Research › Search › Judgment

Karnataka High Court · body

2010 DIGILAW 521 (KAR)

S. Suresh v. L. Po Gowda

2010-04-12

SUBHASH B.ADI

body2010
Judgment :- (This Writ Petition is filed under Articles 226 & 227 of the Constitution of India praying to quash the Article 5(e)(1) of Karnataka Stamp Act was unconstitutional and quash Annexure-A, the order passed on 17.3.2007 in O.S.No.1323/2007 on I.A.V. filed under Section 34 of the Karnataka Stamp Act by the City Civil Judge, Bangalore. (CCH-19) and dismiss I.A.No.V in O.S.No.1323/2007 on the file of City Civil Judge, Bangalore, (CCH-19) and etc.) This Writ Petition is directed against the order dated 17.3.2007 in O.S.No.1323/2007 on I.A.V filed under Section 34 of the Karnataka Stamp Act, 1957 (hereinafter referred to as ‘the Act’). 2. Petitioner is the plaintiff in the trial court. He has sought for permanent injunction, restraining the defendants from interfering with peaceful possession and enjoyment of the suit schedule property. In the said suit, plaintiff produced documents along with the plaint, further he also filed an application under Order XXXIX Rule 1 and 2 of CPC interalia for grant of temporary injunction, restraining the defendants from interfering with peaceful possession and enjoyment of the suit schedule property. As against the application for grant of temporary injunction, defendants filed I.As.5 and 6 under Section 34 of the Act read with Section 11 of the Karnataka Court Fees and Suit Valuation Act interalia alleging that, the document produced along with the plaint is a conveyance as defined under the provisions of Section 2 clause (d) of the Act and is an instrument chargeable under Section 3 of the Act, unless the stamp duty and penalty is paid as required under the provisions of Section 34 of the Act. It is also alleged that, the documents are required to be impounded. 3. The trial court relying on Article 5 clause (e) and section 33 of the Act allowed I.A.V by holding that, the Memorandum of Understanding dated 20th November 2005 and possession letter of the same date are required to be impounded, for want of stamp duty and penalty. It is against this order, the plaintiff has filed this writ petition. 4. Petitioner though has sought for declaration that Article 5 clause (e) sub-clause (i) of schedule to the Act as unconstitutional, however, during the course of hearing, he confined the relief insofar as the impugned order is concerned. 5. It is against this order, the plaintiff has filed this writ petition. 4. Petitioner though has sought for declaration that Article 5 clause (e) sub-clause (i) of schedule to the Act as unconstitutional, however, during the course of hearing, he confined the relief insofar as the impugned order is concerned. 5. Sri.Dwarakanath, learned Counsel appearing for the petitioner submitted that, I.A.V filed for impounding of the document is not maintainable in view of the provisions of Section 34 of the Act and submitted that, the document is produced along with the plaint and is not tendered in the evidence nor it is sought to be marked in the evidence. Unless the document is sought to be admitted in the evidence, question of impounding under Section 33 of the Act does not arise. 6. He relied on the judgment of this Court reported in 1969(2) Mys.L.J. 299 in the matter of LAKSHMINARAYANACHAR –vs- NARAYAN AND ANOTHER and submitted that, in identical circumstances, this Court on interpretation of the provisions of Section 34 has held that, the impounding of document for non-payment of deficit stamp duty arises only when the document is tendered is tendered in the evidence. He further relied on another judgment of this court reported in 1994 Vol.4 Kar.L.J.573 in the matter of LEELAMMA SAMUEL – vs- T.M.FRANCIS and submitted that, only when the document comes before the court for the purpose of being used in evidence, the court is required to determine the question as to whether the document sought to be produced in the evidence is chargeable, if chargeable, whether sufficient stamp duty is paid, if not and determine the stamp duty, call upon the party producing such document to deposit the duty and penalty. If the party fails to deposit the said amount, the court gets the jurisdiction to impound the document. 7. This Court on interpretation of the provisions of Sections 33 and 34 of the Act in a judgment reported in 2000 (4) Kar.L.J.55 in the matter of K.AMARNATH –vs-SMT.PUTTAMMA has explained the scope of provisions of Sections 33, 34, 35, 36, 37 and 41 of the Act. It is observed that, when a document is sought to be admitted in evidence, Court must verify as to whether it is required to compulsorily registerable and whether the document is sufficiently stamped or not. It is observed that, when a document is sought to be admitted in evidence, Court must verify as to whether it is required to compulsorily registerable and whether the document is sufficiently stamped or not. If it finds the document required to be sufficiently stamped, and is not duly stamped or insufficiently stamped, it shall call upon the party producing the document to deposit duty payable as well as the penalty and on failure, it can impound the document. 8. In this regard, he also referred to Order XIII Rule 4 of CPC and submitted that, the marking of document arises only when it is tendered in the evidence, Order XIII Rule 6 confers power on the court to admit or reject the marking of the document in the evidence. Reading of provisions of Section 34 of the Act along with the provisions of Order XIII Rule 6 abundantly make it clear that, the test as to whether document could be admitted in the evidence or not, could be raised only when it is tendered in evidence. He further submitted that, the admissibility of document cannot be gone into before the same tendered in evidence. He also submitted that, the document gets the evidentiary value only when it is produced in the evidence and marked, as otherwise document would not become an evidence. As such, Section 34 of the Act bars the admissibility of the document if it is not duly stamped. 9. To support his contention, he also relied on the provisions of Section 35 of the Act and submitted that, the provisions of Section 35 of the Act bar the questioning of admissibility on the ground of insufficiency of stamp duty after the document is admitted in evidence, except under Section 58 of the Act. The admissibility or rejection or impounding of document arises only when the document is produced in the evidence. He further submitted that, the trial court erroneously has ordered for impounding of the documents, even before the same are produced in the evidence. 10. The admissibility or rejection or impounding of document arises only when the document is produced in the evidence. He further submitted that, the trial court erroneously has ordered for impounding of the documents, even before the same are produced in the evidence. 10. On the other hand, learned Counsel Prakash appearing for the respondents – defendants strongly relied on the judgment of this Court reported in AIR 2003 KAR 241 in the matter of K.B.JAYARAM AND ANOTHER –vs- NAVINEETHAMMA AND OTHERS and submitted that, this Court on consideration of the provisions of Section 34 and on interpretation of the word “for any other purpose” referred to under Section 34 of the Act means, even the use of document for grant or refusal of temporary injunction, the document relied by the party requires to be duly stamped, and the document not sufficiently stamped is liable to be impounded. The word “for any other purpose” stipulated under Section 34 means, if the document is sought to be acted upon even prior to the production of the same in the evidence, such document cannot be acted upon by the court unless it is duly stamped. The judgment in K.B.JAYARAM’s case (supra) being the later judgment, the same is binding and required to be followed. 11. He further submitted that, when two views are expressed in two different judgments by the coordinate bench, then the later judgment is required to be followed or the matter may be required to be referred to the Division Bench. In this regard, he relied on the judgment reported in AIR 1990 SC 261 in the matter of SUNDARJAS KANYALAL BHATHIJA AND OTHERS –vs- THE COLLECTOR, THANE, MAHARASHTRA AND OTHERS. 12. In the light of the submissions made by both the parties, the points that arise for consideration in this writ petition are: (1) Whether the document produced along with the plaint or application but not tendered in the evidence for marking could be impounded? (2) What are the considerations to be followed in the case of document sought to be admitted in the evidence? (3) What is the consequence of admitting of document, which is not sufficiently stamped, but admitted in the evidence without any objection? 13. (2) What are the considerations to be followed in the case of document sought to be admitted in the evidence? (3) What is the consequence of admitting of document, which is not sufficiently stamped, but admitted in the evidence without any objection? 13. More often, the trial court is faced with the problem as regards to the impounding of document either as regard to the stage at which the document could be impounded or as regard to the procedure followed in ordering the impounding of the document. In connection with order of impounding or rejection, large number of cases are filed before this court. In this case itself, the trial court, based on the application filed by the defendants for impounding, has directly impounded the document by allowing the said application only on the ground that the document is not duly stamped. In some cases, the order of impounding the document is passed only when such document is sought to be marked in the evidence. Sometimes courts on the basis of the objection raised for marking on the ground of insufficiency of stamp, order for impounding of the documents. 14. All suits have to be filed and tried in terms of the procedure prescribed in the Code of Civil Procedure unless, otherwise is provided by any other law. Insofar as production of documents is concerned, by amendment Act No.46 of 1999, which came into effect on 1.7.2002, Order VII Rule 14 was substituted interalia where the plaintiff sues upon a document or relies upon a document in his possession or power, he shall enter such a document in the list, and shall produce it in the court wherein plaint is presented by him and shall, at the same time, deliver the document and a copy thereof to be filed with plaint. Similarly defendants also in view of the insertion of Order VIII Rule 1-A are required to produce the list of documents, which they rely. Under Order XIII Rule 1 CPC, the originals of the document shall have to be filed on or before the settlement of issues. Order XIII Rule 1 reads as under: “1. Documentary evidence to be produced at or before the settlement of issue. Under Order XIII Rule 1 CPC, the originals of the document shall have to be filed on or before the settlement of issues. Order XIII Rule 1 reads as under: “1. Documentary evidence to be produced at or before the settlement of issue. (1) The parties or their pleaders shall produce at or before the settlement of issues all the documentary evidence of every description in their possession or power, on which they intend to rely, and which has not already been filed in Court, and all documents which the Court has ordered to be produced. (2) The Court shall receive the documents so produced; Provided that they are accompanied by an accurate list thereof prepared in such form as the High Court directs.” 15. Reading of the provisions of Order VII Rule 14, Order VIII Rule1-A and Order XIII Rule 1 makes it clear that, the originals of the documents relied by the party could be filed on or before the settlement of issues. It means that, it is not necessary that the original to be produced along with the plaint. However, the original documents on which the party relies and seeks to produce the same in evidence must produce the same on or before the settlement of issues. Power is also conferred on the Court to reject irrelevant or inadmissible documents under Order XIII Rule 3 CPC and further power is conferred on the court to admit the document in evidence in terms of Order XIII Rule 4 CPC. Once the document is admitted, the procedure contemplated under Order XIII Rule 4 requires to be followed for the purpose of making an endorsement on every such document, which has been admitted in the evidence. Thus, it is clear that, original documents are required to be produced on or before the settlement of issues, power is conferred on the court to reject inadmissible or irrelevant documents and power is also conferred on the court to admit the document in the evidence. Order XIII Rue 6 requires the court to make an endorsement on the documents rejected as inadmissible in evidence. Order XIII Rule 8 confers power on the court to impound the document, notwithstanding anything contained under Order XIII Rule 5 or 7 or under Order VII Rule 17 CPC. Order XIII Rue 6 requires the court to make an endorsement on the documents rejected as inadmissible in evidence. Order XIII Rule 8 confers power on the court to impound the document, notwithstanding anything contained under Order XIII Rule 5 or 7 or under Order VII Rule 17 CPC. Reading of these provisions clarifies that the plaintiff or defendant must produce the documents along with the plaint or written statement, as the case may be. If the documents are not in possession of the party, the party must state as regard to the possession of such document in the plaint or written statement. However, if originals are not produced along with the plaint or written statement, plaintiff or defendant shall produce originals before the issues are settled. The court is conferred with power to reject the documents if they are irrelevant or inadmissible by making appropriate endorsement thereon. At the same time, if the court also finds that the document is required to be impounded, court may order any document to be impounded. This is also further clear from the provisions of Order XVI Rule 1 wherein, on or before the date fixed by the court being not later than 15 days after the date on which the issues are settled, party may present a list of witnesses whom they proposed to call either to give evidence or to produce document and obtain summons to such persons for their attendance in court. Thus, after the original documents are filed in terms of Order XIII Rule 1 and after the issues are settled, on the date fixed by the court, the parties are required to file list of witnesses for issue of summons for production of documents and attendance of witnesses. This is second stage of production of documents through the witness. However, these provisions will not bar the plaintiff or the defendant to confront any document in the cross-examination of the witness. 16. Reading of Order VII Rule 14 and/or Order VIII rule 1-A and/or Order XIII Rule 1 CPC, they do not make it mandatory for the party to produce the original documents along with plaint and written statement, but same can be produced on or before the settlement of issues. However, there is no bar to look into the documents produced along with the plaint or written statement while considering the interlocutory application. However, there is no bar to look into the documents produced along with the plaint or written statement while considering the interlocutory application. Interlocutory application could be filed at any stage of the suit even before the settlement of issues. Production of document is not depending on filing or non-filing of interlocutory application and the documents, which are required to be admitted in evidence, have to be filed in original before the settlement of issues. Documents, which are required to be summoned, such list shall be filed within 15 days from the date of settlement of issues i.e., the appointed day fixed by the court. Document to be impounded must be original and not xerox copy. If the original document itself could be produced at or before the settlement of issues and its impounding could be considered only at the stage of framing of issues, it cannot be said that the document produced along with the plaint or written statement could be rejected or impounded even before the issues are settled. Reading of these provisions indicates that, the objection as regard to the admissibility of the document could only be raised during the course of the evidence and if such objections are raised, the court shall record reasons as regard to the objection by determining the same. Order XVIII Rule 4, which was substituted by amendment Act 22 of 2002 provides for filing an affidavit by way of evidence in examination-in-chief and where the documents are filed and the parties rely upon the documents, the proof and admissibility of such documents, which are filed along with the affidavit, shall be subject to the orders of the court. Hence, all such documents on which the party relies and produces in the evidence, its admissibility has to be tested only during the course of the evidence. 17. In the light of the provisions of the Code of Civil Procedure as regard to production of evidence and the provisions of Sections 33 and 34 of the Act, it is clear that a document or instrument, which required to be duly stamped and is not duly stamped or insufficiently stamped, is inadmissible in evidence. The purpose of Sections 33 and 34 of the Act is not to admit any document in evidence, if it is not duly or insufficiently stamped. The purpose of Sections 33 and 34 of the Act is not to admit any document in evidence, if it is not duly or insufficiently stamped. It is in this context, the impounding of the document has to be considered, as once the document is marked, it becomes an evidence. Under Rule 82 of the Civil Rules of Practice, once the document is marked, it becomes an evidence. It is also further clear from the provisions of Section 35 of the Act wherein raising of objection as regard to the admissibility after the document is admitted, is impermissible. Hence, from the procedure contemplated under Order VII Rule 14, Order XIII Rule 1, 4, 6 and 8. Order XVI Rule 1 and Order XVIII Rule 4 makes it abundantly clear that the admissibility or inadmissibility of document or its rejection or impound arises only when it is tendered in evidence. In the light of the procedure prescribed under the Code of Civil Procedure read with Sections 33, 34 and 35 of the Act, impounding of document has to be considered only when it is produced in evidence and not otherwise. 18. No doubt, in K.B.JAYARAM’s case (supra), except reference to an interlocutory application, there is no reference to the procedure as regards to the production of document. The question of procedure of impounding of the document or the provisions of the Code of Civil Procedure did not fall for consideration. The said case was decided under the facts and circumstances of that case and as such, in view of the earlier decision of this court in LAKSHMINARAYANACHAR’s case (supra) and LEELAMMA SAMUEL’s case (supra) and in the light of the procedure contemplate under the provisions of the Code of Civil Procedure read with the provisions of Sections 33, 34 and 35 of the Act, impounding of document would arise only when it is produced in evidence and not otherwise. 19. As far as Section 34 of the Act is concerned, title of Section 34 itself makes it clear, which reads as under: “34. Instruments not duly stamped inadmissible in evidence, etc. 19. As far as Section 34 of the Act is concerned, title of Section 34 itself makes it clear, which reads as under: “34. Instruments not duly stamped inadmissible in evidence, etc. – 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, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped.” A plain reading of Section 34 as it is, it prohibits the Court from admitting a document in evidence, if the said document is not duly stamped or insufficiently stamped. Bara reading of this provision indicates that the court will not permit a document, which is not duly or insufficiently stamped to be admitted in evidence. Section 33 of the Act, which is strongly relied by the learned Counsel for the respondents also makes it clear that, every person having by law or consent of parties authority to receive evidence and every person incharge of public office before whom any instrument chargeable in his opinion, with duty is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same. Very fact that the person, who has authority to receive evidence, receives documents and finds that it is not duly stamped or insufficiently stamped, the said authority shall order for impounding. This provision also makes it clear that the impounding arises only at the stage of receiving the document in the evidence. Section 33 is read along with the provision of Sections 34 and 35 of the Act, it leaves no doubt in the mind that the power of impounding could be exercised only when such document is sought to be admitted in evidence. Section 35 of the Act, prohibits the questioning of admissibility of document once it is admitted even on the ground of document not duly or insufficiently stamped, except under Section 58 of the Act. These provisions make it abundantly clear that, documents though are filed in the suit, but they are not sought to be admitted in the evidence, in such cases, the party cannot be compelled to pay the duty for production of document without using them in the evidence. These provisions make it abundantly clear that, documents though are filed in the suit, but they are not sought to be admitted in the evidence, in such cases, the party cannot be compelled to pay the duty for production of document without using them in the evidence. However, if the documents are used as evidence to prove the issue involved, party cannot be allowed to use the evidence without paying the stamp duty and penalty. From the provisions of the Code of Civil Procedure, the stage of rejection of the document arises, if the document is inadmissible in evidence, or is irrelevant or its admissibility is objected by the court or the party the court can reject the document as inadmissible or impound for noncompliance with the provisions of the Act or any other law. 20. Sometimes the Courts call upon the party to pay the stamp duty and penalty, even though such document is not admissible in evidence. The Apex Court in a judgment reported in (2002) 10 SCC 427 in the matter of PETETI SUBBA RAO –vs-ANUMALA S.NARENDRA while considering the admissibility of the document, has observed that, the document, which was in the nature of xerox of an original document and was sought to be produced in the evidence, impounding of xerox of the original document does not arise. The Apex Court held that the copy of the document or the xerox copy, which cannot be marked in the evidence, the party cannot be called upon to pay the duty on the copy of the document. It is only the original document, which requires the duty or registration and which is sought to be marked in the evidence, alone could be impounded and not the copy or xerox of the same. 21. It is only the original document, which requires the duty or registration and which is sought to be marked in the evidence, alone could be impounded and not the copy or xerox of the same. 21. The Apex Court in another case reported in 2009 SUPREME COURT page 1 in the matter of AVINASH KUMAR CHAUHAN –vs_ VIJAY KRISHNA MISHRA has held that, reading of Sections 34 and 35 of the Act includes document produced in the evidence for collateral purpose, referring to the earlier judgment of Privy Council in AIR 1946 PC 51 has held that, ‘for any purpose’ referred to in Section 34 of the Act, should be given its natural meaning and effect, as such, any other purpose also include a collateral purpose, whether it is for the purpose of proving the main issue or for the collateral purpose, if the party relies on the document in the evidence and which requires payment of duty or requires the compliance of any other provisions of law, such document shall not be admitted in evidence unless it complies with the requirement of law. 22. The stage at which the document could be impounded has to be considered in the light of the provisions of Sections 33, 34, 35 and 36 of the Act. In the judgment of K.AMARNATH –vs SMT.PUTTAMMA, this Court on interpretation of the provisions of Sections 33, 34, 35, 36, 37 and 41 of the Act, at para-11, has observed thus: “11. A combined reading of Sections 33, 34, 35, 37 and 41 of the Karnataka Stamp Act requires the following procedure to be adopted by a Court while considering the question of admissibility of a document with reference to the Stamp Act: (a) when a document comes up before the Court, it has to examine and determine whether it is properly stamped. When the other side objects o it, the Court should consider such objection and hear both sides; (b) after hearing, if the Court comes to the conclusion that the document has been duly stamped, it shall proceed to admit the document into evidence; (c) on the other hand, if the Court comes to the conclusion that the document is not stamped or insufficiently stamped, it shall pass an order holding that the document is not duly stamped and determine the Stamp duty/deficit stamp duty and penalty to be paid and fix a date to enable the party who produces the document to pay the Stamp duty/deficit Stamp duty plus penalty; (d) if the party pays the duty and penalty the Court shall certify that proper amount of duty and penalty has been levied and record the name and address of the person paying the said duty and penalty and then admit the document in evidence as provided under Section 41(2); and the Court shall send an authenticated copy of the instrument to the District Registrar together with a Certificate and the amount collected as duty and penalty, as provided under Section 37 (1); (e) if the party does not pay the duty and penalty, the Court will have to pass an order impounding the document and send the instrument in original, to the District Registrar for being dealt with in accordance with law as per Section 37 (2) of the Karnataka Stamp Act.” 23. The procedure as explained as by this Court considering the scope of Sections 33, 34, 35, 36, 37 and 41 of the Act indicates that, admission of document depends upon the duty payable, if the duty is paid, document could be admitted, if the duty is not paid, it could be impounded. If the document itself is not sought to be admitted in the evidence, the question of determining the duty and directing the parties to pay duty does not aries. 24. If the document itself is not sought to be admitted in the evidence, the question of determining the duty and directing the parties to pay duty does not aries. 24. Further it is clear that, even if document is insufficiently stamped and objection is not raised by the defendants as to the admission of the document in the evidence, this Court in a judgment reported in ILR 2007 KAR 2786 in the matter of SMT.MALLIGA PANEER SELVAM –vs- SRI RAJA SATHYANARAYANA SHETTY AND OTHERS referring to the judgment of the Apex Court reported in AIR 1961 SC 1655 has held that, once the document is admitted, its admissibility cannot be questioned thereafter except under Section 58 of the Act. 25. If two conflicting opinions are expressed by two different Benches of the same State, normally the matter requires to be considered by the larger Bench. This Court in K.B.JAYARAM’s case (supra) has considered the admissibility of the document at the interlocutory stages also, however, it is based on the facts of the said case, question of admissibility of such document in the evidence was not a matter, which fell for consideration. The said decision has also not considered the earlier decision of this Court in the matter of LAKSHMINARAYANACHAR’s case (supra) and LEELAMMA SAMUEL’s case (supra). The said decision will not be a bar to consider the provisions of C.P.C. and the Act, as regard to impounding of the document. Merely because the documents are produced along wit the plaint, that by itself automatically does not warrant for impounding of the document. The party may admit the document in the evidence or may not choose to admit the same in the evidence. 26. When a document is produced and is sought to be marked in the evidence in proof of the issue raised in the suit, court is required to see as to whether, the document is admissible in evidence, or whether the document is irrelevant, or the document requires the compliance of any provisions of law. Payment of stamp duty is revenue to the government, as such, it is the duty of the court to verify the document sought to be admitted in evidence and if it is not duly stamped or insufficiently stamped, it shall call upon the party producing the same to pay the duty and penalty. Payment of stamp duty is revenue to the government, as such, it is the duty of the court to verify the document sought to be admitted in evidence and if it is not duly stamped or insufficiently stamped, it shall call upon the party producing the same to pay the duty and penalty. If the same is paid, the court may proceed to mark the said document in evidence. If the duty is not paid, the court may impound the original document and send the same to Registrar for further action. Party objecting to the marking must raise his objection at the time of marking, if the document admitted without objection, the party cannot raise its objection as to the admissibility of the document in the evidence except under Section 58 of the Act. 27. In my considered opinion, impounding of the document under Section 33 or 34 of the Act arises only when it is sought to be admitted in the evidence. Accordingly, the petition is allowed. The impugned order is set aside. The trial court is directed to consider the admissibility of the document, if the said document is sought to be produced in evidence and not otherwise.