INSTRUMENT DULY STAMPED
To be 'duly stamped' an instrument should comply with three requirements: (i) the stamp must be of the
proper amount; (ii) should bear the proper description of stamp; (iii) the stamp must have been affixed or
used according to law for the time being in force. It is evident from sub-section (2) of Section 33 that for
determining whether an instrument bears the proper stamp and thus complies with the requirement of being
'duly stamped', the stamp duty payable on the instrument must be determined only with reference to the
terms of the instrument and not evidence dehors or beyond the instrument. Section 33 does not contemplate
an enquiry, with reference to material other than the instrument itself, to reach a conclusion as to whether
such instrument is duly stamped or not. If a property of the market value of Rs. 25,000/-, is conveyed under
a sale deed, mentioning the sale consideration as Rs. 10,000/- and the stamp duty at the specified rate is paid
on Rs. 10,000/- then it is duly stamped for purposes of the Act, even though there may be undervaluation
regarding market value.
This is so, because, to find out whether there is undervaluation, an enquiry beyond
the terms and contents of an instrument, is required, to determine the market value. Undervaluation cannot
be assumed merely with reference to the terms or contents of an instrument but can be determined only with
reference to external evidence relating to market value. Section 33 does not contemplate or permit any such
enquiry into the market value of the property which is the subject-matter of the instrument, nor
determination whether there is any undervaluation. Thus, a deed of conveyance bearing the necessary stamp
duty at the specified rate on the consideration or value mentioned therein, cannot be considered as 'not duly
stamped' and therefore cannot be impounded under Section 33. The Sub-Registrar can send an instrument to
the Deputy Commissioner under Section 37(2) for determination of a proper duty under Section 39, only if it
is impounded under Section 33, as not being duly stamped. He cannot send an instrument to the Deputy
Commissioner under Section 37(2), if he is merely of the opinion that it is undervalued. The Deputy
Commissioner while exercising his power under Section 39 of the Act, in regard to an impounded instrument,
cannot embark upon an enquiry into the market value of the property; he can only decide whether the
instrument is duly stamped or not; and if he finds that it is duly stamped, he shall certify thereon that it is
duly stamped; and if it is not duly stamped, he shall require payment of proper duty or the amount required
to make up the. same together with a penalty as specified therein. The resultant position is that, there can be
no determination of 'proper duty' not levy of penalty under Section 39, in respect of documents which are not
impounded or which cannot be impounded. Hence no penalty can be levied under Section 39, in regard
to an instrument which is undervalued. It should however be noted that in regard to instruments which
are not duly stamped, but which are not impounded, but registered, the proper duty can be collected by
initiation of proceedings under Section 46-A of the Act. Thus the determination whether a document is not
duly stamped and therefore should be impounded relates to a pre-registration stage. On the other hand, the
enquiry as to whether the document is undervalued or not and the determination of market value and proper
duty on such market value, is a post-registration enquiry, which has nothing to do with the registration or
validity of the instrument. Thus, if a document which is not duly stamped, is presented for registration, the
Registering Officer will not register the document but impound it, and send it to Deputy Commissioner
under Section 37(2) so that the Deputy Commissioner can require payment of proper duty and
penalty under Section 39. On the other hand, if the document is undervalued, the Registering Officer shall
register the document and refer the instrument to the Deputy Commissioner for determination of market
value and payment of proper duty under Section 45-A and the Deputy Commissioner has to determine the
market value and the proper duty payable thereon after giving the parties, a reasonable opportunity of being
heard. Before 1-4-1991, in areas where Section 45-A was not brought into force, there could be no action
under Section 45-A, even if the consideration/price/value mentioned in Instruments of Conveyance,
Exchange or Gift was less than the market value. In such case, action could be taken only under Sections 28
and 61 of the Act. The combined effect of Section 28(1) and (2) and Section 61 and Rule 15-A was that if there
was any undervaluation, the person executing the document could be prosecuted and punished under Section
61. Once Section 45-A was made applicable, of course, the deficit stamp duty could also be collected. But
under no circumstances, penalty could be levied under Section 39, in regard to undervalued instruments. -
Coming to the case on hand, the land sold is situated in Yadur Village in Chikodi Taluk and Section 45A
became applicable in the said area only from 1.4.1991. On the date of execution and registration of the sale
(26.8.1985) Section 45A was inapplicable and what was applicable was Section 28 and Rule 15A. Hence, if the
Registering Authority on verification found that there was undervaluation, he could only prosecute the
executant under Section 61 and could not impound the document under Section 33 or initiate any action
under Section 39. Hence, the impugned order directing recovery of stamp duty on the basis of market value
and penalty equivalent to ten times the duty, under Section 39 is without authority of law and contrary to the
provisions of the Act.Huleppa Balappa Karoshi v Sub-registrar, Chikodi, ILR 1995 KAR 3589
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