Andhra HC (Pre-Telangana)
M/S Srinivasa Builders, Hyderabad, ... vs A.Janga Reddy (Died) Rep. By Lrs on 8 February, 2016
Author: A.Ramalingeswara Rao
Bench: A.Ramalingeswara Rao
HONBLE SRI JUSTICE A.RAMALINGESWARA RAO
CIVIL REVISION PETITION No.4599 of 2015
08-02-2016
M/s Srinivasa Builders, Hyderabad, Rep. by its Managing Director V. Nagi
ReddyPetitioner
A.Janga Reddy (Died) rep. by LRs Respondents
Counsel for the Petitioner: Sri Harender Pershad
Counsel for the Respondents: Sri K. Prabhakar Rao
<Gist :
>Head Note :
? Cases referred
1990(3) ALT 305 (F.B.)
2 (2010) 5 SCC 401
3 (2003) 8 SCC 752
4 (2006) 11 SCC 331
5 2006(4) ALT 216
6 2011(6) ALT 671
7 (2011) 14 SCC 66
8 2014 (1) ALT 577
9 2015(3) ALT 575
HONBLE SRI JUSTICE A. RAMALINGESWARA RAO
Civil Revision Petition No. 4599 of 2015
Order:
The petitioner herein is the plaintiff in OS No.94 of 2006 on the file
of II Additional Senior Civil Judge, Mahaboobnagar. The said suit was
filed for specific performance of an agreement of sale in respect of 30
plots in an extent of Ac.1-20 gts., in the layout plan in Survey Nos.13, 14
and 15, situated at Kalwakurthy town.
2. The first defendant filed a written statement and the same was
adopted by the defendants 2 and 3. The fifth defendant filed a separate
written statement.
3. During the course of evidence, Exs.A1 and A2 were marked by
PW.1 apart from other Exs.A3 to A28 on 15.10.2014. Ex.A1 was the
agreement of sale dated 19.05.1999 and Ex.A2 was the agreement of sale
dated 25.06.1999.
4. The defendants in the suit filed IA No.27 of 2015 in the said suit to
de-exhibit the said Exs.A1 and A2 and collect proper stamp duty and
penalty stating that in the written statement filed by defendant No.1 it
was specifically stated that the said two agreements were not properly
stamped as there was a recital in the said agreements that the possession
of property was delivered to the plaintiff and thus, they are inadmissible in
evidence. However, when the Court directed the office to determine the
payment of stamp duty and penalty on those documents, the office
wrongly calculated the stamp duty and penalty and collected less stamp
duty and penalty on those documents without looking into the recitals in
the documents with regard to delivery of possession. After collection of
stamp duty and penalty, those documents were marked on 15.10.2014
under the mistaken impression that proper stamp duty and penalty was
paid. In those circumstances, the defendants wanted to de-exhibit the
said two agreements of sale.
5. A counter was filed by the plaintiff stating that two agreements of
sale were executed on stamp papers worth of Rs.50/- and Rs.100/-
respectively. With respect to the agreement of sale executed on Rs.50/-
stamp paper, the Court imposed stamp duty and penalty, the amount was
already remitted and in view of the same, the said document was marked
as exhibit without any objection from the defendants. Therefore, the
defendants cannot raise objection at the stage of cross-examination.
6. The lower Court observed that the recitals in Ex.A1 - agreement of
sale dated 19.05.1999 disclose that the deceased first defendant agreed
to sell the land of an extent of Ac.7-00 in Survey Nos.13 to 15 at
Kalwakurthy, received an amount of Rs.20,000/- as advance and delivered
possession to the plaintiff. Ex.A2 is another agreement of sale. It was
also noticed that there was a specific recital in Exs.A1 and A2 that
possession of land was delivered to the vendee. If the agreement of sale
coupled with delivery of possession was executed, the document has to
be executed on a stamp paper as specified under Article 47-A of Schedule
1-A of the Indian Stamp Act, 1899 (for brevity the Act) and since the
penalty was collected under Article 6 instead of Article 47-A of the Act,
both the documents were held to be insufficiently stamped documents. It
was held by the trial Court that, though, the defendants did not raise
objection at the time of marking of the documents, they can raise the
objection with regard to admissibility at a later point of time and,
accordingly, allowed the application, by an order dated 11.09.2015.
Challenging the said order, the present Civil Revision Petition is filed.
7. In view of the above narration of events, facts in the case are not
in dispute. The only point that has to be considered in the present
petition is whether the defendants, who did not raise objection to the
marking of documents by PW.1 in his evidence, can raise an objection
with regard to admissibility of documents at a later stage.
8. Admittedly, Exs.A1 and A2 contain the recital with regard to
delivery of possession. As observed by the trial Court, the stamp duty and
penalty were collected assuming that the documents did not contain a
recital with regard to possession. Now the trial Court noticed the defect
and allowed the objection raised by the defendants.
9. In this background, we have to see the relevant provisions of the
Indian Stamp Act. Chapter IV deals with instruments not duly stamped.
Section 33 obligates the persons having authority to receive evidence to
impound an instrument not duly stamped. Section 35 says that no
instrument chargeable with duty shall be admitted in evidence for any
purpose by any person having authority to receive evidence, unless such
instrument is duly stamped subject to exceptions mentioned therein.
Section 36 says that where an instrument has been admitted in evidence,
such admission shall not be called in question at any stage of the same
suit or proceeding on the ground that the instrument has not been duly
stamped, but subject to Section 61 of the Act. Section 37 provides for
making rules by the State Government where an instrument bears a
stamp of sufficient amount but of improper description. The procedure
for dealing with the impounded instruments is provided in Sections 38, 39
and 40. Section 42 provides making an endorsement with regard to duty
and penalty paid under the instrument by the person admitting such
instrument in evidence. Sub-Section (2) thereof provides that every
instrument so endorsed shall be admissible in evidence and may be
registered and acted upon and authenticated as if it had been duly
stamped and shall be delivered. Section 61 empowers the appellate or
revisional Court to review the decision of the Court of original jurisdiction
with regard to admission of any instrument in evidence.
10. In the instant case the procedure contemplated under the
provisions of Stamp Act were followed at one point of time but improper
stamp duty and penalty were collected under the misconstruction of the
documents. Now the objection is with regard to said collection of
improper stamp duty and penalty at that time and improper marking of
the documents.
11. Order 13 of CPC provides for production, impounding and return of
documents. Rule 3 of the said Order provides that the Court may at any
stage of the suit reject any document which it considers irrelevant or
otherwise inadmissible, recording the grounds of such rejection. Now the
present case involves the interpretation of Sections 35 and 36 of the
Indian Stamp Act and Rule 3 of Order 13 CPC.
12. As stated above, Section 35 of the Indian Stamp Act prohibits
reception of improperly stamped document in evidence. Section 36 bars
raising an objection of admitted documents except under Sec.61 of the
Act. Rule 3 of Order 13 CPC empowers the Court to reject any document
which it considers irrelevant or otherwise inadmissible. The procedure
contained in the Code of Civil Procedure governs the suits.
13. In the light of the above provisions it has to be seen whether the
trial Court which admitted the documents in evidence can reject the
documents subject to payment of stamp duty and whether the party who
did not raise objection at the time of marking the documents can raise an
objection with regard to improper stamp duty at a later point of time.
14. If one reads Rule 3 of Order 13 CPC along with Section 61 of the
Indian Stamp Act, which is an exception to Section 36, it is clear that the
matter regarding admissibility of improperly stamped document does not
become final on receiving the said document in evidence. The original
Court on its own or at the instance of the objector or by the appellate or
revisional Court can review the decision of admissibility of such document.
15. The learned Counsel for the Petitioner relied on the decisions
reported in The Land Acquisition Officer, Vijayawada Thermal
Station v. Nutalapati Venkata Rao , S. Kaladevi v. V.R.
Somasundaram , RVE Venkatachala Gounder v. Arulmigu
Viswesaraswami and VP Temple , Shyamal Kumar Roy v. Sushil
Kumar Agarwal , Isra Fatima v. Bismillah Begum , C. Prithvi Raj
Reddy v. M/s GPR Housing Pvt.Ltd., rep. by its M.D. , SMS Tea
Estates Private Limited v. Chandmari Tea Company Private
Limited , and Boggavarapu Narasimhulu v. Sriram Ramanaiah ,
whereas the learned counsel for the respondents relied on a decision of
this court in G. Sukender Reddy v. M. Pullaiah .
16. A Full Bench of this Court in The Land Acquisition Officer,
Vijayawada Thermal Stations case (1 supra), considered the issue
with regard to raising of objection as to the mode of proof subsequently
on the ground that nobody connected with the deed was examined in a
case arising under the Land Acquisition Act. The Court observed as
follows:
Point No. 1:-- we shall first refer to certain procedural
provisions of the C.P.C. Order 13, R. 1, C.P.C. permits
production of documentary evidence and the Court is enjoined
to receive all the documents. O.13, R. 3 states that the Court
'may, at any stage of the suit, reject any document which it
considers irrelevant or otherwise inadmissible, recording the
grounds of such rejection. Under 0. 13, R. 4, C.P.C. the Court is
to endorse on every document which has been 'admitted' in
evidence, the following particulars, namely (a) the number and
title of the case, (b) the name of the person producing the
document, (c) the date of production and (d) a statement of its
having been so admitted, and the endorsement shall be signed
or initialled by the Judge.
Thus, there are two stages relating to documents filed in
Court - one is the stage when all the documents are filed by the
parties in the Court and the next stage where the documents
are formally proved and tendered in evidence. It is at the latter
stage that the Court has to decide whether the documents so
tendered are to be admitted or rejected. The words 'admitted in
evidence' mean the making of the document part of the judicial
record of the case. The endorsement by the Court as provided
in O. 13, R. 4, C.P.C. is intended to be a record of the fact that
the document 'has been admitted' in evidence after the
necessary legal formalities have been complied with. Under 0.
13, R. 6, C.P.C. where a document relied on as evidence by
either party is considered by the Court to be inadmissible in
evidence, there shall be endorsed thereon the particulars
mentioned in Clauses (a), (b) and (c) of Rule 4, sub-rule (1),
together with a statement of its having been rejected, and the
endorsement shall be signed or initialled by the Judge. Finally,
0. 13, R. 7, C.P.C. provides that every document which has
been admitted in evidence (or a copy thereof where a copy has
been substituted for the original under Rule 5), shall form part
of the record of the case and documents not admitted shall not
form part of the record and shall be returned to the person
producing the same.
It is now well settled, by a long series of decision of all
Courts, to which it is unnecessary to refer, that there is a basic
difference between the mode of proof of a document and its
admissibility. The mode of ' proof of a document is a matter of
procedure while its admissibility is a matter of substantive law,
such as the Registration Act or the Stamp Act or other specific
provision. If the objection is as to the admissibility of the
document, then the mere making of the document as an
exhibit, does not preclude any objection being raised later as to
its admissibility. But so far as the mode of proof is concerned, it
is well-settled that, if an objection as to the mode is not raised
at the stage when the document is marked as evidence in the
case under 0. 13, R. 4, C.P.C such an objection cannot be
raised at any subsequent stage.
17. The decision of the Honble Supreme Court reported in
S. Kaladevis case (2 supra), is a decision relating to non-registration of
the document and we are not concerned in the present case with regard
to the same.
18. The authoritative case appears to be RVE Venkatachala
Gounders case (3 supra), wherein the Honble Supreme Court
considered the issue of admissibility of documentary evidence and held as
follows.
Ordinarily an objection to the admissibility of
evidence should be taken when it is tendered and not
subsequently. The objections as to admissibility of documents
in evidence may be classified into two classes:- (i) an objection
that the document which is sought to be proved is itself
inadmissible in evidence; and (ii) where the objection does not
dispute the admissibility of the document in evidence but is
directed towards the mode of proof alleging the same to be
irregular or insufficient. In the first case, merely because a
document has been marked as 'an exhibit', an objection
as to its admissibility is not excluded and is available to
be raised even at a later stage or even in appeal or
revision. In the latter case, the objection should be taken
before the evidence is tendered and once the document has
been admitted in evidence and marked as an exhibit, the
objection that it should not have been admitted in evidence or
that the mode adopted for proving the document is irregular
cannot be allowed to be raised at any stage subsequent to the
marking of the document as an exhibit. The later proposition is
a rule of fair play. The crucial test is whether an objection, if
taken at the appropriate point of time, would have enabled the
party tendering the evidence to cure the defect and resort to
such mode of proof as would be regular. The omission to object
becomes fatal because by his failure the party entitled to object
allows the party tendering the evidence to act on an
assumption that the opposite party is not serious about the
mode of proof. On the other hand, a prompt objection does not
prejudice the party tendering the evidence, for two reasons:
firstly, it enables the Court to apply its mind and pronounce its
decision on the question of admissibility then and there; and
secondly, in the event of finding of the Court on the mode of
proof sought to be adopted going against the party tendering
the evidence, the opportunity of seeking indulgence of the
Court for permitting a regular mode or method of proof and
thereby removing the objection raised by the opposite party, is
available to the party leading the evidence. Such practice and
procedure is fair to both the parties. Out of the two types of
objections, referred to hereinabove, in the later case, failure to
raise a prompt and timely objection amounts to waiver of the
necessity for insisting on formal proof of a document, the
document itself which is sought to be proved being admissible
in evidence. In the first case, acquiescence would be no
bar to raising the objection in superior Court. (emphasis
supplied)
19. In a decision of the Honble Supreme Court in Shyamal Kumar
Roys case (4 supra), the issue with regard to admission of insufficiently
stamped document came up for consideration. Relying on Section 36 of
the Stamp Act it was held that if no objection was taken with regard to
admissibility of the document, at a later stage the objector cannot be
permitted to turn round and contend that the document is inadmissible in
evidence. The appellant having consented to the document being marked
as an exhibit has lost his right to reopen the question. The observations
of the Honble Supreme Court are as follows.
Section 36, however, provides for a 'stand alone'
clause. It categorically prohibits a court of law from reopening a
matter in regard to the sufficiency or otherwise of the stamp
duty paid on an instrument in the event the same has been
admitted in evidence. Only one exception has been made in this
behalf, viz., the provisions contained in Section 61 providing for
reference and revision. In a case where Section 33 of the Act,
as amended by West Bengal Act would be applicable, the
proviso appended to Sub-Section (5) carves out an exception
that if no action would be taken after a period of four years
from the date of execution of the instrument.
The agreement, as notice hereinbefore, was executed in
the year 1995. The applications purported to be under Section
151 of the Code of Civil Procedure, 1908 were filed by Appellant
only on 16.2.2005. The Development Agreement, as noticed
hereinbefore, was admitted in evidence on 17.2.2003. The
learned Trial Judge as also the High Court relied upon a
decision of this Court in Javer Chand (supra). An attempt to
distinguish the said decision of this Court was made, inter alia,
on the premise that therein this Court was concerned with
interpretation of the provisions of Marwar Stamp Act, 1947 in
respect of two mudatti hundis, which have been admitted in
evidence on payment of duty and penalty, but sought to be
made inadmissible in evidence in terms of the provisions
contained in the 1947 Act. This Court opined that once the said
document was admitted in evidence, the new Act i.e. the 1947
Act would be inapplicable, stating :
"Once a document has been marked as an exhibit in the
case and the trial has proceeded all along on the footing that
the document was an exhibit in the case and has been used by
the parties in examination and cross- examination of their
witnesses, Section 36 of the Stamp Act comes into operation.
Once a document has been admitted in evidence, as aforesaid,
it is not open either to the trial court itself or to a court of
appeal or revision to go behind that order. Such an order is not
one of those judicial orders which are liable to be reviewed or
revised by the same court or a court of superior jurisdiction."
The said decision, therefore, is an authority for the
proposition that Section 36 would operate even if a document
has been improperly admitted in evidence. It is of little or no
consequence as to whether a document has been admitted in
evidence on determination of a question as regards
admissibility thereof or upon dispensation of formal proof
therefor. If a party to the lis intends that an instrument
produced by the other party being insufficiently stamped should
not be admitted in evidence, he must raise an objection thereto
at the appropriate stage. He may not do so only at his peril.
20. On the same lines, a learned single Judge of this Court in Isra
Fatimas case (5 supra) and C. Prithvi Raj Reddys case (6 supra),
held that, in view of Section 36 of the Stamp Act, the admissibility cannot
be challenged subsequent to marking of document as an exhibit.
21. in the decision of Shyamal Kumar Roys case (4 supra) and the
decisions of this Court in Isra Fatimas case (5 supra) and C. Prithvi
Raj Reddys case (6 supra), there is no reference to the case of RVE
Venkatachala Gounders case (3 supra) and the consideration of effect
of Rule 3 of Order 13 CPC and Section 61 of the Indian Stamp Act.
Hence, those decisions cannot be taken in aid for the purpose of deciding
the present issue.
22. In SMS Tea Estates Private Limiteds case (7 supra), the
Honble Supreme Court was considering a case of compulsorily
registerable document which was not registered and not duly stamped.
The relevant observations of the Honble Supreme Court are as follows.
Therefore, when a lease deed or any other instrument is
relied upon as contending the arbitration agreement, the court
should consider at the outset, whether an objection in that
behalf is raised or not, whether the document is properly
stamped. If it comes to the conclusion that it is not properly
stamped, it should be impounded and dealt with in the manner
specified in section 38 of Stamp Act. The court cannot act upon
such a document or the arbitration clause therein. But if the
deficit duty and penalty is paid in the manner set out in section
35 or section 40 of the Stamp Act, the document can be acted
upon or admitted in evidence.
We may therefore sum up the procedure to be adopted
where the arbitration clause is contained in a document which
is not registered (but compulsorily registrable) and which is not
duly stamped :
(i) The court should, before admitting any document into
evidence or acting upon such document, examine whether the
instrument/document is duly stamped and whether it is an
instrument which is compulsorily registrable.
(ii) If the document is found to be not duly stamped,
Section 35 of Stamp Act bars the said document being acted
upon. Consequently, even the arbitration clause therein cannot
be acted upon. The court should then proceed to impound the
document under section 33 of the Stamp Act and follow the
procedure under section 35 and 38 of the Stamp Act.
(iii) If the document is found to be duly stamped, or if
the deficit stamp duty and penalty is paid, either before the
Court or before the Collector (as contemplated in section 35 or
40 of the Stamp Act), and the defect with reference to deficit
stamp is cured, the court may treat the document as duly
stamped.
(iv) Once the document is found to be duly stamped, the
court shall proceed to consider whether the document is
compulsorily registrable. If the document is found to be not
compulsorily registrable, the court can act upon the arbitration
agreement, without any impediment.
(v) If the document is not registered, but is compulsorily
registrable, having regard to section 16(1)(a) of the Act, the
court can de-link the arbitration agreement from the main
document, as an agreement independent of the other terms of
the document, even if the document itself cannot in any way
affect the property or cannot be received as evidence of any
transaction affecting such property. The only exception is
where the respondent in the application demonstrates that the
arbitration agreement is also void and unenforceable, as
pointed out in para 8 above. If the respondent raises any
objection that the arbitration agreement was invalid, the court
will consider the said objection before proceeding to appoint an
arbitrator.
(vi) Where the document is compulsorily registrable, but
is not registered, but the arbitration agreement is valid and
separable, what is required to be borne in mind is that the
Arbitrator appointed in such a matter cannot rely upon the
unregistered instrument except for two purposes, that is (a) as
evidence of contract in a claim for specific performance and (b)
as evidence of any collateral transaction which does not require
registration.
23. A learned single Judge of this Court considered the case of an
unregistered agreement of sale exhibited in Boggavarapu
Narasimhulus case (8 supra), and following the judgment of the Full
Bench of this Court held that the objector can raise an objection with
regard to admissibility of a document on the ground that it has been not
duly registered despite the fact that the said document has already been
exhibited and admitted in evidence.
24. I have considered elaborately the issue with regard to marking of
document in G. Sukender Reddys case (9 supra), and it was held that
it is the duty of a Court of Law to exclude all irrelevant or inadmissible
evidence even if no objection was taken by the opposite side.
25. In view of the above legal position, the order of the trial Court is
sustainable and it does not warrant interference. However, if the
document does not require registration and it is only insufficiently
stamped, the trial Court can take necessary action under the provisions of
the Stamp Act as aforesaid.
26. Accordingly, the Civil Revision Petition is dismissed subject to the
above observations. However, in the circumstances, no costs.
27. As a sequel thereto, the miscellaneous petitions, if any, pending in
the Civil Revision Petition shall stand closed.
________________________
A.RAMALINGESWARA RAO, J.
Date: 08th February 2016