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Time limit and Impound of POA executed outside the country



WP(C).No. 26645 of 2016 (E)


Citation: AIR 2017 (NOC) 216 kerala

In this writ petition, petitioner seeks to quash Ext.P3 order passed by the 1st respondent, whereby request made by the petitioner to affix stamp to a power of attorney executed abroad was declined, and for other related reliefs. Material facts for the disposal of the writ petition are as follows:

2.Petitioner is a non-resident Indian and presently employed in USA. His mother also is residing in USA. Both petitioner and his mother have assets in India and particularly in Piravanthoor Village, Pathanapuram Taluk.    Mother has executed a power of attorney in favour of the petitioner, true copy of which is produced as Ext.P1.     According to the petitioner, Ext.P1 power of attorney is valid and it is in force even now. The power of attorney executed by the mother of the petitioner is attested before the Notary Public in and for the State of Texas and also attested in the Consulate office. But, as contemplated under the Kerala Stamp Act, 1959 [hereinafter called ‘the Act’], the required stamp duty is not affixed on the power of attorney. According to the petitioner, in exercise of the power conferred under the   power of attorney, he has executed documents and conveyed property.

3. However,  recently  petitionerenteredinto an agreement for sale of a property with one Binoy Paul, in exercise of the power conferred under the power of attorney. The buyer has to obtain a housing loan and for the purpose he submitted a copy of the power of attorney to the State Bank of Travancore, Punalur Branch.   The Bank has returned the same with a direction to re-submit the document after adjudication and stamping of power of attorney. Accordingly, as per Ext.P2 correspondence issued by the Bank, petitioner approached the 1st respondent and produced the  power of attorney offering to pay the required stamp duty and penalty. But the 1st respondent rejected the application of the petitioner stating that the time limit prescribed for affixing the stamp has expired, and therefore stamp duty cannot be levied to the power of attorney.

4. According to the petitioner, the time limit prescribed under Sec.18 is only for the purpose of paying the required stamp duty without penalty. In other cases, it is open for the respondents to exercise the power under Sec.33, and dealt with under Sec.39 of the Act. It is in this background, this writ petition is filed by the petitioner challenging Ext.P3 order.

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5. Heard learned counsel for the petitioner and the learned Senior Government Pleader, andperused the documents on record and the pleadings put forth by the petitioner.

6. The question with respect to charging of stamp duty executed out of India is dealt with under Sec.18 of the Kerala Stamp Act, 1959, which read thus:

“18.Instruments executed out of India.–

(1) Every instrument chargeable with duty executed
only out of India may be stamped within three months
after it has been first received in the State of Kerala.

(2) Where any such instrument cannot, with
reference to the description of stamp prescribed
therefor, be duly stamped by a private person, it may
be taken within the said period of three months to the
Collector who shall stamp the same, in such manner as
the Government may by rules prescribe, with a stamp
of such value as the person so taking such instrument
may require and pay for.”

7.Therefore, on a reading of Sec.18, it is distinctively clear, every instrument chargeable with duty executed out of India may be stamped within three months after it has been first received in the State of Kerala. Therefore, invoking the said provision only, 1st respondent has passed Ext.P3 order, declining to charge with stamp duty. On verifying Ext.P1 power of attorney, it is clear, same is executed on 24th day of September, 1995 in the United States of America. Necessarily, the deed has to suffer stamp duty as provided under Sec.18 within the time limit prescribed thereunder, viz. three months of its receipt in the State of Kerala. Petitioner has produced the same before the 1st respondent for stamping as per an application dated 23.03.2016, apparently after 20 years. Moreover, petitioner has no case that it was produced before the authority within the time limit of three months prescribed under law. Therefore, it cannot be said that Ext.P3 order passed by the 1st respondent is an arbitrary or illegal action.

8.However, learned counsel for the petitioner has invited my attention to a Division Bench judgment of this Court in ‘Asokan v. Deputy Collector another’ [1995 (2) KLJ 315] to canvass the proposition that there is no period of limitation for impounding an instrument insufficiently stamped. Learned counsel in that regard invited my attention to Sec.33 of the Act. Sec.33 deals with a circumstance wherein every person having by law or consent of parties authority to receive evidence, and every person in charge of public office, except an Officer of Police, before whom any instrument, chargeable in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same. In my considered opinion, Sec.33 deals with an entirely different situation of production of an insufficiently stamped document before an authority and consequent action thereto.

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9.Learned counsel has also invited my attention to Sec.39 of the Act, where the Collector is vested with powers to stamp instruments impounded. There, when the collector impounds any instrument under Sec.33, or receives any instrument sent to him under sub-section (2) of Sec.37, not being an instrument chargeable with a duty of [twenty paise] or less, he shall adopt a procedure in order to identify whether the document impounded is not charged with a duty or not as per the procedure contemplated thereunder.

10.Learned counsel has further invited my attention to Sec.17, which deals with instruments executed in the State of Kerala, wherein it is stated that all instruments chargeable with duty and executed by any person in the State of Kerala shall be stamped before or at the time of execution. Referring to these sections, an attempt was made by learned counsel for the petitioner to establish that, so far as impounding of a document is concerned, there is no material difference between a document executed within the country and outside, and therefore merely because a document is produced after three months of its execution outside the country, will not prevent the collector from impounding the document, after imposing the penalty contemplated under Sec.39.

11.However, on a reading of Sec.33, what is discernible is that, Sec.33 deals with a situation wherein a document is produced before an authority who is authorised to receive evidence, finds that the document is not sufficiently stamped, then the procedure contemplated thereunder has to be followed, and thereafter the collector is to follow the proceedings contemplated under Secs.37 and 39 of the Kerala Stamp Act, 1959.   Admittedly, there is no such situation existing in this case. Ext.P1power of attorney was not produced by the petitioner before any authority authorised to receive evidence. On the other hand, Ext.P1 is a document executed outside the country which is to be suffered with stamp duty as contemplated under Sec.18 of the Stamp Act. The same is a condition prescribed under the Act to ensure that the State is not losing revenue on the basis of a document executed outside the country for the purpose of use of the same within the country and particularly within the State. Therefore, Sec.18 deals with a situation delineated from other provisions of the Kerala Stamp Act, 1959.   Rather, Sec.18 deals with an exclusive situation in respect of an instrument executed outside India and chargeable with duty. In that view of the matter, I do not think that the contention put forth by the petitioner to treat Sec.18 para materia with Sec.33, and other consequential provisions of the Act, is a sustainable argument. Therefore, the judgment of this Court in ‘Asokan’ supra has no bearing to the facts and circumstances of this case at all.

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12.It is a well settled proposition of law, when a statute prescribes a particular manner for dealing with a situation, the same will have to be considered in accordance with the said provision of law. By incorporating three months’ period in Sec.18 of the Act, I am of the considered opinion that, it is not without any meaning, purpose or purport. Obviously, when a document is executed outside the country, a time limit is prescribed to produce the same for affixing with stamp, with the obvious intention of avoiding any manipulation or other extraneous circumstances, especially for the reason that the executant is a person residing outside the country. Therefore, I am of the considered opinion that Ext.P3 order passed by the 1st respondent is in accordance with law, and therefore I do not find any reason to interfere with the said order exercising the power conferred on this Court under Article 226 of the Constitution of India.

Resultantly, writ petition fails and accordingly it is dismissed.

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