Karnataka Stamp Act: Courts Have No Discretion To Impose Lesser Penalty While Admitting Insufficiently Stamped Documents

In CIVIL APPEAL NO.11932 Of 2018, GANGAPPA AND ANR. vs FAKKIRAPPA before the Supreme Court, trial court in Karnataka had impounded agreements to sell filed by the plaintiffs with direction to the plaintiff to pay deficit duty and penalty of at the rate of 2 times but on appeal the High Court directed the courts below to levy the penalty at 10 times of the deficit duty as per judgment of Karnataka High Court in Digambar Warty and others vs. District Registrar, Bangalore Urban District and another.

The Supreme Court observed that there is no discretion vested with the authority impounding the document in the matter of collecting duty under Section 33 of the Act. It said that there is clear contradistinction between the power under Section 33 and that under Section 39.

The bench said that the object and purpose for such contradistinction in the provision and power is not far to seek. Section 33 applies to every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office. Thus, Section 33 covers a host of authorities, persons before whom instruments are filed. The legislative scheme does not indicate any distinction between a court receiving an insufficiently stamped instrument in evidence and other authorities. All have to impose penalty of 10 times of the duty or deficit portion, if it exceeds rupees five. This provision is for purpose of maintaining a uniformity in imposing a fixed penalty of 10 times without adverting to any adjudicatory process regarding quantifying the quantum of penalty.