Insufficiently Stamped Document Not Admissible Merely Because It Was Exhibited Unless Deficiency Is Cured : Supreme Court

Update: 2024-09-20 15:17 GMT
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Recently, the Supreme Court justified the dismissal of the specific performance suit because it was filed based on the insufficiently stamped agreement to sell. The Court said that a relief cannot be sought based on a document that has not satisfied the legal requirements for admissibility i.e., an insufficiently stamped instrument being inadmissible in evidence could not bring relief to...

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Recently, the Supreme Court justified the dismissal of the specific performance suit because it was filed based on the insufficiently stamped agreement to sell.

The Court said that a relief cannot be sought based on a document that has not satisfied the legal requirements for admissibility i.e., an insufficiently stamped instrument being inadmissible in evidence could not bring relief to the litigant.

“We find no reason to disagree with the findings of the Trial Court regarding the inadmissibility of the agreement to sell dated 29.03.1999. The document, being insufficiently stamped, was rightfully barred from being admitted as evidence in the absence of the requisite stamp duty and penalty being paid and certified by the Collector. The High Court, in treating this document as admissible without resolving the stamp duty deficiency, overlooked the statutory mandate under the Stamp Act. As the document is foundational to the suit, the failure to comply with the statutory requirements renders the entire claim unenforceable.”, the bench comprising Justices Vikram Nath and Prasanna B. Varale said.

The Court said that the plaintiff cannot seek the benefit of Section 36 of the Stamp Act, 1899 unless the objection or defect recorded by the court while exhibiting the instrument was not cured or removed.

It is worthwhile to mention that Section 36 of the Stamp Act permits the court to take the insufficiently stamped document in evidence with a condition that the objection recorded by the court under Section 61 of the Stamp Act while exhibiting the document is removed.

In the present case, the dispute pertains to the admissibility of the 'agreement to sell' because the specific performance suit to enforce a contract was based on the insufficiently stamped agreement to sell. The trial court dismissed the suit because it was based on an insufficiently stamped agreement to sell. Before the dismissal of the suit, the trial court had marked the agreement to sell as an 'exhibit' subject to the condition that the document would be admissible in evidence subject to payment of the deficient stamp duty on the instrument i.e., removal of the objection. However, the objection was not removed or cured as the plaintiff failed to pay the sufficient stamp duty on the document.

The High Court took a contrary view and reversed the trial court's decision without thoroughly examining the applicable legal provisions. The High Court cursorily concluded that the document would be admissible simply because the plaintiff had expressed willingness to pay the deficient stamp duty and any penalty imposed by the competent authority or the Collector.

Upholding the trial court's decision, the court said that even though an instrument was marked as an 'exhibit' if there's an objection regarding the admissibility of the instrument than the instrument would not be admissible unless the objection or defect is cured or removed by the plaintiff.

Having regard to the fact that the plaintiff made no effort before the Collector to get the deficiency and penalty determined on the impounded document and to clear the same, the court observed that the "High Court failed to recognize that an insufficiently stamped document can only be admitted into evidence after the deficiency in stamp duty and any applicable penalty has been duly paid and cleared. This lapse of procedure was not properly addressed in the High Court's judgment.”

The Court added that the plaintiff cannot take a shield of Section 36 of the Stamp Act once the court records objection and such objection was not removed by the plaintiff.

“The argument advanced on behalf of the plaintiff-respondent no.1 is that he would be entitled to get benefit of section 36 of the Stamp Act as the document had been exhibited and admitted in evidence, holds no ground in as much as the document was found to be insufficiently stamped and was marked as exhibit with objection and that objection having not been removed or cured, no benefit of section 36 of the Stamp Act could be extended to the plaintiff-respondent no.1.”, the court said.

In this regard, a reference was made to the case of Ram Rattan (dead) by L.Rs. vs. Bajrang Lal and others (1978) where too an instrument had been exhibited with objection but the objection had not been removed or cured. This Court held that such an instrument would not be admissible in evidence and section 36 of the Stamp Act would not be attracted.

Appearance:

For Appellant(s) Mr. Subrata Dutt, Adv. Ms. Shipra Ghose, AOR

For Respondent(s) Mr. Shubhayu Roy, Adv. Mr. Rohit Dutta, Adv. Ms. Shalini Kaul, AOR Ms. Priyata Chakraborty, Adv.

Case Title: BIDYUT SARKAR & ANR. VERSUS KANCHILAL PAL (DEAD) THROUGH LRs. & ANR., CIVIL APPEAL NOS. 10509-10510 OF 2013

Citation : 2024 LiveLaw (SC) 723

Click here to read/download the judgment

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