Courts Cannot Reduce Mandatory Penalty on Insufficiently Stamped Documents: Supreme Court

The Supreme Court held that courts have no discretion to impose a penalty lower than ten times the deficient stamp duty on unstamped or insufficiently stamped documents under the Karnataka Stamp Act, 1957.

Interpreting Section 34, the Court emphasised that once such a document is sought to be admitted in evidence, payment of the deficit duty along with a mandatory 10x penalty is compulsory.

It clarified that judicial discretion cannot override statutory mandates, and any relaxation is impermissible.

However, if the document is sent to the Deputy Commissioner under Sections 37–39, limited discretion on penalty may be exercised.

[Krishnavathi Sharma v. Bhagwandas Sharma & Ors.]