CASE TITLE: N.M. THEERTHEGOWDA Versus Y.M. ASHOK KUMAR AND OTHERS, CIVIL APPEAL NO. 10038 OF 2024
The Supreme Court in a recent judgment justified the imposition of ten times penalty on a deficit stamp duty being unpaid by the litigant under the Karnataka Stamp Act, 1957 (“Act”).
The Appellant wanted the suit agreement to be admitted in evidence at the interlocutory stage, however, the agreement was not sufficiently stamped. Therefore, in terms of Section 34 of the stampAct, the Appellant was directed to pay ten times of deficit stamp duty by the trial court as a penalty for not paying sufficient stamp duty. The trial court’s order was sustained by the High Court. Following this, an appeal was preferred before the Supreme Court.
It was argued by the Appellant/litigant in the supreme court that the deficit stamp duty should alone be collected at the time of the passing of the judgment and decree, and the levy of penalty is illegal and erroneous.
Rejecting the Appellant’s contention, the bench comprising Justices Hrishikesh Roy and SVN Bhatti observed that since the Appellant’s case squarely falls within Section 34 of the Act, which makes instruments not duly stamped so it is inadmissible in evidence, the levy of penalty by the trial court i.e., ten times the deficit stamp duty amount could not be interfered with.
On the aspect of whether the trial court has the discretion to levy a lesser amount of penalty than ten times the deficit stamp duty amount, the Court drew reference from the case of Gangappa and another Vs Fakkirappa (2018) where it was held that while admitting insufficiently stamped documents, trial courts have no discretion in levying the penalty.
Accordingly, the appeal was dismissed.
