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2012 DIGILAW 4672 (MAD)

Easwari v. Duraisami

2012-11-15

R.S.RAMANATHAN

body2012
Judgment :- Plaintiff is the revision petitioner. 2. The plaintiff filed the suit for declaration and injunction. The plaintiff relied upon an unregistered sale deed dated 28.2.1998 to claim title to the suit property and during her evidence, the document was not permitted to be marked as it was unregistered and not duly stamped and therefore, she filed application in I.A.No.302 of 2011 for impounding the document offering to pay stamp duty penalty and that application was dismissed and aggrieved by the same, this revision is filed. 3. The respondent was served and his name was also printed in the cause list, but, there was no appearance for the respondent. Therefore, the respondent was set ex parte. 4. Learned counsel for the revision petitioner submitted that the court below, without properly appreciating the provisions of the Stamp Act and the judgments reported in KALAIVANI @ DEVASENA v. J.RAMU ( 2010(1) CTC 27 ), K.VEERABADRAN & ANOTHER v. K.VENUGOPAL & 4 OTHERS (2009-5-LW 465) and THIRUVENGADA PILLAI v. NAVANEETHAMMAL ((2008) 2 MLJ 1115(SC)), erred in dismissing the application and the court below ought to have impounded the document and sent the document to the Collector for payment of deficit stamp duty and the court below ought not to have rejected the application. 5. According to me, the court below, without properly appreciating the provisions of the Stamp Act particularly, sections 33, 35 and 38, erred in rejecting the application. 6. Under section 35 of the Stamp Act, no instrument chargeable with duty shall be admitted in evidence for any purpose. Therefore, there is a total bar for admitting any document in evidence if the document is not duly stamped. Nevertheless, the proviso to section 35 makes it clear that such instrument which is not duly stamped shall be admitted in evidence on payment of the duty with which the same is chargeable or in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion. Therefore, though section 35 prohibits admission of instrument which is not duly stamped, by reason of the proviso, such instrument shall be admitted in evidence on payment of penalty. 7. Therefore, though section 35 prohibits admission of instrument which is not duly stamped, by reason of the proviso, such instrument shall be admitted in evidence on payment of penalty. 7. Under section 33, a duty is cast upon the person having by law or authority to receive evidence to impound any instrument which is not duly stamped when the same is produced before him. Section 38 of the Stamp Act deals with the procedure when the document is impounded under section 33 and when the party who produced the document agrees to pay the stamp duty penalty. As per section 38(2) of the Act, when the party, who produced the document, is not willing to pay the penalty as per the proviso to section 35 of the Stamp Act, the court has to send the document to the Collector for imposing penalty as provided under section 40 of the Stamp Act. 8. In the judgment in CHILAKURI GANGULAPPA v. REVENUE DIVISIONAL OFFICER, MADANAPALLE ((2001) 2 MLJ 33(SC)), the procedure has been dealt with by the Honourable Supreme Court as follows:- "In this context Sec.38 is to be looked into. 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 needs to forward only a copy of the document to the Collector, together with the amount collected from the party for taking adjudicatory stamps. But if the party refuses to pay the amount aforesaid the court has no other option except to impound the document and forward the same to the Collector. On receipt of the document through either of the said avenues the Collector has to adjudicate on the question of the deficiency of the stamp duty. If the Collector is of the opinion that such instrument is chargeable with duty and is not duly stamped "he shall require the payment of the proper duty or the amount required to make up the same together with a penalty of an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof." 9. Similarly, in the judgment in AVINASH KUMAR CHAUHAN v. VIJAY KRISHNA MISHRA ( (2009) 2 SCC 532 ), the Honourable Supreme Court held as follows:- "22. We have noticed heretobefore that Section 33 of the Act casts a statutory obligation on all the authorities to impound a document. The court being an authority to receive a document in evidence is bound to give effect thereto. The unregistered deed of sale was an instrument which required payment of the stamp duty applicable to a deed of conveyance. Adequate stamp duty admittedly was not paid. The court, therefore, was empowered to pass an order in terms of Section 35 of the Act. ... 25. Section 35 of the Act, however, rules out applicability of such provision as it is categorically provided therein that a document of this nature shall not be admitted for any purpose whatsoever. If all purposes for which the document is sought to be brought in evidence are excluded, we fail to see any reason as to how the document would be admissible for collateral purposes." 10. In the judgment reported in (2008) 2 MLJ 1115(SC), the Supreme Court held that even if an agreement is not executed on requisite stamp paper, it is admissible in evidence on payment of duty and penalty under section 35 or 37 of the Indian Stamp Act. Therefore, when an instrument which is not duly stamped is produced before the court for the purpose of admitting the same in evidence, as per section 35 of the Stamp Act, such instrument cannot be admitted in evidence and if the person who produces the document is willing to pay the stamp duty penalty, then a duty is cast upon the court to impound the document and direct the party to pay penalty as per proviso (a) to section 35 of the Act and follow the procedure contemplated under section 38(1) of the Act. In case, the person refuses to pay penalty as fixed by the court and request the court to send the document to the Collector for impounding and determination of penalty and also the stamp duty payable on that document, the court has to send the document in original to the Collector as contemplated under section 38(2) of the Stamp Act. On receipt of such document, the Collector has to follow the procedure contemplated under section 40 of the Act. 11. On receipt of such document, the Collector has to follow the procedure contemplated under section 40 of the Act. 11. Without appreciating the above judgments and the provisions of the Stamp Act, the court below rejected the application on the ground that the document, being not duly stamped and unregistered, cannot be admitted in evidence by reason of section 35 of the Stamp Act. Hence, the revision is allowed. The order of the court below is set aside and the case is remitted back to the court below for the purpose of following the procedure contemplated under sections 33, 35 and 38 of the Stamp Act as indicated above. The connected miscellaneous petition is closed.