Delhi High Court
Rakesh Jain & Others vs Vinod Kumar Bhola on 21 May, 2010
Author: Reva Khetrapal
Bench: Reva Khetrapal
REPORTED
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% DATE OF RESERVE: February 11, 2010
DATE OF DECISION: May 21, 2010
+ RFA 476-78/2005 and CM No.9428/2005 (stay)
RAKESH JAIN & ORS. ..... Appellants
Through: Mr. Sanjay Jain, Sr. Advocate with
Ms. Garima Jain and Ms. Ruchi Jain,
Advocates
versus
VINOD KUMAR BHOLA ..... Respondent
Through: Mr. Ravi Sikri and Mr. Vaibhav
Kalra, Advocates
CORAM:
HON'BLE MS. JUSTICE REVA KHETRAPAL
1. Whether reporters of local papers may be allowed
to see the judgment?
2. To be referred to the Reporter or not?
3. Whether judgment should be reported in Digest?
: REVA KHETRAPAL, J.
1. This appeal is directed against the judgment and decree dated 07.04.2005 passed by the learned Additional District Judge decreeing the suit of the plaintiff in the sum of Rs.3,32,100/- with interest @ 12% per annum from the date of the filing of the suit till the date of realization against all the three defendants.
RFA No.476-78/2005 Page 1 of 20
2. The respondent-plaintiff in the suit filed by him against the defendants No.1, 2 and 3 for the recovery of the aforesaid amount had alleged in the plaint that the defendants No.1 and 2 (the appellants herein), who were known to the plaintiff, had approached the plaintiff somewhere in July, 2000 and informed the plaintiff about their plans for expanding their partnership business. Thereafter, it is alleged, the defendants No.1 and 2 repeatedly approached the plaintiff to invest his money in the expansion project of their partnership business. In view of the assurances held out by them, the plaintiff agreed to invest his money with the defendants on the following terms and conditions, mutually settled and agreed upon between the parties in the suit:-
"a. That the plaintiff was to invest a sum of Rs.15,000/- every month with the defendants for a total of one and half years (18months) starting from 10th August, 2000 to 10th January, 2002. b. That on this Rs.15,000/- deposited with the defendants every month the defendants No.1 was to issue a Promissory Note of the equivalent amount and pay interest @ 24% per annum.
c.That the Promissory Notes were to be for a period of one and half years, after which the defendants were to return the principal amount of Rs.15,000/- along with interest at the above mentioned rate of 24% per annum."
3. Pursuant to the aforesaid oral understanding arrived at between the parties, the plaintiff regularly deposited with the defendants a sum of Rs.15,000/- beginning 10th August, 2000, and in all a total amount of Rs.2,70,000/- was deposited with the defendants till 10th January, 2002 by the plaintiff, thereby complying with his part of the agreement. The defendant No.2 regularly issued promissory notes on the terms and RFA No.476-78/2005 Page 2 of 20 conditions as stated above after receiving every payment of Rs.15,000/- from the plaintiff, the details whereof are set out in paragraph 6 of the plaint. However, in January, 2002, when the time came for repayment of the amount mentioned in the promissory note of 10 th August, 2000, the defendants delayed the payment of the amount due, viz., the principal amount and the interest thereon @ 24% per annum, and sought time on the pretext that the extension plans undertaken by the respondent were not yet fulfilled. The defendants further promised the plaintiff that they will pay the amount due as on 10th January, 2002 in the next month along with the amount due in lieu of the promissory note executed by them on 10th September, 2000. On their failure to honour their commitments, the plaintiff was constrained to serve the defendants with a legal notice dated 20th April, 2002. Despite the issuance and service of the said notice dated 20th April, 2002, as alleged in the plaint, the defendants have till date failed to clear the outstanding of Rs.3,32,100/-. Hence, the suit for recovery of the aforesaid amount under the provisions of Order XXXVII of the Code of Civil Procedure.
4. On receiving summons of the suit, the defendants (the appellants herein) entered appearance and also filed an application for leave to defend the suit. The defendants-appellants were granted unconditional leave to defend and, therefore, filed their written statement.
5. The suit was contested by the defendants principally on the ground that the promissory notes were not admissible in evidence being payable "otherwise than on demand". This being so, the alleged RFA No.476-78/2005 Page 3 of 20 promissory notes were not duly stamped as required under Entry 49 read with Entry 13 of the First Schedule to the Indian Stamp Act, 1899 and in view of Section 35 of the said Act, were not admissible in evidence. A number of other preliminary objections were also raised to the maintainability of the suit.
6. On merits, it was submitted in the written statement that one Shri Vijay Kumar Bhardwaj used to visit the shop of the defendants in the Defence Colony market during the year 1993. When the defendants were facing severe financial crunch, the said Vijay Kumar Bhardwaj offered to bail out the defendants and started giving them loans as and when the defendants required the same. Each time the loan was handed over to the defendants, the said Vijay Kumar Bhardwaj used to obtain the signatures of the defendants on a blank pro-note along with a blank cheque on the ground that the same were being taken as security for the repayment of the loan and would be returned to the defendants after repayment of the loan amount.
7. Around the first week of May, 1998 when the financial position of the defendants had further deteriorated, the said Vijay Kumar Bhardwaj suggested to the defendants that the defendants transfer the first and second floors of Shop No.41, Defence Colony belonging to them in his favour and the entire loan would stand adjusted towards the sale consideration thereof. Having no other option, the defendants agreed to the aforesaid proposal. Shri Vijay Kumar Bhardwaj in turn agreed to return the blank pro-notes and cheques to the defendants. The said Vijay RFA No.476-78/2005 Page 4 of 20 Kumar Bhardwaj, however, stated that since he was a Government servant (working in the police department), liable to be questioned on his source of income, the Sale Deed for the first floor of Shop No.41, Defence Colony market be executed in the name of his brother Shri Ajay Kumar Bhardwaj and similarly the Sale Deed for the second floor of the aforesaid shop be executed in the name of his brother-in-law Shri Pramod Khanna.
8. Accordingly, two unregistered Sale Deeds were executed by the defendants in June, 1999 whereby the first and second floors of Shop No.41 were transferred to Ajay Kumar Bhardwaj, the brother of Vijay Kumar Bhardwaj and to Shri Pramod Khanna, brother-in-law of Vijay Kumar Bhardwaj for Rs.15,48,000/- each. As the total sale consideration for the two floors amounted to Rs.30,96,000/-, the entire loan given by Vijay Kumar Bhardwaj stood adjusted as per the defendants. According to the defendants, at this juncture, the intentions of Shri Vijay Kumar Bhardwaj turned malafide and the said Vijay Kumar Bhardwaj started misusing the cheques and pro-notes bearing the signatures of the defendants by filing false suits and other proceedings under fictitious names with a view to extract money from the defendants. Thus, though the plaintiff is a complete stranger to the defendants and no transaction ever took place between the plaintiff and the defendants, a calculated fraud was played upon the defendants by the said Shri Vijay Kumar Bhardwaj to which the plaintiff is an active party, apart from being a beneficiary.
RFA No.476-78/2005 Page 5 of 20
9. On the pleadings of the parties, the following issues were framed by the learned trial court on 01.05.2003:-
"(i) Whether the suit is bad for mis joinder of the parties as so alleged in preliminary objection No.2 of the written statement? OPD
(ii) Whether the suit is not maintainable in its present form ? OPD
(iii) Whether the suit is premature as so alleged in preliminary objection No.4 of the written statement? OPD
(iv) Whether the suit is barred by limitation?
OPD
(v) Whether the suit has not been properly valued for the purposes of court fees and jurisdiction? OPD
(vi) Whether the plaintiff is entitled for the suit amount? OPP
(vii) Whether the plaintiff is entitled for the interest, if so, then at what rate and to what extent? OPP
(viii) Relief."
10. An additional issue was subsequently framed on 05.09.2003 as follows:-
"1A. Whether the promissory notes are not properly stamped as so alleged in preliminary objection No.1 of the written statement? OPD"
11. The learned trial court on the basis of the evidence adduced by the parties and the documentary evidence on record, as stated above, held the plaintiff entitled to a decree for Rs.3,32,100/- along with costs and interest @ 12% per annum from the date of the filing of the suit till realization against the defendants. Aggrieved by the judgment and decree of the learned trial court, the appellants have preferred the present appeal.
RFA No.476-78/2005 Page 6 of 20
12. Mr. Sanjay Jain, the learned senior counsel for the appellants confined his arguments in the appeal to additional Issue No.1A, viz., to the non-admissibility of the pro-notes and the findings on the other issues rendered by the learned trial court were not assailed by him. As such, it is deemed unnecessary to go into the factual aspects of the pleas raised in defence and the findings rendered by the learned trial court thereon. In any case, I have gone through the findings rendered on issue Nos.1 to 5, which pertain to the maintainability of the suit and also on the remaining issues and I do not find any perversity or illegality in the said findings.
13. According to the appellants, thus, the core questions arising in the appeal are:-
(A) Whether the pro-notes, relied upon by the learned trial court to decree the suit, have been rightly admitted in evidence by the learned trial court?
(B) Whether the respondent-plaintiff could claim a decree independent of the said promissory notes?
14. The contention of Mr. Sanjay Jain, the learned senior counsel for the appellants is that the entire edifice of the suit filed by the respondent- plaintiff under Order XXXVII of the Code was based on the pro-notes, which, according to the respondent-plaintiff, had become due and payable. It is submitted that a mere reading of the plaint itself clearly demonstrates that the suit was based only on the promissory notes and no part of the claim was structured on any other document or cause of RFA No.476-78/2005 Page 7 of 20 action. The appellants-defendants had filed their leave to defend application, wherein one of the preliminary objections was that the pro- notes were insufficiently stamped and, thus, not admissible in evidence. The learned trial court by its order dated 27.11.2002 favourably considered the said submission and on the basis thereof granted unconditional leave to defend to the appellants-defendants. The appellants-defendants thereafter filed their written statement wherein they took the same objection being preliminary objection No.1, which reads as follows:-
"All the promissory notes are not admissible in evidence. Each Promissory note is payable „otherwise than on demand‟. This being so, the alleged Promissory Notes are not duly stamped as required vide Entry 49 read with Entry 13 of Schedule Stamp Act and in view of Section 35 of the Stamp Act the said promissory notes are not admissible in evidence."
15. Mr. Jain further contended that on the basis of the aforesaid preliminary objection, an additional issue was also framed by the learned trial court, being Additional Issue No.1A:-
"Whether the promissory notes are not properly stamped as alleged in preliminary objection No.1 of the written statement? OPD"
16. The argument of Mr. Jain is that simply because leave to defend the suit was granted in the instant case, the basic character of the suit did not change and the claim of the respondent-plaintiff remained structured on the promissory notes. Therefore, if the promissory notes are inadmissible in evidence, the suit cannot be decreed. Alternatively, it is argued that there being no independent document to support the theory RFA No.476-78/2005 Page 8 of 20 of loan apart from the promissory notes, there was nothing to justify the passing of the decree against the appellants herein.
17. It is further submitted by the learned senior counsel for the appellants that the learned trial court had no occasion to apply its mind to the admissibility or otherwise of the promissory notes and to pass any adjudicatory order thereon. The mechanical exercise performed by the learned trial court of marking the documents could not be construed to mean that the promissory notes had been admitted in evidence, more so, as no admission/denial of the documents anterior to the marking of the documents had taken place, and the exhibit-marking was done by the respondent-plaintiff in the affidavit of evidence filed by him. No subsequent order was invited from or returned by the Court to establish the admissibility of the documents. Moreover, the plaintiff, in his entire evidence, nowhere propounded the theory of an oral transaction of loan or laid any basis of claim independent of the promissory notes. Thus, the findings of the trial court on the theory of an oral transaction of loan are misconceived, unfounded and untenable, besides being beyond the pleadings and evidence on record.
18. Mr. Jain also contended that the conferment of benefit of Section 36 of the Stamp Act on the respondent-plaintiff by the learned trial court was also without any basis whatsoever, for, to confer the benefit of Section 36 of the Stamp Act, the instruments in question (the pro-notes in the instant case) had to be first admitted in evidence. Once the said basic premise remained unfulfilled, as in the instant case, the suit was RFA No.476-78/2005 Page 9 of 20 bound to fail in its entirety. Thus, if the promissory notes themselves were found to be inadmissible in evidence, the suit could not be decreed on the alternative premise of loan, more so as there was independent document to support the oral theory of loan, apart from the promissory notes.
19. Reliance in support of the aforesaid contention was placed by Mr. Jain on paragraph 15 of the decision of this Court in Sudir Engineering Company vs. Nitco Roadways Ltd., 1995 (34) DRJ 86, which reads as follows:-
"(15) The marking of a document as an exhibit, be it in any manner whatsoever either by use of alphabets or by use of numbers, is only for the purpose of identification. While reading the record the parties and the Court should be able to know which was the document before the witness when it was deposing. Absence of putting an endorsement for the purpose of identification no sooner a document is placed before a witness would cause serious confusion as one would be left simply guessing or wondering which was the document to which the witness was referring to while deposing.
Endorsement of an exhibit number on a document has no relation with its proof. Neither the marking of an exhibit number can be postponed till the document has been held proved; nor the document can be held to have been proved merely because it has been marked as an exhibit."
20. Mr. Jain next submitted that a distinction was drawn by the Supreme Court in Javer Chand vs. Pukhraj Surana, 1961 SC 1655 between cases where a document has been inadvertently admitted, without the Court applying its mind to the question of its admissibility, and cases where the marking upon the exhibited documents was done RFA No.476-78/2005 Page 10 of 20 after judicial determination by the Court. The following extract of the said decision was specifically referred to:-
"The Court has to judicially determine the matter as soon as the document is tendered in evidence and before it is marked as an exhibit in the case. The record in this case discloses the fact that the hundis were marked as Exs. P. 1 and P. 2 and bore the endorsement 'admitted in evidence' under the signature of the Court. It is not, therefore, one of those cases where a document has been inadvertently admitted, without the Court applying its mind to the question of its admissibility."
21. Mr. Jain submitted that in the case of Ram Rattan vs. Bajrang Lal (1978) 3 SCC 236, the Supreme Court emphasized that the Court has to judicially apply its mind when an objection is taken regarding admissibility of a document and it is only after admission of a document in evidence after such judicial determination that Section 36 of the Stamp Act would come into play. The relevant extract of the judgment relied upon by the learned counsel for the appellants is as follows:-
"When the document was tendered in evidence by the plaintiff while in witness box, objection having been raised by the defendants that the document was inadmissible in evidence as it was not duly stamped and for want of registration, it was obligatory upon the learned trial judge to apply his mind to the objection raised and decide the objection in accordance with law. Tendency sometimes is to postpone the decision to avoid interruption in the process of recording evidence and, therefore, a very convenient device is resorted to, of marking the document in evidence subject to objection. This, however, would not mean that the objection as to admissibility on the ground that the instrument is not duly stamped is judicially decided; it is merely postponed. In such a situation at a later stage before the suit is finally disposed of it would none-the-less be obligatory upon the court to decide the objection. If after applying mind to RFA No.476-78/2005 Page 11 of 20 the rival contentions the trial court admits a document in evidence, Section 36 of the Stamp Act would come into play and such admission cannot be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped. The Court, and of necessity it would be trial Court before which the objection is taken about admissibility of document on the ground that it is not duly stamped, has to judicially determine the matter as soon as the document is tendered in evidence and before it is marked as an exhibit in the case and where a document has been inadvertently admitted without the Court applying its mind as to the question of admissibility, the instrument could not be said to have been admitted in evidence with a view to attracting Section 36(see Javar Chand v.Pukhraj Surana), AIR 1961 S.C. 1665. The endorsement made by the learned trial judge that "objected, allowed subject to objection", clearly indicates that when the objection was raised it was not judicially determined and the document was merely tentatively marked and in such a situation Section 36 would not be attracted."
22. Finally, the learned counsel for the appellants relied upon a Division Bench judgment rendered by this Court in Love Kumar Sethi vs. M/s. Deluxe Stores & Ors., 145 (2007) DLT 275, which, according to him, being on identical facts was squarely applicable to the instant case.
23. To counter the arguments of Mr. Sanjay Jain, Mr. Ravi Sikri, the learned counsel for the respondent contended that the plaintiff- respondent had filed his affidavit by way of evidence on 04.08.2003 and the documents, i.e., the promissory notes, etc. were exhibited on the same day without any objection from the side of the defendants- appellants. However, an application raising an objection that the promissory notes were not duly stamped and thus could not be taken as RFA No.476-78/2005 Page 12 of 20 evidence was subsequently filed on 05.09.2003 by the appellants herein. On the same day, i.e., on 05.09.2003, the additional issue, being Issue No.1A was framed.
24. Thus, Mr. Sikri urged that in the present case, as noted by the learned trial court, all the promissory notes and receipts had been exhibited without any objection of the defendants about insufficiency of the stamp duty. The instruments in question having been once admitted in evidence, by virtue of the provisions of Section 36 of the Indian Stamp Act such admission shall not, except as provided in Section 61 of the said Act, be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped. In support of this submission, Mr.Sikri relied upon the decision rendered by the Rajasthan High Court in Kedar Singh Chauhan vs. Bhagwan Singh, AIR 2001 Raj. 125, the relevant portion of which is reproduced hereunder:-
"The Court further said that once a document has been marked as an exhibit in the case and trial has proceeded all along on the footing that the document was an exhibit in the case and has been used by the parties in examination and cross examination of their witnesses, Section 36 of the Stamps Act comes into operation and once the documents is taken in evidence it is not open either to the trial Court itself or to a Court of Appeal or revision to go behind that order. Such an order is not one of those judicial orders which are liable to be reviewed or revised by the same Court or a Court of superior jurisdiction."
25. Mr. Sikri on behalf of the plaintiff-respondent also sought to place reliance on the decision of the Supreme Court in Javer Chand vs. RFA No.476-78/2005 Page 13 of 20 Pukhraj Surana, 1961 SC 1655 (relied upon by the appellants as well), wherein, the Supreme Court while dealing with the defendant's plea that the suit of the plaintiff based on certain hundis was liable to be rejected, as the hundis were inadmissible in evidence because they had not been stamped in accordance with law, held as follows:-
"That section is categorical in its terms that when a document has once been admitted in evidence, such admission cannot be called in question at any stage of the suit or the proceeding on the ground that the instrument had not been duly stamped. The only exception recognised by the section is the class of cases contemplated by s. 61, which is not material to the present controversy. Section 36 does not admit of other exceptions. Where a question as to the admissibility of a document is raised on the ground that it has not been stamped, or has not been properly stamped, it has to be decided then and there when the document is tendered in evidence. Once the Court, rightly or wrongly, decides to admit the document in evidence, so far as the parties are concerned, the matter is closed. Section 35 is in the nature of a penal provision and has far-reaching effects. Parties to a litigation, where such a controversy is raised, have to be circumspect and the party challenging the admissibility of the document has to be alert to see that the document is not admitted in evidence by the Court. The Court has to judicially determine the matter as soon as the document is tendered in evidence and before it is marked as an exhibit in the case. The record in this case discloses the fact that the hundis were marked as Exs. P. 1 and P. 2 and bore the endorsement 'admitted in evidence' under the signature of the Court. It is not, therefore, one of those cases where a document has been inadvertently admitted, without the Court applying its mind to the question of its admissibility. Once a document has been marked as an exhibit in the case and the trial has proceeded all along on the footing that the document was an exhibit in the case and has been used by the parties in examination and cross-RFA No.476-78/2005 Page 14 of 20
examination of their witnesses, s. 36 of the Stamp Act comes into operation. Once a document has been admitted in evidence, as aforesaid, it is not open either to the Trial Court itself or to a Court of Appeal or revision to go behind that order. Such an order is not of those judicial orders which are liable to be reviewed or revised by the same Court or a Court of superior jurisdiction."
26. Mr. Ravi Sikri, the learned counsel for the plaintiff-respondent further submitted that once Section 36 of the Indian Stamp Act comes into the picture, the provisions of Section 35 of the said Act are rendered inapplicable, which is evident from a bare reading of Section 36 itself. Section 36 of the Act being apposite, is reproduced hereunder:-
"36. Admission of instrument where not to be questioned.- Where an instrument has been admitted in evidence, such admission shall not, except as provided in section 61, be called in question at any stage of the same suit or proceeding on the ground that the instrument has not duly stamped."
27. Mr.Sikri contended that even if a duty is cast upon the Court and the Court fails to perform the same, Section 36 of the Stamp Act will come into force on its own motion as observed by the Supreme Court in Shyamal Kumar Roy vs. Sushil Kumar Agarwal, (2006) 11 SCC 331:-
"22. What was necessary was that the document should be marked in presence of the parties and they had an opportunity to object to the marking of the document. The question of judicial determination of the matter would arise provided an objection is taken as to what document is tendered in evidence and before it is marked as an exhibit in the case. Before the learned Trial Judge, reliance was placed on a decision of a learned Single Judge of the Andhra Pradesh High Court in Vemi Reddy Kota Reddy v. Vemi Reddy Prabhakar Reddy. In that case there was nothing on record to show that the document was marked RFA No.476-78/2005 Page 15 of 20 as an exhibit after an objection has been raised. The said case, therefore, has also no application to the facts of the present case.
23. It may be true that the object of Indian Stamp Act is to collect revenue and the amendments carried out by the State of West Bengal provides for more stringent steps in that behalf. It may also be true that by reason of Sub- Section (4) of Section 33 of the West Bengal Act, a duty has been cast upon the court to apply its mind when an instrument having insufficient stamp duty is brought to its notice, but, only thereby Section 36 of the Indian Stamp Act cannot be made inapplicable. Section 36, as indicated hereinbefore, applies on its own force."
28. Reliance was also placed by Mr. Sikri on a decision of the Patna High Court in Rajendra Prasad vs. Most. Siba Devi and Ors., AIR 1982 Pat 65 and upon the decision of this Court in Delhi Box Co. vs. Munshi Lal Abhinandan Kumar, 28 (1985) DLT 272 to contend that if a promissory note has once been admitted in evidence though in disregard of the provisions of Section 35 of the Indian Stamp Act, its admissibility cannot be questioned at a subsequent stage, and it will be available as evidence in the proceeding for all purposes, as if it had been properly stamped at the outset.
29. After considering the rival submissions of the parties and the precedents cited at the bar, I am of the considered opinion that Section 36 of the Indian Stamp Act is couched in mandatory terms and admits of no exceptions, except as provided in Section 61. Thus, the challenge to the admissibility of an insufficiently stamped instrument stands foreclosed as soon as the said instrument is admitted in evidence. The RFA No.476-78/2005 Page 16 of 20 reason is not far to seek. Section 35 of the Indian Stamp Act, as held by the Supreme Court in Hindustan Steel Ltd. Vs. Messrs Dilip Construction Company, AIR 1969 SC 1238, is a fiscal measure enacted to secure revenue for the State on certain classes of instruments. Its stringent provisions are conceived in the interest of the revenue. It is not enacted with a view to enable a litigant to defeat the legitimate claim of the other party based on an insufficiently stamped instrument, by raising a technical objection as to its admissibility once the document has been admitted in evidence, whether rightly or wrongly.
30. In other words, Section 36 of the Indian Stamp Act has been enacted to ensure that there is no miscarriage of justice on fiscal grounds alone and towards this objective mandates that in case that an instrument is once admitted in evidence, the same shall not be susceptible to challenge on the ground that it has not been duly stamped. The words "at any stage", which occur in the said Section, are a pointer to the legislative intent. Looked at it from another angle, once an instrument has been admitted in evidence even if it has been so admitted mistakenly, and the parties proceed to trial on the said basis, examining and cross-examining the witnesses on the premise that the instrument is an integral part of the record, for a Court of law to order the de- exhibiting of such a document at a subsequent stage, by ordering that it shall not be reckoned as admissible, may result in grave injustice to the party at whose behest the document has been admitted in evidence. The provisions of Section 36 in a sense, therefore, in my view, are intended RFA No.476-78/2005 Page 17 of 20 to operate as a manner of estoppel by enacting that the admissibility of a document shall not be reconsidered/considered once the document has crossed the barrier of being admitted in evidence, whether by intent or by mistake, whether rightly or wrongly. As already stated, to hold otherwise would be to afford a limited play to the provisions of Section 36, which, in fact, are by legislative design intended to foreclose challenge to the admission of a document at a subsequent stage of the same suit or proceeding on the ground of it falling short of the fiscal requirements.
31. Further, as held by the Supreme Court in the case of Shyamal Kumar Roy (supra), an objection to the admissibility of a document must be raised at the appropriate stage by the party objecting to its admission in evidence. In case of failure to do so, admissibility of a document cannot be questioned by such a party at a subsequent stage. Once the document is marked as an exhibit, the party loses its right to reopen the question of its admissibility . A conjoint reading of Section 35 and Section 36 of the Act thus lead to the conclusion that a party who does not object to the admissibility of a document at an appropriate stage does so at his peril. Indeed, the Supreme Court in the Shyamal Kumar Roy case (supra) has gone a step further by stating that though a duty has been cast upon the Court to apply its mind when an instrument having insufficient stamp duty is brought to its notice, only thereby Section 36 of the Indian Stamp Act cannot be made inapplicable. Section 36 applies on its own force, i.e., it comes into operation RFA No.476-78/2005 Page 18 of 20 automatically once a document is admitted in evidence. Thus, where the opposing party whether on account of the failure or neglect of the Court or on account of its own lack of vigilance loses its right to object to the admissibility of the document at the appropriate stage, it cannot at a subsequent stage of the same suit or proceedings challenge the admissibility of the very same document or instrument.
32. Adverting to the second limb of the submission of the learned counsel for the appellants that if the promissory notes themselves were found to be inadmissible in evidence, the suit could not be decreed on the premise of loan advanced by the plaintiff-respondent to the appellants-defendants, in view of my findings recorded hereinabove, it is unnecessary for me to venture into this arena. However, I cannot help but notice that the learned trial court has rightly held that a suit on the basis of the original loan transaction will be maintainable, the promissory notes being a mere collateral security. A similar view was taken by this Court in Radha Mohan and Anr. vs. Radha Fancy Stores and Ors., 23 (1983) DLT 269, wherein it has been held that where an insufficiently stamped promissory note cannot be the basis of a suit, the plaintiff can fall back on the original contract.
33. As far as the judgment of this Court in the case of Love Kumar Sethi (supra) is concerned, the same is clearly distinguishable. In the said case a Division Bench of this Court had affirmed the view taken by the learned District Judge that the promisory notes in the said case were insufficiently stamped and therefore inadmissible in evidence. There RFA No.476-78/2005 Page 19 of 20 can be no dispute so far as this proposition of law is concerned, nor, in fact this legal position has been challenged in the present appeal.
34. In view of the aforesaid, the inevitable conclusion is that there is no merit in the present appeal. The appeal is accordingly dismissed. There shall, however, be no order as to costs.
REVA KHETRAPAL (JUDGE) May 21, 2010 km RFA No.476-78/2005 Page 20 of 20