In the second part of the article series we have seen the kind of objections that fall into procedural domain and how the court has to deal with them. Moving further in the same line another kind of objection that is frequently encountered in courts with regard to Stamping of Documents is:
Whether Documents that are Unstamped or Insufficiently Stamped can be Impounded by Court
By the time it is clear to all of us that the Indian Evidence Act does not purport to deal with the admissibility of documents in evidence which require to be stamped under the provisions of the Indian Stamp Act. The Stamp Act which is an Act of 1899, its Chapter IV deals with instruments not duly stamped. Section 33(1) of this Act provides that:
“Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except and officer of police, before whom any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same.”
So it is clear from the plain reading of this section that any instrument that comes within the definition under Section 2(14) of the act according to which ‘Instrument’ includes every document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded needs to be stamped if it is chargeable with duty. Now question arises why such instruments requires stamping? Can’t they be admitted in evidence without getting stamped. The answer lies in Section 35 of the Stamp Act according to which:
“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.”
Provided that any such instrument not being an instrument chargeable with a duty not exceeding ten paise only, or a bill of exchange or promissory note, shall, subject to all just exceptions, 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.
So it becomes crystal clear that such documents will not be admitted in evidence until they are stamped or the remaining duty is paid upon them. At this stage it is noteworthy to look at Section 36 of the act, according to which:
“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 been duly stamped.”
Ways open to the court when a Document that is insufficiently stamped or unstamped is produced before it
Supreme Court in its landmark decision of Chilakuri Gangulappa v Revenue Divisional Officer, Madanpalle & Anr[i], held 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 Stamps, together with the amount collected from the party for taking adjudicatory steps. But if the party refuses to pay the amount aforesaid, the Civil Court has no other option except to impound the document and forward the same to the Collector Stamps. 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 it 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.
Similarly Hon’ble Rajasthan High Court in Bhawana & Ors v Chandmal[ii], while interpreting the provisions of Rajasthan Stamp Act whose provisions are pari materia with the provisions of Indian Stamp Act held that a conjoint reading of provisions of Sections 39, 41 and 42 of the Act makes is abundantly clear that if the respondents/plaintiffs are ready and willing to remit the amount of deficient stamp duty and penalty as provided by proviso (a) to Section 39 of the Act, after payment of such duty and penalty, the document cannot be refused as to be admitted in evidence on account of insufficiency of the stamp duty and only an authenticated copy thereof along with a certificate in writing stating the amount of duty and penalty levied and such amount recovered is required to be sent to the Collector (Stamp). However, if the respondent/plaintiffs are not ready to remit the amount of deficient stamp duty and penalty as provided by proviso to Section 39 of the Act then the court has to impound the document not duly stamped and make reference to the Collector for determination of the stamp duty and penalty payable notwithstanding the fact that the respondents / plaintiffs have not expressed their readiness and willingness to pay the deficient stamp duty and penalty. In any case, a document insufficiently stamped is not admissible in evidence even for collateral purposes.
Whether the Court should determine the deficient fee on its own or the document has to be impounded and sent to collector for determining and payment of stamp duty
In Sanjeev Bharadwaj v Yogeshwar Swaroop Bhatnagar[iii], while dealing with marking of exhibit on an unregistered and unstamped document, Hon’ble Rajasthan High Court held that an unregistered document can be taken into consideration for collateral purpose but an unstamped document cannot be admissible in evidence at all in view of the words “for any purpose whatsoever” in Section 35 of the Act. Once a document has been marked as an exhibit in the case and the trial has proceeded all along this footing, Section 36 comes into operation and it is not open either to the trial Court itself or to the Appellate or Revisional Court 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. But the point whether it is duty of the Court on production of unstamped document to determine the stamp fee alongwith penalty as per Section 35(1) of the Act or it has to impound the same under Section 33 and to send the same to the Collector for determination of stamp duty and penalty in order to make the document admissible, it was directed to the Registry to lay the matter before larger bench after seeking order of Hon’ble the Chief Justice.
Whether Court in order to admit and exhibit the Secondary Evidence (Photo Copy) of a Document whose original was either unstamped or insufficiently stamped can impound the same
The plain reading of Section 35 clearly shuts out from evidence any instrument chargeable with duty unless it is duly stamped. The second part of it which relates to acting upon the instrument will obviously shut out any secondary evidence of such instrument, for allowing such evidence to be let in when the original admittedly chargeable with duty was not stamped or insufficiently stamped would be tantamount to the document being acted upon by the person having by law or authority to receive evidence. Proviso (a) is only applicable when the original instrument is actually before the court of law and the deficiency in stamp with penalty is paid by the party seeking to rely upon the document. Clearly secondary evidence either by way of oral evidence of the contents of the unstamped document or the copy of it covered by Section 63[iv] of the Indian Evidence Act would not fulfil the requirements of the proviso which enjoins upon the authority to receive nothing in evidence except the instrument itself. Section 35 is not concerned with any copy of an instrument and a party can only be allowed to rely on a document which is an instrument for the purpose of Section 35.
In Jupudi Kesava Rao v Pulavarthi Venkata Subbarao[v], , it was held that if Section 35 only deals with original instruments and not copies then Section 36 cannot be so interpreted as to allow secondary evidence of an instrument to have its benefit. The words “an instrument” in Section 36 must have the same meaning as that in Section 35. The legislature only relented from the strict provisions of Section 35 in cases where the original instrument was admitted in evidence without objection at the initial stage of a suit or proceeding. In other words, although the objection is based on the insufficiency of the stamp affixed to the document, a party who has a right to object to the reception of it must do so when the document is first tendered. Once the time for raising objection to the admission of the documentary evidence is passed, no objection based on the same ground can be raised at a later stage. But this in no way extends the applicability of Section 36 to secondary evidence adduced or sought to be adduced in proof of the contents of a document which is unstamped or insufficiently stamped.
One of the earliest decisions is the judgment of the Judicial Committee of the Privy Council in Raja of Bobbili v Imuganti China Sitaramaswami Garu[vi]. The question was whether the draft or a copy, of the instrument tendered as secondary evidence of its contents when the original instrument was shown to have been insufficiently stamped, could be, subjected to the penalty prescribed by Section 34 of the Indian Stamp Act, 1879 as a preliminary to its being admissible in evidence. High Court of Madras held that the copy should not be admitted on payment of a penalty, for the provision of the Stamp Act regarding penalty (section 39 of Act) prescribes that such payment shall be endorsed on the document and presupposes that the document is forthcoming. When the matter went to the Judicial Committee it held, these clauses throughout deal with, and exclusively refer to, the admission as evidence of original documents which, at the time of their execution, were not stamped at all, or were insufficiently stamped. It is only upon production of the original document, that the Collector has the power or the duty imposed upon him, of assessing and charging the penalty, a duty which he must, in that case, perform by writing an endorsement upon the document submitted to him, which then, and not till then, becomes probative in law.
In The State of Bihar v Karam Chand Thapar & Bros Ltd[vii], more than sixty years after the above decision the apex Court observed that the law laid down there was well-settled and that a copy of an instrument could not be validated. In this case the contention put forward was whether an instrument i.e. an award received in court which had been prepared in triplicate, the other two having been sent to the parties, was an original instrument which could be used by the payment of stamp duty under Section 35 of the Stamp Act and validated. The Court held that although the document sent to the court was marked as a certified copy, it was in reality an original instrument for the purpose of the Stamp Act. The above judgment shows that if the document tendered in court was not an original instrument but a copy, the decision would have been otherwise.
The decisions of different High Courts make it quite clear that the cause of the non-production of the original instrument is immaterial i.e. whether it was lost or whether it was destroyed or even if it was the allegation of the party seeking to prove its contents by alleging that the document was suppressed by his opponent.
In Chidambaram v Meyyappan[viii] the plaintiffs produced an unstamped document as the basis of their claim. Before the trial commenced a mob invaded the court and set fire to it with the result that records of many cases including the record of the above case were destroyed. When the trial commenced the plaintiff sought to put in a copy of the document and it was objected to on the ground that the copy could not be stamped even on payment of penalty. The Subordinate Judge without admitting the document but leaving the question, of its admissibility open until he had heard the arguments of counsel, marked it as an exhibit. In rejecting the plaintiffs appeal the learned Judges of the Madras High Court referred to the decision of the Privy Council in Raja of Bobbili’s case and observed that the destruction by the mob’s action put the plaintiffs-in no better position. As Section 35 imposed a bar on the reception of any but the original instrument and forbade the reception of secondary evidence. Section 36 only lifted that bar in the case of an original unstamped or insufficiently stamped document to which no exception as to admissibility was taken at the first stage. It did not create any exemption in the case of secondary evidence which a copy would undoubtedly be.
In Kamlesh Chanwala v Khema @ Khemchand & Ors[ix], Hon’ble the Rajasthan High Court while dealing with Rajasthan Stamp Act opined that:
“Otherwise also law is well settled on the issue that proviso cannot be allowed to eat the main section. On consideration of the entire Section 39 of the Act of 1998, it is clear that the legislature never intended to allow admissibility of unstamped copy of the document.”
Further in Smt. Amari v Sukhraj Gaur[x], where document in question was insufficiently stamped therefore the trial court held that it cannot be impounded for payment of the requisite stamp duty. Document in question bears only one rupee stamp and it is an agreement to sale so the order of rejecting application for leading secondary evidence is set aside and the petitioner can lead the secondary evidence after complying the conditions of Sec 37 and 39 of the Stamp Act according to which first the original needs to be properly stamped.
[i] [(2001) 4 SCC 197]
[ii] 2015 AIR CC 1237 (Raj)
[iii] 2016 (3) WLC (Raj) 94
[iv] https://devgan.in/iea/section/63/
[v] 1971 AIR 1070
[vi] (1919) 37 MLJ 274
[vii] [1962] 1 S.C.R. 827
[viii] (1946) 1 MLJ 64
[ix] 2011 (3) DNJ (Raj) 1048
[x] 2016 (2) DNJ (Raj) 815