Vimala w/o Late Bhaskar Rao and Sreenath Rao v. Vijayan

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE ASHOK MENON** ## **WEDNESDAY, THE 8TH DAY OF AUGUST 2018 / 17TH SRAVANA, 1940** **OP(C).No. 2912 of 2013(O) -------------------------** **AGAINST THE ORDER/JUDGMENT IN OS 7/2000 of PRL.M.C., KOCHI** ## **PETITIONER(S)/PETITIONERS:** **-------------------------** **1 VIMALA W/O.LATE BHASKAR RAO, RESIDENT OF 42-D,MASJID MOTH, D.D.A.FLATS,NEW DELHI-110048.** **2 SREENATH RAO,** **S/O.LATE BHASKAR RAO,RESIDENT OF 42-D,MASJID MOTH, D.D.A.FLATS,NEW DELHI-110048.REPRESENTED BY POWER OF ATTORNEY HOLDER R.SIVASANKARA RAO,S/O.RAJENDRA RAO,66,RESIDING IN HOUSE NO.X/1665,AMARAVATHY, FORT KOCHI,KOCHI TALUK, PIN-682001.** **BY ADVS.SRI.T.K.PANKAJASHAN PILLAI SRI.SAJI PANKAJAKSHAN** ## **RESPONDENT(S)/RESPONDENT:** **------------------------** **VIJAYAN,** **S/O.ANANTHASIVAN,RESIDING IN THE NORTHERN SIDE(WESTERN PART)DOWN STAIR ROOM OF TWO STOREYED HOUSE NO.X/1663 AS A LICENSEE,AMARAVATHY,FORT KOCHI-682001.** **R1 BY ADV. SRI.G.KRISHNAKUMAR R1 BY ADV. SRI.D.R.BALAKRISHNA PRABHU R1 BY ADV. SMT.P.M.NASEEMA R1 BY ADV. SRI.K.A.ANI JOSEPH** **THIS OP (CIVIL) HAVING BEEN FINALLY HEARD ON 04-07-2018, THE COURT ON 08-08-2018 DELIVERED THE FOLLOWING:** **OP(C).No. 2912 of 2013 (O) --------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS: ------------------------** - **EXHIBIT P1 COPY OF I.A.1475/2010 IN O.S.7/2000 OF KOCHI PRL.MUNSIFF'S COURT,DATED 17/8/2010.** - **EXHIBIT P2 COPY OF POWER OF ATTORNEY DATED 18/08/1978.** - **EXHIBIT P3 COPY OF POWER OF ATTORNEY DATED 2.4.1993.** - **EXHIBIT P4 COPY OF POWER OF ATTORNEY DATED 31.08.2010.** - **EXHIBIT P5 COPY OF ORDER DATED 26.6.2013 IN I.A.1475/2010 IN O.S.7/2000 OF PRL.MUNSIFF'S COURT,KOCHI ON STAMP DUTY MATTER** - **EXHIBIT P6 COPY OF THE ORDER DATED 12.7.2013 IN I.A.1475/2010 IN O.S.7/2000 IN PRL.MUNSIFF'S COURT,KOCHI ON STAMP DUTY MATTER.** - **EXHIBIT P7 COPY OF RECEIPT DATED 5.7.2013 ROR RS.290/- FOR LEVYING STAMP DUTY OF RS.26+10 TIMES PENALTY** - **EXHIBIT P8 COPY OF RECEIPT DATED 5.7.2013 FOR RS.1100/- FOR LEVYING STAMP DUTY OF RS.50/-+10 TIMES PENALTY.** ## **RESPONDENT(S)' EXHIBITS** ## **-----------------------** ## **NIL** ## **/TRUE COPY/** **PA TO JUDGE** _**dkr**_ ## ASHOK MENON, J. ------------------------------------------O.P.(C) No. 2912 of 2013 ------------------------------------------Dated this the 8[th] day of August, 2018 ## J U D G M E N T The plaintiffs/petitioners are before this Court aggrieved by the order of the learned Munsiff, Kochi in I.A. No.1475/2010 in O.S.No.7/2000. The application is one filed under Order IX, Rule 13 for setting aside the exparte decree passed in the suit on 05.02.2000. The defendant raised a contention that the power of attorneys produced for the plaintiffs in the suit and also the execution petition before the Court could not have been accepted as those were insufficiently stamped and that the Court went wrong in decreeing the suit, exparte. It was contended for the defendant that since he was exparte, no objection could be raised regarding the validity of the power of attorneys. On examination of the power of attorneys by the Court, those were found to be insufficiently stamped and hence all the power of attorneys relied upon by the plaintiffs were directed to be impounded and penalty imposed. The _OP(C) 2912/2013_ 2 plaintiffs in the suit are aggrieved by the impugned order and have come up before this Court. 2. It is prayed that the order of the Court below in ordering stamp duty under Article 44(f) of the Kerala Stamp Act ('Act', for short) is not sustainable. In case there was any deficiency in the fee payable under Section 19 of the Act, the difference alone could be directed to be paid. Moreover, sitting on the original side, it was not proper on the part of the court below to call for the power of attorneys produced in the execution proceedings. It is therefore, prayed that the impugned orders at Exts.P5 and P6 may be set aside. It is further prayed for a declaration that the Court is not in seizin of the proceedings to set aside the exparte decree dated 05.02.2000 in O.S.No.7/2000 since the proceedings stood abated due to death of the 3[rd] respondent in I.A. No.1475/2010 filed to set aside the exparte decree. It is also prayed that the penalty amount illegally collected from the petitioner on 05/07/2013 in respect of Exts.P3 and P4 may be ordered to be refunded. 3. The question for determination before this Court is whether the power of attorneys executed by the plaintiffs produced _OP(C) 2912/2013_ 3 in the suit can be ordered to be impounded and penalty directed to be paid and whether Exts.P5 and P6 orders are liable to be set aside. 4. Heard both sides. The learned Counsel for the petitioners would submit that the power of attorneys were executed outside the State in New Delhi. By virtue of Section 19 of the Act, only the difference in stamp duty , found to be in deficit needs to be paid. He relies on the decision of the Honourable Supreme Court in New Central Jute Mills Co.Ltd. v. State of W.B., AIR 1963 SC 1307, wherein it held as thus,- “..... if an instrument after becoming liable to duty in one state on execution there becomes liable to duty also in another state on receipt there, it must first be stamped in accordance with the law of the first state and it will not require to be further stamped in accordance with the law of the second state when the rate of that second state is the same or lower; and where the rate of the second state is higher, it will require to be stamped only with the excess amount and that in accordance with the law and the rules in force in the second state.” 5. On the point whether the power of attorneys could be ordered to be impounded after the passing of the decree, the learned Counsel relies on the decision reported in Varghese v. State of Kerala, 1989 (1) KLT 24 , wherein it is held as thus:- _OP(C) 2912/2013_ 4 “5. From the various above decisions it is clear that the impounding of a document cannot be made after the court has become functus officio. If the document is merely presented along with the plaint, it cannot be said that the document was produced as contemplated under S.33 of the Stamp Act. If the plaintiff intended to use the document as an item of evidence, then only the court can consider that it was a document “produced” and the same can be impounded by the court. As it has been pointed out by the Supreme Court, the court has to judicially determine the matter as soon as the document is tendered in evidence and before it is marked as an exhibit in the case. Once the case is over and the decree was signed and sealed or when a document is ordered to be returned, it can no longer be considered to be a part of the judicial record and cannot therefore properly come before the court again in the performance of its function and the court is not competent to impound the same.” The learned counsel then relies on the decision of this Court reported in George v. Subordinate Judge, Kottayam, 1976 KLT 700, wherein it is held as thus,- “A civil Court has ample powers to impound an instrument which is either not stamped or not sufficiently stamped. A Civil Court can also forward the instrument in question to the District Collector for impounding. But in no case an instrument which is not either stamped or not sufficiently stamped can be allowed to be marked and admitted in evidence without impounding. In this case, what the learned Subordinate Judge has done is to allow such an instrument to be marked without impounding the same. This is not something which is contemplated by the Act. After admitting the instrument in evidence nothing can be done in the matter of _OP(C) 2912/2013_ 5 impounding by that Court. This is clear from S.35 and 59 of the Act. Thereafter only S.59 of the Act can be put into action and under the section the court which allowed the instrument to be marked cannot be anywhere in the picture. In this case, what the learned Sub-Judge has done is to impound the instrument in question after the same was admitted in evidence. It goes without saying that this is something which cannot be done under the Act. The impounding is one without jurisdiction. The learned Sub-judge issued Ext.R1 requisition to the 2[nd] respondent because of the above impounding he made. Ext.P-2 has been issued by the 2[nd] respondent-District Collector only in pursuance of Ext.R-1. If Ext.R-1 cannot be sustained, then Ext.P-2 also will have to go.” The learned counsel would further rely on the decision reported in Barium Chemicals Limited v. Vishwa Bharati Mining Corporation, (2009) 16 SCC 262, to argue for the proposition that the document, which is not duly stamped and also not registered, can be admitted in evidence for collateral purposes under the proviso to Section 49 of the Registration Act. But, so far as the stamp duty is concerned, if the document is not duly stamped, it has to be dealt with under Section 35 of the Act, before it is admitted in evidence, failing which, by virtue of admission of a document in evidence it cannot be challenged subsequently. _OP(C) 2912/2013_ 6 6. Per contra, the learned Counsel for the respondent contends that the defendant was not served with summons in the suit and that is how he happened to be exparte and after having come to know about the exparte decree, he filed I.A. No.1475/2010 for setting aside the exparte decree along with I.A. Nos.1474/2010 and No.1473/2010 for condonation of delay and for stay of the execution, respectively. It is pointed out that when the power of attorney has filed a suit or a petition without a properly stamped power of attorney, the plaintiff is not sufficiently represented in such a suit. 7. The learned Counsel for the respondent would rely on the decision reported in Mohanan v. MACT Moovattupuzha, 2005 KHC 1475, to argue that whenever a document is produced before the Court and when it appears to the Court that such an instrument is not duly stamped, it can be impounded. It is not necessary that the production of the document should be followed by marking the same as part of the evidence. It is also not necessary that only a document that is relied on by the authority can be impounded. Insufficiently stamped instrument cannot be admitted in evidence _OP(C) 2912/2013_ 7 and is permissible only if the deficiency is made up by penalty and deficit portion is paid as penalty as per the provisions under Sections 34 and 37(2) of the Act, 1959. 8. The learned Counsel for the respondent argues that the fact that 'admitted in evidence' should mean finally admitted in evidence after judicial consideration of all the circumstances. The Court has not at the time of letting of evidence, considered the fact regarding the insufficiency of stamp. More over, the fact that the document was admitted in evidence will not be sufficient to upheld its validity. The learned Counsel relies on the decision reported in Sitaram v. Thakurdas, AIR 1919 Nagpur 141 . The learned Counsel for the respondent argues that being a financial statute, strict interpretation has to be given. 9. After considering the rival contentions and argument, it has to be considered whether the power of attorneys produced by the plaintiffs can be ordered to be impounded and penalty realised at the time when the application for setting aside the exparte and execution proceedings are pending before the trial court. By virtue of the provisions in the Act, any document which is produced before _OP(C) 2912/2013_ 8 an authority is found to be insufficiently stamped, the document has to be impounded and deficit stamp duty paid and penalty realised. In the instant case, the documents are power of attorneys produced by the plaintiffs for the purpose of filing of the suits on their behalf by the power of attorney holder. The fact whether the power of attorney holder is authorised to file or not, is not disputed. By virtue of Section 19 of the Act, what is required to be paid in the case of insufficiently stamped documents executed outside the State, is the difference between the stamp duty and nothing more. Perusal of Section 19 of the Act would be helpful. ## “ Section 19: Payment of duty on certain instruments liable to increased duty in the State of Kerala. Where any instrument of the nature described in any article in the Schedule and relating to any property situate or to any matter or thing done or to be done in the State of Kerala is executed out of the said State and subsequently received in the said State- (a) the amount of duty chargeable on such instrument shall be the amount of duty chargeable under the Schedule on a document of the like description executed in the State of Kerala less the amount of duty, if any, already paid on such instrument in any other State in India, (b) and in addition to the stamps, if any, already affixed thereto, such instrument shall be stamped _OP(C) 2912/2013_ 9 with the stamps necessary for the payment of the duty chargeable on it under clause (a) of this section, in the same manner and at the same time and by the same persons as though such instrument were an instrument received in the State of Kerala for the first time at the time when it became chargeable with the higher duty, and (c) the provisions contained in clause (b) of the proviso to sub-section (3) of Section 32 shall apply to such instrument as if such were an instrument executed or first executed out of India and first received in the State of Kerala when it became chargeable to the higher duty aforesaid, but the provision contained in clause (a) of the said proviso shall not apply thereto.” 10. There is no dispute that the stamp duty as per the provisions prevailing at the place where it has been executed, has been paid. But it is not sufficient in accordance with the stamp duty where it is intended to be implemented. In such circumstances, only the balance of the stamp duty need be paid. Hence, the direction of the learned Munsiff in directing payment of stamp duty and penalty on all the documents cannot be sustained. 11. The learned Munsiff has directed impounding of the Power of Attorneys as if those were unstamped. This may not be proper. What could have been done is only to collect the difference of the stamp duty leviable. Hence the impugned orders are set aside _OP(C) 2912/2013_ 10 and the learned Munsiff is directed to collect only the difference of the stamp duty payable as stated in Section 19 referred to above. The Original Petition is allowed with the above direction. No order as to costs. Sd/ASHOK MENON Judge dkr