Hariom
Agrawal Vs. Prakash Chand Malviya [2007] Insc 1013 (8 October 2007)
B.N.
Agrawal,P.P. Naolekar & P. Sathasivam
(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.
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