Dissenting the Equitable Mirage: The Karnataka High Court's Misguided Reprieve in Munisanjeevamma v. State of Karnataka - Legal Service India

Judgments Contrary to Binding Precedent

It is common knowledge that sometimes Courts pass judgments which are contrary to the binding precedents of the Supreme Court. This may be due to sheer inadvertance or due to poor assistance by the Bar.

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One such recent judgment by the Karnataka High Court in the case Smt. Munisanjeevamma (Deceased) by LRs v. State of Karnataka (Writ No. 49527/2016), in my view, with due respect to the Honourable Bench, does not lay down the correct law and runs contra to the binding declaration of law declared by the Apex Court in a number of cases in this regard.

Brief Facts of the Case

The brief facts of the case are that Smt. Munisanjeevamma (deceased by LRs) and others challenged an order dated 30.07.2016 by the Deputy Commissioner and District Registrar, Bangalore, in Writ Petition No. 49527 of 2016.

Sri. Munikrishnappa, husband of petitioner No.1, entered a 1994 agreement to buy 2 acres 20 guntas land in Survey No.110/5, Varthur village, for Rs.4 lakhs (paying Rs.3.5 lakhs advance).

Vendor Khader Mohiddin defaulted on the agreement.
This led to a suit for specific performance (OS No.759/1995).
The suit was decreed on 12.09.2005.
The decree was confirmed in RFA No.1721/2005 on 01.08.2007.

The vendor then voluntarily executed the sale deed in 2008 at the agreement value. However, the Sub-Registrar refused registration and referred the matter to the Deputy Commissioner, who demanded stamp duty and registration fee based on the 2008 market value.

Particulars	Amount
Original Agreement Value (1994)	Rs. 4 lakhs
Market Value Assessed in 2008	Rs. 3.12 crores
Approximate Deficit Stamp Duty Demanded	Rs. 29 lakhs

Findings of the Karnataka High Court

A single member bench of the Karnataka High Court allowed the writ, quashing the 2016 order.

The Court held that stamp duty and registration fee were payable on the original 1994 agreement value (Rs.4 lakhs) and not on the escalated market value. The reasoning was that the sale deed was executed in enforcement of a contested decree for specific performance and that the delay between 1994 and 2007 was solely attributable to the vendor’s default and litigation.

Distinction Between Modes of Execution

The Court held that the distinction between sale deeds executed through execution proceedings and those executed voluntarily pursuant to a decree was “without difference.”

It would be pertinent to quote the relevant extracts of the said judgment which are as under:

“The distinction sought to be made by the State between sale deeds executed through execution proceedings and those executed voluntarily in furtherance of a decree is a distinction without a difference.”

The Court further held:

“In both situations, the sale deed is essentially being executed to give effect to the decree of specific performance. Whether the judgment debtor executes the deed voluntarily or the court compels its execution, the outcome remains the same—the enforcement of the decree.”

The Court observed further:

“If Mohiddin had honoured the contract in time, the petitioners would have paid stamp duty on the original consideration of ₹4 lakhs, not on any later inflated market value.”

Final Direction of the Court

The Court allowed the writ and held thus:

“Stamp duty/registration fee payable on original 1994 agreement value (Rs.4 lakhs), not escalated market value… Directed registration within 15 days at agreement value.”

This ruling thus prioritizes perceived equity over statutory rigor. The bench held this approach necessary to avoid unjust penalization of the decree-holder for litigation delays attributable to the vendor’s mala fides.

The court mandated refund of excess payments, emphasizing that the stamp duty liable to be paid would not be as per the valuation of the property on the date on which the document was presented for registration but would be on the agreement value.

Departure From Supreme Court Mandate

This decision, while cloaked in benevolence, is a stark deviation from the Supreme Court’s unequivocal mandate under Article 141 of the Constitution, which binds all courts to its declarations of law.

The judgment exhibits troubling hallmarks of inadequate assistance to the bench—a phenomenon where counsel’s failure to cite binding precedents leads courts astray, producing per incuriam rulings that fragment legal certainty.

This article dissents robustly, examining the Supreme Court’s crystalline jurisprudence, the Karnataka ruling’s fatal omissions, and comparable cases revealing systemic advocacy failures that compromise judicial outcomes.

The Doctrine of Per Incuriam and Inadequate Advocacy

A judgment is rendered per incuriam when it is delivered in ignorance of binding precedent or relevant statutory provisions. In State of U.P. v. Synthetics & Chemicals Ltd. (1991) 4 SCC 139, the Supreme Court clarified that decisions reached without considering applicable law lack precedential value:

“A decision given in ignorance of a statute or a binding authority is not a precedent and has no binding force.”

The concept of poor assistance to the bench gained prominence in Suganthi Suresh Kumar v. Jagdeeshan (2002) 2 SCC 420, where Justice K.T. Thomas observed:

“It is the bounden duty of the counsel to bring to the notice of the Court all the relevant decisions on the point, more so if they are directly in point, even though they may be against the client… The failure to cite binding precedents amounts to professional misconduct and results in judicial error.”

In Ajay Kumar Ghose v. State of Bihar (1988) Supp SCC 599, the Court lamented:

“We are constrained to observe that the High Court judgment suffers from non-consideration of the binding precedents of this Court… This appears to be a case where neither the counsel nor the Court applied their mind to the governing law.”

Such observations resonate powerfully with the Munisanjeevamma ruling, where no reference appears to State of Rajasthan v. Khandaka Jain Jewellers (2008) 14 SCC 339 or Shanti Bhushan v. State of U.P. (2023) INSC 425 – 2023 SCC OnLine SC 489—the lodestar authorities on stamp duty for decree-executed conveyances.

Binding Supreme Court Precedent: The Execution Date Imperative

The Supreme Court’s jurisprudence on stamp duty for delayed conveyances, particularly those crystallized via specific performance decrees, is unyielding: the fiscal dragnet snaps shut on the instrument’s execution date, capturing contemporaneous market realities to thwart undervaluation and ensure state exchequer integrity.

Khandaka Jain Jewellers: The Foundational Pronouncement

In Khandaka Jain Jewellers, purchasers enforced a 1983 agreement through specific performance after vendor default, with the decree-executed sale deed surfacing years later amid soaring property values. The Rajasthan authorities demanded duty on the then-prevailing market rate, prompting the challenge.

The Supreme Court, per Justices B.N. Agrawal and G.S. Singhvi, rebuffed pleas for “backdating” to agreement-era valuations, declaring:

“The stamp duty is to be determined on the basis of the market value of the property on the date of the execution of the sale deed and not on the basis of the market value on the date of the agreement to sell.”

Elaborating, the Bench underscored:

“Stamp duty is payable as per the market value prevailing on the date of conveyance, irrespective of litigation delays.”
“The relevant date for determining stamp duty is the date of execution.”

This rationale roots in the instrument-centric levy under Section 3 of the Indian Stamp Act, 1899 (mirrored in the Karnataka Stamp Act), where duty attaches to the deed’s presentation and execution, not the underlying bargain.

Shanti Bhushan: Reaffirmation and Clarity

This principle was reaffirmed with crystalline clarity in Shanti Bhushan, where a 2003 agreement culminated in a 2010 sale deed amid tenanted property complexities. The Uttar Pradesh authorities assessed duty on 2010 market values, rejecting pleas for agreement-date fixation.

Justices B.V. Nagarathna and Augustine George Masih remanded for fresh valuation, holding:

“The stamp duty on a conveyance will be payable as per the market value prevailing on the date of conveyance according to Article 23 of Schedule IB of the Act.”

The Court further clarified:

“Stamp duty on sale deed can be assessed on market value of property at the time of the sale, & not prior to.”
Equity pleas remain subordinate to statutory mandate.
The execution date governs to ensure “no evasion through delayed instruments.”

Complementary Authorities Ignored

These holdings echo State of Haryana v. Manoj Kumar (2010) 4 SCC 350, where the Supreme Court invalidated specific performance suits engineered to lock in undervalued rates:

“Attempts to evade higher stamp duty by filing suits for specific performance based on older agreements must be thwarted; duty accrues on execution value.”

Additionally, in Smt. Sawarni v. Inder Kaur (1996) 6 SCC 631, the Court held:

“The date of execution of the conveyance deed is determinative for stamp duty, not the date of agreement or decree… The Stamp Act levies duty on instruments, not transactions.”

This instrument-centric approach was reiterated in Karanja Umamaheshwar Rao v. State of A.P. (2013) 10 SCC 445, emphasizing that “market value ascertainment must be contemporaneous with deed execution to prevent revenue loss.”

Article 141 renders these declarations impervious to High Court dilution, mandating uniform application to prevent “pockets of judicial anarchy.”

The Karnataka High Court’s Erroneous Deviation: A Case Study in Advocacy Failure

The Munisanjeevamma saga traces to a 1994 agreement thwarted by vendor Khader Mohiddin’s default, spawning a 1995 suit, a 2005 decree (upheld on appeal), and a voluntary 2007 sale deed. Registration authorities invoked Section 47-A of the Karnataka Stamp Act, referencing undervaluation on 2007 market metrics, but the petitioners sought refuge in the decree’s “equitable” halo.

The Judgment’s Flawed Reasoning

It dismissed the State’s “distinction without a difference” between voluntary and compelled executions, holding:

“Whether the judgment debtor executes the deed voluntarily or the court compels its execution, the outcome remains the same—the enforcement of the decree.”

Conflating Section 3 (ad valorem duty on execution-date market value) with Article 20(1) of the KSA Schedule, the Bench directed registration on 1994 values and refund of excesses, sans any reference to Khandaka or Shanti Bhushan.

The Advocacy Deficit

This omission is fatal and symptomatic of poor assistance. The absence of citation to directly applicable Supreme Court precedents suggests either:

Counsel for the State failed to research or present binding authorities, or
Petitioners’ counsel strategically omitted adverse precedents, hoping the Bench would overlook them.

In Union of India v. Paras Laminates Pvt. Ltd. (1990) 4 SCC 453, the Supreme Court admonished:

“It is deeply disturbing when decisions are rendered without reference to controlling precedents. The responsibility lies both with the bar and the bench to ensure that all relevant authorities are brought to notice and considered.”

Similarly, in Haryana Financial Corporation v. Kailash Chandra Ahuja (1997) 7 SCC 361, the Court noted:

“When a High Court decides a matter without adverting to a binding precedent of this Court, it creates confusion in the law and necessitates corrective intervention… This is particularly egregious when the precedent is directly on point.”

The Karnataka ruling’s equity lens—treating decrees as “time capsules” for valuation—flouts Khandaka’s edict that “litigation delays [do] not alter the conveyance date for duty purposes.” Voluntary execution, far from mitigating, reinforces instrument autonomy under Section 17 of the Indian Stamp Act.

Legal Flaws: Incentivizing Evasion and Eroding Section 47-A

The decision’s fissures run deep, compounded by the Bench’s reliance on incomplete legal foundations.

Inversion of Statutory Architecture

First, it inverts the Karnataka Stamp Act’s architecture: Section 47-A empowers undervaluation probes at execution, tethering to “market value… at the date of execution” per Article 20(1)—not antecedent pacts. By “freezing” at 1994 rates, the court nullifies this safeguard, inviting suits as “valuation hedges” against appreciation, as warned in Manoj Kumar:

“Such practices erode state revenue and distort property markets.”

In Commissioner of Wealth Tax v. Arvind Narottam (1988) 2 SCC 347, the Court emphasized:

“Valuation statutes are designed to capture present economic reality, not historical artifacts. To permit backdating undermines the very purpose of market-value assessments.”

Equity Cannot Trump Statute

Second, equity cannot trump statute. The Specific Relief Act, 1963, enforces bargains but does not immunize from contemporaneous fiscal impositions. Shanti Bhushan repudiates “penalization” rhetoric:

“Market value assessment ensures fairness to the exchequer, not punishment; delays are risks borne by parties.”

The Supreme Court in India Cement Ltd. v. State of Tamil Nadu (1990) 1 SCC 12 held:

“Stamp duty is a tax on instruments, not transactions. The obligation arises when the instrument comes into existence, regardless of underlying equities between the parties… Courts cannot fashion exemptions based on perceived hardship.”

The Karnataka view risks a cascade: decree-holders, armed with this precedent, could perpetually litigate to “lock” low duties, contravening Khandaka’s “irrespective of litigation delays” mantra.

The Moral Hazard Problem

In Javer Chand v. Pukhraj Surana (1961) 3 SCR 154, the Supreme Court cautioned:

“Any interpretation that creates incentives for deliberate delay in property transactions to avoid fiscal obligations must be eschewed… The law cannot reward dilatoriness with revenue concessions.”

This moral hazard is precisely what the Karnataka ruling enables. As Justice V.R. Krishna Iyer observed in State of Kerala v. Haji K. Kutty Naha (1969) 2 SCC 689:

“Revenue laws must be construed to prevent avoidance, not facilitate it. Equity in taxation means equal treatment, not selective leniency.”

Systemic Pattern: Other Cases Revealing Poor Judicial Assistance

The Munisanjeevamma error is not isolated. Recent case law reveals a troubling pattern where inadequate advocacy produces per incuriam judgments on stamp duty.

Punjab & Haryana High Court’s Course Correction

The Punjab & Haryana High Court, in Uggar Singh v. State of Punjab (July 14, 2025), overruled deviant single-judge views, aligning with the Supreme Court: “Stamp duty is levied on the instrument (i.e., the registered deed), not on the transaction or prior agreements… The market value at the time of execution of the sale deed is determinative for stamp duty purposes, regardless of when the agreement to sell was executed or whether a decree of specific performance intervened.”

Citing Khandaka, Manoj Kumar, and Shanti Bhushan, it mandated execution-date valuation, deeming contrary rulings “incorrect for failing to adhere to governing precedents.” The Division Bench specifically noted: “It appears that in the earlier single-judge decisions, the relevant Supreme Court authorities were neither cited by counsel nor considered by the Court, rendering those judgments per incuriam.”

Delhi High Court’s Similar Misstep

Even the Delhi High Court, in a parallel October 2025 ruling on court-ordered sales (FAO(OS) 79/2022), veered similarly by upholding original deal values over market rates, highlighting “the legal distinction between market value… and a judicially confirmed agreement price.” Yet, this too invites per incuriam scrutiny, as it ignores Shanti Bhushan’s remand directive for “fresh valuation on the [execution] date.”

Comparative Lessons from Tax Jurisprudence

The problem of inadequate assistance extends beyond stamp duty. In CIT v. Vegetable Products Ltd. (1973) 88 ITR 192 (SC), the Court noted: “Three different High Courts reached contradictory conclusions on the same statutory provision because different precedents were cited in each case. This fragmentation of law results from counsel’s selective citation and courts’ failure to undertake independent research.”

In State of Punjab v. Devans Modern Breweries Ltd. (2004) 11 SCC 26, the Court observed: “When constitutional courts decide matters without considering binding precedents, they not only err in law but also fail in their duty to maintain legal certainty… The responsibility for bringing precedents to notice rests with both the Bar and the Bench.”

Comparative Cases Summary

Case	Key Observation
CIT v. Vegetable Products Ltd. (1973) 88 ITR 192 (SC)	“Three different High Courts reached contradictory conclusions on the same statutory provision because different precedents were cited in each case. This fragmentation of law results from counsel’s selective citation and courts’ failure to undertake independent research.”
State of Punjab v. Devans Modern Breweries Ltd. (2004) 11 SCC 26	“When constitutional courts decide matters without considering binding precedents, they not only err in law but also fail in their duty to maintain legal certainty… The responsibility for bringing precedents to notice rests with both the Bar and the Bench.”

The Doctrine of Precedent and Judicial Discipline

The Indian jurisprudential system, grounded in Article 141, demands strict adherence to Supreme Court pronouncements. In Central Board of Dawoodi Bohra Community v. State of Maharashtra (2005) 2 SCC 673, the Court emphasized: “The doctrine of precedent is not a matter of courtesy but constitutional compulsion. When this Court lays down the law, it binds all courts within the territory of India.”

Consequences of Non-Adherence:

In Official Trustee v. Sachindra Nath Chatterjee (1969) 3 SCC 267, the Supreme Court held: “A High Court judgment that proceeds in ignorance or disregard of this Court’s decisions cannot be treated as declaring the law correctly. Such judgments must be overruled at the earliest opportunity to restore uniformity.”
The Court in Commissioner of Sales Tax v. Modi Sugar Mills (1961) 2 SCR 189 stated: “The binding force of a precedent depends not merely on its existence but on its conscious application. A judgment that could and should have considered binding precedents but failed to do so lacks legal soundness.”

The Role of Amicus Curiae

When advocacy fails, courts have mechanisms for correction. In Ashok Kumar Gupta v. State of U.P. (1997) 5 SCC 201, the Supreme Court noted: “In complex matters involving interpretation of fiscal statutes, courts may appoint amicus curiae to ensure all relevant authorities are brought to notice… This is particularly important when one party’s counsel appears inadequately prepared.”

The Karnataka bench, faced with a novel question involving substantial revenue implications, could have appointed an amicus or independently researched Supreme Court precedents on stamp duty for decree-executed conveyances. The failure to do so perpetuated the advocacy deficit.

Implications: Fiscal Integrity and Uniformity Under Siege

Munisanjeevamma’s ripple effects threaten the Karnataka Stamp Act’s revenue backbone, potentially slashing collections by anchoring to archaic values amid Bengaluru’s realty boom.

Systemic Pattern: Other Cases Revealing Poor Judicial Assistance

The Munisanjeevamma error is not isolated. Recent case law reveals a troubling pattern where inadequate advocacy produces per incuriam judgments on stamp duty.

Punjab & Haryana High Court’s Course Correction

Delhi High Court’s Similar Misstep

Comparative Lessons from Tax Jurisprudence

Comparative Cases Summary

Case	Key Observation
CIT v. Vegetable Products Ltd. (1973) 88 ITR 192 (SC)	“Three different High Courts reached contradictory conclusions on the same statutory provision because different precedents were cited in each case. This fragmentation of law results from counsel’s selective citation and courts’ failure to undertake independent research.”
State of Punjab v. Devans Modern Breweries Ltd. (2004) 11 SCC 26	“When constitutional courts decide matters without considering binding precedents, they not only err in law but also fail in their duty to maintain legal certainty… The responsibility for bringing precedents to notice rests with both the Bar and the Bench.”

The Doctrine of Precedent and Judicial Discipline

Consequences of Non-Adherence:

In Official Trustee v. Sachindra Nath Chatterjee (1969) 3 SCC 267, the Supreme Court held: “A High Court judgment that proceeds in ignorance or disregard of this Court’s decisions cannot be treated as declaring the law correctly. Such judgments must be overruled at the earliest opportunity to restore uniformity.”
The Court in Commissioner of Sales Tax v. Modi Sugar Mills (1961) 2 SCR 189 stated: “The binding force of a precedent depends not merely on its existence but on its conscious application. A judgment that could and should have considered binding precedents but failed to do so lacks legal soundness.”

The Role of Amicus Curiae

Implications: Fiscal Integrity and Uniformity Under Siege

Munisanjeevamma’s ripple effects threaten the Karnataka Stamp Act’s revenue backbone, potentially slashing collections by anchoring to archaic values amid Bengaluru’s realty boom.

Revenue Impact

In M.P. Jain v. State of M.P. (1964) 6 SCR 528, the Supreme Court observed:

“Stamp duty constitutes a significant source of state revenue. Interpretations that erode this base without statutory warrant undermine fiscal federalism and burden other revenue sources.”

Karnataka’s approach, if widely adopted, could incentivize property buyers to deliberately litigate to “freeze” stamp duty at agreement-stage values, waiting years for favorable decrees while property appreciates. The revenue loss could run into thousands of crores annually in metros like Bengaluru and Mumbai.

Legal Uncertainty for Practitioners

For legal practitioners, the Karnataka ruling creates a minefield of uncertainty.

Which valuation date applies when advising clients on decree enforcement?
Can decree-holders in Karnataka now claim refunds on past registrations?

The Punjab & Haryana correction in Uggar Singh provides the proper roadmap, but conflicting High Court precedents force practitioners to navigate a fractured legal landscape.

In State Bank of India v. S.N. Goyal (2008) 8 SCC 92, the Court warned:

“Divergent High Court interpretations of fiscal statutes impose unconscionable compliance burdens on citizens and necessitate Supreme Court intervention to restore uniformity.”

The National Impact

Other states watching Karnataka’s experiment may be tempted to follow suit, particularly where populist pressures favor taxpayer-friendly interpretations. However, as the Supreme Court held in M.C. Mehta v. Union of India (1987) 1 SCC 395:

“Constitutional courts must resist the temptation to craft equitable solutions that undermine statutory schemes… Fiscal statutes embody legislative policy choices that courts cannot rewrite.”

Remedial Framework: Restoring Doctrinal Consistency

Immediate Practitioner Strategy

Practitioners must pivot immediately. In Karnataka and similar jurisdictions:

Cite Khandaka and Shanti Bhushan prominently in challenges.
Urge authorities to levy stamp duty on execution-date market values.
Where refunds have been directed per Munisanjeevamma, revenue departments should file appeals or Special Leave Petitions (SLPs) to the Supreme Court.

In Union of India v. Raghubir Singh (1989) 2 SCC 754, the Court held:

“Revenue authorities have a constitutional duty to protect the public fisc. Where High Courts issue directions contrary to settled law, the State must appeal expeditiously to prevent precedential harm.”

Curative Mechanisms

This dissent implores review through multiple mechanisms:

Reference to Larger Bench: Under Order 39 Rule 1 of the Supreme Court Rules, the Chief Justice may refer the matter to a Constitution Bench if substantial questions of constitutional importance arise regarding Article 141’s enforcement.
Curative Petitions: Affected states can file curative petitions under the principles established in Rupa Ashok Hurra v. Ashok Hurra (2002) 4 SCC 388, demonstrating that the Karnataka judgment violates principles of natural justice by ignoring binding precedents.
Clustering SLPs: The Supreme Court should cluster SLPs from multiple states challenging similar deviations (Karnataka, Delhi, and any other jurisdictions following this approach) for authoritative resolution, as done in State of M.P. v. Nandlal Jaiswal (1986) 4 SCC 566.

Legislative Clarification

State legislatures can also act. In K.T. Plantation Pvt. Ltd. v. State of Karnataka (2011) 9 SCC 1, the Court recognized:

“Where judicial interpretations create unintended fiscal consequences, legislatures may enact clarificatory amendments making explicit what was already implicit in the statutory scheme.”

Karnataka could amend Section 47-A to explicitly state:

“For conveyances executed pursuant to specific performance decrees, whether voluntarily or under court compulsion, stamp duty shall be computed on the market value prevailing at the date of execution of the conveyance instrument, not the antecedent agreement or decree date.”

Systemic Reforms in Legal Education and Practice

The deeper problem requires addressing advocacy standards. Bar Councils must:

Mandate Precedent Research: Require certification from counsel that they have researched and disclosed all binding contrary precedents, as practiced in some foreign jurisdictions.
Continuing Legal Education: Emphasize training on the duty to cite adverse authorities, drawing from Rule 3.3 of the ABA Model Rules adapted to the Indian context.
Court Library Modernization: Ensure all courts have access to comprehensive digital databases (SCC Online, Manupatra) to facilitate independent research when advocacy falters.

In Bar Council of India v. High Court of Kerala (2004) 6 SCC 311, the Supreme Court emphasized:

“The quality of judicial outcomes directly correlates with the quality of legal representation. Bar Councils and law universities share responsibility for ensuring competent, ethical advocacy.”

Conclusion: The Imperative of Correction

The framers of our Constitution envisioned a fiscal federalism where equity serves, not subverts, law. Karnataka’s “considered opinion” in Munisanjeevamma must yield to the Supreme Court’s unyielding voice under Article 141: the execution date reigns supreme for stamp duty computation.

As Justice Markandey Katju observed in State of U.P. v. Manbodhan Lal Srivastava (2006) 1 SCC 91:

“Judicial discipline requires that once this Court has laid down the law, all subordinate courts must follow it faithfully. Departure, however well-intentioned, fractures the rule of law and necessitates corrective intervention.”

Until corrected through appeal, review, or legislative clarification, this ruling foments a dangerous precedent—one where justice’s scales tip toward evasion clothed as equity, not genuine fairness. The systemic failure of advocacy that enabled this outcome should prompt introspection across the legal profession.

When binding precedents go uncited and courts proceed unaware, the casualty is not merely fiscal revenue but the integrity of the adjudicatory process itself.

The Supreme Court’s intervention is now imperative, not merely to resolve one state’s confusion, but to reaffirm a foundational principle: in matters of law, precedent is paramount, and equity cannot be the engine of evasion. States, practitioners, and the judiciary must unite to restore the Stamp Act’s integrity, ensuring that future generations inherit a legal system where doctrine, not chance or advocacy deficits, determines outcomes.

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