Telangana High Court
G Kiran Kumar, Kurnool vs N Venkateswara Reddy, Kurnool Dist 3 ... on 20 December, 2018
1
THE HON'BLE SRI JUSTICE CHALLA KODANDA RAM
CIVIL REVISION PETITION No.2874 of 2017
ORDER:
This Civil Revision Petition, under Article 227 of the Constitution of India, is filed by the petitioner/4th defendant, challenging the Order, dated 07.06.2017, passed in O.S.No.6 of 2008, by the I Additional District Judge, Kurnool, whereby, an unregistered agreement of sale, dated 29.03.2007, which was sought to be received in evidence by the plaintiff and which was opposed by the defendants, was received in evidence.
2. Heard both sides and perused the material on record.
3. It is the case of the Revision Petitioner/4th defendant in O.S.No.6 of 2008 on the file of the Court below that the unregistered agreement of sale, dated 29.03.2007, sought to be received in evidence by the plaintiff clearly reflects that the possession of the suit schedule property has already been delivered to the defendants and, therefore, such document is required to be sufficiently stamped as per Article 47A of Schedule I-A of the Indian Stamp Act, 1899 ('Stamp Act', for brevity), as applicable to the State of Andhra Pradesh. The Court below, ignoring the said aspect, had marked the said document as Ex.A.1, which is impermissible on account of specific bar under Section 35 of the Stamp Act, which mandates that an instrument, not duly stamped, cannot be acted upon, and ultimately prayed to allow the Revision Petition by setting aside the order under challenge. In support of his contentions, the learned counsel had relied on the judgments 2 reported in Barium Chemicals Limited and Vishwa Bharati Mining Corporation and another1, B. Ratnamala v G. Rudramma2, Veena Hasmukh Jain and another v State of Maharashtra and others3, Omprakash v Laxminarayan and others4 and Tatineni Venkata Subbarao v Kodali Jayalakshmi Devi (CRP No.3333 of 2013, dated 07.06.2018)
4. On the other hand, learned counsel for the respondent No.1/plaintiff submits that the suit is not filed seeking enforcement of the said unregistered agreement of sale, but is filed for recovery of advance amount paid as a part of sale consideration under the said agreement of sale, since the defendants did not have any valid transferable title to the suit schedule property. He would further submit that Ex.A.1-unregistered sale deed is sought to be relied on for a limited purpose, i.e., admission by the defendants that they received Rs.38 lakhs as advance amount. Since Ex.A.1- unregistered sale deed is being relied on for limited purpose of evidencing the receipt of the money under the contract entered into between the parties to the lis and since the suit proceedings do not relate to any immovable property, insufficiency of the stamp duty paid on Ex.A.1 cannot be a ground for marking of the said document. The Court below, relying on the Judgment of this Court in Cheryala Srinivas v Moola Sujatha5, rightly allowed the marking of the said document. There are no grounds to interfere with the order under challenge and ultimately prayed to dismiss the Civil Revision Petition.
1 (2009) 16 SCC 262 2 1999 (6) ALD 160 (DB) 3 (1999) 5 SCC 725, 4 (2014) 1 SCC 618 5 2010 (1) ALD 246 3
5. By drawing specific attention to the decision of this Court in Cheryala Srinivas's case (5 supra), the learned counsel for the respondent No.1/plaintiff would assert that it would be inequitable to mulct the plaintiff with the liability of paying huge deficit Court fee, merely because the respondent No.1/plaintiff is relying on the document for a limited purpose of evidencing the payment of money. He would further submit, by citing the judgment of this Court in U. Madan Gopal v M. Sudhakar6, that as a matter of fact, this Court had allowed a similar case, observing that an unregistered document can be received in evidence for collateral purpose i.e., for the purpose other than enforcement of an agreement.
6. In reply, the learned counsel for the petitioner/4th defendant would submit that there is a clear distinction between insufficiently stamped document being admitted in evidence under Section 35 of the Stamp Act and a document being admitted in evidence in terms of Section 49 of the Registration Act, which provides for certain exemptions and allows the document which is not registered to be admitted as evidence of any collateral transaction not required to be effected by a registered document.
7. Having regard to the respective submissions, at the outset, it may be noted that there is no dispute with regard to the judgment of the Supreme Court in Barium Chemicals Limited's case (1 supra) that a document, which is not duly stamped, has to be dealt with under Section 35 of the Stamp Act before it is admitted in 6 2010 (4) ALT 803 4 evidence, failing which, its admission in evidence cannot be questioned at any later stage; and that a document, which is neither duly stamped nor registered (though required to be registered) can be admitted in evidence for collateral purpose under Proviso to Section 49 of the Registration Act. Under the Code of Civil Procedure, 1908, a document, which is enforceable in evidence, is required to be eschewed from the record, so as to not have any confusion. Under Explanation-I to Article 47-A of Schedule 1-A of the Stamp Act, an agreement to sell, followed by or evidencing delivery of possession of the property agreed to be sold, shall be chargeable as a 'sale' under the Article.
8. In the instant case, the recitals in Ex.A.1-unregistered agreement of sale are clearly setting out to the effect that the possession of the property, which is the subject matter of Ex.A.1- unregistered agreement of sale, was delivered to the defendants on 29.03.2007. Dealing with the requirement of the Stamp Duty on a document, the Supreme Court had held that it is open to the legislature to levy duty on different kinds of agreements at different rates and if the legislature thought that it would be appropriate to collect duty at the stage of agreement itself, if it fulfils certain conditions instead of postponing the collection of such duty till the completion of the transaction by execution of a conveyance deed inasmuch as all substantial conditions of a conveyance have already been fulfilled such as passing of a consideration and delivery of possession of the property, and what remained to be done is a mere formality of execution of a sale deed, it would be necessary to collect duty at the agreement stage 5 itself though right, title and interest may not have passed as such. Still, by reason of the fact that under the terms of the agreement, there is an intention of sale and possession of the property has also been delivered, it is certainly open to the State to charge such instruments at a particular rate which is akin to a conveyance. Therefore, it cannot be said that levy of duty is not on the instrument but on the transaction. The Supreme Court also held that the collection of the duty basically being a levy, it is open for the Legislature to prescribe and levy the same in the manner in which it pleases.
9. Similarly, in Omprakash's case ( 4 supra), the Supreme Court, adverting to Section 35 of the Stamp Act, held, in para No.16, as follows:
"From a plain reading of the aforesaid provision, it is evident that an authority to receive evidence shall not admit any instrument unless it is duly stamped. An instrument not duly stamped shall 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 penalty. As we have observed earlier, the deed of agreement having been insufficiently stamped, the same was inadmissible in evidence."
By making a reference to the judgment of the Madhya Pradesh High Court, it was further observed in para No.18 in the same judgment as follows:
"A document would be admissible on basis of the recitals made in the document and not on basis of the pleadings raised by the parties. In the matter of Laxminarayan (supra), the learned Single Judge with due respect to his authority we don't think that he did look into the legal position but it appears that he was simply swayed away by the argument that as the defendant was denying the delivery of possession, the endorsement/recital in the document lost all its effect and efficacy.
It would be trite to say that if in a document certain recitals are made then the Court would decide the admissibility of the document on the strength of such recitals and not otherwise. In a given case, if there is an absolute unregistered sale deed and the parties say that the same is not required to be 6 registered then we don't think that the Court would be entitled to admit the document because simply the parties say so. The jurisdiction of the Court flows from Sections 33, 35 and 38 of the Indian Stamp Act and the Court has to decide the question of admissibility. With all humility at our command we over-rule the judgment in the matter of Laxminarayan (supra)." We respectfully agree with the conclusion of the High Court in this regard."
10. Further, a Division Bench of this Court in B. Ratnamala's case (2 supra), while dealing with Article 47-A of the Schedule 1-A of the Indian Stamp Act, categorically held that the delivery of possession before the execution or at the time of execution or after the execution of an agreement is deemed to be conveyed for the purpose of imposing stamp duty. This Court also interpreted that the word 'followed by' should be read in conjunction with the earlier expression 'agreement' and in the latter case, any agreement recording delivery of possession should be stamped as a sale deed, even though the possession had been delivered in the past.
11. The Judgment relied on by the learned counsel for the respondent No.1/plaintiff and the trial Court in Cheryala Srinivas's (5 supra), runs contrary to the aforementioned Judgments of the Supreme Court and the Division Bench of this Court in Ratnamala's case (2 supra). Further, in Ratnamala's case (2 supra) a Division Bench of this Court specifically interpreted the Article 47-A of the Schedule 1-A of the Indian Stamp Act, but the same was not referred to in the order under challenge, though Ratnamala's case (2 supra) was delivered on 20.08.1999 and the judgment in Cheryala Srinivas's relied upon by the Court below was delivered on 07.10.2009, i.e., more than 10 years later. Likewise, the other judgments, which were relied 7 upon by the learned counsel for the respondents are distinguishable both on facts and law, and has no application to the set of facts of the case on hand. In all the said judgments, what was being considered was the effect of Section 49 of the Registration Act.
12. Under these circumstances, the Order, dated 07.06.2017, passed in O.S.No.6 of 2008, by the I Additional District Judge, Kurnool, is contrary to the law declared and accordingly, the same is hereby set aside. However, considering the importance of Ex.A.1-unregistered agreement of sale, the Court below may consider returning of Ex.A.1-unregistered agreement of sale for getting it adequately stamped in accordance with the provisions of the Stamp Act by approaching the authorities concerned and by granting reasonable time to do so and then present the said document for marking it in evidence in accordance with law.
13. Accordingly, this Civil Revision Petition is allowed. No costs.
As a sequel, miscellaneous applications pending, if any, shall stand closed.
_______________________ CHALLA KODANDA RAM, J Dt: 20-12-2018 eha 8 HONOURABLE SRI JUSTICE CHALLA KODANDA RAM Civil Revision Petition No.2874 of 2017 Dt. 20.12.2018 eha