Rekha S. Chandru and Others vs Chikka Venkatappa and Others

N. Kumar, J.—The plaintiffs have preferred this writ petition challenging the order passed on I.A. No. V, allowing the application filed by the defendants under Section 33 of the Karnataka Stamp Act, 1957.

The plaintiffs have filed a suit for specific performance of agreement of sale. The defendants have filed written statement and are contesting the claim. Issues are framed. The plaintiffs in support of their claim have filed their affidavit by way of examination in chief. Thereafter, they have entered the box on 07.12.2005 and have produced the General Power of Attorney which is marked as Ex. P-1. They also produced the agreement of sale as Ex. P-2. They have spoken about the signatures of the defendants on the said agreement which is marked as Ex. P-2a and Ex. P2b. They have also identified the signature of witness and it is marked as Ex. P-2c and Ex. P-2d. At the time of marking of the said document, the defendants did not raise any objection for marking on the ground that the document is insufficiently stamped. However, after the examination in chief was over, before the cross examination, I.A.V is filed under Section 33 of the Karnataka Stamp Act, to impound the agreement of sale dated 26.06.2003 on the ground that the said document is not sufficiently stamped and it attracts Article 5(e)(1) of the Karnataka Stamp Act. It was also contended that under the agreement of sale, as possession is delivered, the document has to be stamped as conveyance.

The plaintiffs filed their objection contending that once the document is marked without objection, the document cannot be impounded as sought for by the defendants. After hearing the parties, the trial Court held that though the agreement of sale Ex. P-2 is marked in evidence, the same cannot be made use of by the plaintiffs for any of the purposes unless the duty and penalty are paid. If they want to rely on Ex. P-2 they have to pay duty and penalty and unless the same are paid, it cannot be made use of by the plaintiffs in order to establish their case. Hence Ex. P-2 is to be impounded as sought for in I.A. No. V. Accordingly the application was allowed. Aggrieved by the said order, the plaintiffs are before this Court.

The learned Counsel for the plaintiffs contends that once the agreement of sale was marked without any objection, the objection regarding stamp duty cannot be raised at a later stage and therefore the impugned order passed by the trial Court is erroneous and requires to be set aside.

Per contra, the learned Counsel for the defendants relying on the judgment of this Court in the case of Shri. K. Dinesh and Others Vs. Shri. Kumaraswamy and Others--> contends that when the document not duly stamped is admitted in evidence without any objection being raised, the Court is not obliged to act upon or enforcing for a purpose thereafter without requirement of payment of duty and penalty. Therefore he contends that the impugned order passed relying on the said judgment is valid and legal and cannot be found fault with.

In the light of aforesaid facts and rival contentions, the point that arises for my consideration is:

"When a document which is not duly stamped, is admitted in evidence without any objection, can it be said that the said document cannot be made use of by the plaintiffs in order to establish their case?" 7. A constitution Bench of the Apex Court in the case of Javer Chand and Others Vs. Pukhraj Surana, , has held as under:

"........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 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 disclosed 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-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 one of those judicial orders which are liable to be reviewed or revised by the same Court or a Court of superior jurisdiction." 8. Section 33 of the Karnataka Stamp Act, 1957 for short, hereinafter referred to as the ''Act'' provides for impounding of instruments. When an instrument chargeable with duty is produced and if it appears to the Court that such instrument is not duly stamped, the Court shall impound the same. Section 34 declares that no instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of 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. Section 35 provides that where an instrument has been admitted in evidence such admission shall not, except as provided in Section 58, be called in question at any stage of the same suit or proceedings on the ground that the instrument has not been duly stamped.

A conjoint reading of the aforesaid provisions makes it clear that a duty is cast on the Court to impound a document which is not duly stamped if the same is produced as evidence before it. However, if such an instrument is admitted in evidence even by mistake, then, the said question namely, whether the instrument is duly stamped or not cannot be gone into by the Court in the proceedings. That is precisely what the Apex Court has said in the aforesaid judgment.

The learned Counsel for the defendants has relied on the judgment of the learned Single Judge. As the law laid down by the learned Single Judge runs counter to the law laid down by the Apex Court, the question of following the judgment of the learned Single Judge would not arise.

Therefore once the document is admitted in evidence, the Court has to take note of the said document and decide the case on merits, looking into the said document. However, the admissibility of insufficiently stamped instrument is totally different from the Court impounding the document. Even a document which is insufficiently stamped admitted by mistake is liable to be impounded by the Court and the procedure prescribed in the Act is to be followed in so far as collection of stamp duty and penalty is concerned. But non-payment of duty and penalty cannot be made a ground to say that the document will not be looked into. Both of them are totally different aspects of the matter and therefore the trial Court committed a serious error in holding that because the document is insufficiently stamped, it will not be looked into for any purpose, is erroneous and the said order requires to be set aside.

However, it is made clear that it is still open to the Court to impound the document and order for collection of stamp duty and penalty in accordance with law. Hence, I pass the following order:

"Writ petition is allowed. The impugned order is set aside. As the document is already marked in evidence, the trial Court shall take note of the document and decide the case on merits."