CASE NO.:
Appeal (civil) 4696 of 2007
PETITIONER:
Hariom Agrawal
RESPONDENT:
Prakash Chand Malviya
DATE OF JUDGMENT: 08/10/2007
BENCH:
B.N. AGRAWAL,P.P. NAOLEKAR & P. SATHASIVAM
JUDGMENT:
J U D G M E N T
(arising out of Special Leave Petition (Civil)No.12573 of 2006)
P.P. NAOLEKAR, J.:
1. Leave granted.
2. The facts necessary for deciding the question
involved in the case are that one Maganlal Jain was the
original tenant of Prakash Chand Malviya, the respondent-
landlord. Maganlal Jain had given the shop to the appellant
for carrying out the business. On a dispute being arisen
between the respondent-landlord, the original tenant Maganlal
Jain and the appellant herein, an agreement was executed on
28.3.1988 by the respondent (landlord) and the appellant
(subsequent tenant), whereby the landlord tenanted the shop
to the appellant on payment of an advance amount of
Rs.4,75,000/- which was received by the landlord in cash in
front of the witnesses. The agreement further provided that in
case the landlord requires eviction of the tenant from the shop
he will have to give notice of 6 months to the tenant and will
also refund the payment of Rs.4,75,000/- to the tenant. On
the other hand, if the tenant wants to vacate the shop he will
have to give prior notice of 6 months to the landlord and the
landlord will pay back Rs.4,75,000/- to the tenant. This
document was affixed with a notarial stamp of Rs.4/-. Under
the Indian Stamp Act, 1899 (for short the Act), agreement of
this nature requires affixture of a stamp of Re.1/- under
Schedule I, Item 42 of the said Act.
3. On 12.5.2003 a suit for eviction was filed by the
respondent-landlord before the Civil Judge, Bhopal under
Section 12(1)(f) of the Madhya Pradesh Accommodation
Control Act, stating the bonafide need for the use of the
accommodation by his elder son. It was the case of the
appellant-tenant that the original copy of the agreement which
was with him was stolen and thus he was unable to produce
the original document dated 28.3.1988, but was in possession
of a photostat copy of the agreement and made a prayer for
receipt of the photocopy of the agreement as secondary
evidence under Section 63 of the Indian Evidence Act, 1872.
The trial court allowed the application for admission of the
photocopy of the document and admitted it as secondary
evidence under Section 63 of the Evidence Act.
4. On being aggrieved by the order of the trial court,
the respondent-landlord filed a writ petition before the High
Court. The High Court set aside the order of the trial court and
remitted the matter back to decide the question as to whether
a photocopy of an improperly stamped original document can
be received in secondary evidence. After hearing the parties,
the trial court by its order dated 9.8.2005 ordered that the
document be impounded, it being insufficiently stamped; the
document was sent to the Collector of Stamps for affixing
appropriate stamp duty and thereafter for sending the
document back to the court. This order was challenged by the
respondent in a review petition which was dismissed by the
trial court. Thereafter, a writ petition was filed before the
High Court. The High Court by its judgment dated 3.5.2006
held that the impugned document which is a photocopy of the
agreement, original of which is lost, cannot be admitted in
evidence; and that such a document can neither be
impounded nor can be accepted in secondary evidence.
5. It is an admitted fact that the photostat copy which
is sought to be produced as secondary evidence does not show
that on the original agreement proper stamp duty was paid.
The photostat copy of the agreement shows that the original
agreement carried only a notarial stamp of Rs.4/-. Thus the
original instrument bears the stamp of sufficient amount but
of improper description. From the facts of the case, the issue
which requires consideration is: Whether the court can
impound the photocopy of the instrument (document) of
improper description exercising its power under the provisions
of the Indian Stamp Act, 1899?. For answering this question,
Sections 33 and 35 of the Act might render some help.
Relevant extracts of the Sections are :
33. Examination and impounding of
instruments (1) Every person by law or consent
of parties, authority to receive evidence, and every
person in charge of a public office, except an officer
of police, 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.
(2) For that purpose every such person shall
examine every instrument so chargeable and so
produced or coming before him, in order to
ascertain whether it is stamped with a stamp of the
value and description required by the law in force
in(India) when such instrument was executed or
first executed:
35. Instruments not duly stamped
inadmissible in evidence, etc. - No instrument
chargeable with duty shall be admitted in evidence
for any person having by law or consent of parties 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:
6. Section 33 gives power to the authority to check
whether the instrument has been duly stamped and in case it
is not duly stamped, to take steps to impound the same by
proper stamp duty on the said document. This power can be
exercised in regard to an `instrument. Section 2(14) of the
Act defines `instrument as:
Instrument includes every document by
which any right or liability is, or purports to
be, created, transferred, limited, extended,
extinguished or record.
7. The instrument as per definition under Section
2(14) has a reference to the original instrument. In State of
Bihar v. M/s. Karam Chand Thapar & Brothers Ltd., AIR
1962 SC 110, this Court in paragraph 6 of the judgment
held as under :-
6. It is next contended that as the copy of
the award in court was unstamped, no decree
could have been passed thereon. The facts are
that the arbitrator sent to each of the parties a
copy of the award signed by him and a third
copy also signed by him was sent to the court.
The copy of the award which was sent to the
Government would appear to have been
insufficiently stamped. If that had been
produced in court, it could have been validated
on payment of the deficiency and penalty
under S.35 of the Indian Stamp Act, 1899.
But the Government has failed to produce the
same. The copy of the award which was sent
to the respondents is said to have been seized
by the police along with other papers and is
not now available. When the third copy was
received in court, the respondents paid the
requisite stamp duty under S.35 of the Stamp
Act and had it validated. Now the contention
of the appellant is that the instrument actually
before the court is, what it purports to be, a
certified copy, and that under S.35 of the
Stamp Act there can be validation only of the
original, when it is unstamped or insufficiently
stamped, that the document in court which is
a copy cannot be validated and acted upon
and that in consequence no decree could be
passed thereon. The law is no doubt well-
settled that the copy of an instrument cannot
be validated. That was held in Rajah of Bobbili
v. Inuganti China Sitaramasami Garu, 26 Ind
App 262, where it was observed :
The provisions of this section
(section 35) which allow a document
to be admitted in evidence on
payment of penalty, have no
application when the original
document, which was unstamped or
was insufficiently stamped, has not
been produced; and, accordingly,
secondary evidence of its contents
cannot be given. To hold otherwise
would be to add to the Act a provision
which it does not contain. Payment
of penalty will not render secondary
evidence admissible, for under the
stamp law penalty is leviable only on
an unstamped or insufficiently
stamped document actually produced
in Court and that law does not
provide for the levy of any penalty on
lost documents
.
This Court had an occasion again to consider the scope and
ambit of Sections 33(1), 35 and 36 of the Act and Section 63 of
the Indian Evidence Act in Jupudi Kesava Rao v.
Pulavarthi Venkata Subbarao and others AIR 1971 SC
1070 and held that :-
13. The first limb of Section 35 clearly shuts
out from evidence any instrument chargeable
with duty unless it is duly stamped. The
second limb of it which relates to acting upon
the instrument will obviously shut out any
secondary evidence of such instrument, for
allowing such evidence to be let in when the
original admittedly chargeable with duty was
not stamped or insufficiently stamped, would
be tantamount to the document being acted
upon by the person having by law or authority
to receive evidence. Proviso (a) is only
applicable when the original instrument is
actually before the Court of law and the
deficiency in stamp with penalty is paid by the
party seeking to rely upon the document.
Clearly secondary evidence either by way of
oral evidence of the contents of the unstamped
document or the copy of it covered by Section
63 of the Indian Evidence Act would not fulfil
the requirements of the proviso which enjoins
upon the authority to receive nothing in
evidence except the instrument itself. Section
35 is not concerned with any copy of an
instrument and a party can only be allowed to
rely on a document which is an instrument for
the purpose of Section 35. `Instrument is
defined in Section 2(14) as including every
document by which any right or liability is, or
purports to be created, transferred, limited,
extended, extinguished or recorded. There is
no scope for inclusion of a copy of a document
as an instrument for the purpose of the Stamp
Act.
14. If Section 35 only deals with original
instruments and not copies Section 36 cannot
be so interpreted as to allow secondary
evidence of an instrument to have its benefit.
The words an instrument in Section 36 must
have the same meaning as that in Section 35.
The legislature only relented from the strict
provisions of Section 35 in cases where the
original instrument was admitted in evidence
without objection at the initial stage of a suit
or proceeding. In other words, although the
objection is based on the insufficiency of the
stamp affixed to the document, a party who
has a right to object to the reception of it must
do so when the document is first tendered.
Once the time for raising objection to the
admission of the documentary evidence is
passed, no objection based on the same
ground can be raised at a later stage. But this
in no way extends the applicability of Sec.36 to
secondary evidence adduced or sought to be
adduced in proof of the contents of a
document which is unstamped or
insufficiently stamped.
8. It is clear from the decisions of this Court and a
plain reading of Sections 33, 35 and 2(14) of the Act that an
instrument which is not duly stamped can be impounded and
when the required fee and penalty has been paid for such
instrument it can be taken in evidence under Section 35 of the
Stamp Act. Sections 33 or 35 are not concerned with any copy
of the instrument and party can only be allowed to rely on the
document which is an instrument within the meaning of
Section 2(14). There is no scope for the inclusion of the copy
of the document for the purposes of the Indian Stamp Act.
Law is now no doubt well settled that copy of the instrument
cannot be validated by impounding and this cannot be
admitted as secondary evidence under the Indian Stamp Act,
1899.
9. The learned counsel for the appellant submitted
that the High Court was guided by the decisions rendered by
this Court while deciding the question involved in the case
whether original document was unstamped or not properly
stamped and not in regard to a document which was although
stamped but was improperly stamped. As per the learned
counsel, the case in hand shall be governed by Section 37 of
the Act and not by Section 33 read with Section 35 of the Act.
The learned counsel further urged that the High Court has
committed an error in overlooking Section 48-B inserted by
Indian Stamp (Madhya Pradesh Amendment) Act, 1990 (No. 24
of 1990], which received assent of the President and was
published in the Madhya Pradesh Gazette (Extraordinary)
dated 27.11.1990, applicable in the State of Madhya Pradesh
whereby the Collector is authorized even to impound copy of
the instrument.
10. Section 33 refers to the power of the authority to
impound the instrument not duly stamped, and by virtue of
Section 35 any document which is not duly stamped shall not
be admitted in evidence.
11. Section 37 of the Act reads as under:
37. Admission of improperly stamped
instruments.- The State Government may make
rules providing that, where an instrument bears a
stamp of sufficient amount but of improper
description, it may, on payment of the duty with
which the same is chargeable be certified to be duly
stamped, and any instrument so certified shall then
be deemed to have been duly stamped as from the
date of its execution.
Under this provision, the State Government is authorized to
make rules providing therein to impound any instrument
which bears a stamp of sufficient amount but of improper
description and on payment of chargeable duty to certify it to
be duly stamped and to treat such document as duly stamped
as on the date of its execution.
12. In the State of Madhya Pradesh, Rule 19 of the
Madhya Pradesh Stamp Rules, 1942 permits payment of duty
on the instrument which carries stamp of proper amount but
of improper description. The said Rule reads as under:
When an instrument bears a stamp of proper
amount but of improper description, the Collector
may, on payment of the duty with which the
instrument is chargeable, certify by endorsement
that it is duly stamped:
Provided that if application is made within three
months of the execution of the instrument, and
Collector is satisfied that the improper description
of stamp was used solely on account of the difficulty
of inconvenience of procuring one of the proper
description, he may remit the further payment of
duty prescribed in this rule.
13. Section 37 of the Act would be attracted where
although the instrument bears a stamp of sufficient amount
but such stamp is of improper description, as in the present
case where the proper stamp duty of Re.1/- under the Act has
not been paid but a notarized stamp of Rs.4/- was affixed on
the document. The sufficient amount of the stamp duty has
been paid but the duty paid by means of affixture of notarized
stamp is of improper description. By virtue of Rule 19 of the
Madhya Pradesh Stamp Rules, 1942, the Collector of Stamp is
authorized to receive the proper stamp duty on an instrument
which bears a stamp of proper amount but of improper
description, and on payment of the adequate duty chargeable
under the Act he would certify by endorsement on the
instrument that the instrument is duly stamped. Under the
proviso to the Rule, the Collector may pardon the further
payment of duty prescribed in this Rule provided the person
holding the original instrument moves the Collector within
three months of the execution of the instrument for
certification by endorsement and the Collector is satisfied that
the stamp of improper description was used solely on the
account of the difficulty or inconvenience of the holder of the
instrument to procure the adequate stamp duty required to be
paid on the instrument. But the power under Section 37 and
Rule 19, even after framing the rules by the State Government,
could only be exercised for a document which is an instrument
as described under Section 2(14). By various authorities of
this Court, an instrument is held to be an original instrument
and does not include a copy thereof. Therefore, Section 37
and Rule 19 would not be applicable where a copy of the
document is sought to be produced for impounding or for
admission as evidence in a case.
14. Section 48-B is a provision applicable in the State of
Madhya Pradesh which was inserted by Indian Stamp (M.P.
Amendment) Act, 1990 (No. 24 of 1990] in Chapter IV under
heading Instrument not duly stamped of the Act. This
Section reads as under:
48-B. Original instrument to be produced
before the Collector in case of deficiency.
Where the deficiency of stamp duty is noticed from
a copy of any instrument, the Collector may by
order require the production of original instrument
from a person in possession or in custody of the
original instrument for the purpose of satisfying
himself as to the adequacy of amount of duty paid
thereon. If the original instrument is not produced
before him within the period specified in the order,
it shall be presumed that the original document is
not duly stamped and the Collector may proceed in
the manner provided in this Chapter:
Provided that no action under this section
shall be taken after a period of five years from the
date of execution of such instrument.
15. On a plain reading of Section 48-B, we do not find
that the submission of the learned counsel for the appellant
that by virtue of this provision the Collector has been
authorized to impound even copy of the instrument, is
correct. Under this Section where the deficiency of stamp
duty is noticed from the copy of any instrument, the Collector
may call for the original document for inspection, and on
failure to produce the original instrument could presume that
proper stamp duty was not paid on the original instrument
and, thus, recover the same from the person concerned.
Section 48-B does not relate to the instrument, i.e., the
original document to be presented before any person who is
authorized to receive the document in evidence to be
impounded on inadequacy of stamp duty found. The Section
uses the phraseology where the deficiency of stamp duty is
noticed from a copy of any instrument. Therefore, when the
deficiency of stamp duty from a copy of the instrument is
noticed by the Collector, the Collector is authorised to act
under this Section. On deficiency of stamp duty being noticed
from the copy of the instrument, the Collector would order
production of original instrument from a person in possession
or in custody of the original instrument. Production is
required by the Collector for the purpose of satisfying himself
whether adequate stamp duty had been paid on the original
instrument or not. In the notice given to person in possession
or in custody of original instrument, the Collector shall provide
for time within which the original document is required to be
produced before him. If, in spite of the notice, the original is
not produced before the Collector, the Collector would draw a
presumption that original document is not duly stamped and
thereafter may proceed in the manner provided in Chapter IV.
By virtue of proviso, the step for recovery of adequate stamp
duty on the original instrument on insufficiency of the stamp
duty paid being noticed from the copy of the instrument, can
only be taken within five years from the date of execution of
such instrument. The words the Collector may proceed in the
manner provided in this Chapter has reference to Section 48
of the Act. Under this Section, all duties, penalties and other
sums required to be paid under Chapter IV, which includes
stamp duty, would be recovered by the Collector by distress
and sale of the movable property of the person who has been
called upon to pay the adequate stamp duty or he can
implement the method of recovery of arrears of land revenue
for the dues of stamp duty. By virtue of proviso to Section
48-B, the Collectors power to adjudicate upon the adequacy of
stamp duty on the original instrument on the basis of copy of
the instrument is restricted to the period of five years from the
date of execution of the original instrument. This Section only
authorizes the Collector to recover the adequate stamp duty
which has been avoided at the time of execution of the original
instrument. This Section does not authorize the Collector to
impound the copy of the instrument.
16. For the reasons stated above, the appeal fails and
is dismissed.
17. There shall be no order as to costs.
