@JUDGMENTTAG-ORDER
Soumen Sen, J.@mdashThe order impugned is required to be tested on a proper consideration of the two agreements that are directed to be impounded in terms of the provisions of the Indian Stamp Act. The learned trial Judge on consideration of the two alleged agreements for sale dated 4th December, 2000 and 26th May, 2002 held that the second agreement is not a continuation of the first agreement and if both the agreements are required to be tendered in evidence, the said agreements cannot be admitted to evidence without each being adequately stamped in terms of the provisions of the Indian Stamp Act. The learned trial Judge, accordingly, directed the plaintiffs to deposit stamp duty at the rate of 6 per cent over the total valuation as mentioned in the two agreements dated 4th December, 2000 and 26th May, 2002 along with maximum penalty which in this case would be a sum equal to ten times such duty or portion. Similar direction was given for payment of penalty ten times in respect of the money receipt.
2. Insofar as the money receipt is concerned, the said issue was not seriously argued.
3. The plaintiff instituted a suit for specific performance. Defendant Nos. 1 and 2 at first agreed to sell the schedule land to the plaintiff No. 1 and Ashoke Kumar Jain at a consideration of Rs. 35,000/- per cottah. The said plaintiff No. 1 and Ashoke Kumar Jain had given the earnest money of Rs. 41,000/- to the defendants Nos. 1 and 2 and in acknowledgement thereof, the defendant Nos. 1 and 2 on 4th December, 2000 executed a written agreement for sale in favour of the aforesaid persons in respect of the schedule property and handed over the original agreement to the plaintiff No. 1. The defendant Nos. 1 and 2, however, had failed to perform their part of the agreement. The said agreement was cancelled and the defendant Nos. 1 and 2 executed a fresh agreement in favour of the plaintiffs on 26th May, 2002 on condition that the price of the schedule property would be Rs. 23,00,000/- and the advance amount already received by the defendant Nos. 1 and 2 to the extent of Rs. 41,000/- by virtue of the earlier agreement should be treated as advance of the later agreement. It was further stipulated that the defendant Nos. 1 and 2 after settling their disputes with the third parties and obtaining a clear title would execute the deed and register the same in favour of the plaintiffs within four months. It was further contended that the plaintiffs would pay the consideration by installments and the defendants would grant receipt thereof and both the parties would take effective steps to resolve their disputes that were presently going on between the defendant Nos. 1 and 2 and other persons and if for settling such disputes, any further amount is required to be paid, the plaintiffs would pay the same. In terms of the said agreement Rs. 28,220 was fixed as the rate of land per cottah. Though in the first agreement dated 4th December, 2000 the entirety of the two plots of land measuring 1.42 acres were involved, in the subsequent agreement, the lands measuring 134.5 sataks were involved being Schedule II of the plaint and balance 5 cottahs of land out of Schedule I was retained by the defendant Nos. 1 and 2. In implementation of the later agreement, the defendant Nos. 1 and 2 appointed the plaintiffs as their constituted attorney by executing power of attorney on the selfsame day. Pursuant to such agreement, the plaintiffs on demand made by the defendant Nos. 1 and 2 paid Rs. 2000/- on 11th December, 2002 and further sum of Rs. 2000/- on 11th August, 2003. The plaintiffs on the basis of the authority given under the power of attorney took various steps and, in fact, had erected pillars around the land and were in possession of the same. The said defendant Nos. 1 and 2, however, refused to perform their obligation in terms of the agreement. The plaintiffs were all along ready and willing to perform their part of the agreement. The plaintiffs also demanded specific performance of the agreement dated May 26, 2002 by a notice issued on 8th December, 2003. Subsequent thereto, it transpired that the defendant Nos. 1 and 2 executed and registered a sale in favour of the defendant No. 3 contrary to the agreement arrived at between the plaintiffs and the defendant Nos. 1 and 2 in relation to the said property. Primarily, on the basis of such allegations, the plaintiffs filed the suit.
4. The trial had commenced. During the trial, the plaintiff wanted to rely upon both the agreements. The plaintiffs wanted to rely upon the first agreement only to show that the advance paid under the first agreement was treated as a part consideration for the second agreement. It was on such consideration, it was argued that the first agreement doesn''t attract Schedule IA, Clause 5(d) of the Indian Stamp Act, 1899. This argument did not find favour with the trial Judge.
5. In view thereof, it is to be seen whether the second agreement is a continuation of the first agreement or that the said agreements are separate, distinct and different and if there would be any requirement of payment of stamp duty in respect of both the agreements.
6. The learned Government Pleader appearing on behalf of the plaintiffs/petitioner refers to Section 4 of the Indian Stamp Act to show that where in the case of any sale, several instruments are employed for completing the transaction, the principal instrument only shall be chargeable with the duty prescribed in Schedule IA for the conveyance and each of the other instruments shall be chargeable with a duty of one rupee instead of the duty (if any) prescribed for in that schedule. In view thereof, it was argued that save and except the agreement dated 26th May, 2002, no other instrument could have been impounded and appropriate order would have been passed for payment of duty only in respect of the second instrument. It was further submitted that while imposing the penalty, the Court should not be harsh, arbitrary and unreasonable. The maximum penalty could only be awarded when the Court is of a considered opinion that the plaintiff has purposely avoided payment of the stamp duty. It is submitted that there is no finding that there has been an act of deliberate avoidance of payment of such stamp duty.
7. On a reading of the two agreements, it cannot be said that the second agreement is not a continuation of the first agreement. The minor variations here and there in the second agreement would not mean that the second agreement is not a continuation of the first agreement when the fact remains that in the second agreement, it has been clearly acknowledged that the part consideration paid under the first agreement would be treated as payment of earnest money for the second agreement concerning the same property with insignificant and minor variations. The two documents ought to be read together as part of one and the same contract and that the second was liable to duty as conveyance and the first to the fixed duty u/s 4 of the Stamp Act. The two instruments were intended by the parties to be employed in completing one transaction. Both the instruments seek to effect a single disposition. No new property has been introduced in the second deed.
8. As observed earlier, this Court is of the view that the second agreement makes it abundantly clear that second agreement is a continuation of the first agreement, notwithstanding the fact that Ashoke Kumar Jain is not a party in the second agreement and the areas covered under the second agreement are partly reduced from the original agreement. There has been no change as to the identity of the properties covered excepting minor reduction in the area under the agreement. Ashoke Kumar Jain did not raise any dispute that the amount deposited under the first agreement shall not be treated as a consideration amount in the second agreement. In my view, having regard to the true nature, scope and purport of the two agreements, the second agreement is a continuation of the first agreement and the second agreement is liable to duty as conveyance. Accordingly, in so far as the order directing the plaintiffs to pay penalty and other charges in respect of the first agreement dated 4th December, 2000 is concerned, the same is set aside. The second agreement would attract the fixed duty of one rupee as prescribed u/s 4 of the said Act. It is also not disputed that stamp duty is chargeable on the said agreement.
9. The question is whether the penalty of 10 times is harsh under the facts and circumstances of the case. It appears that in an earlier proceeding, a Division Bench of this Court in considering an appeal preferred by the respondent No. 3 observed that the plaintiffs have been able to establish a prima facie case against the defendant Nos. 1 and 2 and, ultimately, the plaintiff at the time of trial, if could establish that defendant No. 2 had purchased the said property with knowledge of the prior agreement in such a case the plaintiff would be entitled to get a decree for specific performance of the contract passed an order of status quo upon the plaintiffs'' depositing a sum of Rs. 25,00,000/- in order to show their bona fide as also to protect interest of the defendant No. 3 in the event the suit fails. The said amount, however, was not deposited. Where it appears from the circumstances that the failure to pay the stamp duty during execution of the instrument was due to an honest and bona fide belief that they do not require to be stamped and not due to any fraudulent intent to defraud the Government, ten times the duty would be excessive and deems to be reduced. The petitioner has failed to prove bona fide and in any event it cannot be doubted that the said agreement attracts payment of stamp duty in terms of the provisions of the Stamp Act (West Bengal Amendment). In view thereof, the penalty of ten times not interfered with and the petitioner shall pay the same as directed by the trial court. The order of the trial Judge in relation to the money receipts is upheld. The order of the trial Judge in relation to the agreement dated 26th May, 2002 is accordingly modified. The plaintiffs/petitioners are directed to deposit the said stamp duty and penalty in respect of the agreement dated 26th May, 2002 and money receipt on or before 12th of April, 2013. In the event, this order is not complied with the said documents should be impounded forthwith and the said agreements along with money receipt should not be admitted in evidence.
10. The revisional application succeeds in part. However, there shall be no order as to costs. Urgent xerox certified copy of this judgment, if applied for, be given to the parties on usual undertaking.
