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1994 SCC OnLine Bom 96 : (1995) 1 Mah LJ 489 : (1995) 1 Bom CR 452 : AIR
1994 Bom 337 : (1994) 2 AP LJ (DNC 1) 71 : (1995) 2 BC 115

In the High Court of Bombay

Bombay Stamp Act Section 33: Power to Impound Consent Terms after
Application Under Order 21, Rule 2, Civil Procedure Code to Record Them
Withdrawn
(Bombay)
(BEFORE B.P. SARAF, J.)

Deepak Corporation, Bombay … Petitioner;

Versus
Pushpa Prahlad Nanderjog … Respondent.
Civil Revn. Appln. No. 481 of 1989
Decided on March 4, 1994
Bombay Stamp Act (60 of 1958), Ss. 33, 35, 58 and Civil Procedure Code, O. 21, R. 2 —
Court has power to impound consent terms produced before it along with application, under
Order 21, Rule 2, Civil Procedure Code, for recording said consent terms, even after said
application is withdrawn — Court does not become functus officio for purpose of section 33
of Stamp Act.
After a consent decree dated 20-12-1984, an application, under Order 21, Rule 2 of Civil
Procedure Code was made to record fresh consent terms dated 21-2-1989 in part adjustment of
original decree. Fresh consent terms were tendered in court and court took cognizance of the
document. Parties admitted their respective signatures to the consent terms. On court raising
questions of sufficiency of stamp duty and registration in respect of the document the petitioners
wanted to withdraw the application and not to press for orders thereon. After hearing arguments on
Court's power to impound the document, the Court held that the document was liable to be
impounded and accordingly directed the Registrar to send the same to the Collector for recovery of
stamp duty, penalty and registration charges. In revision application challenging the decision,

Page: 490

Held :
That a duty has been cast on the authority or Court to impound a document under section 33 if
any such document which is inadequately stamped is produced before it to be acted upon and that
duty does not come to an end on withdrawal of the document by the party liable to pay additional
duty and penalty. The powers, duties and jurisdiction of the Court to pass orders on the application
of the party for modification of the decree on the basis of such application and the document
produced therewith and the powers, functions and jurisdiction of the Court under section 33 of the
Stamp Act to impound the inadequately stamped document produced or coming before it are two
distinct and different powers and jurisdictions. For the purpose of modification of the decree the
Court might become functus officio on withdrawal of the application but for the purpose of taking
action under section 33, it cannot become functus officio. A reference to sections 35 and 58 of the
Stamp Act shows that section 35 only gives finality to the decision in regard to the admissibility of
the document in evidence. It does not operate as a bar to impounding of the same. Order
impounding document confirmed.
(Para 7)
For Petitioner: L.H. Rambhia
For Respondent: Ms. S. Kalyani
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JUDGMENT
1. This revision application is directed against the order of 26 April, 1989 of the
Bombay City Civil Court in SC Suit No. 2603 of 1984 holding that the document
described as “consent terms” dated 21 February, 1989 tendered to the court along
with application dated 21 February, 1989 filed by the petitioners for modification of
the undertaking given by them under clause 5 of the earlier consent terms dated 20-
12-1984, was liable to be impounded and directing the Registrar to forward the same
to the Collector for recovery of the stamp duty and penalty and registration charges.
2. The material facts, briefly stated, are as follows: The respondent, Pushpa
Prahlad, had filed a suit against the petitioners for permanent injunction restraining
them from interfering with her peaceful use and enjoyment of the suit premises and
from taking any steps to dispossess her therefrom except by due process of law. The
said suit, which was numbered as S.C. Suit No. 2603 of 1984, was settled between
the parties and consent terms dated 20 December, 1984 were filed. By the said
consent terms the petitioners (original defendants) agreed and undertook to offer to
the respondent (original plaintiff) a self contained flat of 600 sq. ft. in the new
building to be constructed by the petitioners on the suit property at the rate of Rs.
225/- per sq. ft. and to deliver possession of the said flat within two years from the
date of commencement of the construction. The above suit was decreed by the court
on 20 December, 1984 in accordance with the said consent terms. Thereafter on 21
February, 1989, the parties signed fresh consent terms in modification and part
adjustment of the above decree. An application was filed on 21 February, 1989 before
the Bombay City Civil Court under Order 21, Rule 2 of Civil Procedure Code for
recording the fresh consent terms and relieving the petitioners from the undertaking
given by

Page: 491

them to the court under clause 5 of the original consent terms and the decree passed
in terms thereof. Fresh consent terms dated 21 February, 1989 were tendered to the
court along with the above application for the purpose of recording the part
adjustment of the decree to the satisfaction of the plaintiff. The court took cognizance
of the said document. The plaintiff as well as the partner of the defendants who had
put their signatures on the said document admitted their respective signatures and
contents of the document. However, before acting upon the said document, the court
made a query to counsel for the petitioners (original defendants) whether the
document was sufficiently stamped and whether it attracted the provisions of the
Indian Registration Act. Counsel for the petitioners instead of answering the query
informed the court on 24 Feb. 1989 that the petitioners wanted to withdraw their
application dated 22 February, 1989 itself and not to press for order thereon. On the
above prayer of the counsel, the trial court passed the following order on 24 February,
1989:

“Advocate for the defendant states that he wants to withdraw the application i.e. 22
-2-1989 and therefore he does not press for orders.
With the above, I am not passing any orders but it will be considered whether it is
necessary to impound the document by sending it to the Collector of Stamps as the
parties have used it as evidence and tendered the consent terms as their
agreement before this Court. In this respect separate orders will be passed. Mr.
Rambhia wants to argue on this point. Adjourned to 10-3-1989 for orders at 2.45
p.m.”
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(Emphasis supplied)
3. Later, on hearing the parties on the question whether it was necessary for the
court to forward the document to the Collector for recovery of stamp duty, penalty and
registration charges, it decided the issue against the petitioners by its order dated 26
April, 1989 which is the subject matter of challenge in this revision application. The
trial court recorded a finding that the document in question had been tendered before
it as evidence. It was observed that the advocate for the defendants (the petitioners
herein) by written application dated 22 February, 1989 had tendered the consent
terms as evidence of fresh agreement between the parties for modification of the
decree and for recording part adjustment of the decree. Not only that, the parties also
admitted their respective signatures as also the contents of the said document before
the court. It was only when a question was raised by the court whether the document
was adequately stamped or it was liable to additional stamp duty, penalty and
registration charges that the learned advocate was instructed not to press the
application. Such an attempt by the parties, according to the trial Court, was not only
deceptive but gross dishonest attempt to avoid stamp duty and penalty. The court
distinguished the various decisions relied upon by the counsel for the petitioners and
observed that they were not applicable as, unlike in those cases, in the present case
the consent terms dated 21 February, 1989 were tendered before the court as
evidence of agreement between the parties for adjustment of part of the decree. Not

Page: 492

only that, the parties had confirmed their respective signatures as well as the contents
of the document in question. The consent terms were duly produced before the court
as evidence. It was only when before marking it as an exhibit the court wanted to
impound the same and recover the stamp duty and penalty, an attempt was made to
disarm the court by seeking to withdraw the application itself. The trial court observed
that such action of the party cannot affect the power of the court to impound an
inadequately stamped document duly produced before it. The trial court, therefore,
held that the document was liable to be impounded and accordingly directed the
Registrar to send the same to the Collector for recovery of stamp duty, penalty and
registration charges. It is this order which is the subject matter of challenge in this
revision petition.

4. Learned counsel for the petitioners submits that the action of the trial court is
illegal and without jurisdiction inasmuch as the petitioners having withdrawn the
application for modification of the decree, the court became functus officio and no
more remained in possession of the said document and hence it had no power to
impound the same. Counsel also referred to the order of the court dated 24 February,
1989 which has been set out above and pointed out that as the petitioner wanted to
withdraw its application dated 22 February, 1989 and did not press for orders, the trial
court did not pass any order thereon. In such a situation, the court was not justified in
observing that it would consider whether it was necessary to impound the document
by sending it to the Collector of Stamps as the same had been used as evidence and
tendered before the court and that separate order would be passed in that respect.
Counsel submits that the latter part of the above order and the impugned order
passed in pursuance thereof later are both illegal and without jurisdiction.
5. For appreciation of the point in issue, it may be expedient to set out the relevant
provisions of the Bombay Stamp Act, 1958 (the Act). Chapter IV deals with
“Instruments not duly stamped”. Section 33 provides for examination and impounding
of such instruments. This section as it stood at the material time reads:
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“S. 33(1) Subject to the provisions of section 32-A, every person having by law
or consent of parties authority to receive evidence and every person in charge
of a public office, except an officer of police or any other officer, empowered
by law to investigate offences under any law for the time being in force, before
whom any instrument chargeable, in his opinion, with duty, is produced or
comes in the performance of his functions shall if it appears to him that such
instrument is not duly stamped, impound the same irrespective whether the
instrument is or is not valid in law.
(2) For that purpose every such person shall examine every instrument so
chargeable and so produced or coming before him in order to ascertain
whether it is stamped with a stamp of the value and description required by
the law for the time being in force in the State when such instrument was
executed or first executed:

Page: 493

Provided that,—
(a) nothing herein contained shall be deemed to require any Magistrate or
Judge of a Criminal Court to examine or impound, if he does not think fit so
to do any instrument coming before them in the course of any proceeding
other than a proceeding under Chapter IX or Part D of Chapter X of the
Code of Criminal Procedure, 1973;
(b) in the case of a Judge of a High Court, the duty of examining and
impounding any instrument under this section may be delegated to such
officer as the Court may appoint in this behalf.
(3) For the purposes of this section, in cases of doubt,—
(a) the State Government may determine what office shall be deemed to be
public offices; and
(b) the State Government may determine who shall be deemed to be persons
in charge of public offices.”
(Emphasis supplied)
Section 34 provides that instruments not duly stamped shall be inadmissible in
evidence. This section, as it stood at the material time, so far as relevant, reads:
Section 34 “Instruments not duly stamped inadmissible in evidence, etc. —
No instrument chargeable with duty not being any instrument referred to in sub-
section (1) of section 32-A shall be admitted in evidence for any purpose by any
person having by law or consent of parties authority to receive evidence, or shall be
acted upon, registered or authenticated by any such person or by any public officer
unless such instrument is duly stamped.
Provided that,—
(a) any such instrument shall, subject to all just exceptions, be admitted in
evidence on payment of,—
(i) the duty with which the same is chargeable, or in the case of an instrument
insufficiently stamped, the amount required to make-up such duty, and
(ii) a penalty of five rupees or, ten times the amount of deficient portion thereof,
whichever is higher.”
(Emphasis supplied)
Section 37 lays down the manner of dealing with instruments which have been
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impounded. If the person impounding the document has the authority to receive
evidence and admits the instrument in evidence on payment of penalty or duty, he
has to follow the procedure laid down in sub-section (1). In other cases, procedure laid
down in sub-section (2) is to be followed. This section reads:
Section 37. “Instruments impounded how to be dealt with.— (1) When the person
impounding an instrument under section 33 has by

Page: 494

law or consent of parties authority to receive evidence and admits such instrument in
evidence upon payment of a penalty as provided by section 34 or of duty as provided
by section 36, he shall send to the Collector an authenticated copy of such instrument,
together with a certificate in writing stating the amount of duty and penalty levied in
respect thereof, and shall send such amount to the Collector, or to such person as he
may appoint in this behalf.

(2) In every other case, a person so impounding the original instrument shall
prepare an authentic copy of such instrument and where it is a true copy on an
abstract referred to in section 31 or true copy referred to in section 33-A, he shall
send such authentic copy or, true copy or, as the case may be, an abstract to the
Collector, for the purpose of taking action on the authentic copy or a true copy or,
as the case may be, an abstract as if it were the original instrument and endorsing
thereon a certificate with reference to the instrument under clause (a) of sub-
section (1) of section 39 or under sub-section (1) of section 41, as the case may be.
On receipt of the authentic copy, the true copy or, as the case may be, an abstract
with the certificate as aforesaid endorsed thereon, the person who had impounded
the original instrument shall copy on the original instrument the certificate
endorsed on the authentic copy and shall authenticate such certificate and where it
is a true copy or an abstract on which the certificate as aforesaid is endorsed, the
registering officer who had forwarded the true copy or an abstract shall make
appropriate entries in respect of the instrument of which it was a true copy or an
abstract, in the relevant register maintained by him and on an application made in
this behalf issue under his signature a certificate to the effect that the proper duty
or, as the case may be, the property duty and penalty stating the amount of each
have been levied in respect of that instrument, and the name and residence of the
person paying such duty and penalty.”
6. A conjoint reading of the above sections makes it clear that section 34 of the Act
only prohibits the admissibility of instruments not duly stamped in evidence except on
payment of the amount required to make up the proper stamp duty and the penalty
specified therein. Section 33 is intended to achieve a different object altogether. It has
been incorporated to safeguard the revenue of the State. It mandates every person
specified therein before whom any instrument chargeable with duty is produced or
come in performance of his functions to impound the same if he is satisfied that such
an instrument is not duly stamped. For that purpose, he has been given the power to
examine the instrument so produced or coming up before him in order to ascertain
whether it is stamped of the value and description described by the law. The fact that
the instrument is or is not valid in law is not relevant for the purpose of impounding
the same. Under section 37 such impounded document has to be sent to the Collector
for the purpose of taking action as contemplated in sub-section (2) thereof. If the
document has been admitted in evidence on payment of duty and penalty provided in
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Page: 495

section 34 the authority concerned may follow the procedure laid down in sub-section
(1). In other cases the procedure laid down in sub-section (2) has to be followed and
authenticated copy of the instrument from the court has to be forwarded to the
Collector for appropriate action.

7. In the instant case there is no dispute that the Bombay City Civil Court falls in
the category of persons specified in sub-section (1) of section 33. It has by law
authority to receive evidence. So the first condition of section 33 is fulfilled. As the
document in question has been produced before the court by the petitioners
themselves for being acted upon, the second condition is also fulfilled. The document
was sought to be admitted in evidence. The signatures of the respective parties as well
as the contents of the instrument were duly proved. It was only at that stage when a
question was raised by the court in regard to the adequacy of the stamp duty paid on
the said instrument that time was sought by the parties and later the application for
modification of the decree itself was withdrawn. The question is whether the court
before whom an inadequately stamped document had been produced for modification
of the decree passed by it earlier, can be restrained from impounding the same under
section 33 of the Act by the concerned party by withdrawing the application itself with
which the said document had been produced. To put it differently, in such a situation
whether the court becomes functus officio for the purpose of section 33 of the Act. The
answer, in my opinion, in clear terms is in the negative. A duty has been cast on the
authority or the court to impound a document under section 33 if any such document
which is inadequately stamped is produced before it to be acted upon and that duty
does not come to an end on withdrawal of the document by the party liable to pay
additional duty and penalty. The powers, duties and jurisdiction of the court to pass
orders on the application of the party for modification of the decree on the basis of
such application and the document produced therewith and the powers, functions and
jurisdiction of the court under section 33 of the Stamp Act to impound the
inadequately stamped document produced or coming before it are two distinct and
different powers and jurisdictions. For the purpose of modification of the decree, the
court might become functus officio on withdrawal of the application but for the
purpose of taking action under section 33, it cannot become functus officio if all the
requirements of section 33 are fulfilled. If the contention of the petitioners is accepted
then in every case a party may produce before the court any document which is not
adequately stamped and take a chance of same being admitted and in the event of the
inadequacy of the stamp being deducted withdraw the same to avoid impounding
under section 33 and recovery of deficiency of penalty and fine by the Collector. In this
connection, it may be expedient to refer to section 35 of the Act, which provides that
once a document is admitted in evidence it cannot be called in question at any stage
of the same even if it is found that it is not duly stamped. In such cases also, the
document may be impounded in the manner laid down in section 58. Section 58
provides:

Page: 496

Section 58 “Revision of certain decisions of Courts regarding the sufficiency of

stamps.— (1) When any Court in the exercise of its civil or revenue jurisdiction or any
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Criminal Court in any proceeding under Chapter IX or Part D of Chapter X of the Code
of Criminal Procedure, 1973, makes any order admitting any instrument in evidence as
duly stamped or as not requiring a stamp, or upon payment of duty and a penalty
under section 34, the Court to which appeals lie from, or references are made by, such
first-mentioned Court may, of its own motion or on the application of the Collector,
take such order into consideration.
(2) If such Court, after such consideration is of opinion that such instrument should
not have been admitted in evidence without the payment of duty and penalty under
section 34, or without the payment of a higher duty and penalty than those paid, it
may record a declaration to that effect, and determine the amount of duty with
which such instrument is chargeable, and may require,—
(i) the party or person concerned to make the payment of the proper duty or the
amount required to make up the same, together with a penalty under section 34,
or payment of a higher duty and penalty than those paid, to itself or to the
Collector; and
(ii) any person in whose possession or power such instrument then is, to produce
the same, and may impound the same when produced.
(3) When any declaration has been recorded under sub-section (2), the Court
recording the same shall send a copy thereof to the Collector, and, where the
instrument to which it relates has been impounded or is otherwise in the possession
of such Court, shall also send him such instrument.
…………………………………….
(4) The Collector may thereupon, notwithstanding anything contained in the order
admitting such instrument in evidence, or in any certificate granted under section
41, or in section 42, prosecute any person for any offence against the stamp law
which the Collector considers him to have committed in respect of such instrument:
Provided that —
(a) no such prosecution shall be instituted where the amount including duty and
penalty, which, according to the determination of such Court, was payable in
respect of the instrument under section 34, is paid to the Court or the Collector,
unless the Collector thinks that the offence was committed with an intention of
evading payment of the proper duty;
(b) except for the purpose of such prosecution no declaration made under this
section shall affect the validity of any order admitting any instrument in evidence
or of any certificate granted under section 41.”
(Emphasis supplied.)

Page: 497

Thus it is evident that section 35 only gives finality to the decision in regard to the
admissibility of the document in evidence. It does not operate as a bar to impounding
of the same.
8. Counsel for the petitioner referred to decisions of various High Courts in support
of his contention that once proceedings are concluded, the authority becomes functus
officio and it cannot thereafter call for the document and examine the adequacy or
inadequacy of the stamp duty paid thereon for the purpose of taking action under
section 33 of the Act. All these decisions, in my opinion, are applicable only to cases
where the court rightly or wrongly comes to a conclusion during the pendency of the
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proceedings before it that the document in question was properly stamped. Once that
is done and the proceedings are concluded, it cannot later proceed to take action
under section 33 of the Act for impounding of the very same document. That is not the
position in the instant case. Here, when the petitioner on being questioned about the
inadequacy of the stamp duty paid on the document in question wanted to withdraw
the application itself for modification of the decree on the basis of the said document,
the court observed that it would examine the document for the purpose of section 33
of the Act and it was only at the request of the counsel for the petitioner that the
above determination was deferred to a later date. That, in my opinion, does not in any
way affect the power of the court to take action under section 33 of the Act.
9. In view of the above discussion, I do not find any infirmity in the impugned
order of the trial court impounding the document and directing the Registrar to
forward the same to the Collector for determination of the correct stamp duty and
penalty and recovering the same. In that view of the matter this revision application is
dismissed.
There shall be no order as to costs.
Certified copy expedited.
Revision dismissed.
———
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