# [1962] Supp. 3 S.C.R. 50

- **Citation:** [1962] Supp. 3 S.C.R. 50
- **Court:** Supreme Court of India
- **Decided:** 1962
- **Case number:** Civil Appeal No. 29 of 1958
- **Bench:** S. K. Das, A. K. Sarkar, K. SFnBA R, K. N. WANCrroo, N'. Ra.Jagop.U.A Ayy A :\Gar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1962-supp-3-s-c-r-50-2397
- **Pages:** 9

## Headnote

Stamp Duly- lmpoundinq of document -
llcferrn•:clleVl!n?t-! /Joard, if mlUif
lu11r
the pflrly
f1[f~/rirrp1/ -
/nrlirzn
Stamp Act, 1899 (2 of !89Y), ss. 33, 5G(2).
The respondents sought permission of the Court to with.
dra\v certain moneys on furnishing security which \\·as granted.
A security bond was executed by the respondents by
v..·hich a
house v•as given as security.
The Inspector of Stan1p; rcpnrt~d that the security bonrl ,,·as
inc:ufficicntly
starnpt:d
and
therefore it should he in1p0undcrl anrl a deficit stamp duty
of Rs. 4B2;1 I !·and a penalty of Rs. 4,82G:I ~!-should he le\'icd.
'I'hereupor1 thr: ])cputy Con11nissionrr, acting as Collector,
called for objcr.tinns.
'J'hc judicial
offic~r hefurf! \\'horn the
security bond , .. ,as filed in1pnundcrl the bond and
for\\'ardcd
it to the Deputy Comrnissioner.
Afi.cr further ohjcctLJns h·erc
filed by the respondents before the Stan1p Offirrr,
the latter
submitted a report to the l)tputy
Co1nmissiuner upholding
the order of the Inspector of Stamps.
Therc:upon the Deputy
Commissioner passed an order ''realise". ·rhe responrlnents filed
a re.vision petition against the order of the Deputy Commissioner before the Board of Re\'en1H~ and \\·hile that petirion
'vas pending the Deputy Commission,.r referred the 1nat1er to
the Boarrl of Revenue under s. j() (2) of the Stamp ;\ct and
the Board of Ile.venue passed an order upholding the orrh.:r of
the Deputy
Cuminissioner.
'J'hc respondent:.; then filer! ;i
\\·rit petition-under Art.
226 of the
(~on!'-titution before the
High Court.
1,heir 1n~in contention \\'as that they were 11nt
gh·en a hearing f":ither hy the Board of Revcnur: <ir the J)cputy
Commissioner.
'!'he p~tition \Va!! heard by a Single Judge vvhn
dismissed the petition on the ground that ncith~:r t!ie Stan1p
i\ct nor the Rules franied thcreundr-r providr-d that a hearing should be given to the aggrieved person.
Th~rt>aficr the
appeal Court creatl"d the m;i.ttcr as a
rcfer('n~e hrfore the
R("venue Boar<l 11ndCr s. 51) (2) of the 1\ct and
h~Jd that the
Act or Rules did not require. tl:at a hearing sliculd be given by
the authorities acting under s. :)G but that although they \\'Crc
acting only ad1ninistrativcly they \\'ere hound to give a hear~
ing according to the principle~ of natural justice. 'fh(' appeal
was allowed.
j
1
3 S.C.R.
SUPREME COURT REP0RT3
51
Held, that it is clear that s. 56 (2) deals with cases where
there is a doubt in the mind of the Collector in regard to an
instrument as to its construction and the provisions of the Act
applicable to it.
Sucb doubt itself shows that the point rais.
ed for the Collector's decisions is a difficult point of law and
from the very nature of the duty to be performed in such circumstances it appears clear that the Chief Controlling Revenue Authority has to decide the matter judicially and would
thus be a quasi-judicial tribunal.
w
Where .the provisions of the Act are silent, the duty to
act judicially may be inferred from the provisions of the statute or may be gathered from the cumulative effect of the
-
nature of the rights affected, the manner of the disposal provided the objective criterion to be adopted and the phraseology
used and other indicia afforded by the statute.
The questions before the Board under s. 56 (2) being
one of construction of an instrument and the application of
the Act to it being a pure questions of law which may result
in payment of large amounts by the executani of the document, the Board should give, for the determination of such
question, a hearing and it should act judicially in determining a pure question of law.

## Text

1962
:50 SUPREME COGRT REPORTS [1962] SUPP.
THE BOARD OF REVENTE, U. P. AND
OTHEHS
t'.
SARDARXI VIDYAWATI AND ANOTHER
(S. K. DAS, A. K. SARKAR, K. SFnBA R,w, K. N.
WANCrroo and N'. RA.JAGOP.U.A AYY A :\GAR, J,J.)
Stamp Duly- lmpoundinq of document -
llcferrn•:clleVl!n?t-! /Joard, if mlUif
lu11r
the pflrly
f1[f~/rirrp1/ -
/nrlirzn
Stamp Act, 1899 (2 of !89Y), ss. 33, 5G(2).
The respondents sought permission of the Court to with.
dra\v certain moneys on furnishing security which \\·as granted.
A security bond was executed by the respondents by
v..·hich a
house v•as given as security.
The Inspector of Stan1p; rcpnrt~d that the security bonrl ,,·as
inc:ufficicntly
starnpt:d
and
therefore it should he in1p0undcrl anrl a deficit stamp duty
of Rs. 4B2;1 I !·and a penalty of Rs. 4,82G:I ~!-should he le\'icd.
'I'hereupor1 thr: ])cputy Con11nissionrr, acting as Collector,
called for objcr.tinns.
'J'hc judicial
offic~r hefurf! \\'horn the
security bond , .. ,as filed in1pnundcrl the bond and
for\\'ardcd
it to the Deputy Comrnissioner.
Afi.cr further ohjcctLJns h·erc
filed by the respondents before the Stan1p Offirrr,
the latter
submitted a report to the l)tputy
Co1nmissiuner upholding
the order of the Inspector of Stamps.
Therc:upon the Deputy
Commissioner passed an order ''realise". ·rhe responrlnents filed
a re.vision petition against the order of the Deputy Commissioner before the Board of Re\'en1H~ and \\·hile that petirion
'vas pending the Deputy Commission,.r referred the 1nat1er to
the Boarrl of Revenue under s. j() (2) of the Stamp ;\ct and
the Board of Ile.venue passed an order upholding the orrh.:r of
the Deputy
Cuminissioner.
'J'hc respondent:.; then filer! ;i
\\·rit petition-under Art.
226 of the
(~on!'-titution before the
High Court.
1,heir 1n~in contention \\'as that they were 11nt
gh·en a hearing f":ither hy the Board of Revcnur: <ir the J)cputy
Commissioner.
'!'he p~tition \Va!! heard by a Single Judge vvhn
dismissed the petition on the ground that ncith~:r t!ie Stan1p
i\ct nor the Rules franied thcreundr-r providr-d that a hearing should be given to the aggrieved person.
Th~rt>aficr the
appeal Court creatl"d the m;i.ttcr as a
rcfer('n~e hrfore the
R("venue Boar<l 11ndCr s. 51) (2) of the 1\ct and
h~Jd that the
Act or Rules did not require. tl:at a hearing sliculd be given by
the authorities acting under s. :)G but that although they \\'Crc
acting only ad1ninistrativcly they \\'ere hound to give a hear~
ing according to the principle~ of natural justice. 'fh(' appeal
was allowed.
j
1
3 S.C.R.
SUPREME COURT REP0RT3
51
Held, that it is clear that s. 56 (2) deals with cases where
there is a doubt in the mind of the Collector in regard to an
instrument as to its construction and the provisions of the Act
applicable to it.
Sucb doubt itself shows that the point rais.
ed for the Collector's decisions is a difficult point of law and
from the very nature of the duty to be performed in such circumstances it appears clear that the Chief Controlling Revenue Authority has to decide the matter judicially and would
thus be a quasi-judicial tribunal.
w
Where .the provisions of the Act are silent, the duty to
act judicially may be inferred from the provisions of the statute or may be gathered from the cumulative effect of the
-
nature of the rights affected, the manner of the disposal provided the objective criterion to be adopted and the phraseology
used and other indicia afforded by the statute.
The questions before the Board under s. 56 (2) being
one of construction of an instrument and the application of
the Act to it being a pure questions of law which may result
in payment of large amounts by the executani of the document, the Board should give, for the determination of such
question, a hearing and it should act judicially in determining a pure question of law.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 29 of 1958.
Appeal from the judgment and order dated
May 3, 1956, of the Allahabad High Court in Special Appeal No. 48of1954.
Veda Vya.sa and 0. P. Lal. for the appellant.
A. N. Goyal, for the respondents.
1962. February 6, The Judgment of the Court
was delivered by
WANCHOO, J.-This is an appeal on a certificate granted by the Alla.habad _High Court. The
brief facts necessary for present purposes are these.
Certain decretal moneys were deposited in the then
- Chief Court ·of Oudh at Lucknow. The respondents
applied to the Chief Court for permission to withdraw
the mone,i.s on furnishing security and were permitted
to do so. Thereupon a registered security bond was
[executed and registered. in Simla in 1949 by which
196t
The Board of
Revenue, U.P.
v.
.
Sardarni Vidyawati
Wanc~OD J'.
1962
The Board or
RttJtT---Ue, u. P.
v.
Sard,rni Vid;-awali
11'o'1thoo J,
52 SUPREME COURT REPORTS [I!l62J SUPP.
a house there was given in security for withdrawal
of the money.
Befere, however, the mon<'V cotild
be withdrawn, th'3 Inspector of Stamps reported on
March 15, 1!)50, that tho so called security bnnd
wits in reality a mortgage deed without possession
and waa insufficiently
stamped. He
therefore
reported that it should be impounded
and the
deficit stamp duty of Rs. 482/11 /- and a penalty
amounting to Rs. 4,826/14/· should be levied with
respect to that document. Thereupon on April ~.
1950, the Deputy Commissioner, Kheri, acting as
Collector passed the following order :-
"In case the parties have any objection,
they put it in writing which will be referred
to the Board of Rcv('nue."
It seems that on July 5, J!l;)O, t-he respondents
objected that the document wail not a mortgagedeed and that no duty or penalty was paynblo,
and further that as the dooument had not been till
then accepted by the court, it was only a tentatin•
document. On August 3, 1950, the judidal oft1c('I'
before
whom
the
security bond
was filed
impounderl it under s. 33 of the Indian Stamp Act,
Xo. II of 1898, (hereinafter referred to as the Act).
and apparently forwarded it to the Deputy Commis·
sioner, Kheri, under s. 38 of the Act.
It. seems
thereafter that in November 1950 the respondents
filed further objectionR before Stamp Officer (Treasury Officer), Kheri, from whom the Deputy Comm is·
sioncr who acts as a Collector for the purposPs of
the Act had called for a report. In December 19.'iO,
the Treasury Officer made a report to t.he Ptfe,·t that.
the view of the Inspoctor of St.ampH was correct. and
duty and penalty as reported by the latter were
due. The respondents' case was that the Treasury
Officer did not give them any hearing bcfor<' making
tho said report. It eeems that on thiR report tlw
Deputy Commissioner made the order "Realist,". He
also is said to have given no hearing to the respondenta. In ~anuary 1951, the respond@ts filed a
r
. .:
--
•
3 S.C.R.
SUPREME COURT REPORTS
53
revision against the order of the Deputy Commissioner
before the Board of Revenue. It appears however
that in March 1951 the Deputy Commissioner referred the matter to the Board of Revenue under
s. 56(2) of -the Act. In July 1951 the Board of
Revenue disposed of the maUer and upheld the
order of the Collector. But the respondents' complaint waR that the Board of Hevenue also did not
give them a hearing. Consequently they filed a writ
petition in the High Court in November 1951.
That" petition was dismissed by the learned Single
Judge on the ground that neither the Act nor the
Rules made thereunder provided that any hearing
should be given to the person who was liable to pay
the deficit stamp duty and the penalty. He further
held that in any case the Collector had given an
opportunity to the respondents to urge their objections in writing, and that the Board of Revenue
had also considered the grounds taken by the
respondents in their .revision-petition and there was
no provision in the law requiring the Board of
Revenue to give a personal hearing or a hearing
through counsel in a case of this kind.
·
The respondents then went in appeal. The
appeal court seems to have treated the matter
before the Board as if it were a reference under
s. 56(2) of the Act. As •the learned Single Judge
has pointed out, though the order of the Collector of
December 1950 would usually be final. it appeared that he had chosen to make a reference to the
Board of Revenue under s. 56(2). We must therefore proceed on the assumption that this case has
been disposed of by the Board under s. 56(2) and
not by the Collector under s. 40( 1) or by the Board
under s. 56(1).
The appeal court under ss. 40 and
56 leave the entire matter to the opinion of the
person before whom the insufficiently stamped
document is produced and do not lay down any
procedure for calling upon the party concerned to
show cause why the document be not held to be
1962
The Board ()f
Re1enue, U.P.
v.
Sariarni Vidyaw1t i
Wanchoo J.
i9Gl
T•,, Boe.rd of
lfern;111, l./. P.
v.
S111dami l'idy-awotl
54
SlJPHE:IIE COURT REi'ORTS [I !J62] SUPP.
insufJiciently stnmpecl and there was n<> provision
und~r the Act or the Rules which re4uired the
authorifies concerned to gini imy h«aring to tlw
person executing the documtmt.
The appeal cour1,
therefore hel<l that tho authoritit" cunc,·rncd when
acting either under s. 40 or s. ;)li were not acting
judicially or quasi judicially. Tho :ippcal cuurL
further helcl th"'t e\"cn thvugh tlw authorities were
acting mt,fl!ly a<lmiuistratindy under s.
40
and
s. 56(2) they were bound to give a bearing a"corcling
to the principle:'! of natural justice, in accordance
with the decision of tl:iat court in Special Appral
No. 2\J l of I 9ii5, Gluinshyamdas Uuμta v. 'l'h'!-
Board of 11 iyh Schlj()l and I 11te1111r:di<lte Lducati<m,
U. P.
They thercforn set asicl" the order of the
Board of Hevcnuc on the ground that. uo hearing
had been giveu to the rcspondent8. Thereupon on
application for leave to appeal to this Court; was
made to the High Court, which was allowed ; und
that is how the mD,Lter has come before us.
The main rontention of the appellant before
us is that. thn High Court having heir! that, the
Boarrl was acting nwrely administr:itivcly when proceeding under s.5fi (2) of the Act went wrong in holding that it was bound under the principles of natural
justice to give a heari1ig to the rcspondnnts. In
effect the appel11111t in this cast' impugned the correctness of the view taken in Special Appeal No.
291 of 1955 (supm).
That casp, has come up before
us in appeal (C. A. 132 of 1959 Board of High
School anrl lnlermed£ate Aduwtian v. G. IJ. G?Jpla),
judgment in which is being deliv<·red today.
We
have in that Cll8e held that t.he examinations' committee is under a duty tu act jullicially when proceecling under r. I( I) of Chap. VI of the Hegulations
framed under the C. P. Intermediate Education Act,
(No. II of 1921 ), and have not upheld the view
taken by the High Court that it acts administratively. A similar question arises in the present
r
3 s.c.R.
SUPREME COURT REPORTS
55
appeal, viz., whether the Board of Revenue when
dealing with a proceeding under s. 56(2) of the Act
acts administratively or quasi-judi0ially. We must
make it clear that we are proceeding in this appeal
on the basis that the matter before the Board was
under s.56( 2) on a reference by the Collector and not
under s.56(1) on the application filed by the respondents inviting it to exercise its power of control
thereunder. The contention on behalf of the
respondents is that when the Board is acting
under s. 56(2) of the Act it is acting quasi-judicially.
Let us therefore first look to the scheme
whiuh leads up to the reference under s. 56(2) of
the Act. That sub-section provides that if any Collector, acting under s. 31, s.40 or s.41, feels don ht as
to the amount of duty with which any instrument
is chargeable, he may draw up a statement of the
case, and refer it, with his own opinion thereon, for
the decision uf the Chief Controlling Revenueauthority. Section 31 deals with the case when
auy instrument is brought to the Collector, and the
person bringing it applies to have the opinion of
that officer as to the duty (if any) with which it is
charg0able. It is then the duty of the Collector
either to determine the duty (if any) with which, in
his judgment tho instrument is chargeable or to refer
the case to the Chief Controlling Revenue-authority
nnder s.56(2) if he has any doubt in the matter.
Section 40 deals with the case where an instrument is
impounded under s.33 or the Collector receives any
instrument sent to him under s.38(2), (subject to
certain exceptions) and gives power to the Collector either to certify that the instrument is duly
stamped or that it is not chargeable at all, or if he is
.of opinion that the instrument is chargeable with duty
and is not duly stamped to require the payment of
proper duty or to make up the same together with
a penalty. But if the Collector is doubtful in the
ma.tter he has been given power under s.56(2} to
/9C2
The B 06111 •f
lttvenu·~, U.P.
v.
Sarda.rni Vidyawari
Tf anchoo J,
1962
Thi l1oarti of
Ret'1!1uc. u.r.
v.
S'J"dorni Viclyawati
lt 'n:uhoo ,/.
56 SUPREME COURT REPORTh (1962) SUPP.
refer the question to the Chief Ccntrolling Revenueauthority. Lastly under s.-11, if any instrument
chargeable with duty and not d:uy stamped (subjrct
to certain cxceptious) is producea by any perEOn
of his own motion before the Collector within one
year from the date of its uxecution of first execution, and such person biings to the notice of the
Collector the fact that such i11su ument is not duly
stamped and offers to pay to the Collector the
amount of the proper duty, or the amount to make
up the same, and the Collector is satisfied that the
omission to duly stamp such instrument has been
occasioned by accident, mistake or urgent necessity, he may, inst-0ad of proceeding undt•r ,;s.33 and
4(1, receive such amuuut and under s.42 certify by
endorsement thereon that the p1oper duty has been
paid. But even in such a case it the Collector is
doubtful in the matter, he has been given the power
to make a reference to the Chief Controlling Hevenue-authority. It is clear therefore that s .. :J6(2)
deals with cases wlwro there is a doubt in the mind
of the Collector in rogard to an i11strnme11t which
comes up before him under the above provisions of
the Act as to the construction of the instrument and
the provisions of the Act applicable to it. Such
doubt itself shows that the point raised for the
Collector's decision is a difficult point of Jaw and
from tho very nature of the duty to be performed
in such circumstances it appears olear that the
Chief Controlling He venue-authority has to decide
the matter judicially and would thus be a quasijudicial tribunal.
As pointed out by us in l'.A. l ::2 of JO;'i!J, the
question whether an authority, like the Hoard of
Hevenue, acts judicially i~ to be gathcr2d from the
express provisions of the Act in tho first instance.
Wllcre however the provisions of the Act arc silent,
the duty to act judicially may he inferrnd from
the provisione of the statute or may bo gathered
from the cummulative effect of the naturo of the
3 S.C.R.
SUPREME COURT REPORTS
57
rights affected, tho manner of the disposal provided, the objective criterion to be adopted, the
phraseology used and other indicia nfiorded by the
statute. It is true that in the present case the Act
and the Rules framed thereunder do not provide
for a hearing by the Board of Revenue, when it is
dealing with a matter under s.56(2) of the Act.
But the question that is before the Board of Revenue under s.55(2) is of the construction of an instrument and the application of the Act to it. In
many cases the decision of the Board, if it goes
against the person executing the instrument, may
result in payment of large amounts as deficit
stamp duty and even larger amounts as penalty.
The question is purely a question of law in the
circumstances. It seems to us, considering the
nature of the duty cast on . the Board of Revenue
under s.56(2) requiring it to construe instruments
submitted to it thereunder and the application of
the Act to them which may result in payment of
heavy amounts of deficit duty and even heavier
amounts as penalty, that the legislature intended
that the Board of l{evenue should hear the person
executing the document before saddling him with
large pecuniary liability. The question before the
Board under s.56(2) being one of construction
of an instrument and the application of the
Act to it being a pure question of law which
may result in payment of large amounts by the
executants of the document, it would not in our
opinion be improper to hold that for the determination of such a question the legislacure intended
that the party affected by the decision of the Board
of Revenue should be given a hearing, and that
the Board should act judicially in deciding a pure
question of law. The fact that tbe decision will
depend upon the opinion of the Board cannot in
any way make any difference for the determination
of questions of law must always depend upon the
opinion arrived at judicially of the person or authority who has to determine it, and the.t will not
1962
The Boord oj
lfevem1e, U. P.
,.,
Sardarni Vidyowati
Jf anchoo J.
Jf62
The /!-;o,d rd
R ,rnw", U. I'.
v.
8 ·.rJarr:i, f'it/_JO/r~I!
IV anc~oo J
ii8 SUPREME COURT REPORTS [1962] SUPP.
nccessnrily mean that tho pc·rwn determining' it
cannot. po~:;ibly be required to act judicially be·
cause he has lo act upon l1is opinion. Further, s.5i
c11forc<·s the above conclusion. That section providrs that the Chief Controllii1g H.evrnue·authority
may state any case rtforn'd lo it. under s.56(2), er
litherwi8e coming lo its notice, ancl rrfer such case,
with its own opini<m thereon to the High Court,·
and every such case shall be decidl'd by not lest:
than three .Judges of the High Court lo which it fr
referred.
This proYision shows ti.mt questions
referred to the Board under s.56(2) may he sul'h
complicatPd question~ of Jr,w that the Board may
not be able t-0 make up its mind and mn,y be in
doubt and in such a rn1se the Board has the power
to n:for the matter to the High Court along with its
opinion, and the question has to he decided by u
Bench of three Judges, where undoubtedly the
hearing could not but be judicial. If therefore the
bearing under s.5i is judicial it would in our opinion be proper to infer that the hearing under s.56(:!)
which deals with similar questious ·must also Le
judicial.
We are therefore of opiuio11 that, eonsidering
the totality of circumota11ces and the nature of the
matter to be determined Ly the Board of Reveuue
under s.56(2), the Board has to act judicially when
proceeding under s.5G(2) and must therefore on
principles of natural justice give a hearing to the
other party, namely, the exccutimt of the instru·
mcnt. The Board of Hcvcnue therefore acts as a
quasi-judicia! body under s. 56(2) and the respondents wore entitled to a hearing. 'Ye therefore
uphold the order of tho High Court, though on a
different ground.
'l'l•<i appeal is hereby dismissed with costs.
A ppenl dismissed.