A significant legal issue has emerged in the context of a partition dispute, challenging the trial court’s decision to impound an unregistered partition deed for insufficient stamp duty. The case, arising out of Regular Civil Suit No. 105 of 2014 in the Court of the Civil Judge Senior Division at Gadhinglaj, Kolhapur, has raised critical questions about the application of the Maharashtra Stamp Act, 1958, and the procedures involved in the impounding of documents with insufficient stamp duty.

The underlying suit is a family dispute concerning partition of immovable property, filed by Respondents No. 2 and 3 (along with others) against the present petitioner, Defendant No. 1. The primary issue in the partition suit was the declaration of a sale deed dated February 11, 2003, as being non-binding on the plaintiffs.

The petitioner's defense centered around a partition arrangement recorded in an unregistered document dated January 18, 2013. This document, titled “Noting of Partition by Way of Family Arrangement,” purportedly recorded a partition of family property, with the petitioner claiming exclusive ownership of certain lands under this arrangement. The plaintiffs contested the validity of this partition document, arguing that it was insufficiently stamped, which triggered the controversy.

During the trial, when the document was presented in court, it was discovered that it had not been properly stamped. Consequently, the trial court issued an order on January 13, 2022, to impound the unregistered partition deed, directing it to be sent to the Collector of Stamps for the payment of requisite stamp duty and penalty. The court set a deadline for compliance, requiring the Collector to report back within 15 days.

Following this, the Collector of Stamps assessed the deficit stamp duty and penalty, amounting to Rs. 2,75,100 as stamp duty and Rs. 6,60,300 as a penalty. This assessment was subsequently communicated to the petitioner and challenged in the writ petition.

One of the primary objections raised by the respondent was the maintainability of the writ petition itself. It was argued that the Collector’s assessment of stamp duty could not be challenged via a writ petition, as an alternate remedy under the Maharashtra Stamp Act was available. However, the petitioner contended that the challenge was not to the assessment of the stamp duty, but to the trial court’s order impounding the document, which was deemed to be ancillary to the main issue.

The court agreed with the petitioner’s submission, holding that the writ petition was maintainable since the core issue was the legality of the trial court’s order and not the stamp duty assessment itself.

The next point of contention was the classification of the document in question. The petitioner argued that the document was a "partition deed" under Article 46 of Schedule I of the Maharashtra Stamp Act and thus liable for stamp duty of Rs. 100. However, the respondent’s counsel contended that the document was essentially a "release deed," as certain co-sharers had relinquished their rights in favor of others, making it subject to a different stamp duty under a different article.

The court analyzed the contents of the document and concluded that it could not be classified as a release deed but as a "noting of partition" between family members. The document was seen as recording a family arrangement and the partition of joint family property, which involved the allocation of lands among various co-sharers, some of whom relinquished their claims while others gained ownership of specific properties.

The trial court had mistakenly treated the issue of registration and stamping as interrelated. The court emphasized that while registration of documents is mandatory under the Indian Registration Act in certain circumstances, it does not apply to family partition documents, which are not considered transfers under the law. Therefore, the non-registration of the partition deed should not have been used as a ground for impounding the document.

The court also found that the trial court had failed to address the specific provisions of the Maharashtra Stamp Act applicable to the document in question. Moreover, the impounding process was incorrectly initiated by the trial court without a proper legal foundation. Under Section 33 of the Maharashtra Stamp Act, it is the Collector of Stamps who is authorized to determine the stamp duty payable on documents with insufficient stamps, not the trial court.

The court ultimately held that the trial court's order impounding the document and the subsequent communication from the Collector were legally flawed. The order of the trial court was set aside, and the document was directed to be admitted into evidence, subject to proof in the normal course. Any stamp duty and penalty already paid were ordered to be refunded to the petitioner.

This judgment underscores the importance of correctly classifying documents under the Maharashtra Stamp Act and highlights the distinction between registration and stamp duty issues. It also reinforces that the trial court's role in impounding documents should be carefully limited to cases where the document clearly falls under the relevant provisions of the law. The decision further clarifies the procedures for dealing with documents that are inadequately stamped, ensuring that the assessment of stamp duty remains under the purview of the Collector of Stamps.

The writ petition is allowed.

The trial court’s order of January 13, 2022, is set aside.

The trial court is directed to consider the document in evidence, subject to its proof.

The communication by the Collector of Stamps is set aside.

If any stamp duty or penalty was paid, the amount should be refunded to the petitioner.