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2005 DIGILAW 1171 (MAD)

Tmt. Indirani v. Seetharaman

2005-07-26

M.THANIKACHALAM

body2005
Judgment :- (Civil Revision Petition filed under Article 227 of the Constitution of India filed against the fair and decretal order dated 8.12.2004 made in I.A.No.641 of 2004 in O.S.No.973 of 2004 by the I Additional District Munsif, Dindigul.) The defendant, who failed before the I Additional District Munsif, Dindigul, in resisting I.A.No.641 of 2004 in O.S.No.973 of 2004, which was filed by the respondent/plaintiff, to mark certain documents, as exhibits, is the revision petitioner. 2. O.S.No.973 of 2004 was filed by the respondent against the revision petitioner for specific performance, based upon a sale agreement. According to the respondent/plaintiff, as seen from the averments in the plaint, discharge of two this dated 20.10.2001 and 31.10.2001, also form part of sale consideration, in addition, those documents, evidence his possession also. 3. The suit for specific performance, filed by the respondent/plaintiff, is opposed by the defendant/revision petitioner, disputing the alleged sale agreement as well as questioning the admissibility of the said documents, in evidence. 4. Because of the dispute, 'whether the documents dated 20.10.2001 and 31.10.2001 and the endorsements therein are admissible, in evidence', a petition came to be filed by the respondent/plaintiff for the reception and marking of the same, in I.A.No.641 of 2004, which was opposed by the defendant/revision petitioner. 5. The learned I Additional District Munsif, Dindigul, considering the rival contentions of the parties and by going through the judicial precedents, quoted before her, came to the conclusion that the documents could be admitted, for collateral purpose, without mentioning what is the collateral purpose, as per the order dated 8.12.2004, which is under challenge in this revision. 6. Heard both. 7. The learned counsel for the revision petitioner submitted that admittedly, the documents, sought to be exhibited, are un-registered and un-stamped this (mortgage) and in this view, in the absence of payment of stamp duty and penalty as well as registration, they are inadmissible in evidence, since admitting those documents would offend the provisions of Section 35 of the Stamp Act as well as certain provisions of the Registration Act. 8. 8. Responding to the above submission of the learned counsel for the revision petitioner, the learned counsel for the respondent submitted that in view of the law declared by the Apex Court as well as this Court, the documents, in question, could be admitted in evidence for collateral purpose, such as, for proving the possession, which was properly considered by the Court below, not warranting any interference by this Court. 9. By going through the documents, in question, as well as the decisions available and the provisions of Section 35 of the Stamp Act, I am afraid to subscribe my view to the submission made by the learned counsel for the respondent as well as hesitate to affix my seal of approval, for the order passed by the Court below. The learned counsel for the respondent/plaintiff fairly concedes that the documents, sought to be admitted in evidence, require stamp duty as well as registration. It is also an admitted fact that the two documents, sought to be admitted in evidence, are written in ordinary paper, wherein the party is said to have signed in a revenue stamp. The recitals therein certainly make out a case of mortgage, not only warranting stamp duty but also requiring registration, not very much in dispute. 10. Having the above admitted facts, if we read Section 35 of the Stamp Act, the irresistible conclusion that could be drawn by the Court must be, that 'unless these documents are properly stamped, they are inadmissible in evidence for any purpose, whether it is collateral or otherwise.' Section 35 of the Stamp Act mandates: "No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon ...." (emphasis supplied) 11. True, the various provisos, to the said Section, regulate the admissibility of certain instruments, on payment of the stamp duty or deficit stamp duty and penalty, thereby showing, even though the documents were not written on stamp papers, that could be cured by paying stamp duty and penalty, as contemplated under provisos. If the conditions stated in provisos to Section 35 of the Stamp Act are complied with, then, the documents could be admitted in evidence, otherwise, they shall not be admitted in evidence 'for any purpose', whether it is collateral or otherwise. If the conditions stated in provisos to Section 35 of the Stamp Act are complied with, then, the documents could be admitted in evidence, otherwise, they shall not be admitted in evidence 'for any purpose', whether it is collateral or otherwise. In the absence of payment of stamp duty and penalty, if the documents are to be admitted in evidence, as if it could be utilised for collateral purpose, then, the courts of law, certainly, would be offending the provisions of Section 35 of the Stamp Act. If such documents, for which stamp duty was not paid are admitted in evidence, then, such admission cannot be questioned, at any stage, later on, on the ground that the instruments were not duly stamped. Therefore, even subject to objection, if the documents are admitted in evidence, without payment of stamp duty, then, the other party cannot have a chance to agitate the same at a later stage, as envisaged under Section 36 of the Stamp Act. In this view, it is incumbent upon the Court to find out, at the admission stage itself, whether the documents require stamp duty, if so, the party, who wants to admit the same in evidence, should be called upon to pay the stamp duty and penalty, and then, it can be looked into for collateral purpose, probably, avoiding the registration, though it is also mandatory. In this view alone, the Section is very clear in its terms, without giving any ambiguity, that 'no instrument, chargeable with duty, shall be admitted in evidence for any purpose' and the words 'any purpose', certainly, include 'collateral purpose' also. If any other interpretation is given, no useful purpose will be served, having the meaning in detaining Section 35 of the Stamp Act. 12. Though it is often said, that the Stamp Act is a fiscal measure, enacted to serve the revenue of the State, the Courts of law should not ignore the intention of the legislature, when it has made it specific that the instrument, which is not properly stamped, shall not be admitted in evidence, 'for any purpose'. 12. Though it is often said, that the Stamp Act is a fiscal measure, enacted to serve the revenue of the State, the Courts of law should not ignore the intention of the legislature, when it has made it specific that the instrument, which is not properly stamped, shall not be admitted in evidence, 'for any purpose'. In this view, in my considered opinion, as long as Section 35 of the Stamp Act is available in the statute, no document shall be admitted in evidence, if it is not properly stamped, and if already not stamped, then stamp duty should be paid with penalty, as prescribed by the authority. As adverted above, admittedly, the documents, sought to be exhibited in this case, are un-stamped, which require stamp duty. 13. The trial Court, though concluded, based upon certain decisions, that the documents could be admitted in evidence for collateral purpose, it has not considered 'whether the documents could be admitted in evidence, even for collateral purpose, without the payment of stamp duty - in this case stamp duty and penalty'. Because of certain decisions available, which are not properly considered by the trial Court, and because of the reason that the judgments were taken in their face value, the learned Additional District Munsif, had landed in an erroneous conclusion, admitting the documents, which could be seen by reading the judgments, very carefully. 14. In BONDAR SINGH AND OTHERS vs. NIHAL SINGH AND OTHERS (2004-1-L.W. 706), the Apex Court has observed: "Under the law, a sale deed is required to be properly stamped and registered before it can convey title to the vendee. However, legal position is clear law that a document like the sale deed in the present case, even though not admissible in evidence, can be looked into for collateral purposes." 15. This observation, guided the learned trial Judge to admit the documents, in question, in evidence, though they are un-stamped. In the case involved in the above decision also, the document sought to be relied on was an un-registered and un-stamped sale deed. But, the same was admitted, in evidence, for collateral purposes. Though such an observation has been made, the Honourable apex Court has not considered the effect of Section 35 of the Stamp Act. If Section 35 of the Stamp Act was considered and the wording stated therein, viz. But, the same was admitted, in evidence, for collateral purposes. Though such an observation has been made, the Honourable apex Court has not considered the effect of Section 35 of the Stamp Act. If Section 35 of the Stamp Act was considered and the wording stated therein, viz. 'for any purpose' is ignored, then, if it is said, it can be taken as the law declared by the Apex Court, which is binding upon the Courts below throughout the breadth and length of this country. As seen from the above decision, nowhere it is discussed about the effect of Section 35 of the Stamp Act, though in the head-note, the publishers have stated, Stamp Act Sections 35, 32, 36, Registration Act Section 49, etc. In the absence of any discussion about the payment of stamp duty and penalty, mere observation that, the document could be looked into, for collateral purposes, alone, is not sufficient to allow all the documents un-stamped, which require stamp duty, should be admitted in evidence, thereby offending the statute viz., in this case, Section 35 of the Stamp Act. In this context, it is useful to refer to the decision of the Apex Court in BIPIN SHANTILAL PANCHAL vs. STATE OF GUJARAT AND ANOTHER [ (2001) 3 SCC 1 ] and CHILAKURI GANGULAPPA vs. REVENUE DIVISIONAL OFFICER, MADANPALLE AND ANOTHER (2001-3-L.W. 113). 16. In the first decision, the objection raised regarding the admissibility of a document came before the Apex Court, for consideration. The Apex Court, in a way, criticised the archaic practice and prescribed guidelines as to how the documents should be admitted in evidence, despite the objection raised by the other side. It is observed that, "Whenever an objection is raised during evidence-taking stage regarding the admissibility of any material or item of oral evidence, the trial Court can make a note of such objection and mark the objected document tentatively as an exhibit in the case (or record the objected part of the oral evidence) subject to such objections to be decided at the last stage in the final judgment. If the court finds at the final stage that the objection so raised is sustainable, the Judge or Magistrate can keep such evidence excluded from consideration. In our view there is no illegality in adopting such a course. If the court finds at the final stage that the objection so raised is sustainable, the Judge or Magistrate can keep such evidence excluded from consideration. In our view there is no illegality in adopting such a course. (However, we make it clear that if the objection relates to deficiency of stamp duty of a document, the Court has to decide the objection before proceeding further. For all other objections, the procedure suggested above can be followed)." 17. The last portion of the above observation makes it clear that 'if the objection relates to deficiency of stamp duty of a document, the Court has to decide the objection before proceeding further.' Therefore, in this case, the trial Court should have considered, 'whether the documents require stamp duty and penalty or not, before allowing the documents to be admitted, in evidence, for collateral purposes, which was not followed. Therefore, I am unable to affix my seal of approval, as such, to the order passed by the trial Court, which requires modification. 18. In the second case viz. CHILAKURI GANGULAPPA vs. REVENUE DIVISIONAL OFFICER, MADANPALLE AND ANOTHER (2001-3-L.W. 113), the Apex Court, considering Section 38 of the Indian Stamp Act, 1899, and the fact under what circumstances, an insufficiently stamped document could be admitted in evidence, has observed that 'it is the duty of the Court, at the first instance, that if the Court finds that the instrument is insufficiently stamped, it should call upon the party, as to whether he would remit the deficient portion of the stamp duty together with a penalty, amounting to ten times the deficiency, and in case, if the party agrees to remit the said amount, the Court has to proceed with trial, after admitting the document in evidence. Then, it contemplates what are the further proceedings, to be initiated under Section 38 of the Stamp Act, etc. In the case involved in the above decision also, an insufficiently stamped document came to the consideration of the Apex Court. Then, it contemplates what are the further proceedings, to be initiated under Section 38 of the Stamp Act, etc. In the case involved in the above decision also, an insufficiently stamped document came to the consideration of the Apex Court. If the Apex Court was of the view that un-stamped or un-registered documents are, automatically, to be admitted in evidence, without reference to Section 35 of the Indian Stamp Act, then, the Apex Court would not have observed, that the Court should call upon the party to remit the deficient portion of the stamp duty together with a penalty, amounting to ten times the deficient or even the lesser penalty. Since the Apex Court was conscious about Section 35 of the Stamp Act, while considering Section 38, it is observed on the basis of Section 38(1) of the Stamp Act: "It is clear from the first sub-section extracted above that the Court has a power to admit the document in evidence if the party producing the same would pay the stamp duty together with a penalty amounting to ten times the deficiency of the stamp duty. When the Court chooses to admit the document on compliance of such condition, the Court need forward only a copy of the document to the Collector, together with the amount collected from the party for taking adjudicatory steps. (emphasis supplied). Thus, showing, if the party fails to pay the stamp duty and penalty, the document is not to be admitted in evidence, in view of the embargo contemplated under Section 35 of the Stamp Act. This ruling also, supports Section 35 of the Stamp Act, that no document shall be admitted in evidence for any purpose, unless it is properly stamped, and in case, if it is not properly stamped, without payment of stamp duty and penalty and that is the reason, we find the words in Section 38(1) of the Stamp Act that 'when the person impounding an instrument under Section 33 has, by law, or consent of parties, authority to receive evidence and admits such instrument in evidence, upon payment of a penalty, as provided by Section 35 or of duty as provided by Section 37 ....,' thereby confirming, without payment of stamp duty and penalty, no document shall be admitted in evidence. 19. 19. This Court in VENUGOPAL @ ALAGARSAMY (DIED) AND OTHERS vs. BAJANAI ALAGARSAMY AND ANOTHER [ (2004) 3 M.L.J. 362 ], has taken the view, 'though un-registered documents are inadmissible in evidence, they may be considered for collateral purpose.' The learned Judge, in this judgment also, has not adverted to the provisions of Section 35 of the Stamp Act and has not rendered any finding, that a document is admissible in evidence, even in the absence of stamp duty and penalty, considering Section 35 of the Stamp Act, is not applicable. 20. There cannot be any dispute, as long as Section 35 of the Stamp Act is available in the statute that the same is to be applied for all the instruments, which require stamp duty. This being the position, unless a finding is given, as observed by the Three Judges Bench of the Apex Court, in BIPIN SHANTILAL PANCHAL vs. STATE OF GUJARAT AND ANOTHER [ (2001) 3 SCC 1 ], regarding the stamp duty and penalty, the document cannot be admitted in evidence, as if it can be looked into for collateral purpose. No doubt, it is true, a document, which is un-registered or un-stamped, can be looked into for collateral purpose, provided, provisos to Section 35 of the Stamp Act are complied with, and not otherwise. The above position of law was not considered properly by the trial Court and therefore, the order of the trial Court requires modification, in my considered opinion, in view of the admitted position that the documents, in question, require stamp duty and penalty. 21. For the foregoing reasons, the revision is allowed in part and the order of the trial Court is modified. The trial Court is directed to ascertain the stamp duty and penalty payable upon the disputed documents, then, call upon the party, who wants to rely on those documents, to pay the stamp duty and penalty, and then on payment of stamp duty and penalty, admit the documents in evidence, whether it is for collateral purpose or otherwise, which could be decided at the later stage while hearing the case, as guided by the Apex Court in BIPIN SHANTILAL PANCHAL's case. No costs. Consequently, C.M.P.No.2557 of 2004 is closed.