A. Karuppanna Pillai vs Nallathambi and 4 others

The Civil Revision Petition has been filed by the defendant against the order of the learned District Munsif, Turaiyur, rejecting the memo filed by

him taking exception to the lower court receiving the powers of Attorney in evidence.

The suit itself has been filed by the respondents against the petitioner for declaration of title, recovery of possession for accounts from 1981 and

for the future mesne profits. Respondents 1 to 3 who are plaintiffs 1 to 3 in the suit and permanent residents of Sri Lanka, purported to appoint the

fourth respondent as their Power of Attorney Holder in India. Along with the suit I.A. No.612 of 1988 was filed to permit the fourth respondent to

file the suit as power of Attorney Holder. This application was ordered on 19.8.1988. After the trial got over, the respondents filed an application

in I.A. No.247 of 1997 to receive the original power of Attorney executed by the second respondent in favour of the fourth respondent contending

that the original power was filed in O.S. No.663 of 1983 before the District Munsif''s Court, Turaiyur, filed by the revision petitioner, that after the

disposal of the said suit, they had obtained return of the original on 27.3.97 and were presenting the same immediately thereafter before the lower

court, that the petitioner was making much comment about the non-production of the original power and therefore the application came to be filed.

The petitioner resisted the application contending inter alia that it was revealed in evidence that the existence of the power and its current validity

was in doubt, that the power of attorney document had not been validated according to the Indian Stamp Act, that the provisions of section 18 of

the Stamp Act had not been complied with, that the powers of attorney had not been duly stamped as per the requirement of Stamp Act as

applicable to Delhi, that there was no indication that they had been validated at all within three months from the date of their receipt in India, that

the documents were not acceptable in evidence and could not be acted upon and therefore the application had to be rejected.

The lower Court rejected the contention of the revision petitioner and allowed the application. The revision petitioner filed C.R.P.No.1977 of

1997 before this Court. This Court by order dated 17-3-1998 directed the trial Court to reopen the case and mark the powers of attorney and in

the process to give an opportunity to the revision petitioner to object to the marking on any of the grounds available in law. Thereafter, the revision

petitioner filed his memorandum of objections to which there was a reply filed by the respondents and the lower Court, as already noticed,

rejected the memorandum of objections and admitted the documents in evidence.

Mr. T.M.Hariharan, learned counsel for the revision petitioner, submitted that u/s 18 of the Indian Stamp Act, every instrument chargeable with

duty executed only out of India has to be stamped within three months after it has been first received in India and in the instant case, at least with

regard to the power attributed to the second respondent Mahalingam it was executed in Sri Lanka on 19.7.1986, but validated on 9.4.1987 more

than three months after it was executed. It is to be incidentally noticed that with regard to the other two powers executed by the first and the third

respondents in favour of the fourth respondent, the learned counsel is not disputing their validity in as much as they had been endorsed within the

period stipulated in section 18 of the Stamp Act. The learned counsel''s serious objection is only with regard to the validation of the power of

attorney attributed to the second respondent.

As regards the deficiency in the stamp duty with regard to this power, the learned counsel conceded that there is no deficiency. The Collector

has made the endorsement on 9-4-1987 and u/s 32 proviso there is a clear embargo for the Collector to endorse any instrument executed or first

executed out of India and brought to him after the expiration of three months after it has been first received in India. The learned counsel placed

very strong reliance on the decision of the Nagpur High Court in Kedarmal Raghunath v. Ratiram And another, AIR 1935 Nag. 54 : 156 IC 213

and contended that the objections raised by the revision petitioner are substantial and have to be upheld as they go to the root of the matter and the

very plaint presented on the basis of an incompetent power of attorney would be non est in the eye of law. According to the learned counsel, the

Collector ought not to have validated the document at all and the Civil Court is entitled to go into the question and hold that the document is

inadmissible in evidence.

Per contra Mr.Kanniah, learned counsel for the respondents submitted that a reading of the relevant sections would show that the document had

been properly validated by the Revenue Authority, viz. the Collector, that in any event, having regard to the decision of this Court in Murugayya

Pillai v. Rajagopal Pillai and others, AIR 1942 Mad. 381 the endorsement by the Collector u/s 32 is final and cannot be questioned by a Civil

Court even if it was erroneous and made out of time. The learned Counsel also relied on two other judgments Sethuraman Chettiar v. Ramanathan

Chettiar, AIR 1946 Mad. 437 and Kuldip Kaur and Others Vs. Prakash Chand Khurana and Others, in support of his submission.

Let us have a look at the relevant provisions. Section 18 of the Stamp Act runs as follows:

''(1) Every instrument chargeable with duty executed only out of India and not being a bill of exchange or promissory note, may be stamped within

three months after it has been first received in India.

(2) Where any such instrument cannot, with reference to the description of stamp prescribed therefore, be duly stamped by a private person, it

may be taken within the said period of three months to the Collector, who shall stamp the same, in such manner as the State Government may by

rule prescribe with a stamp of such value as the person so taking such instrument may require and pay for.

Section 32 runs as follows:

(1) When an instrument brought to the Collector u/s 31 is in his opinion, one of a description chargeable with duty, and -

(a) the Collector determines that it is already fully stamped, or

(b) the duty determined by the Collector u/s 31, or such a sum as, with the duty already paid in respect of the instrument, is equal to the duty so

determined, has been paid,

the Collector shall certify by endorsement on such instrument that the full duty (stating the amount) with which it is chargeable has been paid.

(2) When such instrument upon which an endorsement has been made under this section shall be deemed to be duly stamped or not chargeable

with duty, as the case may be and if chargeable with duty shall be receivable in evidence or otherwise, and may be acted upon and registered as if

it had been originally duly stamped:

Provided that nothing in this section shall authorize the Collector to endorse -

(a) any instrument executed or first executed in India and brought to him after the expiration of one month from the date of its execution or first

execution, as the case may be;

(b) any instrument executed or first executed out of India and brought to him after the expiration of three months after it has been first received in

India; or

(c) any instrument chargeable with a duty not exceeding ten naye paise or any bill of exchange or promissory note, when brought to him, after the

drawing or execution thereof, on paper not duly stamped.

Section 42 runs as follows:

(1) When the duty and penalty (if any) leviable in respect of any instrument have been paid u/s 35, section 40 or section 41, the person admitting

such instrument in evidence or the Collector, as the case may be, shall certify by endorsement thereon that the proper duty or, as the case may be,

the proper duty and penalty (stating the amount of each) have been levied in respect thereof, and the name and residence of the person paying

them.

(2) Every instrument so endorsed shall thereupon be admissible in evidence, and may be registered and acted upon and authenticated as if it had

been duly stamped, and shall be delivered on his application in this behalf to the person from whose possession it came into the hands of the officer

impounding it, or as such person may direct

Provided that -

(a) no instrument which has been admitted in evidence upon payment of duty and a penalty u/s 35, shall be so delivered before the expiration of

one month from the date of such impounding, or if the Collector has certified that its further detention is necessary and has not cancelled such

certificate;

(b) nothing in this section shall affect the CPC (14 of 1882), section 144, clause 3.

Section 19 requires that every instrument chargeable with duty executed only out of India may be stamped within three months after it has been

first received in India. It does not say that it should be produced within three months of its execution. The argument of the learned Counsel for the

revision petitioner presupposes that the instrument wa brought to the Collector after the expiration of three months after it has been first received in

India and he builds on this and relies on provision (b) of section 32 and submits that the Collector had no authority to endorse and any

endorsement made by the Collector contrary to this is void and relies on the decision of the Judicial Commissioner in Kedarmal Raghunath v.

Ratiram and another, AIR 1935 Nag. 54. That was a case where the document was presented ten months after the execution. As to when it was

received in British India there is no material. The Judicial Commissioner had assumed that the execution outside British India and the receipt in

British India were at or about the same time. Before endorsement by the Collector the bond was tendered in evidence. It was in those

circumstances that the Judicial Commissioner held like that. The decision goes further to say that in such cases the Civil Court must impound the

document under proviso (a) to section 32 and sent it to the Collector u/s 38 of the Act. The present case is clearly distinguishable on facts. In this

case, the Collector had endorsed. It must be assumed that the Collector had satisfied himself as to the date of receipt of the instrument and then

made the endorsement. All official acts must be deemed to have been properly performed unless there is anything contra produced.

In Sethuraman Chettiar v. Ramanathan Chettiar and others, AIR 1946 Mad. 437 it has been held by a Bench of this Court as follows:

It cannot be said that Sections 31 and 32 contained in Chapter III form one integrated procedure for adjudication as to stamps and that the limit

referred to in proviso (a) to Section 32 governs applications made u/s 31. Section 31 provides no time limit for an application to the Collector for

adjudication as to the proper stamp duty payable in respect of an instrument. There is nothing in the section to prevent a person from resorting to

the Collector for an adjudication as to the proper stamp even after the expiry of one month from the date of its execution. If the instrument is

brought to the Collector within one month of its execution, the applicant would be entitled to have the Collector''s certificate endorsed on the

instrument on payment of the deficit duty, if any, but without having to pay any penalty. But if he seeks the Collector''s adjudication beyond the limit

specified in Section 32, the Collector has, u/s 33, to impound the instrument and proceed u/s 40 to decide whether the instrument is duly stamped

and to require the payment of the additional duty chargeable in respect of the instrument together with the prescribed penalty in case he is of

opinion that it is not duly stamped. On payment of such duty and penalty, a certificate that the proper duty and penalty have been paid has to be

endorsed u/s 42 on the instrument which becomes thereupon admissible in evidence and may be acted upon as if it had been duly stamped.

As already noticed it is not disputed now that the instrument is properly valued. It has been held in Murugayya Pillai v. Rqjagopal Pillai and

others, AIR 1942 Mad. 381 that ""an endorsement by a Collector u/s 32 is final and cannot be questioned by a Civil Court even if it was erroneous

or was made out of time.

In Kuldip Kaur and Others Vs. Prakash Chand Khurana and Others, it has been held that,

the general power of attorney though not properly stamped was liable to be impounded and admitted in evidence on payment of stamp duty and

penalty in view of section 35 of the Stamp Act.

In the view I am taking it is not necessary to refer to the other authorities cited by the learned Counsel.

For all the reasons stated above, I do not find any error of jurisdiction warranting interference u/s 115 of the CPC and the civil revision petition

is dismissed. However, there will be no order as to costs. Consequently, the stay petition in C.M.P.No.10774 of 1999 is also dismissed.