Madhya Pradesh High Court
Deepak Agrawal vs Shyam Bihari Pandey on 12 August, 2024
Author: Vishal Mishra
Bench: Vishal Mishra
1 MP-6376-2023
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VISHAL MISHRA
ON THE 12 th OF AUGUST, 2024
MISC. PETITION No. 6376 of 2023
DEEPAK AGRAWAL
Versus
SHYAM BIHARI PANDEY AND OTHERS
Appearance:
Shri Hitendra Vishwakarma - Advocate for petitioner.
Shri Dharmendra Soni - Advocate for respondent No.1.
ORDER
The present petition has been filed assailing the order dated 27.09.2023 passed by 2nd Additional District Judge, Maihar, District Satna in RCSA No.01/2021 whereby an application filed by the petitioner under Section 35 of the Indian Stamps Act, 1899 has been decided and directed for impounding the instrument dated 27.12.2017 at Rs.19,98,000/- without referring it to the Collector.
2. It is the case of the petitioner that the respondent No.1 has proposed to sell his land to the petitioner and a sale agreement has been executed on 27.12.2017 for a consideration amount of Rs.2.00 crores. The respondent No.1 took an advance of Rs.2,50,000/- by various cheques bearing Nos.300528, 300529, 300530, 300531 and 300532. Since, the respondent did not take interest to execute a sale-deed and, therefore, the petitioner sent a legal notice to the respondent No.1 for performance of the agreement dated 27.12.2017. Thereafter, a civil suit was filed for specific performance of contract. During the pendency of the suit, an application under Section 35 of the Indian Stamps Act was filed and Signature Not Verified Signed by: SUSHEEL KUMAR JHARIYA Signing time: 8/14/2024 7:25:25 PM 2 MP-6376-2023 the agreement dated 27.12.2017 was produced. The objection was taken by the respondent no.1 regarding impounding of the document. The said document was executed after payment of Rs.1000/- stamp duty. The said document does not transfer the possession of the suit property. The application has been decided by the learned trial court and the petitioner was directed to pay stamp duty as contemplated in Schedule-IA Item No.6, which is applicable in the State of M.P. and the duty was assessed to be Rs.19,98,000/-, which is put to challenge by filing this petition on the ground that it was not even within the jurisdiction of the learned trial court to assess the impounding fee. It is the domain of the Collector i.e. the Registrar of Stamps to do the same in terms of Section 17 of the Indian Stamps Act.
3. Learned counsel appearing for the respondent No.1 has vehemently opposed the contentions and supported the impugned order pointing out the fact that the document for which the impounding is sought for, is only an agreement to sale being unregistered document, no benefit could be extended to the petitioner. The learned trial court has assessed the impounding fee based upon the market price and recitals of the agreement. Therefore, there is no illegality in passing the impugned order by the learned trial court. The petitioner himself has moved an application for impounding of the document.
4. Heard learned counsel for the parties and perused the record.
5. The record indicates that an unregistered document i.e. agreement to sale was asked to be impounded by filing an application. The power of impounding a document is upon the Registrar of Stamps i.e. the Collector. The trial court has no jurisdiction to direct for payment of stamp duty for impounding of a document. A proper course is that the document should be impounded and be sent to the Collector for calculation of the stamp duty as provided in the Indian Stamps Act.
Signature Not Verified Signed by: SUSHEEL KUMAR JHARIYA Signing time: 8/14/2024 7:25:25 PM3 MP-6376-2023 But in the present case, the trial court has exceeded its jurisdiction and passed the impugned order of impounding, which is per se illegal.
6. This Hon'ble Supreme Court in the case of S. Kaladevi vs. B. R. Soma Sundaram, reported in 2010 (III) MPLJ 500 has considered the aforesaid preposition with respect to admissibility of an unregistered document with respect to an immovable property in a suit for specific performance of agreement to sale and the Hon'ble Supreme Court has held that an unregistered sale deed can also be admitted in evidence as an evidence of any collateral transaction not required to be effected by the registered document. The Hon'ble Supreme Court has held as under:-
"11. The main provision in Section 49 provides that any document which is required to be registered, if not registered, shall not affect any immovable property comprised therein nor such document shall be received as evidence of any transaction affecting such property. Proviso, however, would show that an unregistered document affecting immovable property and required by 1908 Act or the Tranfer of Property Act, 1882 to be registered may be received as an evidence to the contract in a suit for specific performance or as evidence of any collateral transaction not required to be effected by registered instrument. By virtue of proviso, therefore, an unregistered sale deed of an immovable property of the value of Rs.100/- and more could be admitted in evidence as evidence of a contract in a suit for specific performance of the contract. Such an unregistered sale deed can also be admitted in evidence as an evidence of any collateral transaction not required to be effected by registered document. When an unregistered sale deed is tendered in evidence, not as evidence of a completed sale, but as proof of an oral agreement of sale, the deed can be received in evidence making an endorsement that it is received only as evidence of an oral agreement of sale under the proviso to Section 49 of 1908 Act."Signature Not Verified Signed by: SUSHEEL KUMAR JHARIYA Signing time: 8/14/2024 7:25:25 PM
4 MP-6376-2023
7. The Hon'ble Supreme Court in the case of K.B. Saha and Sons Private Limited vs. Development Consultant Limited, reported in (2008) 8 SCC 564 has noticed the following statement of Mulla in his Indian Registration Act, 7th Addition and the principle laid down therein which are as under:-
"......The High Courts of Calcutta, Bombay, Allahabad, Madras, Patna, Lahore, Assam, Nagpur, Pepsu, Rajasthan, Orissa, Rangoon and Jammu and Kashmir; the form Chief Court of Oudh; the Judicial Commissioner's Court at Peshawar, Ajmer and Himachal Pradesh and the Supreme Court have held that a document which requires registration under Section 17 and which is not admissible for want of registration to prove a gift or mortgage or sale or lease is nevertheless admissible to prove the character of the possession of the person who holds under it......"
7. This Court then culled out the following principles :-
"1. A document required to be registered, if unregistered is not admissible into evidence under section 49 of the Registration Act. 2 Such unregistered document can however be used as an evidence of collateral purpose as provided in the proviso to section 49 of the Registration Act. 3 A collateral transaction must be independent of, or divisible from, the transaction to effect which the law required registration. 4 A collateral transaction must be a transaction not itself required to be effected by a registered document, that is, a transaction creating, etc. any right, title or interest in immovable property of the value of one hundred rupees and upwards. 5 If a document is inadmissible in evidence for want of registration, none of its terms can be admitted in evidence and that to use a document for the purpose of proving an important clause would not be using it as a collateral purpose. To the aforesaid principles, one more principle may be added, namely, that a document required to be registered, if unregistered, can be admitted in evidence as evidence of a contract in a suit for specific performance."
8. A coordinate Bench of this court in the case of Radu s/o Balu Bhilwal Signature Not Verified Signed by: SUSHEEL KUMAR JHARIYA Signing time: 8/14/2024 7:25:25 PM 5 MP-6376-2023 Bhil and others vs. Jhitra s/o Badiya Meda Bhil and others reported in 2017 (3) MPLJ 96 has held as under:-
"5. After framing the issue evidence of the plaintiffs started and during cross- examination of the plaintiff defendants put the agreement dated 10-6-2002 before the witness and tried to get the said agreement to sale marked as exhibit. Such a conduct was objected by the plaintiffs that the said document cannot be taken on record and marked as exhibit as the same was not registered and properly stamped. Learned trial Court has accepted the objection taken by the plaintiff by the impugned order, hence the present petition.
10. Trial Court has only directed that the said agreement to sale cannot be marked as exhibit unless the same is impounded under the provisions of the Indian Stamp Act. Admittedly, the agreement to sale dated 10.06.2002 contains a recital that possession has been handed over to the defendants, therefore, it is a "conveyance"
as provided under Article 23 of Schedule-IA chargeable with the duty of seven and half percent of market value of the property and penalty maximum up to ten time. This Court in the case of Umesh Kumar vs. Rajaran, reported in 2010(2) M.P.L.J. 104 and Atmaram vs. Anil Kumar (supra) has specifically held that party is required to pay the duty as well as penalty in accordance with sections 33, 35 and 38 of the Indian Stamp Act over the agreement to sell in a suit for specific performance when the possession was handed over at the time of execution of agreement. In view of the above discussion, impugned order passed by the trial Court is just and proper and does not suffer from any procedural infirmity or material irregularity or jurisdictional error so as to warrant interference in exercise of extra ordinary jurisdiction conferred by Article 227 of the Constitution of India. Accordingly, writ petition fails and is hereby dismissed."
9. This Court in the case of Tilak Jain vs. Bala Saheb (deceased) through L.Rs. and others reported in 2020(2) MPLJ 109 wherein this court has held as under:
"From the perusal of the aforesaid, it is apparently clear that if an unregistered document is placed before the learned trial Court for marking as an exhibit or for consideration in evidence the aforesaid document should have been taken into the custody of the Court and should have been sent to the Collector of Stamps for impounding purpose. In the present case the document which was required to be considered in evidence and marked as an exhibit is an agreement to sale dated 6.9.10 for which the civil suit has been filed. The document is insufficiently stamped. An application was filed by the plaintiff for impounding of the document showing his willingness to pay the deficient stamp duty on the document along with the penalty. The application was not considered by the learned trial Court. It is true that the unregistered document cannot be marked as an exhibit but until and unless it is impounded under the provisions of Indian Stamp Act. Therefore, in terms of Article 23 of Schedule I A chargeable with the duty of seven and half percent of the market value of the property and penalty maximum upto 10 times the document should have been impounded. The Hon'ble High Court in the case of Umesh Kumar S/o Prakashchandra Sharma vs. Rajaram, reported in 2010 (2) MPLJ 104 has specifically held that the party is required to pay the duty as well as the penalty in accordance with Sections 33, 35 and 38 of the Indian Stamp Act over the agreement to sell and a suit for specific performance when the possession was handed over at the time of execution of the agreement. Thus, the learned trial Court has committed an error in not taking over the unregistered document in his custody and sending it to the Collector of stamps for impounding purpose rather has rejected the Signature Not Verified Signed by: SUSHEEL KUMAR JHARIYA Signing time: 8/14/2024 7:25:25 PM 6 MP-6376-2023 application. The documents should have been taken into custody by the learned trial Court and should have been sent to the Collector of stamps. To the aforesaid aspect there is an illegality committed by the trial Court and the order impugned is unsustainable and is hereby set aside. The learned trial Court is directed to comply with the provisions of Indian Stamp Act and the Registration Act and take the unregistered document in its custody and send it to the Collector of Stamps for impounding as per the provisions provided under the Registration Act and the Stamp Act. Once the document is properly registered only thereafter the same can be marked as an exhibit in the trial or else the document can only be used for a collateral purposes."
10. Thus, from the aforesaid legal proposition of law, it is clear that powers of impounding stamp duty is within the Collector being a competent authority. Therefore, the impugned order dated 27.09.2023 (Annexure P/1) being unsustainable, is hereby quashed. The learned trial Court is directed to comply with the provisions of Indian Stamps Act and the Registration Act and take the unregistered document in its custody and send it to the Collector of Stamps for impounding as per the provisions provided under the Registration Act and the Stamp Act.
11. With the aforesaid, the writ petition stands allowed and disposed off. No order as to costs.
(VISHAL MISHRA) JUDGE sj Signature Not Verified Signed by: SUSHEEL KUMAR JHARIYA Signing time: 8/14/2024 7:25:25 PM