1989 PLP 3402 (MLD)

Mirza Waqar Hussain for Respondent. When this appeal came up for hearing yesterday Mr. Shaujaat Ali, learned counsel for the appellant drew my attention to the fact that the Power of Attorney produced by the Attorney of the respondent landlady, which has been duly exhibited by the trial Court as Exh. 5, is in fact a General Power of Attorney, whereas it has been executed only on a non-judicial Stamp paper of Rs.10 and hence it is insufficiently stamped. The learned counsel for the respondent however, asked for time to study the matter in the context of the relevant provisions of the Stamp Act. The case was thus adjourned for today. Mr. Mirza Waqar Hussain, learned counsel for the respondent has placed before me a statement duly signed by the respondent herself admitting the fact that the said document is not properly stamped and that she is prepared to pay the deficit duty of Rs.65 together with a penalty of a sum equal to ten times of such deficit. stamp duty, at the rate of Rs.75 amounting to Rs.750 + 65 = 815 in terms of subsection (a) of Section 35 of the Stamp Act (II of 1899). The learned counsel for the appellant, on the other hand, relying upon the provisions of sections 35 and 61 of the Stamp Act, contended that it is not within the competence of this Court as an Appellate Court to levy the penalty and recover the same from the respondent. In support of his contention he referred to two authorities, i.e. P L D 1984 Lah. 407 and Law Notes 1975 Part I page 531.

2. In the first above-noted case, the facts were that the plaintiff/petitioner brought a suit against the respondent for Declaration that he was owner of the land in dispute which he claimed to have been sold away to him, by their predecessor-in-interest for a consideration of Rs.1,20,

000. The respondent contested the suit. The petitioner while appearing as his own witness deposed that he purchased the land from the deceased owner for a sum of Rs.1,20,000 for which the latter issued a receipt. This document was sought to be tendered in evidence by the petitioner as a receipt, but the defendant/respondent raised an objection that it constituted a sale-deed, and being unstamped, was liable to be impounded. The learned trial Court accepted this contention. He impounded it and imposed penalty at ten times of the Stamp Duty. The petitioner however, felt dis-satisfied with this decision of the learned trial Court. In his submission, the trial Court after impounding the document, should have proceeded under section 38(2) of the Stamp Act and forwarded it to the Collector for action under section 40 of the Act. The penalty could be imposed only if the petitioner/plaintiff had expressed his willingness to have the document admitted in evidence on payment of proper duty with ten times of such duty, as penalty, the learned single Judge of the Lahore High Court held as under:- "After a document has been impounded, it is the choice of the litigent to tender it in evidence on payment of requisite duty and penalty or to ask the Court to refer the matter to the Collector under subsection (2) of section

38. If the party does not want to produce the document in evidence or otherwise prefers to have the course laid down in section 8(2) adopted by the Court, the latter cannot embank upon determination and realization of the duty and the penalty. It is noteworthy that when a party offers to tender an unstamped or insufficiently stamped document in evidence and the 10 times of the duty, payable on the instrument exceeds Rs.5, the Court must impose a penalty, equal to 10 times of the duty chargeable thereon and in view of the provisions of section 35, is, not left with any choice, to inflict a lesser penalty. However, in this behalf, under section 40, the Collector appears to be possessed of wider powers." This case has therefore, no direct relevancy to the facts of the case in hand. In the above second cited case the question before the learned Single Judge of the Lahore High Court was whether the Appellate Court can levy stamp duty or penalty under section 35 of the Stamp Act when the document has been admitted m evidence. The facts involved in this case were that upon an objection of the defendant about inadmissibility of the document, the learned trial Court held that it was not duly stamped and, consequently, it was admitted in evidence upon payment of duty of Rs.2 alongwith a penalty of Rs.20 upon the plaintiff. On appeal, the defendant also raised an objection before the Additional District Judge about the said document being not properly stamped. The' learned A.D.J, agreed with the defendant that the stamp duty was to be paid on the value of the property and worked it out at Rs.40,

000. The deficit stamp duty was found to be in the sum of Rs.1,980 and hence the plaintiff was directed to pay that amount alongwith ten times penalty amounting to Rs.19,

980. After allowing adjustment of Rs.22 already paid the plaintiff was directed by the first Appellate Court to deposit a further sum of Rs.21,

956. It was urged on behalf of the plaintiff that once the document was admitted in evidence, rightly or wrongly, it cannot be called in question at any stage of the same suit. After referring to the provisions as contained in sections 35, 36 and 61 of the Stamp Act as well as after taking into consideration certain reported decisions, the Court held: "

6. The Additional District Judge. was empowered to act under section 16 of the Stamp Act but he had no power to levy the stamp duty or to make its deposit a precondition for considering the document as the declaration and send it to the Collector for appropriate action under section

61. The learned counsel for the respondents interpreted this order in the same light. The order is, therefore, to be considered as being an order made for the benefit of the petitioners so that if they are able to make payment of the amount in Court it may not be necessary for the Collector to prosecute them:"

3. The learned counsel for the appellant also invited my attention to the commentary on Stamp Duty by Shaukat Mehmood 1972 Edition which is based on a case from Indian jurisdiction reported in A I R 1961 Cal. 39(FB) which is to the following effect: "Section 61 does not authorise any Court of appeal to direct its office "to do the needful and send necessary intimation to the Collector" for the purpose of realising stamp duty and penalty. Such an order by the Court of appeal therefore, is entirely without jurisdiction."

4. From the above facts narrated above it is evidently clear that the power of attorney produced by the respondent is admittedly a General Power of Attorney and that it is not properly stamped. The respondent has, as already stated, offered to pay the deficit stamp duty together with ten times penalty. The only question that non-poses to the answer is whether this Court can impound the said document, which has been already admitted in evidence and accepted by the trial Court, and levy the penalty as offered by the respondent, which is in accordance with law, or it should be sent to the Collector for necessary action. There is difference of opinion between the various High Court from the Indian jurisdiction on this point. Certain High Courts have taken the view that it is open to the Appellate Court to levy penalty notwithstanding the document having been admitted in evidence by the trial Court; whereas certain others have opined that it is not legal for the Appellate Court to adopt such a course and that the Appellate Court should impound the document and send it to the Collector for necessary " action as envisaged by section 61 of the Stamp Act. The learned counsel for the parties could not draw my attention to any authority of this Court. The Lahore High Court in the above-cited case reported in 1975 Law Notes (Lahore) 531 has, however, expressed the view that the Appellate Court should impound the document and then send it to the Collector under section 61.

5. Since the Power of Attorney has been admitted in evidence by the learned trial Court without applying its mind to the said document being improperly stamped, hence it is not open to the appellant at this stage to call in question the admission of the said document in view of the provisions contained in section 35 of the Stamp Act. I am clearly of the view that the trial Court was legally competent and authorised to receive in evidence the said document upon payment of the deficit stamp duty and the penalty to the extent of ten times of the deficiency had it occurred to it that it was not properly stamped. This Court is, however, not legally debarred from determining about the deficiency of the Stamp duty. The fact that the trial Court has admitted the document would only mean that its inadmissibility, cannot be called in question at a later stage. The Appellate Court is, however, at the same time legally obliged to ensure that the revenue does not suffer any loss and specific provision to that effect has been made under section 59 as well as under section 61 of the Stamp Act.

6. Since the appellant has admitted and so also I am of the opinion that the said document is 'not properly stamped and hence it is liable to be impounded. I, therefore, impound the same. I am however, also at the same time of the opinion that it is not within my competence to recover the deficit stamp duty alongwith the penalty. 1, therefore, following the above-noted decision of the Lahore High Court 1975 Law Notes (Lah.) 531 direct that the document be sent to the Collector for necessary action under section 61 of the Stamp Act. The respondent may, if so desire, deposit the sum of Rs.815 with the Nazir of this Court. MA.K./M-794/K Order accordingly.