Writ Petition No. 37289 of 2017 · The High Court
Case Details
- 1 - NC: 2025:KHC:9730 WP No. 37289 of 2017 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE M.G.S. KAMAL WRIT PETITION NO.37289 OF 2017 (GM-CPC) BETWEEN: SMT. ANITHA, W/O SRI S.V.VENUGOPALACHAR, AGED ABOUT 52 YEARS, REPRESENTED BY HER GPA HOLDER SRI.S.V.VENUGOPALACHAR S/O. VOBLACHAR, AGED ABOUT 62 YEARS, R/O NO.FF102, EMARALD PALACE, NO.75, RATHNAVILASA ROAD, BASAVANAGUDI, BENGALURU-560 004. (BY SRI. M.R. RAJAGOPAL, SENIOR COUNSEL FOR SRI. H N BASAVARAJU, ADVOCATE) …PETITIONER Digitally signed by SUMA B N Location: HIGH COURT OF KARNATAKA AND: 1. SRI. B. S. JAYACHANDRA, S/O LATE B.SUBBAIAH, AGED ABOUT 63 YEARS, R/O "SARASWATHI EMARALD PALACE", GF101, NO.75, RATHNAVILASA ROAD, BASAVANAGUDI, BENGALURU-560 004. 2. SRI. SYED IBRAHIM, S/O LATE SYED KHASIM, AGED ABOUT 57 YEARS, M/S. EMARALD DEVELOPERS, NO.204/A, BLUE CROSS CHAMBERS, - 2 - NC: 2025:KHC:9730 WP No. 37289 of 2017 INFANTRY ROAD, BENGALURU-560 001. …RESPONDENTS
Legal Reasoning
(BY SRI. SHIVANAND METI, ADVOCATE FOR R1; V/O. DATED 29.01.2024, NOTICE TO R2 DISPENSED WITH) THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER DATED 27.10.2016 PASSED BY THE LEARNED XXIV ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU IN O.S.NO.7102/2006 ON IMPOUNDING OF AGREEMENTS OF SALE AND AGREEMENTS OF CONSTRUCTION AND ALSO THE TERMINATION OF STAMP DUTY AND PENALTY BY THE REGISTRY AS AVAILABLE UNDER ANNEXURE-R AND ETC. THIS PETITION, COMING ON FOR HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE M.G.S. KAMAL ORAL ORDER Defendant No.1 in a suit in O.S.No.7102/2006 pending consideration on the file of 24th Additional City Civil and Sessions Judge, Bengaluru, is before this Court being aggrieved by the order dated 27.10.2016 passed by the Trial Court impounding agreements of sale and agreements of constructions sought to be produced by the defendants in evidence. - 3 - NC: 2025:KHC:9730 WP No. 37289 of 2017 2. The above suit is filed by respondent No.1/plaintiff seeking the following reliefs: "WHEREFORE, it is prayed that this Hon'ble Court may kindly be pleased to pass a judgment and decree in favour of the plaintiff and against the defendants: (a) declaring that the "CONSENT AS WITNESS: by the plaintiff in the sale deeds: a) 2785 CD 35 Dt.14-08-2003; b) 2789 CD 35 Dt.14-08-2003; c) 2791 CD 35 Dt.14-08-2003; d) 2793 CD 35 Dt.14-08-2003; and e) 2795 CD 35 Dt.14-08-2003 executed by Second defendant in favour of the first defendant pertains only to the transfer of title in respect of six apartments i.e. 3(three) in first floor, 1 (one) in second floor & 2 (two) in third floor, in the schedule property and not for granting right for extra seventh and eighth car parking and for the change of name of the apartment building in favour of the first defendant. b) declare that the plaintiff is entitled to the fifth car parking in place of the 7th car parking allotted in favour of the first defendant, instead of the car parking allotted in the "Gangway" and grant such other reliefs deemed fit to grant in the circumstances of the case including costs, in the interest of justice and equity." 3. Defendant No.1 claims that she had entered into the following agreements of sale and agreements of constructions; (1) Agreement of sale dated 10.09.2002 and agreement of construction dated 10.09.2002 in respect of apartments No.101, 102, 103 (Annexure-B and C). - 4 - NC: 2025:KHC:9730 WP No. 37289 of 2017 (2) Agreement of sale dated 18.01.2003 along with agreement of construction dated 18.01.2003 in respect of apartment No.SF.103 (Annexures-D and E). (3) Agreement of sale dated 18.1.2003 and agreement of construction dated 18.1.2003 in respect of apartment No.TF-101 and TF-103 (Annexures-F and G). All these apartments to be constructed on the land bearing Site No.75, Rathnavilas Road, Basavangudi, Bengaluru-560 004. 4. It appears, in furtherance of the aforesaid agreements of sale and agreements of construction, deeds of sale have been executed between the plaintiff and the defendants represented by their Power of Attorney Holder. The said deeds of sale have already been produced and marked as exhibits. 5. When the matter was set down for cross- examination of defendant's witness, the aforesaid agreements of sale and agreements of construction were sought to be confronted to the said witness. It is at this juncture taking note of said document not having been registered, the Trial Court upon the submission made by the counsel for the plaintiff - 5 - NC: 2025:KHC:9730 WP No. 37289 of 2017 passed the impugned order holding that since the documents are unregistered and insufficiently stamped, the same are liable to be impounded for the purpose of payment of duty and penalty. Accordingly, proceeded to pass the order directing the office to calculate the duty and penalty on the said six documents. It is this order which is put to challenge. 6. Learned Senior Counsel appearing for the petitioner taking this Court to the aforesaid agreements and deeds of sale submits that the Trial Court erred in impounding the documents and directing the office to calculate the duty and penalty without appreciating the fact that the said agreements of sale and the agreements of construction have culminated and merged in the deeds of sale which have already been produced and marked as exhibits by the parties before the Trial Court. He further submits that once the deeds of sale have been executed, requirement of payment of stamp duty on the agreements would not arise. He refers to the order of the Co- ordinate Bench of this Court dated 25.07.2024 passed in Writ Petition No.105278/2018, wherein under the similar facts of the case, the Co-ordinate Bench of this Court had held that once the deed of sale is executed, the agreement stands merged into - 6 - NC: 2025:KHC:9730 WP No. 37289 of 2017 the same requiring no separate adjudication of the stamp duty on the agreement even if it was not paid. 7. He also refers to Section 3(C) of the Stamp Act, 1957 to contend that the additional stamp duty if any cannot exceed the maximum amount of duty which such instrument is chargeable under the Act. He submits, the Trial Court has grossly erred in passing the impugned order directing calculation of duty and penalty without taking into consideration the agreements and the construction agreements which sought to be impounded, have now stand merged with the deeds of sale which are already produced before the Trial Court. Hence, he seeks for allowing of the petition. 8. In response the counsel appearing for the respondent/ plaintiff submits that the amount of consideration shown in the agreements of sale is different from the one shown in the deeds of sale. Wherein in the agreements of sale a sum of Rs.27,00,000/- is shown as the consideration, while in the deeds of sale is only Rs.13,00,000/- is shown. He submits since the agreements which were otherwise required to be charged for the payment of stamp duty have missed the - 7 - NC: 2025:KHC:9730 WP No. 37289 of 2017 imposition of duty, for the reminder of the amount received, stamp duty is required to be paid. Therefore, the calculation if any required to be made to the extent of the amount in excess. Hence, seeks for appropriate order in this matter. 9. Heard. Perused the records. 10. The impugned order reads as under: "ORDER ON IMPOUNDING OF.. AGREEMENTS OF SALE &, AGREEMENTS OF CONSTRUCTION " three agreements of sale and Present suit is for relief of declaration. At present the case is set down for further cross of DW.1. At this stage, Advocate for plaintiff is intending to three confront construction agreements to DW.1. It is noticed that all these documents are unregistered. At this stage, Advocate for defendants submits that he is neither relying on those documents and nor has produced those documents voluntarily. Those documents were produced by him at the instance of plaintiff and therefore he is not liable to pay duty and penalty. On the other hand, Advocate for plaintiff submits that those documents are coming from custody of defendants and therefore, they are liable to pay duty and penalty. Heard both sides and perused records. Under list dated 3.11.2012, Advocate for defendant No.1 has produced these agreements of sale and construction, agreements, which are in all six in number. Cursory glance of these documents shows that all these documents were executed in favour of - 8 - NC: 2025:KHC:9730 WP No. 37289 of 2017 defendant No.1 and were in custody of defendant No.1 and further that they were produced before Court by her Advocate. The fact that whether defendant No.1 is relying on those documents or not is not at all relevant. As soon as unregistered documents are before the Court, the party, who is producing those documents liable to pay duty and penalty. Accordingly, I am of the opinion, that defendant No.1 is liable to pay duty and penalty on these agreements. is Office is directed to calculate duty and penalty on six documents, which are flagged. Call on 15.11.2016. (Dictated to the Judgment Writer on-line, then print out taken thereof is corrected, signed and pronounced by me on this the 27th day of October, 2016)." 11. Documents produced at Annexures - A to G are the agreements of sale and the corresponding agreements of construction admittedly entered into between the plaintiff represented by Power of Attorney who are the respondents herein with the defendant No.1/petitioner before this Court. Documents at Annexures - H to M are the Deeds of Sale which have been executed by the plaintiff represented by Power of Attorney Holder in favour of the defendant No.1 conveying absolute right, title and interest in respect of the properties which are subject matter of the aforesaid agreements of sale and the agreements of construction. Co-ordinate Bench of this Court in the case of SMT. NAGAMMA AND OTHERS VS. - 9 - NC: 2025:KHC:9730 WP No. 37289 of 2017 RUDRAYYA AND OTHERS, passed in Writ Petition No.105278/2018 dated 25.07.2024 has held that, once stamp duty has been paid on the Deed of Sale, the question of calling upon the parties to pay the stamp duty on the agreement would not arise. 12. Though, the aforesaid order passed by Coordinate Bench of this Court clarifies the position that execution of sale deed duly stamped and registered effectively supersedes the agreement of sale and there is no need for adjudication of payment of stamp duty on the agreement of sale, however, as rightly pointed out by learned counsel for the respondent/plaintiff, there appears to be some difference in the sale consideration shown in the agreements of sale and in the deeds of sale in the instant case. Therefore, if any difference of stamp duty is required to be paid on that count, the Trial Court may have to consider the said aspect of the matter after affording opportunity to the parties in this case. 13. In that view of the matter, the following
Decision
ORDER (i) Writ Petition is allowed. - 10 - NC: 2025:KHC:9730 WP No. 37289 of 2017 (ii) Impugned order is set aside. (iii) Trial Court shall frame an issue with regard to difference of stamp duty if any payable by the defendant No.1 in view of the alleged difference of sale consideration mentioned in the agreements of sale and in the deeds of sale and after affording sufficient opportunity to the parties, if it is found, that additional stamp duty is required to be paid, it shall either determine the stamp duty payable on the difference of amount or refer the matter to the District Registrar under Section 39 of the Karnataka Stamp Act, 1957 for adjudication and determination of such stamp duty, payable if any. SD/- (M.G.S. KAMAL) JUDGE AP List No.: 1 Sl No.: 1