#339 

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 3195-319 6 OF 2020
(ARISING OUT OF SLP(C)Nos.10972-10973 OF 2020)
TRUSTEES OF H.C. DHANDA TRUST ...APPELLANT
VERSUS
STATE OF MADHYA PRADESH & ORS. ...RESPONDENTS
J U D G M E N T
ASHOK BHUSHAN,J.
provisions of Section 40 of the Indian Stamp Act, 1899.
Referring to Section 40 this Court made following
observation in paragraph 6:
“6………The Collector has the power to
require the person concerned to pay the proper
duty together with a penalty amount which the
Collector has to fix in consideration of all
aspects involved. The restriction imposed on
the Collector in imposing the penalty amount is
that under no circumstances the penalty amount
shall go beyond ten times the duty or the
deficient portion thereof. That is the farthest
limit which meant only in very extreme
situations the penalty need be imposed up to
that limit. It is unnecessary for us to say
that the Collector is not required by law to
impose the maximum rate of penalty as a matter
of course whenever an impounded document is
sent to him. He has to take into account
various aspects including the financial
position of the person concerned.”
23. This Court in the above case categorically held
that it is only in the very extreme situation that
penalty needs to be imposed to the extent of ten times.
24. The Collector by imposing ten times penalty in his
order has given the reason for imposition as “the party
has not mentioned the actual nature of the document
with the intention to escape the duty”. When the
Collector found intention to escape the duty, it was
the case of imposition of penalty but whether the
reason given by the Collector is sufficient for
imposition of extreme penalty of ten times is the
question which needs to be further considered. The High
Court while considering the question of imposition of
penalty of ten times has also given almost same reason
in following words:
“………But in the present case the complete title
has been transferred by Trust to Jogesh Dhanda
and Ishan Dhanda in the name of Deed of Assent.
Therefore, there was intention to evade the
heavy stamp duty on such transaction.
Therefore, the Collector of Stamp has rightly
imposed 10 times penalty which is maximum under
the Act.
In view of the above, I do not find any
merit in this writ petition. The same is hereby
dismissed.”
25. No other reasons have been given either by the
Collector or by the High Court justifying the
imposition of maximum penalty of ten times. It is not
the case of Collector that the conduct of the appellant
was dishonest or contumacious. The High Court in its
judgment has noticed that although the resolution was
passed on 06.04.2005 to execute the Deed of Transfer by
Trustees in favour of Jogesh Dhanda and Ishan Dhanda,
but later on they deliberately executed the deed in the
name of Deed of Assent on a stamp paper of Rs.200/-.
For the reason given by the Collector as well as by the
High Court that there was intention to evade the stamp
duty in describing the document as Deed of Assent the
imposition of the penalty was called for but in the
facts and circumstances and the reasons which have been
given by the Collector of Stamps as noticed above we
are satisfied that this was not a case of imposition of
extreme penalty of ten times of deficiency of stamp
duty. Taking into consideration all facts and
circumstances of the case, we are of view that ends of
justice will be served in reducing the penalty imposed
to the extent of the half i.e. five times of deficiency
in the stamp duty.
26. In result the appeals are allowed the order of the
Collector of Stamps dated 22.09.2008 is modified to the
extent that penalty imposed of ten times of
Rs.12,80,97,000/- is modified into five times penalty
i.e. Rs.6,40,48,500/-. The appeals are partly allowed
to the above extent.
.....................J.
( ASHOK BHUSHAN )
......................J.
( R. SUBHASH REDDY )
......................J.
( M.R. SHAH )
NEW DELHI,
SEPTEMBER 17, 2020.