On September 2, 2024, the Incomparable Court of India conveyed a pivotal judgment within the case of N.M. Theerthegowda v. Y.M. Ashok Kumar and Others. The choice sheds light on the translation and application of the Karnataka Stamp Act, 1957, especially in connection to the inconvenience of punishments on insulant stamped archives.
Background of the Case
The appealing party, N.M. Theerthegowda, recorded a suit (O.S. No. 610 of 2015) for particular execution of an understanding of deal dated November 4, 1996. The understanding purportedly exchanged ownership of the suit property to the appealing party. Be that as it may, the archive in address was stamped with a esteem of as it were Rs. 200, remote underneath the advertisement valorem stamp obligation required beneath Article 5(e)(i) of the Plan of the Karnataka Stamp Act, 1957.
When the appealing party endeavored to depend on the certified duplicate of the understanding in court, the trial court seized the record and forced a punishment of ten times the shortage stamp obligation, producing to Rs. 15,81,800. The appealing party challenged this arrange, contending that as it were the shortfall stamp obligation ought to be collected, with the punishment to be decided afterward.
Legal Arguments and Supreme Court’s Analysis
The primary legal question in this appeal was whether the trial court had correctly imposed a tenfold penalty under Section 34 of the Karnataka Stamp Act, or whether the document should have been sent to the District Registrar for determination of the penalty under Section 39 of the Act.
In its judgment, the Supreme Court noted:
"The appellant invited the court to decide under Section 34(1) of the Act. Being so, when the trial court imposed ten times penalty on the deficit stamp duty, the appellant argued in the High Court that he would pay the stamp duty when the decree of specific performance was granted. In our considered view, the case of the appellant is covered by Section 34 of the Act, and rightly ten-times penalty is imposed. Further, the appellant having invited the court, as noted above, cannot now express the willingness to exercise the option under Section 37(2) of the Act."
The Court made it clear that once the appellant had chosen to proceed under Section 34 of the Act, the imposition of the penalty by the trial court was proper and within the bounds of the law. The Court rejected the appellant's claim that the penalty determination should have been deferred until after the decree was passed.
The Court also referenced the earlier judgment in Gangappa and another v. Fakkirappa and Digambar Warty and others v. District Registrar, Bangalore Urban District to support its conclusion:
"The High Court, through the impugned order, while relying on the ratio in Gangappa and Digambar Warty, has rightly rejected the prayer of the appellant."
Conclusion
The Supreme Court dismissed the appeal, upholding the trial court's decision to impose a tenfold penalty on the deficit stamp duty. This judgment reinforces the strict application of the Karnataka Stamp Act and clarifies that parties cannot alter their chosen procedural course mid-way to avoid penalties.
The ruling serves as a critical reminder for legal practitioners and litigants to ensure that all documents presented in court are adequately stamped according to the requirements of the law, failing which severe penalties may be imposed without recourse to leniency.
TAGS: Supreme Court Karnataka Stamp Act deficit stamp duty penalty imposition Section 34 Section 39 specific performance N.M. Theerthegowda v. Y.M. Ashok Kumar legal interpretation.
