Judicial Interpretation

The key judicial interpretation, found in paragraphs 8-9, clarifies that when a party invites the court to decide under Section 34(1) of the Karnataka Stamp Act, they cannot later express willingness to exercise the option under Section 37(2) of the Act. The Court emphasized that in such cases, Section 37(1) would apply, and the imposition of ten times penalty on deficit stamp duty is justified.

Court’s View

The Supreme Court upheld the High Court’s decision, stating that the appellant, having invited the court to decide under Section 34 of the Act, cannot later seek to exercise the option under Section 37(2). The Court found no grounds warranting interference with the impugned order. (Paragraphs 9-11)

Conclusion

The appeal was dismissed. The Court affirmed that the case of the appellant is covered by Section 34 of the Act, and the imposition of ten times penalty on the deficit stamp duty was correct. (Paragraphs 11-12)

Legal Provisions

Karnataka Stamp Act – Sections 33, 34, 35, 37, 39

Case of the Appellant

• Filed a suit for specific performance of an agreement for sale dated 04.11.1996.
• Claimed possession of the suit property as part performance under the agreement.
• Argued that deficit stamp duty should be collected only at the time of passing the judgment and decree.
• Contended that the document should have been sent to the District Registrar for determination of deficit stamp duty and penalty under Section 39 of the Act.

Appellant Relied On

No specific case law mentioned in support of the appellant’s arguments.

Case of the Respondents

The respondents’ arguments are not explicitly mentioned in the judgment.

Respondents Relied On

No specific case law mentioned for the respondents.

Question & Answer

Question: What was the main issue in this case regarding stamp duty? Answer: The main issue was whether the court could impose a ten times penalty on deficit stamp duty under Section 34 of the Karnataka Stamp Act, or whether the document should have been sent to the District Registrar for determination of duty and penalty under Section 39. (Paragraphs 3-4)

Question: Why did the Supreme Court uphold the imposition of the ten times penalty on deficit stamp duty? Answer: The Court upheld the penalty because the appellant had initially invited the court to decide under Section 34(1) of the Act and agreed to pay proper stamp duty and penalty. Having done so, the appellant could not later seek to exercise the option under Section 37(2) of the Act. (Paragraphs 8-9)

Question: Can a party change their stance regarding the method of stamp duty determination after initially agreeing to one approach? Answer: No, the Court ruled that once a party invites the court to decide under Section 34 of the Act, they cannot later express willingness to exercise the option under Section 37(2). In such cases, Section 37(1) would apply. (Paragraph 9)

Question: What is the significance of Section 37(1) and 37(2) of the Karnataka Stamp Act in this case? Answer: Section 37(1) applies when a party pays the deficit duty and penalty as determined by the court under Section 34. Section 37(2) deals with cases where the document is sent to the Deputy Commissioner for determination of duty and penalty. The Court clarified that in this case, Section 37(1) applies due to the appellant’s initial agreement to pay duty and penalty as per the court’s decision. (Paragraphs 5, 9)

Question: Did the Supreme Court find any grounds to interfere with the High Court’s order in this case? Answer: No, the Supreme Court did not find any grounds warranting interference with the High Court’s order. The Court agreed with the High Court’s reliance on previous cases (Gangappa and another v. Fakkirappa and Digambar Warty and others v. District Registrar, Bangalore Urban District and another) in rejecting the appellant’s prayer. (Paragraphs 10-11)

Details of Case

• Court: Supreme Court of India
• Bench: Hrishikesh Roy and S.V.N. Bhatti, JJ.
• Date of Order: September 02, 2024
• Case Name: N.M. Theerthegowda vs. Y.M. Ashok Kumar and Others
• Case No.: Civil Appeal No. 10038 of 2024 (Arising out of S.L.P. (Civil) No. 19165 of 2021)