Head Note: No specific relief can be awarded on insufficiently stamped document as
being inadmissible in evidence as per section 35 of the Indian Stamp Act, 1899.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.9032 OF 2013
OMPRAKASH … APPELLANT
VERSUS
LAXMINARAYAN & ORS. …RESPONDENTS
J U D G M E N T: CHANDRAMAULI KR. PRASAD, J.
Plaintiffs
filed a suit for specific performance of contract, possession and permanent injunction
in respect of un-irrigated land having an area of 0.506 hectares bearing Survey
No. 16012 in Village Arniapitha situated within Tahsil Jaora in District Ratlam
in the State of Madhya Pradesh. It is founded on an agreement to sell dated 27th
December, 2000. It is the case of the plaintiffs that the properties in
question were delivered to them on payment of the part consideration money in pursuance
of the agreement to sell and such a recital finds place in the said agreement. Paragraph
1 of the agreement to sell reads as under:
“1.That while selling the aforesaid land I the
seller, have received Rs. 1,15,000/- (Rupees one lac fifteen thousand) cash as
a token amount before the witnesses and, by remaining present at the spot,
actual physical possession has been handed over to the purchaser, and after
receiving remaining sale consideration amount Rs. 25,000/- (Rupees twenty five thousand)
from the purchaser within a year I, the purchaser, will get the sale deed of
the said land registered in the name of the purchaser.”
The defendants in the written statement, however, denied the assertion
of the plaintiffs and stated that no agreement to sell was ever executed and
possession given. On the basis of the pleading and the written statement, the
trial court framed several issues. During the course of the trial the agreement
to sell was sought to be proved and admitted in evidence by the plaintiffs’
witness Shankarlal. This was objected to by defendant no. 1. Its admissibility
was questioned on the ground that the agreement to sell in question contains a recital
that possession has been handed over to the purchaser and, therefore, it is a
conveyance over which the stamp duty as indicated in Schedule 1A of the Indian
Stamp Act, 1899 as substituted by M.P. Act 22 of 1990 is required to be
affixed. It is pointed out that the agreement to sell in question is on a stamp
paper of Rs. 50 only. The submission made by defendant no. 1 found favour with
the trial court and it held the agreement to sell to be inadmissible in
evidence as it has not been sufficiently stamped. It further observed that if the plaintiffs want to produce the said
document in evidence then they can make proper application as envisaged under
Section 35 of the Indian Stamp Act, hereinafter referred to as ‘the Act’. While
doing so, the trial court observed as follows:
“………Therefore, it is found that sale agreement
dated 27.12.2000 due to mention of possession being handed over, should be
stamped like a conveyance. In the sale agreement the cost of the land is
mentioned as Rs.1,40,000 and its 7 ½ per cent comes to Rs. 10,500/-. Therefore,
it is concluded that the sale agreement can be admissible in evidence only on being
on stamp of Rs. 10,500/-. Therefore, it is concluded that the sale agreement is
not properly stamped, therefore, not admissible in evidence. Thus, objection of
defendant No. 1 is allowed sale agreement dated 27.12.2000 is refused to be
admitted in evidence. If the plaintiff wants to produce the said documents in
evidence then he may make proper application under Section 35 of the Stamp Act
on the next date.”
Plaintiffs challenged the aforesaid order before the High Court in a
writ petition filed under Article 227 of the Constitution of India, inter alia,
contending that when defendants themselves have asserted that possession of the
property was not delivered, the recital in agreement is of no consequence. It
was also pointed out that plaintiffs themselves have claimed relief of
possession, which obviously means that they are not in possession and when this
fact is taken into consideration, the view taken by the trial court appears to
be erroneous. The High Court by its order dated 27th February, 2008 passed in
Writ Petition No. 7237 of 2007 accepted this contention and held the agreement
to sell to be admissible in evidence. The High Court, in this connection, has
observed as follows:
“Although there is no dispute with regard to the
fact that in the document in question, which is an agreement alleged to have
been executed by the defendants in favour of the plaintiffs, and which is basis
of the suit, it is recited that possession of the property in question had been
delivered to the plaintiffs, but the fact cannot be ignored that a specific
plea has been raised by the defendants in their written statement denying the
execution of the said agreement and also specifically denying that the
possession of the property had ever been delivered to the
plaintiff-petitioners. In these circumstances, once, the defendants themselves
have claimed that possession of the property had not been delivered, then the
recital in agreement looses all significance. In such a situation, the document
cannot be held to be insufficiently stamped merely because it was not stamped
in accordance with Article 23 of Stamp
Act.”
Defendant no. 1 assails this order in the present special leave petition.
Leave granted.
We have heard Mr. Niraj Sharm
a on behalf of the appellant and Mr. Fakhruddin, Senior
Counsel on behalf of the respondents.
Mr. Sharma contends that for admissibility of the document what is relevant is the recital therein.
He submits that agreement to sell is “conveyance” as defined under Section
2(10) of the Act and shall be chargeable with duty as contemplated under
Section 3 of the Act. According to him, as the agreement in question is not
duly stamped, it shall be inadmissible in evidence under Section 35 of the Act.
Mr. Fakhruddin, however, submits that the defendants having joined the issue with
regard to the possession of the plaintiffs in terms of the agreement to sell,
the document in question shall not come within the expression “conveyance” as
defined under the Act and, hence, it cannot be said that it is not duly
stamped.
In view of the rival submission, the question which falls for our
determination is as to whether the admissibility of a document produced by the party
would depend upon the recital in the document or the plea of the adversary in
the suit and whether the document in question is “conveyance” as defined under
the Act and is duly stamped.
As stated earlier, the plaintiffs filed a suit for specific performance
of contract and their case is founded on the agreement to sell executed on 27th
December, 2000. The agreement to sell acknowledges payment of the part of
consideration money and further giving actual physical possession to the purchaser
by the seller. Though the defendants dispute that, but in our opinion, for determination
of the question of admissibility of a document, it is the recital therein which
shall be decisive. Whether the possession in fact was given or not in terms of
the agreement to sell is a question of fact which requires adjudication. But, at
the time of considering the question of admissibility
of document, it is the recital therein which shall govern the issue. It does
not mean that the recital in the document shall be conclusive but for the
purpose of admissibility it is the terms and conditions incorporated therein which
shall hold the field. Having said that, we proceed to consider as to whether
the document in question is “conveyance” within the meaning of Section 2(10) of
the Act. Section 2(10) of the Act reads as follows:
2. Definitions. -In
this Act, unless there is something repugnant in the subject or context, -
xxx xxx xxx
(10)“Conveyance” includes a conveyance on sale
and every instrument by which property, whether movable or immovable, is transferred
inter vivos and which is not otherwise specifically provided for by
Schedule I;
xxx xxx xxx”
From
a plain reading of the aforesaid provision, it is evident that an instrument by
which movable or immovable property is transferred, comes within the expression
“conveyance”. In the present case, an immovable property is transferred on
payment of part of the consideration and handing over the possession of the
property. It is relevant here to state that by the Indian Stamp (Madhya Pradesh
Second Amendment) Act, 1990 (Act No.22 of 1990) few Articles including Article
23 of Schedule 1-A has been substituted and Explanation has been added to
Article 23. The Explanation appended to Article 23 of Schedule 1-A of the Stamp
Act as substituted by Section (6) of Act 22 of 1990 reads as follows:
“Explanation.—For the purpose of
this article, where in the case of agreement to sell immovable property, the
possession of any immovable property is transferred to the purchaser before
execution or after execution of, such agreement without executing the
conveyance in respect thereof then such agreement to sell shall be deemed to be
a conveyance and stamp duty thereon shall be leviable accordingly:
Provided that, the provisions of Section 47-A shall apply mutatis mutandis to
such agreement which is deemed to be a conveyance as aforesaid, as they apply
to a conveyance under that section:
Provided further that where subsequently a
conveyance is effected in pursuance of such agreement of sale the stamp duty,
if any, already paid and recovered on the agreement of sale which is deemed to
be a conveyance shall be adjusted towards the total duty leviable on the
conveyance, subject to a minimum of Rs. 10.”
The aforesaid Explanation has come into effect with effect from 26th
September, 1990. The Explanation, therefore, creates a legal fiction. The
agreement to sell shall be deemed to be a conveyance and stamp duty is leviable
on an instrument whereby possession has been transferred. Thus the agreement to
sell in question is a conveyance within the meaning of Section 2(10) of the Act and is to be duly stamped. Section 35
of the Act makes instruments not duly
stamped inadmissible in evidence, the relevant portion whereof reads as
follows:
“35. 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:
Provided that-
(a)any such instrument 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;
xxx xxx xxx.”
From
a plain reading of the aforesaid provision, it is evident that an authority to receive
evidence shall not admit any instrument unless it is duly stamped. An
instrument 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 penalty. As we have observed earlier, the deed
of agreement having been insufficiently stamped, the same was inadmissible in
evidence. The court being an authority to receive a document in evidence to
give effect thereto, the agreement to sell with possession is an instrument
which requires payment of the stamp duty applicable to a deed of conveyance.
Duty as required, has not been paid and, hence, the trial court rightly held
the same to be inadmissible in evidence. The view which we have taken finds support
from a decision of this Court in the case of Avinash Kumar Chauhan v. Vijay
Krishna Mishra, (2009) 2 SCC 532, in which it has been held as follows:
“21. It is not in dispute that
the possession of the property had been delivered in favour of the appellant. He
has, thus, been exercising some right in or over the land in question. We are
not concerned with the enforcement of the said agreement. Although the same was
not registered, but registration of the document has nothing to do with the
validity thereof as provided for under the provisions of the Registration Act, 1908.
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.”
To
put the record straight, the correctness of
the impugned judgment (Laxminarayan & Ors. v. Omprakash &
Ors., 2008 (2) MPLJ 416) came up for consideration before a Division Bench
of the High Court itself in Writ Petition No. 6464 of 2008 (Man Singh
(deceased) through Legal Representatives Smt. Sumranbai & Ors. v. Rameshwar)
and same has been overruled by judgment dated January 22, 2010. The High Court
observed as follows:
“8. A document would be admissible on basis
of the recitals made in the document and not on basis of the pleadings raised
by the parties. In the matter of Laxminarayan (supra), the learned
Single Judge with due respect to his authority we don’t think that he did look
into the legal position but it appears that he was simply swayed away by the
argument that as the defendant was denying the delivery of possession, the endorsement/recital
in the document lost all its effect and efficacy.
9. It would be trite to say
that if in a document certain recitals
are made then the Court would decide the admissibility of the document on the strength
of such recitals and not otherwise. In a given case, if there is an absolute
unregistered sale deed and the parties say that the same is not required to be
registered then we don’t think that the Court would be entitled to admit the
document because simply the parties say so. The jurisdiction of the Court flows
from Sections 33, 35 and 38 of the Indian Stamp Act and the Court has to decide
the question of admissibility. With all humility at our command we overrule the
judgment in the matter of Laxminarayan
(supra).”
We respectfully agree with the conclusion of the High Court in this regard.
In
view of what we have observed above, the order of the High Court is
unsustainable and cannot be allowed to stand.
In
the result, the appeal is allowed, the impugned order of the High Court is set
aside and that of the trial court is restored but without any order as to
costs.
……………………..………………………………..J.
(CHANDRAMAULI KR. PRASAD)
…….….……….………………………………..J.
(KURIAN JOSEPH)
NEW DELHI,
OCTOBER 7, 2013
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