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2023 DIGILAW 965 (AP)

B. v. Krishna Reddy VS Devathi Nagaraja Gupta

2023-07-04

RAVI CHEEMALAPATI

body2023
ORDER : This Civil Revision Petition is filed aggrieved by the orders dated 12.10.2022 passed in I.A.No.934 of 2019 in O.S.No.208 of 2014 by the learned III Additional District Judge, Tirupati. 2. The petitioner is the defendant and the respondent is the plaintiff in O.S.No.208 of 2014 filed for permanent injunction. 3. The respondent filed I.A.No.934 of 2019 under Order-13, Rules 3 and 6 of the Code of Civil Procedure to reject Ex.B2 sale letter on the ground that the said document being a sale letter coupled with delivery of possession is a compulsorily registerable document and as the said document is insufficiently stamped and was not registered, the same is hit by Article 47-A of Act 17 of 1986 and hence liable to be rejected. The respondent resisted the petition contending that the since the suit is for permanent injunction, the document can be marked for collateral purpose. 4. Upon considering the facts and circumstances of the case and submissions made by both the learned counsel, the trial Court allowed the petition rejecting Ex.B2. Aggrieved thereby, the petitioner/defendant filed this Civil Revision Petition. 5. Heard Sri P.Hema Chandra, learned counsel for the petitioner, and Smt. S.Pranathi, learned counsel for the respondent. 6. Sri P.Hema Chandra, learned counsel for the petitioner, in elaboration would submit that, when once the document was admitted into evidence, such an admission cannot be called in question in view of the bar contained under Section 36 of the Stamp Act, except under Section 61 of the Stamp Act. However, the trial Court instead of invoking the provisions of Section 61 of the Stamp Act, in utter misconception of the scheme of Section 61 of the Stamp Act, rejected and de-exhibited the document. The learned counsel for the petitioner would further submit that though the document is inadmissible for insufficiency of stamp duty, but the same can be used for the purpose of establishing possession over the schedule property. Further, the trial Court failed to take into consideration of the factum that the suit is filed for permanent injunction and hence the subject document can be used for collateral purpose. The decision relied on by the trial Court for rejecting the document is not applicable to the facts of the present case, since the nature of the suits differs. Hence, prayed to allow the Civil Revision Petition by setting aside the impugned order. 7. The decision relied on by the trial Court for rejecting the document is not applicable to the facts of the present case, since the nature of the suits differs. Hence, prayed to allow the Civil Revision Petition by setting aside the impugned order. 7. On the other hand, Smt. S.Pranathi, learned counsel for the respondent, would submit that, the document being unregistered besides being insufficiently stamped cannot at all be admitted in evidence, even though admitted, Order 13 Rule 3 CPC empowers the Court to reject the document which it considers irrelevant and inadmissible at any stage of the suit and mere admittance of the document in evidence cannot become an impediment for the Court to reject the document. The trial Court had scanned the material on record and the law applicable to the facts of the case in right perspective and rightly rejected the document. The orders impugned do not suffer from either irregularity or irrationality and no valid grounds are either urged or raised in this Civil Revision Petition warranting interference of this Court. In support of his contention that an unregistered document can be admitted in evidence for collateral purpose, the learned counsel relied on the decision in Vangala Ravinder Reddy vs. U.Venkatamma, 2021 SCC OnLine TS 2225. Hence, prayed to dismiss the Civil Revision Petition being devoid of merits. 8. The material placed on record would indicate that the respondent filed a suit against the petitioner for permanent injunction. The respondent got himself examined as P.W.1 in the said suit. During the course of cross-examination, when he was confronted with a sale letter dated 03.06.1997, he identified the same and consequently the said sale letter was marked as Ex.B1, however subject to objection as the same was not registered. Subsequently, the respondent filed petition to reject the document, which was allowed. 9. The pleadings available on record as well as the submissions made by both the learned counsel and the observations made by the trial Court in the impugned order emerge out an irrefutable fact that the document marked as Ex.B2 is an unregistered and insufficiently stamped document. Under the said document, the entire sale consideration was stated to have been paid in respect of an extent of Ac.1-78 cents of land and possession of the said property was stated to have been delivered to the petitioner. 10. Under the said document, the entire sale consideration was stated to have been paid in respect of an extent of Ac.1-78 cents of land and possession of the said property was stated to have been delivered to the petitioner. 10. Section 17 of the Registration Act stipulates that any non-testamentary instrument which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property is compulsorily registerable. The impugned order in specific terms mentions that the subject document stipulates that a consideration of Rs.14,77,400/-was passed thereunder. This makes it clear that the subject document is a compulsorily registerable document. Section 49 of the Registration Act excludes such a document from being received as evidence of any transaction affecting such property or conferring such power, unless it has been registered. 11. However, there is an exception to this general rule. The proviso to Section 49 of the Registration Act would show that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882) to be registered may be received as evidence of any collateral transaction not required to be effected by registered instrument. 12. This being a suit filed for permanent injunction, the paramount consideration would be as to who was in possession of the property as on the date of filing of the suit. Thus the unregistered document styled as sale letter coupled with possession can be received in evidence for the collateral purpose of establishing possession over the subject property. Therefore, non registration of the document is not at all an impediment from admitting it in evidence. 13. As stated supra, the subject document is not only unregistered but also insufficiently stamped. Section 35 of the Stamp Act debars such an instrument from being admitted in evidence for any purpose. In the instant case, though the document is insufficiently stamped, the same was admitted in evidence and was marked as an exhibit. As per section 36 of the Stamp Act, when once a document has been admitted in evidence, such an admission shall not be called in question at any stage of the suit on the ground that the instrument has not been duly stamped. 14. As per section 36 of the Stamp Act, when once a document has been admitted in evidence, such an admission shall not be called in question at any stage of the suit on the ground that the instrument has not been duly stamped. 14. Section 36 of the Stamp Act puts an embargo on questioning admission of the document at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped, except as provided in section 61. A plain reading of Section 36 of the Act makes it clear that the adverse party as well as the Court is estopped from raising any dispute regarding admissibility of the document on the ground of insufficiency of stamp duty, after it was admitted into evidence. This section does not in any way forbid the Court from reconsidering the issue regarding sufficiency of the stamp duty even after the document is admitted in evidence. The same is evident from Section 61 of the Stamp Act. 15. For expediency, Section 61 of the Stamp Act is extracted hereunder: “61. Revision of certain decisions of courts regarding the sufficiency of stamps: (1) When any court in the exercise of its civil or revenue jurisdiction of any criminal court in any proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898, makes any order admitting any instrument in evidence as duly stamped or as not requiring a stamp, or upon payment of duty and a penalty under section 35, the court to which appeals lie from, or references are made by, such first-mentioned court may, of its own motion or on the application of the Collector, take such order into consideration. (2) If such court, after such consideration, is of opinion that such instrument should not have been admitted in evidence without the payment of duty and penalty under section 35, or without the payment of a higher duty and penalty than those paid, it may record a declaration to that effect, and determine the amount of duty with which such instrument is chargeable, and may require any person in whose possession or power such instrument then is, to produce the same, and may impound the same when produced. (3) When any declaration has been recorded under sub-section (2), the court recording the same shall send a copy thereof to the Collector, and, where the instrument to which it relates has been impounded or is otherwise in the possession of such court, shall also send him such instrument. (4) The Collector may thereupon, notwithstanding anything contained in the order admitting such instrument in evidence, or in any certificate granted under section 42, or in section 43, prosecute any person for any offence against the Stamp-law which the Collector considers him to have committed in respect of such instrument: PROVIDED that (a) no such prosecution shall be instituted where the amount (including duty and penalty) which, according to the determination of such court, was payable in respect or the instrument under section 35, is paid to the Collector, unless he thinks that the offence was committed with an intention of evading payment of the proper duty; (b) except for the purposes of such prosecution, no declaration made under this section shall affect the validity of any order admitting any instrument in evidence, or of any certificate granted under section 42.” 16. A plain reading of Section 61 of the Act makes it abundantly clear that the court may, of its own motion, take such order into consideration and if the Court is of the opinion that the document is chargeable with higher duty or penalty than paid, record a declaration determining the amount of duty with which such instrument is chargeable and then send a copy thereof along with the document to the Collector. 17. Section 61 further envisages that the Collector may prosecute any person for any offence against the Stamp-law in case the amount specified in the declaration is not paid and even if paid, if the Collector comes to the conclusion that the offence was committed with an intention to evade payment of the stamp duty. It is made clear in the proviso that except for the purposes of such prosecution no declaration made under this section shall affect the validity of any order admitting any instrument in evidence. 18. It is made clear in the proviso that except for the purposes of such prosecution no declaration made under this section shall affect the validity of any order admitting any instrument in evidence. 18. A coupled reading of Sections 35, 36 and 61 of the Act unfolds that no instrument chargeable with duty shall be admitted in evidence for any purpose and once the instrument was admitted in evidence the same shall not be called in question except as provided in Section 61, however the declaration made under Section 61 shall not affect the validity of any order admitting any instrument in evidence. 19. Despite the above, the Court below has entertained the application filed by the petitioner contrary to the mandate of Section 36 of the Act and even then, the Court below upon finding that the document admitted in evidence is insufficiently stamped, should have taken recourse to Section 61 of the Act such as recording a declaration and sending the document to Collector for impounding rather than rejecting the document. 20. Before the trial Court, the respondent placed reliance of the judgment in S.Mohan Krishna vs. V.Varalakshmma and others, 2017(5) ALT 264 in support of his contention that the Court may at any stage of the suit, reject any document which it considers irrelevant or otherwise inadmissible, recording the grounds for such rejection and Section 36 of the Stamp Act would not be an impediment for rejection. 21. In the above said citation, the learned Judge has taken into consideration the absence of statement as required under Order-13, Rule-4(1)(d) on the document and held that there was absolutely no judicial determination about the admissibility of the document. Such a contingency is not brought to the notice of this Court in the instant case. Moreover, the impugned order makes a mention that the document was marked subject to objection of non-registration. Thus, there was judicial determination about the admissibility of the document before admitting it in evidence. Thus, the observations made in the decision relied on by the respondent before the Court below cannot be made applicable to the facts of the present case. 22. The decision relied on by the learned counsel for the petitioner in Vangala Ravinder Reddy(supra 1) reiterates the settled principle of law that an unregistered document, which is compulsorily registerable, can be admitted into evidence for collateral purpose. 22. The decision relied on by the learned counsel for the petitioner in Vangala Ravinder Reddy(supra 1) reiterates the settled principle of law that an unregistered document, which is compulsorily registerable, can be admitted into evidence for collateral purpose. However, the issue involved in this Civil Revision Petition is that the document suffers not only from lack of registration but also insufficiency of stamp duty and so also the competence of the Court to demark/de-exhibit on the ground of insufficiency of stamp duty, after it was marked without any protest from the adversary. Thus, the said decision does not cover the issue involved in this Civil Revision Petition. 23. It is also relevant here to note that Section 33 of the Act casts a statutory duty on the learned Judge of the trial Court to impound the document and collect the deficit stamp duty & penalty as per the provisions of the Act, when the document is admittedly not duly stamped to make good the loss caused to exchequer of the State Government. 24. In Parchuri Sireesha and another vs. Challapalli Jalaja, 2019 SCC OnLine AP 268, this Court held as follows: “12. In the light of the settled legal position and the duty that is cast upon the learned Judge of the trial Court, the learned Judge is obliged nay duty bound to impound (seize/take possession of) the document and collect the deficit stamp duty & penalty as per the provisions of the Act, when the document is admittedly not duly stamped, and see that no loss of revenue is caused to the exchequer of the State Government. Therefore, turning a blind eye to the statutory mandate and dismissing of the petition of the defendants by the trial Court on the ground that no purpose would be served by collection of deficit stamp duty & penalty on the gift deed as it is unregistered, though compulsorily registerable, is erroneous as any document brought before a Court should comply with the requirement of Section 35 of the Indian Stamp Act and the Court is duty bound to impound and collect deficit stamp duty & penalty, if any such document is found to be not duly stamped. In that view of the matter, this Court finds that the trial Court committed a grave error in refusing the request of the defendants to pass orders to collect stamp duty and penalty on the subject gift deed.” 25. The observations referred to above makes it clear that, the Court is duty bound to impound and collect deficit stamp duty & penalty, if any such document is found to be not duly stamped. Despite the clear mandate, the trial Court did not take any step in that direction. 26. In view of the above, the impugned order suffers from patent illegality and the same is irregular. Thus, the same requires interference of this Court. 27. Accordingly, the Civil Revision Petition is allowed. The impugned order dated 12.10.2022 passed in I.A.No.934 of 2019 in O.S.No.208 of 2014 by the learned III Additional District Judge, Tirupati is set aside restoring status quoante. The trial Judge shall take recourse to section 61 of the Stamp Act. There shall be no order as to costs. As sequel thereto, miscellaneous petition, if any, pending shall stand closed. Interim orders, if any, shall stand vacated.