Trial Court Can Itself Recover Deficient Stamp Duty: Punjab & Haryana High Court Rejects Delay Tactics in Specific Performance Suit
Case Name: Maninderpal Singh and Another v. Gurbinder Kaur and Others
Date of Judgment: 06 May 2026
Citation: CR-8274-2025
Bench: Justice Virinder Aggarwal
Held: The Punjab and Haryana High Court held that where a party chooses to move an application before the trial Court itself for payment of deficient stamp duty and penalty, the Court is competent to assess and recover the same without mandatorily referring the document to the District Registrar or Collector under Section 39 of the Indian Stamp Act. The Court further observed that the Supreme Court decision in Seetharama Shetty v. Monappa Shetty recognizes two alternative remedies and does not compel reference to the Collector in every case. Accordingly, the revision petition challenging the trial Court’s order was dismissed.
Summary: The dispute arose from a suit for possession by way of specific performance based on an agreement to sell dated 07.02.2019. During the pendency of the suit, the plaintiff moved an application seeking permission to cure deficiency in stamp duty payable on the agreement to sell. The document had allegedly been executed on stamp paper worth ₹300 though stamp duty of ₹2,000 was payable.
The defendants opposed the application and challenged the order passed by the learned Additional Civil Judge (Senior Division), Tarn Taran allowing the plaintiff to make good the deficient stamp duty along with penalty. Before the High Court, the petitioners argued that in light of the Supreme Court judgment in Seetharama Shetty v. Monappa Shetty, the trial Court lacked jurisdiction to itself assess deficient stamp duty and penalty and was mandatorily required to refer the matter to the District Collector under the Indian Stamp Act.
The High Court closely examined paragraph 21.1.1 of the Supreme Court judgment relied upon by the petitioners. The Court observed that the Supreme Court had clearly recognized two distinct legal courses available to a party relying upon an insufficiently stamped instrument. Firstly, the party may approach the Court itself under Section 34 of the Indian Stamp Act and pay deficient stamp duty together with penalty. Secondly, the party may directly invoke Section 39 before the District Registrar or Collector for adjudication of the deficiency and penalty.
It was held that in the present case the plaintiff had consciously chosen the first legally permissible option by filing an application before the trial Court itself. Therefore, once such option had been exercised, there was no mandatory requirement for the trial Court to transmit the document to the District Registrar or Collector. The Court further clarified that paragraph 21.1.2 of the Supreme Court judgment expressly empowers Courts to recover deficient stamp duty along with statutory penalty.
Distinguishing the facts of Seetharama Shetty, the High Court noted that in that case the concerned party itself had sought transmission of the document to the District Registrar under Section 39. Consequently, the ratio of the said judgment did not support the petitioners’ argument. The Court ultimately found no illegality, jurisdictional error, or material infirmity in the impugned order and further remarked that the revision petition appeared to have been filed merely to delay adjudication of the pending suit.
Decision: The civil revision petition was dismissed. The Punjab and Haryana High Court upheld the order of the trial Court permitting the plaintiff to cure deficiency in stamp duty and penalty before the Court itself without requiring reference to the District Registrar or Collector under Section 39 of the Indian Stamp Act.