Andhra HC (Pre-Telangana)
Nookala Krishnaiah And Anr. vs Nookala Dakshina Murthy And Ors. on 18 June, 2007
Equivalent citations: 2007(6)ALD781, 2007(5)ALT758, AIR 2007 (NOC) 2195 (A.P.)
Author: B. Seshasayana Reddy
Bench: B. Seshasayana Reddy
ORDER B. Seshasayana Reddy, J.
1. This Civil Revision Petition is directed against the order dated 31-1-2007 passed in O.S. No. 22 of 2003 on the file of the Additional Senior Civil Judge, (FTC) Nandyal, whereby and where under the learned Additional Senior Civil Judge sustained the objection of the 1st defendant with regard to admissibility of two rental deeds dated 1-8-2001 and 28-4-2003 respectively and directed the plaintiff to pay necessary stamp duty and penalty for exhibiting the rental deeds on her behalf.
2. The background facts leading to filing of this Civil Revision Petition by the plaintiff in O.S. No. 22 of 2003 are:
Nookala Krishnaiah filed suit O.S. No. 22 of 2003 for cancellation of the gift deed dated 18-10-2000 obtained by the 1st defendant-Nookala Dakshina Murthy as the same is void and vitiated by fraud. The plaintiff died and plaintiff No. 2 and defendants 2 to 6 came to be brought on record as his legal representatives as per orders in I.A. No. 894 of 2005 and I.A. 462 of 2006 dated 17-10-2006. Defendant Nos. 2 to 4 and second plaintiff are no other than the children of deceased-1st plaintiff. Defendant Nos. 5 and 6 are the children of Punyamurthi Sukanya who is the daughter of the deceased 1st plaintiff. It was the contention of the deceased-plaintiff that the 1st defendant who is no other than his son obtained a gift deed dated 18-10-2000 in his name by playing fraud and therefore he sought for cancellation of gift deed. After the death of deceased plaintiff, plaintiff No. 2 who is one of the daughters came on record claiming to be legatee under the Will said to have been executed by deceased plaintiff on 9-6-2004.
3. 1st defendant filed written statement disputing the claim of deceased plaintiff as well as plaintiff No. 2. During the course of trial, the 2nd plaintiff introduced two lease deeds said to have been executed by deceased plaintiff in favour of Mohd. Hussain in respect of the suit schedule property. First rental deed dated 1-8-2001 is for one year under which deceased plaintiff-Nookala Krishnaiah is stated to have received entire annual rent of Rs. 30,000/- in advance in respect of ground floor as well as upstair portion of the suit schedule house. Whereas the rental deed dated 28-4-2003 executed by deceased plaintiff-Nookala Krishnaiah in favour of Mohd. Hussain is in respect of upstair portion of the suit schedule house. The rent agreed between the parties is Rs. 1,000/- and the period of lease is for five years. When these two rental deeds are sought to be marked on behalf of the 2nd plaintiff, 1st defendant raised an objection with regard to the admissibility of the documents on twin reasons. Firstly, they are not properly stamped and secondly, they are unregistered.
4. The 2nd plaintiff contended before the trial Court that the two rental deeds are sought to be marked for collateral purpose and therefore no stamp duty is payable on the said documents.
5. The learned Senior Civil Judge, on reading the two rental deeds and on considering the rival contentions of the parties, came to the conclusion that two rental deeds are inadmissible in evidence for want of proper stamp duty and thereby sustained the objection raised by the 1st defendant by order dated 31-1- 2007. The said order is under challenge in this revision.
6. I deem it appropriate to refer para 15 to 17 of the order impugned in the C.R.P. and they are as under:
Section 35 of the Stamp Act prohibits that the document shall not be acted upon by the Court in any manner. The importance of the significant words "No instrument chargeable with duty shall be admitted in evidence for any purpose by any person or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped.
In as much as the document is not stamped, this Court is of the considered opinion that it is not admissible, in evidence for any purpose.
In the result, I find that the lease deeds filed by the plaintiff are not admissible in evidence for want of payment of stamp duty and penalty. If the plaintiff wants to mark them only to show that N.Krishnaiah was in possession of respective dates, the plaintiff may pay necessary Court Fees and stamp duty and penalty and mark the documents. The point is answered accordingly.
7. Heard learned Counsel appearing for the petitioner and learned Counsel appearing for the 1st respndent-1st defendant.
8. Learned Counsel appearing for the petitioner-2nd plaintiff submits that the rental deeds are sought to be marked for collateral matter and therefore, it is immaterial whether the documents are properly stamped or not. He further submits that the purpose of marking these two rental deeds is to prove the fact of possession of deceased plaintiff over the suit schedule house despite the gift deed pressed into service by the 1st defendant. In elaborating his arguments, the learned Counsel tried to make a distinction between collateral purpose and collateral matter. To buttress his submissions reliance has been placed on the following decisions:
1. V.R. Rakkappan Ambalam v. C. Suppiah Ambalam AIR 1930 Madras 485, M. Kunju Nair v. Narayan Nair AIR 1933 Madras 252, Mt. Bibbo v. Rai Saheb Gokaran Singh AIR 1937 Allahabad 101, Meenammal v. S.N. Oavai Reddiar Tayi Rama Krishna Rao v. Pebbu Penchalamma 1980 (2) ALT 436 Mulla Alamsabgari Dastigir v. B. Pullamma and Lakkaraju Radha Krishana v. Pyarle Sri Rama Sarma .
In the 1st cited decision, the Madras High Court held that the promissory note as such though inadmissible is yet admissible to prove acknowledgement under Section 19 of the Limitation Act. It is further held that what is shut out by Section 35 of Stamp Act (1899) is the instrument and not collateral matter connected with the instrument which may be mentioned in the same paper or in the same writing.
In the 2nd cited decision the Madras High Court held that when the instrument contains two parts, if the former part of the instrument which is the promissory note is inadmissible as it is insufficiently stamped, but the latter part contains an express acknowledgement of a prior liability, is admissible as such to save limitation.
In the 3rd cited decision, the Allahabad High Court held that if there are any recitals in the document which, as such, are not chargeable with duty, then it may be possible to use such recitals as evidence for an entirely different and independent matter.
In the 4th cited decision, the Madras High Court dismissed the suit of the plaintiff on the ground that the payment endorsement which have been exhibited as Exs.A-1 to A-4 therein could not save the limitation since the very pro-note is insufficiently stamped. The dismissal of the suit came to be challenged before the Madras High Court. The plaintiff contended that the payment endorsements are independent of the promissory note and therefore they save the limitation. The Madras High Court accepted the contention of the plaintiff.
Para 4 of the judgment needs to be noted and it is thus:
The next question is whether the learned Subordinate Judge's view on the question of limitation was correct. No doubt Exs. A-1, A-3, and A-4 specifically referred to the promissory note, and there was no express reference to the debt independent of the promissory note. The learned Judge purported to rely on Ghulam Murtaza v. Mt. Fasiunnissa AIR 1935 All 129. But, I am unable to see any real scope for extending to the facts of this case, the principle laid down therein. The learned Subordinate Judge held that in the absence of any evidence of the terms of the endorsement that had to be considered, the principle laid down in Kondamma v. Venkatarayadu 1938-2 Mad. L.J. 846 : A.I.R. 1939 Mad 34, could not apply. In Kondamma's case 1938 2 Mad. LJ 846 : AIR 1939 Mad. 34 Madhavan Nair J. applied the principles laid down earlier by a Division Bench of this Court in Chokkalingam v. Annamalai 34 Ind Cas 417 : AIR 1917 Mad. 460, though it was specifically referred to in Kondamma's case 1938 2 Mad LJ 846 : AIR 1939 Mad 34. In 34 Ind Cas 417 : AIR 1917 Mad 460 at P. 464, Srinivasa Aiyangar J. in construing the scope of the acknowledgement relied upon, endorsed in an inadmissible document, observed:
When it is said that payments were made on account of the chit, it means that payments were made on account of the debt evidenced by the note. Therefore, in this case when the defendant made payments towards the promissory note it is obvious that what was paid was towards the debt evidenced by the promissory note, and what was acknowledged successively in Exs. A-2, A-3 and A-4 was the subsistence of the debt itself, which the parties then believed at the time was evidenced by Ex.A-1 in the sense, that Ex. A-1 would be admissible in evidence to prove the existence of the debt itself.
The view taken by the learned Subordinate Judge that Exs. A-2, A-3 and A-4 did not operate as acknowledgements of the debt itself, is in my view erroneous; they did operate as acknowledgments of the debt, to recover which the plaintiff laid the suit. The suit was therefore not barred by limitation.
In the 5th cited decision, this Court held that a document, which is chargeable with duty if not stamped couldn't be received in evidence for any purpose unless the requirements of proviso (a) to Section 35 are satisfied. But if a document consists of two distinct parts, one of which is chargeable and the other is not chargeable with stamp duty, the portion which is not chargeable with stamp duty can be received in evidence, while the other portion which is not stamped, though it is required to be stamped cannot be received in evidence unless on payment of duty and penalty in compliance of Section 35. This is based on the principle that both parts of the document should be treated as two separate and independent instruments and each should be considered independent of the other. Hence, the admissibility of each portion has to be decided on its own merits. Neither Section 5 nor Section 35 operates a bar against the admissibility of the portions, which is not chargeable with stamp duty on the ground that the other portion of the document, which is chargeable with stamp duty, is not stamped.
In the 6th cited decision, this Court held that in case where the objection is with regard to the deficiency in stamp duty, the question has to be decided at the admission stage itself before proceeding further. In the 7th cited decision, this Court held if an unstamped or insufficiently stamped document is received in a particular set of proceedings, before an adjudicatory authority, its admissibility cannot be questioned, at a later point of time. The learned Single Judge in the cited case observed that collateral matter on the other hand is something which is totally divorced, and different from the transaction, evidenced by a document. Para 11 of the judgment needs to be noted and it is thus:
"Collateral matter", on the other hand, is something, which is total divorced, and different from the transaction, evidenced by a document. The document may contain certain recitals, which are totally unrelated to the transaction, which it intends to bring about. For example, the age of the vendor, as on the date of the execution of the document, is shown at a particular figure. The recital in that regard cannot be said to be collateral to the transaction, by any stretch of imagination. If a dispute arises in a different set of proceedings, as to the age of the said vendor, reliance upon the said document for the limited purpose of enlightening the Court, on the said aspect; cannot attract the prohibition contained under Section 35. The reason is that, the purpose for which reliance is placed on the document is related neither to the main transaction, nor to collateral purposes, and its utility is pressed into service in a collateral matter. A Division Bench of Allahabad High Court in Mt. Bibbo v. Rai Saheb Gokaran Singh AIR 1937 All. 101, analyzed Section 35 of the Act, before and after its amendment. After referring to the requirement under Section 35, the Court observed as under:
if however, there are any recitals in a document, as such are not chargeable with duty, then it maybe possible to use such recitals as evidence, for entirely different and independent matter.
A distinction was maintained between collateral purposes and collateral matter. Endorsements of payment, on insufficiently stamped promissory notes, were held to be admissible, for the purpose of proving acknowledgement See 1960 (1) MLT 319 and Therefore, the test is, as to whether the person, who is relying upon an unstamped or insufficiently stamped document, intends to prove the transaction covered by the document, or any purpose collateral to it, or relies on it, in a totally different, but collateral matter. In the former case, it is inadmissible, and in the latter, it can be received in evidence.
9. Learned Counsel appearing for 1st respondent-1st defendant submits that the two documents sought to be received in evidence on behalf of the petitioner-
plaintiff are rental deeds and they are for more than one year and therefore, they are required to be registered under Section under Section 17 of the Indian Registration Act. A further submission has been made that since the petitioner-plaintiff intends to prove the possession of the deceased - 1st plaintiff through these rental deeds and as they are not properly stamped, necessary stamp duty along with penalty is required to be paid before being admitted in evidence, even for collateral purpose.
10. In support of his submissions, reliance has been place on the decisions of this Court in E. Venkat Reddy v. E. Yadgir Reddy and Sanjeeva Reddi v. Johanputra Reddi . In Sanjeeva Reddi's case (9th cited) this Court held that words for the purpose of Section 35 include collateral purpose. No part of a document be it a single sentence, a word or a signature which is chargeable with duty can be received in evidence, even if that document is sought to be admitted only for a collateral purpose. It is further held that there is no prohibition under Section 49 of the Registration act, 1908 to receive such a document which requires registration to be used for collateral purpose. However, under Section 35 of the Stamp Act, there is absolute prohibition unless the requirements of the proviso to that section are fulfilled. Para 9 of the judgment needs to be noted and it is thus:
While considering the scope of Section 35 of the Indian Stamp Act we cannot bring in the effect of non-registration of a document under Section 49 of the Indian Registration Act. Section 17 of the Indian Registration Act deals with documents, the registration of which is compulsory and Section 49 is concerned only with the effect of such non-registration of the documents which require to be registered by Section 17 or by any provision of the Transfer of Property act. The effect of non-registration is that such a document shall not affect any immovable property covered by it or confer any power to adopt and it cannot be received as evidence of any transaction affecting such property or conferring such power. But there is no prohibition under Section 49 to receive such a document which requires registration to be used for a collateral purpose i.e. for an entirely different and independent matter. There is a total and absolute bar as to the admission of an unstamped instrument whatever be the nature of the purpose or however foreign or independent the purpose maybe for which it is sought to be used, unless there is compliance with the requirements of the provisos to Section 35. In other words if an unstamped instrument is admitted for a collateral purposes, it would amount to receiving such a document in evidence for a purpose which Section 35 prohibits. There is nothing in the case of B. Rangaiah v. B. Rangaswamy (1970) 2 Andh WR 181 which supports the contention of the petitioner. That was a case as pointed out by Kuppuswami, J., where there were two instruments though contained in one document one a settlement in favour of the 4th defendant therein and the other a will. It was therefore, held that part of the instrument which constitutes a will did not require any stamp and will be admissible in evidence for proving the bequest contained therein. It was for that reason that the learned Judge said that Section 35 of the Stamp Act has no application to a case where one of the separate instruments relating to one such matters would not at all be chargeable under the Act as in the case before him.
In Venkat Reddy's case (8th cited) a Division Bench of this Court held that when the original was unstamped or insufficiently stamped, the copy therefore, being secondary evidence is inadmissible in evidence.
11. Keeping in view the proposition of law laid down in the above referred cases, let me examine whether two rental deeds which are sought to be exhibited for collateral purpose or for collateral matters. Section 35 of the Indian Stamp Act reads as under:
35. Instruments; 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 or 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 of (twenty paise or a mortgage of crop (Article 36(a) of Schedule I-a) chargeable under Clause (aa) or (bb) of Section 3 with aduty of forty paise) or a bill or 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 it required to make up such duty, together with a penalty of (fifteen rupees) or, when ten times the amount of the proper duty or deficient portion thereof exceeds (fifteen 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 (three rupees) 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 herein 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 of any of the provision of this Act.
12. Section 35 mandates that instrument chargeable with duty should be stamped so as to make admissible. Provision (a) enables to receive a document on payment of penalty, if the document is chargeable but not stamped or payment of deficit duty or penalty if it is insufficiently stamped.
13. Indisuptedly, the petitioner-plaintiff sought to mark these documents to prove that the deceased plaintiff was in possession of the property. The contention of the learned Counsel for the petitioner-2nd plaintiff that the documents are sought to be marked for collateral matter has no merit.
14. What is sought to be proved by introducing these two rental deeds is the possession of the deceased plaintiff. By giving liberal construction to the contents of the documents, it can be said that the petitioner-2nd plaintiff intends to mark these documents for collateral purpose. It is settled proposition of law that if the unstamped documents are sought to be marked for collateral purpose, necessary stamp duty along with penalty is required to be paid before they are being received in evidence.
15. Therefore, I do not see any flaw in the order impugned in the Civil Revision Petition.
16. Accordingly, this Civil Revision Petition fails and it is hereby dismissed. No order as to costs.