Civil court cannot assess stamp duty or penalty on an insufficiently stamped document; it must impound and refer for adjudication.

Under the Bombay Stamp Act, a civil court's role on an insufficiently stamped instrument is limited to deciding whether the document is duly stamped and, if not, impounding it. The court has no jurisdiction to determine the deficit stamp duty or penalty itself, because that adjudicatory function lies with the Collector under the statutory scheme. Once impounded, the document must be forwarded for Collector adjudication, and only after compliance with the Collector's certificate and the statutory payment requirements can it be read in evidence. The impounding direction was upheld, but the order fixing the amount payable was set aside.

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Issues: Whether the Civil Court could itself determine the correct stamp duty and penalty on an insufficiently stamped document, or was bound only to impound the document and send it to the Collector for adjudication before the document could be read in evidence.

Analysis: The statutory scheme under sections 31 and 32 of the Bombay Stamp Act, 1958 vests the power of adjudication regarding proper stamp duty in the Collector. Section 33 requires the Court, when an instrument produced before it appears to be insufficiently stamped, to impound it. Section 34 bars admission of such an instrument in evidence unless the deficit duty and penalty are paid and the statutory procedure is completed. On that scheme, the Civil Court's role is confined to deciding whether the instrument is duly stamped and to impound it if it is not; it has no jurisdiction to assess the amount of stamp duty or penalty payable. After impounding, the document must be forwarded under section 32-A(3) for Collector's adjudication, and only thereafter can the document be admitted on compliance with the Collector's certificate and the requirements of section 34.

Conclusion: The Civil Court could not itself determine the stamp duty and penalty. The impounding direction was upheld, but the order determining the amount payable was set aside, and the matter was left to the Collector for adjudication before the document could be read in evidence.

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