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TMI Blog2018 (12) TMI 2000X X X X Extracts X X X X X X X X Extracts X X X X ..... ty 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. The statute gives discretion to Deputy Commissioner who is the authority envisaged by the Act in-charge of the revenue administration of a District. The power to refund the penalty Under Section 38 clearly indicates that legislature have never contemplated that in all cases penalty to the extent of 10 times should be ultimately realised. Although the procedural part which provides for impounding and realisation of duty and penalty does not give any discretion Under Section 33 for imposing any lesser penalty than 10 times, however, when provision of Section 38 is read, the discretion given to Deputy Commissioner to refund the penalty is akin to exercise of the jurisdiction Under Section 39 where while determining the penalty he can impose the penalty lesser than 10 times. In view of impounding the documents and imposition of penalty, we are sure that the suit must not have been proceeded further, and it must be at the thres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tten submissions. After the order of the High Court, the Principal Civil Judge passed an order dated 22.04.2013 by which agreements to sell in question were admitted in evidence and marked for the Plaintiffs in O.S. Nos. 863 and 864 of 2008 on payment of deficit duty and penalty. Deficit duty in both the suits was determined as Rs. 12013/- and Rs. 20320/- respectively and the penalty imposed was double of the deficit duty in both the suits. 3. Aggrieved by the judgment of the Principal Civil Judge, Respondent-Defendant filed a writ petition in the High Court. The High Court disposed of the writ petition relying on a Division Bench judgment of Karnataka High Court in Digambar Warty and Ors. v. District Registrar, Bangalore Urban District and Anr., ILR 2013 KAR 2099. 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 ILR 2013 KAR 2099. Aggrieved by the judgment of the High Court this appeal has been filed by the Appellants. 4. Learned Counsel for the Appellant submits that the High Court committed an error in directing payment of penalty at 10 times. The trial court has rightly directed for payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case is as follows: 34. Instruments not duly stamped inadmissible in evidence, etc.- No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped: Provided that,- (a) nothing herein contained shall be deemed to require any magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898; 10. Section 38 empowers the Deputy Commissioner to refund penalty paid Under Sub-section (1) of Section 37. Section 39 relates to the Deputy Commissioner's power to stamp instruments impounded. Section 38 and Section 39(1) are as follows: 38. Deputy Commissioner's power to refund penalty paid Under Sub-section (1) of Section 37.- (1) When a copy of an instrument is sent to the Deputy Commissioner Under Sub-section (1) of Section 37, he may, if he thinks fit, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 10 times of such duty or portion. There is a clear Contrast in the language of Section 34 and Section 39. Section 39 Sub-section (1) Sub-clause (b) is extracted for ready reference: 39(1)(b) if he is of opinion that such instrument is chargeable with duty and is not duly stamped he shall require the payment of the proper duty or the amount required to make up the same, together with a penalty of five rupees; or if he thinks fit; an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof, whether such amount exceeds or falls short of five rupees: 14. The above provision indicated that if the Deputy Commissioner is of opinion that such instrument is chargeable with duty and is not duly stamped shall require the payment of the proper duty with a penalty of five rupees. The latter part of the provision states or if he thinks fit an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof, whether such amount exceeds or falls short of five rupees . Thus, discretion has been conferred on the Deputy Commissioner which is apparent from the words if he thinks fit . Deputy Commissioner has discretion of impos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in excess of five rupees which has been paid in respect of such instrument. Section 38 Sub-section (1) again uses the expression if he thinks fit . Thus, in cases where penalty of 10 times has been imposed, Deputy Commissioner has discretion to direct the refund of the penalty in facts of a particular case. The power to refund the penalty Under Section 38 clearly indicates that legislature have never contemplated that in all cases penalty to the extent of 10 times should be ultimately realised. Although the procedural part which provides for impounding and realisation of duty and penalty does not give any discretion Under Section 33 for imposing any lesser penalty than 10 times, however, when provision of Section 38 is read, the discretion given to Deputy Commissioner to refund the penalty is akin to exercise of the jurisdiction Under Section 39 where while determining the penalty he can impose the penalty lesser than 10 times. 17. In the Division Bench judgment of the Karnataka High Court relied by the High Court in Digambar Warty and other (supra), after noticing the provisions of Section 33 and 34 the Division Bench laid down following in paragraph 36: 36. This provision refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not commit any error in relying on the judgment of the Division Bench in Digambar Warty and others (supra). We thus has to uphold the above view expressed in the impugned judgment. 19. There is one more aspect which needs to be noted in the present case. We have seen that even though 10 times penalty has to be collected and imposed by the person impounding the document Under Section 37, Section 38 empowers the Deputy Collector to refund the duty. Learned trial court while imposing penalty at the rate of two times has given following reason: The Plaintiffs of O.S. No. 863/08 and 864/08 are stated to be agriculture and are residing at Sherewad village. The said fact is not denied by the Defendants therein. It appears that the agreements were prepared by local villagers who are not experienced in the documentation. Looking to the status of the Plaintiffs, their standard of having qualification of the document writers. I am of the opinion that the ratio laid down by our Hon'ble High Court in ILR 2011 KAR 4719 can be applied to the present facts and circumstances levying 10 times penalty in respect of said agreement will be harsh on the Plaintiffs. Therefore I am of the opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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