Madras High Court
Chellammal vs Meenakshi on 2 April, 2002
Author: P.D. Dinakaran
Bench: P.D. Dinakaran
ORDER P.D. Dinakaran, J.
1. The revision petitioner is the second defendant in O.S.No.39 of 2000 on the file of the Principal District Munsif Court, Sivagangai, laid by the respondent/plaintiff for declaration of title of the respondent/plaintiff over the suit property and for consequential permanent injunction. After the examination of plaintiff witnesses, the revision petitioner/second defendant, through D.W.1 proposed to mark an unregistered release deed dated 18.5.1980 to substantiate his case and the same was objected by the respondent/plaintiff contending that the said unregistered release deed dated 18.5.1980 cannot be admitted as evidence as per Section 35 of the Indian Stamp Act. Accepting the objection of the respondent/plaintiff the learned Principal District Munsif, Sivagangai, by his order dated 7.8.2001 refused to admit the release deed dated 18.5.1980 even for collateral purpose. Hence, the above revision.
2. Mr. V. Ayyadurai, learned counsel for the petitioner, placing reliance on the decision of this Court in AYYAVU AND OTHERS Vs. SHANTI BIBI AND OTHERS reported in 2000(1) LAW WEEKLY 466 as well as the decision of the Apex Court in CHILAKURI GANGULAPPA Vs. REVENUE DIVISIONAL OFFICER, ETC. & ANR. reported in 2001(3) LAW WEEKLY 113, contends that the said unregistered release deed dated 18.5.1980 is admissible in evidence.
3.1. Per contra, Mr. V. Lakshminarayanan, learned counsel for the respondent, placing reliance on the decision in YASODAMMAL Vs. JANAKI AMMAL , contends that unstamped document cannot be admitted as evidence as per Section 35 of the Indian Stamp Act.
3.2. It is further contended by the learned counsel for the respondent that Section 17 read with Section 49 of the Registration Act, 1908 also makes it clear that an unregistered document shall not be considered as evidence.
4. I have given careful consideration to the submissions of both sides.
5. In this regard, I am obliged to refer Section 35 of the Indian Stamp Act and Sections 17 and 49 of the Registration Act, 1908.
"Section:35 of Indian Stamp Act- Instrument 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 not being an instrument chargeable with a duty not exceeding twenty paise only or a mortgage of crop chargeable under Section 3 with a duty of fifty paise or a bill of exchange or promissory note, shall, subject to all just exceptions, 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 proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion;
(b) where any person from whom a stamped receipt could have been demanded, has given an unstamped receipt and such receipt, if stamped would be admissible in evidence against him, then such receipt shall be admitted in evidence against him on payment of a penalty of one rupee by the person tendering it;
(c) where a contract or agreement of any kind is effected by correspondence consisting of two or more letters and any one of the letters bears the proper stamp, the contract or agreement shall be deemed to be duly stamped;
(d) nothing herein contained shall prevent the admission of any instrument in evidence in any proceeding in a Criminal Court other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898;
(e) nothing therein contained shall prevent the admission of any instrument in any Court, when such instrument has been executed by or on behalf of the Government or where it bears the certificate of the Collector as provided by Section 32 or any other provision of this Act.
Section:17 of Registration Act, 1908 - Documents of which registration is compulsory:
(1) The following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act No. XVI of 1864, or the Indian Registration Act, 1866, or the Indian Registration Act, 1871, or the Indian Registration Act, 1877 or this Act came or comes into force, namely:-
(a) instruments of gift of immovable property;
(b) other non-testamentary instruments 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;
(c) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest;
(d) leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent;
(e) non-testamentary instruments transferring or assigning any decree or order of a Court or any award when such decree or order or award purports or operates 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:
PROVIDED that the State Government may, by order published in the Official Gazette, exempt from the operation of this sub-section any leases executed in any district, or part of a district, the terms granted by which do not exceed five years and the annual rent reserved by which do not exceed fifty rupees.
(2) Nothing in clauses (b) and (c) of sub-section (1) applies to:
(i) any composition-deed; or
(ii) any instrument relating to shares in a Joint Stock Company, notwithstanding that the assets of such company consist in whole or in part of immovable property; or
(iii) any debenture issued by any such company and not creating, declaring, assigning, limiting or extinguishing any right, title or interest, to or in immovable property except insofar as it entitles the holder to the security afforded by a registered instrument whereby the company has mortgaged, conveyed or otherwise transferred the whole or part of its immovable property or any interest therein to trustees upon trust for the benefit of the holders of such debentures; or
(iv) any endorsement upon or transfer of any debenture issued by any such company; or
(v) any document not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest of the value of one hundred rupees and upwards to or in immovable property, but merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, title or interest; or
(vi) any decree or order of a court except a decree or order expressed to be made on a compromise and comprising immovable property other than that which is the subject matter of the suit or proceeding; or
(vii) any grant of immovable property by government; or
(viii) any instrument of partition made by a revenue-officer; or
(ix) any order granting a loan or instrument of collateral security granted under the Land Improvement Act, 1871, or the Land Improvement Loans Act, 1883; or
(x) any order granting a loan under the Agriculturists Loans Act, 1884, or instrument for securing the repayment of a loan made under that Act; or (xa) any order made under the Charitable Endowments Act, 1890 (6 of 1890) vesting any property in a Treasurer of Charitable Endowments or divesting any such treasurer of any property; or
(xi) any endorsement on a mortgage deed acknowledging the payment of the whole or any part of the mortgage money, and any other receipt for payment of money due under a mortgage when the receipt does not purport to extinguish the mortgage; or
(xii) any certificate of sale granted to the purchaser of any property sold by public auction by a civil of revenue-officer.
(3) Authorities to adopt a son, executed after the 1st day of January, 1872, and not conferred by a will, shall also be registered.
Section:49 of the Registration Act, 1908 - Effect of non-registration of documents required to be registered:
No document required by Section 17 or by any provision of the Transfer of Property Act, 1882 to be registered shall:
(a) affect any immovable property comprised therein, or
(b) confer any power to adopt, or
(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered:
PROVIDED that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877, or as evidence of part performance of a contract for the purposes of section 53A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction not required to be effected by registered instrument."
6. It is well settled in law that when a document is tendered in evidence by either party and objection is raised against the same on the ground that the document is not duly stamped under Section 35 of the Indian Stamp Act or for want of registration as contemplated under Section 17 read with Section 49 of the Registration Act, 1908, it is obligatory on the part of the Court to apply its mind to the objections raised and to decide the objection in accordance with law. In other words, no document could be admitted on its face value irrespective of the fact whether it is duly stamped or otherwise; nor it could be rejected as inadmissible for the same reason or otherwise for want of registration automatically.
7. It is also well settled in law that there is no impediment for admitting a document which is merely unregistered even for collateral purposes, as the unregistered documents can be looked into for collateral purposes and thereafter could be admitted by the trial Court, as repeatedly held in:
(i) KRISHNASWAMI NAIDU Vs. SECRETARY OF STATE, reported in AIR 1953 Madras 15 (DB);
(ii) KOVILPATTI SRI DHANDAYUTHAPANI TRUST Vs. TILAKARAJ reported in (1993) I MLJ 552;
(iii) KOUSALYA AMMAL Vs. VALLIAMMAI AMMAL ; and
(iv) M.K.VARAPPAN Vs. SRI LAKSHMINARAYANA VENUGOPALASWAMI TEMPLE BY ITS EXECUTIVE OFFICER, reported in 1997 (3) LAW WEEKLY 27.
Following the said decision, it is held in AYYAVU AND OTHERS Vs. SHANTI BIBI AND OTHERS reported in 2001 (1) LW 466 that admissibility of documents for collateral purpose is permissible in law.
8. However, the admissibility of the unregistered documents, even though they are not duly stamped, is not automatic, in view of Section 35 of the Indian Stamp Act, as rightly pointed out by Mr. V. Lakshminarayanan, learned counsel for the respondent. It is under such circumstances, an obligation is cast on the Court to apply its mind on the objections raised against the admissibility of the document not duly stamped.
9. A Division Bench of this Court in YASODAMMAL Vs. JANAKI AMMAL case, referred supra, relied upon by the learned counsel for the respondent, had held that unstamped documents are not admissible in evidence. But, the Apex court in a recent decision in CHILAKURI GANGULAPPA Vs. REVENUE DIVISIONAL OFFICER, ETC. & ANR. case, referred supra, was pleased to iron out the above controversy holding that the Court is empowered to admit even insufficiently stamped document if the party producing the same is prepared to pay the penalty. The Apex Court interpreting Section 38 of the Indian Stamp Act, as held as follows:
"...
12. 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 need forward only a copy of the document to the Collector, together with the amount collected from the party for taking adjudicatory steps. But if the party refuses to pay the amount aforesaid the Collector 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."
13. In the present case, an argument is raised that the instrument is not actually an agreement of sale as envisaged in the Schedule to the Stamp Act (subject to amendment made by the State of Andhra Pradesh) but is is only a deed of compromise entered into by two disputing persons. We refrain from expressing any opinion on the said pleas as it is open to the parties to raise their contentions regarding the nature of the document before the trial Court. In the present case, the trial Court should have asked the appellant, if it finds that the instrument is insufficiently stamped, as to whether he would remit the deficient portion of the stamp duty together with a penalty amounting to ten times the deficiency. If the appellant agrees to remit the said amount the Court has to proceed with the trial after admitting the document in evidence. In the meanwhile, the Court has to forward a copy of the document to the Collector for the purpose of adjudicating on the question of deficiency of the stamp duty as provided in Section 40(1)(b) of the Act. Only if the appellant is unwilling to remit the amount, the Court is to forward the original of the document itself to the Collector for the purpose of adjudicating on the question of deficiency of the stamp duty. The penalty of ten times indicated therein is the upper limit and the Collector shall take into account all factors concerned in deciding as to what should be the proper amount of penalty to be imposed.
14. In as much as none of the above proceedings had been adopted by any of the authorities including High Court, we set aside the impugned orders. We direct the Munsif to consider first whether the document is insufficiently stamped and if he funds that question in the affirmative, he has to adopt the next step indicated above."
10. In the instant case, even though the document in question is not duly stamped, the revision petitioner was willing to pay deficit stamp duty as well as the penalty on the same. If that be so, without providing an opportunity to the petitioner to pay the deficit stamp duty as well as the penalty thereon, and to refuse to admit the document at the threshold, in my considered opinion, is illegal and therefore requires the interference of this Court. Hence, I am obliged to set aside the orders of the learned Principal District Munsif, Sivagangai, dated 7.8.2001 in I.A.No.468 of 2001 in O.S.No.39 of 2000, and direct the learned Principal District Munsif, Sivagangai, to first consider whether the document is insufficiently stamped and if so, to what extent; to give an opportunity to the petitioner to pay the deficit stamp duty as well as the required penalty thereon; and thereafter to apply the mind, independently, without being influenced by any of the observations made above, as to the merits of admissibility or otherwise of the document, irrespective of the fact whether the document is registered or unregistered, as the unregistered document is also admissible for collateral purpose, in view of the decisions referred to above, as well as in view of proviso to Section 49 of the Registration Act, 1908.
In the result, this petition is ordered accordingly. No costs. Consequently, C.M.P.No.13825 of 2001 is closed.