are entitled to claim refund of entire amount of stamp duty from the State Government spent in purchasing the stamp duty for execution of sale deed in relation to the properties. State has no right to defend the order retaining stamp duty paid by Applicants. The Applicants bona fide genuine claim of refund cannot be denied by SDM on technical grounds. Applicants filed their applications within six months from the date of this order, as provided in Section 50 of the Act, 1899. In the facts of the case, applications should have been entertained treating the same to have been filed under Section 49(d)(2) read with Section 50 of the Act, 1899 for grant of refund of stamp duty amount claimed by Applicants.

Facts: The Divisional Forest Officer notified public auction of resin. The respondent participated in that public auction. His bid was accepted and the formal contract of sale for crude resin was entered into between the competent authority of the State Government and the writ petitioner. Subsequently a letter was issued asking the writ petitioner to lift the contracted resin within 60 days there from. Division Bench hold that respondent not liable to pay stamp duty on documents pertaining to contract of sale for crude resin. Hence, the present appeal.

Held: a. In contract, all essential conditions of transfer of movable property were satisfied. Hence, right was created in favour of the Petitioner in auctioned lot of crude resin. State Government was under obligation to deliver quantity of crude resin specified in document. Resin sold will remain at purchaser's risk from date of acceptance of its bid and seller will not be responsible for any loss and damage which may occur thereto from any cause whatsoever. Contract of sale amounted to 'conveyance' within meaning of Section 2(10).
b. It was chargeable to stamp duty.