PART-III

On receipt of this plaint, the court Jr.civil judge, Medchal directed office Head Clerk, to check the plaint and prepare an office note. In order to number the suit the Head Clerk directed the plaintiff to comply with following objections:

   1.  How suit is maintainable in the absence of sale deed?

2.  Suit Valuation is wrong as the same is not in accordance with S.26 of A.P.Court fee and Suit Valuation Act and Court fee paid is deficit.

       3.  Since sale deed dated:10/11/2011 is neither registered and nor duly stamped.

4.  He directed the plaintiff to pay deficit stamp duty with ten times penalty or else he would impound the instrument b) directed the plaintiff to get the sale deed registered.

For the purpose of our discussion and better understating of certain other related areas, the above questions are reframed as follows:

 Whether the method of valuation of suit done by the plaintiff is correct?  What is the difference between Suit Valuation and Court Fee?

Assume that in the given case Court Fee paid by plaintiff is insufficient. In such a situation what is the direction court can give to plaintiff and what if same is not complied with?

Is it tenable on part of the Head Clerk to direct the plaintiff to pay deficit stamp duty with ten times penalty on a sale deed at the stage of filing the plaint? Justify your answer. What is the purpose of Stamp Duty?  What are the consequences of non-payment of deficit stamp duty by plaintiff at any point of time?

What is ‘Impounding’? Who is competent to impound an instrument? Under what circumstances an instrument can be impounded? Whether court in the given case can impound the sale deed which is not duly stamped executed by Kiran in favour of Plaintiff?

Assume that in the said suit along with plaint, plaintiff filed a petition u/O.39 R/1 &2 CPC seeking the court to grant temporary injunction. On receipt of summons the respondent/defendant appeared and contended that court shall not rely upon unregistered and unstamped documents? Is this contention tenable?  Whether court can impound instrument and collect stamp duty along with penalty at the request of petitioner/plaintiff or should it send to the collector.

Whether unregistered sale deed executed by Kiran in favour of plaintiff can be marked in evidence to prove the sale transaction?

Whether unregistered sale deed executed by Kiran in favour of plaintiff can be marked in evidence for any other purposes? For what other purpose can the plaintiff use the unregistered sale deed in the given case?

Assume that unduly stamped and unregistered sale deed executed by plaintiff in favour of Kiran, is marked in evidence. Can it be challenged by defendant at any point of time?  What is the purpose of registration? List out any six instruments required to be registered under law of registration.

 Whether the method of valuation of suit done by the plaintiff is correct? Justify your answer. What is the difference between Suit Valuation &Court Fee?

Ans: yes, the method of valuation is correct. The reasons are like this: According to S.26(c) of A.P.Court Fee Act, whether the subject matter of the suit has a market value or not, fee shall be computed on the amount at which the relief sought is valued in the plaint or at which such relief is valued by the court, whichever is higher. In the given case relief sought is to prevent interference into suit property by a third party. Thus right being intangible one and it is only one among innumerable rights which ownership to property offers and there is no fixed market rate for such relief, valuation made by plaintiff as per S.26(c) of the Act, is permissible. In the present suit as per plaint allegations possession of plaintiff is lawful one and he seeking injunction against a third party, who is not connected to suit property, seeking relief of injunction is a correct remedy and as such method of valuation is also correct.

This is the proposition of law laid down by High court of A.P in VIRAJ CONSTRUCTIONS VS. P. PANDU 1998 (6) ALT 262: In this case plaintiff filed a suit for a permanent injunction.  He valued the relief claimed under Section 26(c) of the Andhra Pradesh Court Fees and Suits Valuation Act, 1956 (for short ‘the Act’), at Rs.10,000/- and paid Court-fees thereon. The lower Court was of the opinion that the relief has to be valued at more than Rs.1 lakh and so, it returned the plaint for presentation to the proper Court. Finding the fault with lower court High Court in the above case held that in a suit for mere injunction the market value of the suit land is not the criterion for valuing the relief, as the relief has to be valued on the basis of the advantage which is sought to be derived or the loss which is sought to be averted.  Hence, it was held such kind assessment of suit valuation incase of injunction suits is improper.

Difference between suit valuation and court fee:  Suit valuation refers to rate at which reliefs sought in the plaint are valued in monetary terms and whereas court fee is the money paid to court after suit valuation w.r.t table provided in the Act. In other words, based on the relief sought one has to go through the rules provided under this law which say that ½ or ¾ market value of the property or valuation made by the plaintiff in the plaint  w.r.t relief(in case of intangible) sought.  Once plaintiff is determined about relief sought, he has to decide what it comes to upon taking it as ½ or ¾ th basing on which he has to see the table provided under the act and pay the court fee.

 Assume that in the given case Court Fee paid by plaintiff is insufficient. In such a situation what is the direction court can give to plaintiff and what if same is not complied with?

Ans: The court can direct the plaintiff to pay the deficit court fee by fixing time or if it exceeds pecuniary jurisdiction of court direct the plaintiff to present before proper court. As per S.4 of court fee Act, no document which is chargeable with fee under the Act, without payment of court fee, shall be recorded or exhibited or be acted upon except in a criminal court that too if the court considers necessary to do so. It is a ground for rejection of plaint or counterclaim or whichever is applicable.  However, before going to reject the plaint court shall give a direction to plaintiff to pay court fee within the fixed time. The source of power to court for this direction lies in S.5 of A.P.C.F.S.V.Act and S.149 of CPC. These are two are kind of exceptions to S.4 of court fee Act. As per S.5 when a document is not affixed with proper court fee, even if received by court or public office the party can be directed to pay the court fee or part thereof that is payable by fixing time for payment the documents shall be dealt with as if the full court fee is paid as on the document at the first instance. S.149 CPC talks about the same. The S.149 is proviso to S.4 of the court fee Act. It was held so in K.Natrajan Vs. P.K.Rajasshekaran 2003(9) ILC(Mad)274. Non-payment of court fee is valid ground to reject the plaint. Court fee can also be made as issue and court even by way of judgment direct the party to pay court fee.

Is it tenable on part of the Head Clerk to direct the plaintiff to pay deficit stamp duty with ten times penalty on a sale deed at the stage of filing the plaint? Justify your answer. What is the purpose of Stamp Duty? What are the consequences of non-payment of deficit stamp duty by plaintiff at any point of time?

Ans: No, The head clerk or Court cannot direct the plaintiff to pay stamp duty or deficit stamp duty with penalty on the documents liable for stamp duty and penalty at the time of registration of the suit.

Section 33 of the Indian Stamp Act deals with examination and impounding of instruments and Section 35 of the Indian Stamp Act deals with the instruments not duly stamped inadmissible in evidence and proviso (a) to Section 35 contemplates that the instrument which is unstamped or insufficiently stamped  shall be admitted in evidence on payment of duty and penalty.  On a combined reading of the above Sections, it is manifest that the unless deficit stamp duty is paid,  the said document shall not be admitted in evidence, which means deficit stamp duty shall be collected only when the document is tendered in evidence and Hon’ble High Court of A.P. In K. Santhakumari v. K. Suseela Devi[1]1961 (1) An.W.R 425 held thus:     “Section 35 proviso (a) provides that the instrument which is unstamped or insufficiently stamped shall be admitted in evidence on payment of duty and penalty.  Obviously, it presumes that the document would be admissible in evidence if the stamp duty and penalty were paid.  This suggests that the collection of stamp duty should not be done before the stage of admissibility of the document in evidence.  Further it is obvious that if stamp duty and penalty are collected in advance and, later the document is not admitted in evidence, the party concerned would have to pay penalty equal to ten times the duty or deficit duty and take the chance of getting refund afterwards under Section 39 and lose the chance of having to pay a smaller penalty in the first instance at the discretion of the Collector under Section 40(1) (b) without the advantage of the document being admitted in evidence.  This would cause undue hardship to the party.  Such undue hardship will be avoided if the provision under proviso (a) to Section 35 and indicated in 1955-1 Mad. LJ 457 were followed.

     b) Consequences are two-fold: I) As per S.35 such instrument shall not be: a) Received in evidence b) Acted upon c) Registered d) Authenticated e) shall not be used for any purpose. But the same principle is not applicable to any instrument tendered to receive in evidence in any criminal Court other than the proceedings under Chapter IX or X(D) of the Code of Criminal Procedure

          II) Penal consequences: Taking proceeding or payment of penalty shall not bar to prosecute for offence under this law. However, sanction of collector is necessary and collector should opine it was done with an intention to evade payment.

     c) Purpose of stamp Act: Impose duty on the instrument but not to regulate the transactions between parties. It’s fiscal Act for the augmentation of revenue.