Madras High Court
Thilagavathy vs Mohammed Rabeek on 29 November, 2006
Author: S. Ashok Kumar
Bench: S. Ashok Kumar
ORDER S. Ashok Kumar, J.
1. The revision petitioner is the plaintiff in the suit. The suit has been filed for redemption of mortgaged property. Pending the suit, the defendant filed I.A.No:159 of 2005 to receive 11 additional documents. The petitioner/plaintiff opposed the said petition contending that there is no reason adduced as to why such documents have not been filed along with the suit, the first document dated 12.5.1993 intended to be received as an additional document is a concocted document prepared for the purpose of the case, it has not been stamped properly as stipulated under Article 40(a) of the Indian Stamps Act, it has not been registered as required under Section 49 of the Indian Registration Act.
2. Learned District Munsif, Srikali, on consideration of the averments and the respective submissions made by the counsel appeared on either side partly allowed the Interlocutory Application holding that the document dated 12.5.1993 could be taken into consideration only for the purpose of receipt of payment by the defendant under the said document and no other right can be claimed by the said document. Aggrieved over the same, the plaintiff has preferred this revision.
3. Learned Counsel for the revision petitioner contended that a document which ought to have been registered under the Indian Registration Act, which has not been registered shall not be even marked even for the collateral purposes. He placed reliance on the following judgments:
(1) 1937 II MLJ 805 (Penatapati Nageswara Rao v. Moka Narayanamurthi and Anr.) (2) AIR 1946 P.C.,51 (Ram Rattan v. Parma Nand) (3) (Jupudi v. Pulavarthi) (4) (FB) Amar Singh Yadav v. Shanthi Devi.
(5) 2001 (1) CTC 112 (AC. Lakshmipathy and Anr. v. A.M.Chakrapani Reddiar and 6 ors.
4. In 1937 II MLJ 805 (Penatapati Nageswara Rao v. Moka Narayanamurthi and Anr.) a Division Bench of this Court held that the improperly stamped document could not be used to prove a collateral purpose, namely the acknowledgment of liability on previous notes.
5. In AIR 1946 P.C.,51 (Ram Rattan v. Parma Nand) the Privy Council held that the words 'for any purpose' in Section 35 of the Stamp Act, should be given their natural meaning and effect and would include a collateral purpose. Where an unstamped document is admitted in proof of some collateral matter it is certainly admitted in evidence for that purpose which the statute has prohibited. Consequently, an unstamped partition deed cannot be used to corroborate the oral evidence for the purposes of determining even the factum of partition as distinct from its terms.
6. In (Jupudi v. Pulavarthi) the Hon'ble Supreme Court held that in view of Sections 35 and 36, secondary evidence by way of oral evidence or copy of document insufficiently stamped is not admissible in a suit even though objection to its admissibility cannot be taken under the Evidence Act.
7. In 2001 (1) CTC 112 (AC.Lakshmipathy and Anr. v. A.M.Chakrapani Reddiar and 6 ors, a Division Bench of this Court held that unstamped documents if required to be stamped but not so stamped cannot be looked into for any purpose including collateral purpose.
8. However, the learned Counsel for the respondent relied on the judgment of the Apex Court reported in 2004 (I) LW. 706, Bondar Singh v. Nihal Singh wherein Their Lordships have held that "Under the law, a sale deed is required to be properly stamped and registered before it can convey title to the vendee. However, legal position is clear law that a document like the sale deed in the present case, even though not admissible in evidence, can be looked into for collateral purposes." The learned Counsel also relied on the Division Bench of this Court reported in 2004 (3) MLJ 362 (Venugopal @ Alagarsamy and ors v. Bajanai Alagarsamy and anr) wherein this Court held that "though unregistered documents are inadmissible in evidence, they may be considered for collateral purpose'.
9. In Amar Singh Yadav v. Shanthi Devi a Full Bench of the Patna High Court held that where there is a direct conflict between two decisions of the Supreme Court by co-equal Benches, the High Court must follow the judgment which states the law more elaborately and accurately and the question whether the decision is earlier or later, is not the criteria.
10. As far as this case is concerned, the decision of the Hon'ble Supreme Court reported in In (Jupudi v. Pulavarthi) deals with Section 35 and 36 of the Stamp Act in detail whereas the decision reported in 2004 (I) LW. 706, Bondar Singh v. Nihal Singh as well as the Division Bench judgment of this Court in 2004 (3) MLJ 362 (Venugopal @ Alagarsamy and ors v. Bajanai Alagarsamy and anr) Sections 35 and 36 of the Stamp Act has not been discussed at all. Therefore, when there is a conflicting judgments by the two co-equal Benches, the judgment of the larger bench which directly deals with in detail about the controversy regarding the stamp Act has to be preferred than the other judgments which does not discuss about such controversy.
11. However, in 2005 (4) MLJ 337 (Tmt.Indirani v. Seetharaman), which is the latest among the cited decisions, this Court held as follows:
14. In Bondar Singh and Ors. v. Nihal Singh and Ors. (2004) I L.W. 706 the Apex Court has observed:
Under the law, a sale deed is required to be properly stamped and registered before it can convey title to the vendee. However, legal position is clear law that a document like the sale deed in the present case, even though not admissible in evidence, can be looked into for collateral purposes.
15. This observation guided the learned trial judge to admit the documents, in question,k in evidence, though they are unstamped. In the case involved in the above decision also, the documents ought to be relied on was an unregistered and unstamped sale deed. But, the same was admitted, in evidence, for collateral purposes. Though such an observation has been made, the Hon'ble Apex Court has not considered the effect of Section 35 of the Stamp Act. If Section 35 of the Stamp Act was considered and the wording stated therein, vi., 'for any purpose', is ignored, then, if it is said, it can be taken as the law declared by the Apex Court, which is binding upon the Courts below throughout the breadth and length of this country. As seen from the above decision, nowhere it is discussed about the effect of Section 35 of the Stamp Act, though in the head note, the publishers have stated, Stamp Act Sections 35, 32, 36 Registration Act, 49, etc., In the absence of any discussion about the payment of stamp duty and penalty, mere observation that the document could be looked into, for collateral purposes, alone, is not sufficient to allow all the documents un stamped, which required stamp duty, should be admitted in evidence, thereby offending the statute viz., in this case Section 35 of the Stamp Act. In this context, it is useful to refer to the decision of the Apex court in Bipin Shantilal Panchal v. State of Gujarat and Anr. (2001) 3 SCC 1 and Chilakuri Gangulappa v. revenue Divisional Officer, Madanapalle and another (2001) 2 MLJ 33(SC).
16. In the first decision, the objection raised regarding the admissibility of a document came before the Apex Court, for consideration. The Apex Court in a way, criticised the archaic practice and prescribed guidelines as to how the documents should be admitted in evidence, despite the objection raised by the other side. It is observed that, 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 documents 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 al other objections, the procedure suggested above can be followed.
17. The last portion of the above observation makes 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.' Therefore, in this case, the trial court should have considered, whether the documents require stamp duty and penalty or not, before allowing the documents to be admitted, in evidence, for collateral purposes, which was not followed. Therefore, I am unable to affix my seal of approval, as such, to the order passed by the trial Court, which requires modification.
18. In the second case viz., Chilakuri Gangulappa Vs Revenue Divisional officer, Madanpalle and Anr. (2000 2 MLJ 33, the Apex Court considering Section 38 of the Indian Stamp Act, 1899, and the fact under what circumstances, as insufficiently stamped document could be admitted in evidence, has observed that it is the duty of the Court, at the first instance, that if the Court finds that the instrument is insufficiently stamped, it should call upon the party, as to whether he would remit the deficient portion of the stamp duty together with a penalty, amounting to ten times the deficiency, and in the case if the party agrees to remit the said amount, the Court has to proceed with trial, after admitting the document in evidence. The, it contemplates what are the further proceedings to be initiated under Section 38 of the Stamp Act etc. In the case involved in the above decision also, an insufficiently stamped document came to the consideration of the Apex Court. If the Apex Court was of the view that un-stamped or unregistered documents are, automatically, to be admitted in evidence, without reference to Section 35 of the Indian Stamp At, then the Apex Court would not have observed that the Court should call upon the party to remit the deficient portion of the stamp duty together with a penalty, amounting to ten times the deficient or even the lesser penalty. Since the Apex Court was conscious about Section 35 of the Stamp Act, while considering Section 38, it is observed on the basis of Section 38(1) of the Stamp Act:
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 need forward only a copy of the document to the Collector, together with the amount collected from the party for taking adjudicatory steps.
Thus, showing, if the party fails to pay the stamp duty and penalty, the document is not to be admitted in evidence, in view of the embargo contemplated under Section 35 of the tamp Act. This ruling also, supports Section 35 of the Stamp Act, that no document shall be admitted in evidence for any purpose, unless it is properly stamped, and in case, if it is not properly stamped, without payment of stamp duty and penalty and that is the reason, we find the words in Section 38(1) of the Stamp Act that 'when the person impounding an instrument in evidence, upon payment of a penalty, as provided by Section 35 or of duty as provided by Section 37...'thereby confirming, without payment of stamp duty and penalty, no document shall be admitted in evidence.
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20. There cannot be any dispute, as long as Section 35 of the Stamp Act is available in the Statute, that the same is to be applied for all the instruments, which require stamp duty. This being the position, unless a finding is given as observed by the three Judges Bench of the Apex Court, in Bipin Shantilal Panchal v. State of Gujarat (2001) 3 SCC 1, regarding the stamp duty and penalty, the document cannot be admitted in evidence, as if it can be looked into for collateral purpose. No doubt, it is true, a document, which is unregistered or unstamped can be looked into for collateral purpose, provided, provisos to Section 35 of the Stamp Act are complied with, and not otherwise. The above position of law was not considered properly by the trial court and therefore, the order of the trial Court requires modification, in my considered opinion, in view of the admitted position that the documents in question, require stamp duty and penalty.
12. I am in agreement with the views expressed by my Learned Brother M.Thanickachalam,J., Though the judgment of the Supreme Court relied on by the revision petitioner in 2001 (1) CTC 112 (AC.Lakshmipathy and Anr. v. A.M. Chakrapani Reddiar and 6 Ors), still, the judgment of this Court in 2005 (4) MLJ 337 (Tmt.Indirani v. Seetharaman) relied on by the learned Counsel for the respondent, which is supported by several decisions of the Apex Court as relied on by the learned Single Judge in the said decision, has to be followed, because the point is not which is the earlier or latter, but the point is which judgment discusses the point in issue directly involved in the particular case elaborately and accurately.
13. Therefore it is clear no document shall be admitted in evidence if it is not properly stamped, and if already not stamped, then stamp duty should be paid with penalty as prescribed by the authority. As far as the present case is concerned, the plaintiff in her counter to the Interlocutory Application has specifically raised an objection that the document is inadmissible in evidence since the document in question has not been stamped sufficiently as per Article 23 viz., for the sale consideration of Rs. 80,000/= at the rate of Rs. 11/= for Rs. 100/=, stamp fee for the value of Rs. 8880/= has to be affixed together with a penalty amounting to ten times the deficiency. In the absence of payment of the above, the trial court has committed an error in marking the document even for collateral purpose. Hence, the order of the trial court is liable to be modified.
14. In the result, this CRP is allowed in part and the order of the trial court is modified. The trial court is directed to ascertain the stamp duty and penalty payable upon the disputed document, then call upon the party who wants to rely on those documents, to pay the stamp duty and penalty, and then on payment of stamp duty and penalty, admit the document in evidence, whether it is for collateral purpose or otherwise, which could be decided at the later stage while hearing the case as guided by the Apex Court in Bipin Shantilal Panchal v. State of Gujarat and Anr. (2001) 3 SCC 1. Consequently, connected MP is also dismissed. No costs.