Objection to Deficiency of Stamp Duty on Document has to be Decided before Proceeding Further [Case Law]
Indian Stamp Act, 1899 - Section 35 - Objection to deficiency of stamp duty on document has to be decided before proceeding further.
GOUTAM BHADURI, J.
(Judgment Delivered on 12.04.2018)
WP(227) No. 27 of 2018
Sudhanshu Shekhar Shukla Vs. Meenakshi
Trivedi
For Petitioner : Shri B.P. Sharma, Advocate For
Respondents No.1 to 4 : Shri A.K. Pradad & Shri Rajesh Kumar Tiwari,
Advocates C.A.V.
O R D E R
1. The present petition is against the order dated 30.11.2017, whereby
the application filed under Section 35 of the Indian Stamp Act, 1899
(hereinafter referred to as 'the Act, 1899') raising objection about the
admissibility of a document tendered during the evidence, was dismissed.
2. Brief facts
of this case which would be necessary for adjudicating the dispute involved in
the present petition are that present respondent No.1 Smt. Meenakshi Trivedi,
Respondent No.2 Manohar Lal Trivedi, Respondent No.3 Vimal Trivedi and Respondent
No.4 Snehal Trivedi had filed a suit being Civil Suit No.133-A/2011 before the
VI Additional District Judge, Raipur against respondents No.5 to 21 and the
petitioner for partition of the house situated within the Municipal limit of
Raipur and claimed partition of 1/5th share each and preliminary decree was sought
by appointment of a Commissioner. The other relief was claimed that after the
partition by the Commissioner final decree be passed and each of the parties be
put to their possession of the suit property.
3. The further
case of the Respondents No.1 to 4 and the plaintiff is that house bearing
No.10/455 admeasuring 2400 sq. feet was owned by Late Shri Parmeshwar Dayal
Shukla and the same was purchased in the name of Smt. Bhagwati Bai by sale deed
dated 19.2.1950. The Family tree as was given in the plaint is reproduced
hereunder:-
Late Paremeshwar Dayal Shukla
R.B. Shukla (son) Shri Ram Sanehi Shukla
(son) (dead) R.K. Shukla (son) (dead) Ramesh Chand Shukla
(son) (dead) R.V.Shukla (son) (dead) Smt. Ganga Tiwari Smt. Kamla Tiwari Late Smt. Mangla Mishra
4. It was further
pleaded that the son and daughter of Late Paremeshwar Dayal Shukla namely Smt.
Ganga Tiwari, Late Smt. Kamla Bai Tiwari and son and
daughters of Late Smt. Mangla Bai Mishra namely Narendra Kumar Mishra, Smt.
Shashi Mishra and Smt. Sudha Sharma being grand son and daughters by a written consent
letter dated 20.06.1996 had relinquished their right in respect of the said
house (bearing No.10/445) i.e., suit property situated at Budhapara, Raipur.
Further it was pleaded that no partition was effected till 2005 by Parmeshwar
Dayal Shukla, as such, the daughters namely Smt. Ganga Tiwari, Smt. Kamla and Smt.
Mangla did not inherit any right over the property and the properties were in
possession of the petitioner/defendants namely Shri Sudhanshu Shekhar Shukla
and Smt. Usha Shukla & Saurabh Shukla. It was further pleaded that legal
heirs of Late Smt. Mangla Mishra had executed a consent letter in favour of
Respondents No.1 to 4 (plaintiffs) that they do not want any share in the property.
It was further pleaded that one of the sharer Ram Sanehi Shukla by will dated
09.03.1997 has bequeathed his 1/5th Share i.e. 487 sq. feet of property in
favour of Manohar Trivedi. Thereby, by way of a consent, other legal heirs have
become the owners.
5. The said
allegations were rebutted in the reply. During the course of evidence when the
consent letter whereby the rights which were relinquished by few of the sharers
in favour of the plaintiff was sought to be exhibited in evidence, an objection
was raised about the admissibility of that document. Further an application under
Section 35 of the Act, 1899 was filed reiterating the pleading of the plaintiff
of relinquishment deed dated 20.06.1996 and it was stated that the said
relinquishment deed was executed only on Rs.10/- Stamp which is an unregistered
document. It was also pleaded that the value of the property for which the relinquishment
deed operates is more than Rs. 100/-, therefore, as per the Article 55 Schedule
1 A of the Act, 1899 of the Stamp Act, the stamp duty would be attracted over
the value of the property.It was further pleaded that since
the document was insufficiently stamped as such it could not be admitted under
Section 35 of the Act, 1899. Further it was also pleaded that the document is
also unregistered one, therefore, is inadmissible by virtue of Section 17 (1)
of the Indian Registration Act, 1908 (hereinafter referred to as 'the Act,
1908).
6. In reply to
this document, respondents No.1 to 4/the plaintiffs stated that the document
dated 20.06.1996 is original one and it was not disputed that the document is
written on a Rs. 10/- stamp and have stated that the said document is not
required to be registered.
7. Learned Court
below by impugned order dated 30.11.2017 recorded that if the consent
letter/relinquishment deed is exhibited no bar operates to mark it as exhibit
and mere marking of the exhibit, the same would not be admissible in the
evidence and whether it is registered or not, the admissibility of the same would
be decided at the time of final hearing of the case. Consequently, the application
filed by the petitioner under Section 35 of the Act, 1899 was rejected.
8. Shri B.P.
Sharma, learned counsel for the petitioner would submit that the document which
is sought to be exhibited decides the right of the parties and few of the
claimants/sharers have relinquished their right, which would amount to transfer
of right of a property of more than Rs.100/- and therefore, if the document is not
properly stamped, it would be inadmissible in evidence. He further submits that
the manner in which the document was proved unless the objection is taken at
first instance, the petitioner would be precluded to raise admissibility of the
document at the later stage, even in the stage of appeal or revision. He would further
submit that the trial Court erroneously held that there is no bar in exhibiting
the document and failed to appreciate that the objection has been taken at the
very inception of evidence of the plaintiff, therefore, it was bona fide and
when such objection has been raised at the first instance, the trial Court was
bound to decide those issues at the threshold. He would further submit that
under Section 35 of the Act, 1899 unless the stamp duty or penalty due is paid,
the Court cannot act upon such instrument. He would also submit that under
the circumstances the application filed by the petitioner should have been
allowed and the order dated 30.11.2017 is required to be set aside.
9. Per contra,
Shri A.K. Prasad, learned counsel for the respondents supported the order and
submits that the order is well merited which do not call for any interference.
Further it is pleaded that marking of a document as an exhibit would not make
it admissible and the same can be decided at the time of final hearing. Accordingly, the petition is
liable to be dismissed.
10. Perused the
documents filed along-with the petition. The Supreme Court in the matter of Shalimar
Chemical Works Limited Vs. Surendra Oil and Dal Mills
(Refineries) and others {2010 (8) SCC 423} has reiterated the law laid down
in the case of R.V.E. Venkatachala Gounder Vs. Arulmigu Viswesaraswami Vs. V.P.
Temple {(2003) 8 SCC 752} that the objections as to admissibility of documents in evidence
may be classified into two classes :- (i) an objection that the document which
is sought to be proved is itself inadmissible in evidence; and (ii) where the
objection does not dispute the admissibility of the document in evidence but is
directed towards the mode of proof alleging the same to be irregular or
insufficient. In the first case, merely because a document has been marked as
'an exhibit', an objection as to its admissibility is not excluded and is
available to be raised even at a later stage or even in appeal or revision. In
the latter case, the objection should be taken when the evidence is tendered
and once the document has been admitted in evidence and marked as an exhibit,
the objection that it should not have been admitted in evidence or that the
mode adopted for proving the document is irregular cannot be allowed to be
raised at any stage subsequent to the marking of the document as an exhibit. The latter proposition is a rule
of fair play. The crucial test is whether an objection, if taken at the
appropriate point of time, would have enabled the party tendering the evidence
to cure the defect and resort to such mode of proof as would be regular. The omission
to object becomes fatal because by his failure the party entitled to object
allows the party tendering the evidence to act on an assumption that the
opposite party is not serious about the mode of proof. On the other hand, a
prompt objection does not prejudice the party tendering the evidence, for two
reasons: firstly, it enables the Court to apply its mind and pronounce its
decision on the question of admissibility then and there; and secondly, in the
event of finding of the Court on the mode of proof sought to be adopted going
against the party tendering the evidence, the opportunity of seeking indulgence
of the Court for permitting a regular mode or method of proof and thereby
removing the objection raised by the opposite party, is available to the party leading
the evidence. Such practice and procedure is fair to both the parties.
11. The issue,
therefore, falls for consideration that whether the document dated 20.06.1996
i.e. the deed of relinquishment is admissible in evidence or not for want of
proper stamp duty and registration.
12. The impugned
order would show that at the initial stage when the document dated 20.06.1996
was tendered for evidence, the same was objected on the ground that it is not
properly stamped and registered. In this case, reading of the document would
redirect to examine the relative provisions of the Indian Registration Act, 1908
and the Indian Stamp Act, 1899.
13. Section 17 of the Registration
Act, 1908 is
reproduced hereunder :- (I) Documents of which registration is compulsory.
— (l) The following documents
shall be registered, if the property to which they relate is situate in a
district in which, and if they have been executed on or after the date on
which, Act No. XVI of 1864, or the Registration Act , 1866, or
the Registration
Act, 1871, or
the Registration
Act, 1877, or
this Act came or comes into force, namely:— (a) Instruments of gift of
immovable property; (b) other non-testamentary instruments which purport or
operate to create, declare, assign, limit or extinguish, whether in present or
in future, any right, title or interest, whether vested or contingent, of the
value of one hundred rupees and upwards, to or in immovable property; (c)
non-testamentary instruments which acknowledge the receipt or payment of any consideration
on account of the creation, declaration, assignment, limitation or extinction
of any such right, title or interest; and (d) leases of immovable property; (e)
non-testamentary instruments transferring or assigning any decree or order of a
Court or any award when such decree or order or award purports or operates to
create, declare, assign, limit or extinguish, whether in present or in future,
any right, title or interest, whether vested or contingent, of the value of one
hundred rupees and upwards, to or in immovable property: (f) any decree or
order or award or a copy thereof passed by a Civil Court on consent of the
defendants or on circumstantial evidence but not on the basis of any instrument
which is admissible in evidence under section 35 of the Indian
Stamp Act, 1899 (2 of 1899), such as registered title deed produced by the
plaintiff, where such decree or order or award purports or operate to create,
declare, assign, limit, extinguish whether in present or in future any right,
title or interest whether vested or contingent of the value of one hundred
rupees and upwards to or in immovable property; and (g) agreement of sale of
immovable property of the value of one hundred rupee and upwards”, Provided
that the State Government may, by order published in the Official Gazette,
exempt from the operation of this sub-section any lease executed in any
district, or part of a district, the terms granted by which do not exceed five
years and the annual rents reserved by which do not exceed fifty rupees.
(II) Section 49 of the
Registration Act,1908 Effect of non-registration of documents required to be registered.—
No document required by section 17 or by any provision of the Transfer of Property Act, 1882 ( 4 of
1882), to be registered shall— (a) affect any immovable property comprised
therein, or (b) confer any power to adopt; or (c) be received as evidence of
any transaction affecting such property or conferring such power, unless it has
been registered: Provided that an unregistered document affecting immovable
property and required by this Act or the Transfer of Property Act, 1882 (4 of
1882), to be registered may be received as evidence of a contract in a suit for
specific performance under Chapter-II of the Specific Relief Act, 1877 (3 of
1877) or as evidence of any collateral transaction not required to be effected
by registered instrument.
14. Thus, Section
17 (1) (b) of the Registration Act mandates that any document which has the
effect of creating and taking away the rights in respect of an immovable
property must be registered and Section 49 of the Act imposes bar on the
admissibility of an unregistered document and deals with the documents which
are required to be registered u/s 17 of the Act. The said proposition is laid
down in Yellapu Uma
Maheshwari and others Vs. Buddha Jagadheeswara Rao and
others (2015) 16 SCC 787.
15. Likewise
Section 35 of the Stamp Act provides that instruments not duly stamped is inadmissible
in evidence and cannot be acted upon. The same is reproduced hereunder:- Section
35 of the Stamp Act "35. Instruments not duly stamped inadmissible in evidence,
etc. -- 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-- (a) any such
instrument shall 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."
16.
The Supreme Court in Yellapu Uma Maheswari Vs. Buddha Jagadheeswara Rao (2015) 16 SCC
787 (supra) has held that it is well settled that the nomenclature given to
the document is not decisive factor but the nature and substance of the transaction
has to be determined with reference to the terms of the documents and that the
admissibility of a document is entirely dependent upon the recitals contained
in that document. In the case in hand, an application u/s 35 of the Indian
Stamp Act 1899 was filed raising objection that Swikri/Sahmati Patra is not properly
stamped and registered. A perusal of the said document shows that two persons
namely Smt. Ganga Bai Tiwari and Kamla Bai Tiwari and sons and daughters of
late Mangla Bai Mishra have relinquished their right in respect of the
immovable property i.e., House No.10/445 situated at Budhapara in favour of the
plaintiffs.. The contents of the document would
show that sharers have withdrawn themselves from the property and abandoned
their rights thereby they have relinquished their rights from the property in
favour of the plaintiffs. The plaintiffs have placed reliance on the same to
claim right over the property i.e., suit property in question.
17. The Supreme
Court held in Sneh Gupta Vs. Devi Sarup which was reported in 2010 (1)
M.P.L.J. ( Para 27) that title to a property must be determined in terms of the
statutory provision and if the right has been derived under the provisions of
the Hindu Succession Act, 1956 the same cannot be taken away or the party
cannot be deprived by a reason of an agreement entered into between the parties
and if a party further relinquishes his right in respect of his or her
property, the same has to be stamped and must be registered in terms of
provisions of Indian Registration Act.
18. Admittedly in
this case the document sought to be exhibited is not registered and the
objection has been raised that the proper stamp duty has not been paid. The
Supreme Court in Bipin Shantilal Panchal Vs. State of Gujarat 2001 AIR SCW 841 (Three
Judges Bench) laid down that whenever an objection is raised during the evidence
regarding the admissibility of the document, the Court can make note of such
objection and mark the objected document tentatively as an exhibit in the case
but at the same time it was laid down that if the objection relates to the deficiency
of stamp duty of a document, the Court has to decide the objection before
proceeding further. Therefore, in the instant case, admittedly the objection
about the admissibility of document has been raised with respect to the payment
of stamp duty under Section 35 of the Indian Stamp Act. Hence, the preposition
of AIR 2001 SCW
841 – Bipin Shantilal Panchal (Supra) is read together with the law laid
down in Yellapu Uma
Maheswari Vs. Buddha Jagadheeswararao (2015) 16
SCC 787 (Supra) to the effect that the document would be inadmissible in evidence
for want of proper stamp duty and registration. The Court has held that in such
circumstances the instrument is not admissible in evidence even for collateral
purpose until the same is impounded. The Court has further held that
the document which has the effect of creating and taking away the rights in
respect of an immovable property must be registered otherwise section 49 of the
Registration Act imposes a bar on the admissibility of an unregistered document
in respect of an immovable property. Therefore, in the instant case,
the objection having been raised u/s 35 of the Stamp Act with respect to the
admissibility of the document about the payment of stamp duty, not deciding the
said objection by the trial Court is against the settled principles as laid down
by the Supreme Court. Consequently the order dated 30.11.2017 cannot be allowed
to sustain and accordingly, the same is set aside.
19. In the
result, the application filed by the petitioner u/s 35 of the Indian Stamp Act
is allowed. The trial Court is directed to decide the admissibility of the
document sought to be exhibited by the plaintiff in terms of the observation
made in this order. If the trial Court finds that the document is insufficiently
stamped and is tendered in evidence then the Court is duty bound to impound the
same and in order to decide the levy of stamp, the document is required to be
sent to the Collector as per sections 33, 35, 38 & 40 of the Indian Stamp
Act, 1899.
20. Consequently,
the writ petition is allowed in view of the observations made in the foregoing
paragraphs.