- (1.) THIS revision is directed against the order of the Collector, Chittorgarh, dated 13-1-65. The facts of the case, in brief, are that the applicant Chhogalal tendered in evidence a document in the court of the Civil Judge, Chittorgarh which was not stamped. The learned Civil Judge held that this document amounted to a conveyance and was chargeable with stamp duty as such. He assessed stamp duty at Rs. 373/- levied penalty of Rs. 3,700/ -. The applicant went in revision to the High Court of Judicature for Rajasthan at Jodhpur, contesting that the document was memorandum. The High Court vide their of 9-8-1960 held the document clearly to be a conveyance passing the title to property. Its primary intention was held to evidence the conveyance of the property from executant to the applicant purchaser. The applicant thereafter compromised the suit which he had filed in the court of the Civil Judge. The Civil Judge, however, impounded the document and sent the same to the Collector Chittorgarh under sec. 38 (2) of the Indian Stamps Act. The learned Collector Chittorgarh, after hearing the parties, held that the amount of Of Rs. 370/- was payable by Shri Chhogalal. He, however, reduced the penalty to Rs, 1,850/-, and ordered that both the amount of the stamp duty as well as the penalty should be resiled from the applicant aggrieved by this order this revision has come before this court. Choghraj, the executant, on this document, was also served a notice, but he did not attend and the proceedings were taken against him exparte.
(2.) I have heard the counsel for the parties and also seen the record. The learned counsel for the applicant urged that as held in A. I. R. 1955 Bombay at page 79 in reference of Jagdish Mills Limited , the duty was payable by the executant and not by his client. I have carefully examined the aforesaid authority of the Bombay High Court. That was a case under the Companies Act, and it was held that liability in respect of transfer of shares not duly stamped is upon the executant. The law on the point is contained in sec. 29 of the Indian Stamp Act, which says that in the sense of an agreement to contrary, the expense of providing the proper stamp shall be borne and the relevant provisions in the present case is clause (c) of the Section which says "in the case of a conveyance by the grantee. It is, therefore, evident that in the present case the expense of providing the stamp duty was to be borne by the applicant himself in whose favour the conveyance deed had been made. In the Bombay case the relevant provision under sec. 29 is Article 62 (c) which provides that the expense of stamp in the case of transfer of shares by the person drawing, making or executing such instrument. The aforesaid authority of the Bombay High Court was inapplicable to the facts of this case. This contention of the learned counsel for the applicant that in the case of a conveyance the executant bears the Stamp is therefore, untenable and it is the applicant himself who is responsible for the payment of the stamp duty under sec. 29 (c) of the Stamp Act. The other questions raised whether the person tendering the document in evidence or its executant would be responsible to pay the stamp duty are hardly relevant in view of the clear provisions that Collector can levy Rs. 5/- as penalty and on the refusal of the person responsible to do so, he may impose a penalty not exceeding ten times the amount of the proper duty or the deficient portion thereof. I think this interpretation is too far-fetched. Sec. 40 (b) reads as under: "if he (Collector is of opinion that such instrument is chargeable with duty and is not duly stamped, he shall require the payment of the proper duty of the amount required to make up the same, together with a penalty of five rupees; or if he thinks fit, an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof, whether such amount exceeds or falls short of five rupees. " A plain reading of this section clearly shows that the Collector has been given a discretion to levy a penalty of five rupees, of if he considers fit, the penalty not exceeding ten times the amount of the proper stamp duty, or of the deficient portion thereof. The learned counsel for the applicant could not cite any authority in support of the interpretation he wanted to put. It is not understood how we can read anything more than what is plainly meant by the plain language of this section. There is no justification to interpose the meaning that the Collector would i be competent to levy penalty not exceeding ten times of the amount of the proper stamp duty, only when the party fails to pay rupees five. Mulla and Pratt in their commentary on the Indian Stamp Act say in regard to Sec. 40 (1) (b) that "this clause gives the Collector discretion to accept ten times the amount of the proper duty, or of the deficient portion thereof, whether such amount exceeds or falls short of five rupees. There is no minimum penalty of five rupees as in Sec. 35 which applies to Courts and arbitrators. " Similar view is taken in his commentary on the Indian Stamp Act by B. N. Bannerjee, who says that "if the Collector is of the opinion that the instrument is chargeable with duty and not duly stamped, he shall require the payment of the deficient duty together with a penalty of rupees five, but he has been given discretion to levy an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof irrespective of whether such amount exceeds or falls short of five rupees. Thus, the discretion conferred on the Collector under this section is wider than that given to courts and arbitrators who are required by Sec. 35 to levy a minimum penalty of five rupees. The matter being discretionary he should not inflict the maximum penalty as a matter of course and when he does, he should give the reasons therefor" (page 361 ). It is, therefore, evident that Sec. 40 (l) (b) does not limit the discretion of the Collector in any way to levy rupees five only in the first instance, and not the amount not exceeding ten times the amount of the proper duty or the deficient portion thereof. He can do either in his discretion which is restricted only by the principle of justice, equity and good conscience. In the present case, the Collector has not imposed the penalty amounting to five times the proper duty. He, as a matter of fact, reduced it by 50 per cent. In a transaction in which a stamp duty of Rs. 370/- was involved, the applicant certainly tried to deprive the Government of its legitimate dues by making the document only a memorandum and not a deed of conveyance which it was. The reason given by the Collector for imposing penalty equal to five times the amount of the proper duty is, in my opinion, unexceptionable. The learned counsel for the applicant also urged that as the case was compromised there should have been no question of imposition of penalty. He relied on A. I. R. 1947 Lahore 319 (Harjimal & Sons vs. Mossrs H. S. Hessrs Palta & Sons ). As rightly held by the Collector it was irrelevant that the case was compromised. The applicant's obligation to pay a proper stamp on a deed of conveyance arose independently under 3 of the Indian Stamps Act. The ratio decidendi in 1947 Lahore 319 was that mere production of a document does not amount to a tendering of that document in evidence. In this case the document was positively tendered as a piece of evidence. For the reasons given above, I do not think there is any force in this revision application, which is hereby rejected. . ;