Mr.K.Santhanam vs Mr.S.Sampath on 30 November, 2012

[Cites 12, Cited by 0]

Madras High Court

Mr.K.Santhanam vs Mr.S.Sampath on 30 November, 2012

2. The revision petitioners filed the suit in O.S.No.19 of 2009 on the file of the Principal Sub Court, Chingleput for partition and permanent injunction. The second defendant filed an application to permit him to pay the stamp duty on Ex.B20, a Koor Chit and that application was allowed and that order is challenged by the revision petitioners.

3. Learned counsel for the revision petitioners submitted that the court below erred in allowing the application filed by the second defendant viz., the respondent herein on the misconception that the document was already marked and the respondent herein is entitled to apply to the court for payment of deposit of stamp duty and penalty and the document Ex.B20 has not been marked in evidence and it is not duly stamped and it is not registered and as per the provisions of section 35 of the Stamp Act, a document which is not duly stamped cannot be received in evidence and therefore, the court has no power to entertain such a petition permitting the party to pay the stamp duty penalty on the document which is not duly stamped and the court below also failed to appreciate the judgment of this court made in C.R.P.No.4325 of 2010 between the same parties wherein this court held that an unstamped document cannot be received even for collateral purpose and therefore, the court below erred in permitting the respondent to pay deficit stamp duty and penalty. He relied upon the judgment reported in CHILAKURI GANGULAPPA v. REVENUE DIVISIONAL OFFICER, MADANPALLE ((2001) 4 SCC 197 = (2001) 2 MLJ 33 SC), BIPIN SHANTILAL PANCHAL v. STATE OF GUJARAT ((2001) 3 SCC 1), A.C.LAKSHMIPATHY v. A.M.CHAKRAPANI REDDIAR (AIR 2001 MADRAS 135) and RADHA AMMAL v. MANTHI REDDIAR (2008 (6) CTC 43).

4. According to me, the court below has rightly understood the provisions of sections 35 and 38 of the Stamp Act and section 49 of the Registration Act and rightly held that Ex.B20 has not been received and marked as evidence and at the time of marking, objection can be raised regarding the admissibility of the document and Ex.B20 is a Koor Chit which is not duly stamped and without paying the stamp duty penalty, the document cannot be relied or marked for any purpose and the respondent has agreed to pay stamp duty penalty and therefore, the petition can be allowed and the respondent can be directed to pay stamp duty penalty. I am in complete agreement with the findings of the court below.

5. Under section 35 of the Stamp Act, no instrument chargeable with duty shall be admitted in evidence for any purpose. Therefore, there is a total bar for admitting any document in evidence if the document is not duly stamped. Nevertheless, the proviso to section 35 makes it clear that such instrument which is 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 a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion. Therefore, though section 35 prohibits admission of instrument which is not duly stamped, by reason of the proviso, such instrument shall be admitted in evidence on payment of penalty.

6. Under section 33, a duty is cast upon the person having by law or authority to receive evidence to impound any instrument which is not duly stamped when the same is produced before him. Section 38 of the Stamp Act deals with the procedure when the document is impounded under section 33 and when the party who produced the document agrees to pay the stamp duty penalty. As per section 38(2) of the Act, when the party, who produced the document, is not willing to pay the penalty as per the proviso to section 35 of the Stamp Act, the court has to send the document to the Collector for imposing penalty as provided under section 40 of the Stamp Act.

7. In the judgment in CHILAKURI GANGULAPPA v. REVENUE DIVISIONAL OFFICER, MADANAPALLE ((2001) 2 MLJ 33(SC)), the procedure has been laid down by the Honourable Supreme Court as follows:-

"In this context Sec.38 is to be looked into.

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 needs to forward only a copy of the document to the Collector, together with the amount collected from the party for taking adjudicatory stamps. But if the party refuses to pay the amount aforesaid the court 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."

8. Similarly, in the judgment in AVINASH KUMAR CHAUHAN v. VIJAY KRISHNA MISHRA ((2009) 2 SCC 532), the Honourable Supreme Court held as follows:-

"22. We have noticed heretobefore that Section 33 of the Act casts a statutory obligation on all the authorities to impound a document. The court being an authority to receive a document in evidence is bound to give effect thereto. The unregistered deed of sale was an instrument which required payment of the stamp duty applicable to a deed of conveyance. Adequate stamp duty admittedly was not paid. The court, therefore, was empowered to pass an order in terms of Section 35 of the Act. ...

25. Section 35 of the Act, however, rules out applicability of such provision as it is categorically provided therein that a document of this nature shall not be admitted for any purpose whatsoever. If all purposes for which the document is sought to be brought in evidence are excluded, we fail to see any reason as to how the document would be admissible for collateral purposes."

9. In the judgment reported in (2008) 2 MLJ 1115(SC), the Supreme Court held that even if an agreement is not executed on requisite stamp paper, it is admissible in evidence on payment of duty and penalty under section 35 or 37 of the Indian Stamp Act. Therefore, when an instrument which is not duly stamped is produced before the court for the purpose of admitting the same in evidence, as per section 35 of the Stamp Act, such instrument cannot be admitted in evidence and if the person who produces the document is willing to pay the stamp duty penalty, then a duty is cast upon the court to impound the document and direct the party to pay penalty as per proviso (a) to section 35 of the Act and follow the procedure contemplated under section 38(1) of the Act. In case, the person refuses to pay penalty as fixed by the court and request the court to send the document to the Collector for impounding and determination of penalty and also the stamp duty payable on that document, the court has to send the document in original to the Collector as contemplated under section 38(2) of the Stamp Act. On receipt of such document, the Collector has to follow the procedure contemplated under section 40 of the Act.

10. Further, in the judgment reported in AIR 2001 Madras 135, this court summarized the legal provisions regarding the family arrangement as follows:-

"42. To sum up the legal position (I) A family arrangement can be made orally.

(II) If made orally, there being no document, no question of registration arises.

(III) If the family arrangement is reduced to writing and it purports to create, declare, assign, limit or extinguish any right, title or interest of any immovable property, it must be properly stamped and duly registered as per the Indian Stamp Act and Indian Registration Act.

(IV) Whether the terms have been reduced to the form of a document is a question of fact in each case to be determined upon a consideration of the nature of phraseology of the writing and the circumstances in which and the purpose with which it was written.

(V) However, a document in the nature of a Memorandum, evidencing a family arrangement already entered into and had been prepared as a record of what had been agreed upon, in order that there are no hazy notions in future, it need not be stamped or registered.

(VI) Only when the parties reduce the family arrangement in writing with the purpose of using that writing as proof of what they had arranged and, where the arrangement is brought about by the document as such, that the document would require registration as it is then that it would be a document of title declaring for future what rights in what properties the parties possess.

(VII) If the family arrangement is stamped but not registered, it can be looked into for collateral purposes.

(VIII) Whether the purpose is a collateral purpose, is a question of fact depends upon facts and circumstances of each case. A person cannot claim a right or title to a property under the said document, which is being looked into only for collateral purposes.

(IX) A family arrangement which is not stamped and not registered cannot be looked into for any purpose in view of the specific bar in Section 35 of the Indian Stamp Act."

11. In the judgment reported in 2008 (6) CTC 43, the learned Judge followed the judgment of the Honourable Supreme Court reported in (2001) 3 SCC 1 wherein the Honourable Supreme Court held as follows:-

"Whenever an objection is raised during evidence-taking stage regarding the admissibility of any material or item of oral evidence the trial court can make a note of such objection and mark the objected document tentatively as an exhibit in the case (or record the objected part of the oral evidence) subject to such objections to be decided at the last stage in the final judgment. If the court finds at the final stage that the objection so raised is sustainable the Judge or Magistrate can keep such evidence excluded from consideration. In our view there is no illegality in adopting such a course. (However, we make it clear that if the objection relates to deficiency of stamp duty of a document the court has to decide the objection before proceeding further. For all other objections the procedure suggested above can be followed.)"

12. In this case, as stated supra, though the document was given number as Ex.B20, admittedly, the document was not admitted in evidence and as per the judgment reported in (2001) 3 SCC 1, the parties are entitled to raise objection at the time of admitting the document in evidence and in this case, the respondent has voluntarily come forward to pay the stamp duty penalty and in such a case, the proviso to section 35 and section 38 deal with the procedure for collecting stamp duty penalty and that has to be followed by the court and the application filed by the respondent was allowed. Hence, I do not find any merit in this revision.

In the result, the revision is dismissed. The connected miscellaneous petition is also dismissed.

ssk.

1. The Principal Sub Judge, Chengalpattu.

2. The Record Keeper, V.R. Section, High Court, Chennai

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