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Advocates
  • For petitioner: Mr. P. Mathivanan
  • For respondent: Mr. R. Gururaj
Judges
  • Hon'ble Thiru.Justice M. Jeyapaul
Acts
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Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
  • For petitioner: Mr. P. Mathivanan
  • For respondent: Mr. R. Gururaj
Judges
  • Hon'ble Thiru.Justice M. Jeyapaul
Acts
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Smart Summary

Concise Analytical Summary of the Opinion

Factual and Procedural Background

The plaintiff instituted a suit for a declaration of title and consequential injunction restraining the defendant from interfering with the plaintiff's enjoyment of certain property. During the cross-examination of PW1, an unstamped and unregistered release deed dated 19.3.1999 was marked in evidence on behalf of the defendant (the mark was made through the plaintiff). Several xerox copies (Exs.B2, B3 and B11) were also marked. The plaintiff thereupon filed a petition requesting that the documents marked as Exs.B1 to B3 and B11 be recalled from the evidence of DW1 and PW1, contending, among other things, that these documents were exhibited before the defendant's application under Order VII Rule 14(3) Code of Civil Procedure had been disposed of.

The defendant opposed the recall petition, asserting that its Order VII Rule 14(3) application had already been allowed (albeit that the order was erroneously inscribed on the suit notes), that the documents had been proved earlier, and that the original of Ex.B1 was subsequently marked as Ex.B4. The Trial Court observed that Ex.B1 had been marked only through PW1 during cross-examination and concluded that recalling the document from evidence did not arise. Aggrieved by that dismissal, the plaintiff filed the present civil revision petition.

Legal Issues Presented

  1. Whether an unstamped instrument once admitted and marked in evidence can be recalled later by a party on the sole ground that it was not duly stamped, having regard to section 36 of the Indian Stamp Act, 1899.
  2. Whether an unregistered document that is required to be registered (per section 17 of the Registration Act, 1908) can be admitted in evidence and, if not registered, whether it can nevertheless be used for collateral purposes under section 49 of the Registration Act.
  3. What is the effect of the Trial Court's mechanical marking of an unstamped and unregistered document and whether that error can be remedied at the trial stage or only on appeal (including the role of section 61 of the Indian Stamp Act regarding collection of stamp duty and impounding of the instrument).
  4. Whether the plaintiff is entitled to recall Ex.B1 (and related marked xerox documents) from the record given the circumstances described.

Arguments of the Parties

Plaintiff's Arguments

  • The unstamped and unregistered release deed (Ex.B1) could not be marked even for establishing a collateral transaction unless stamp duty and penalty were paid; therefore Ex.B1 must be recalled from the evidence of PW1.
  • As to Exs.B2, B3 and B11 (xerox copies), since originals of those documents were produced, the plaintiff did not press for recalling those particular xerox copies.
  • The documents were exhibited and marked before the defendant's application under Order VII Rule 14(3) CPC was disposed of, which militated in favour of recalling them.

Defendant's Arguments

  • The defendant contended that its application under Order VII Rule 14(3) CPC had been allowed by the Trial Court (but the order was mistakenly noted on the suit papers), and the documents had been proved in earlier proceedings.
  • The original corresponding to Ex.B1 was later marked as Ex.B4; accordingly, the plaintiff could not seek recalling of the documents from evidence.
  • Reliance on section 36 of the Indian Stamp Act: once an unstamped document is admitted in evidence, that admission cannot be questioned later on the ground that the instrument was not duly stamped.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
K.B Saha & Sons Private Limited v. Development Consultant Limited, 2008 (5) CTC 260 Explains that a document required to be registered is not admissible under section 49 of the Registration Act except for collateral purposes; sets out criteria for what constitutes a collateral transaction and that important clauses of an unregistered document cannot be admitted unless they form a collateral transaction. The court relied on this ratio to hold that an unregistered document may be used only for collateral purposes and that an important clause in an unregistered document which is not collateral cannot be admitted in evidence.
Javer Chand v. Pukhraj Surana, AIR 1961 SC 1655 Affirms that once a document has been admitted in evidence, its admissibility cannot be called in question later for want of proper stamping (section 36 of the Stamp Act); the objection must be raised when the document is tendered. The court applied the principle to conclude that Ex.B1, once admitted and marked, could not be recalled later on the ground of being unstamped.
Avinash Kumar Chauhan v. Vijay Krishna Mishra, (2000) 2 SCC 532 Holds that a Trial Court can direct payment of stamp duty and penalty on an instrument before admitting it in evidence. The court distinguished this authority: it applies where the objection is taken prior to admission; it does not assist where the instrument has already been admitted and marked without objection.
Mohammed Rafee, K. v. A. G. Akbar Sherief, 2006 (2) CTC 121 (this Court) Upheld a Trial Court's direction that a party producing an unstamped document should pay stamp duty and penalty when the objection was raised before marking, confirming such a direction in revision. The court noted the decision to illustrate the permissible course when objection is timely; contrasted the present facts where the document was already marked and the section 36 bar applied.

Court's Reasoning and Analysis

The court's analysis proceeds from statutory provision to statutory provision and from precedent to precedent, applying the principles to the facts before it without expanding beyond the text of the opinion:

  1. Statutory framework:
    • The court observed section 17 of the Registration Act, 1908, which sets out which instruments relating to immovable property must be registered (in particular section 17(b) for instruments affecting immovable property of value Rs.100 or upwards).
    • Section 49 of the Registration Act provides that a document required to be registered shall not be received as evidence of a transaction affecting such property unless registered; the proviso permits reception of an unregistered document as evidence of a collateral transaction not requiring registration.
    • Section 35 of the Indian Stamp Act provides that an instrument chargeable with duty shall not be admitted in evidence unless duly stamped (subject to the proviso permitting admission on payment with penalty).
    • Section 36 of the Indian Stamp Act provides that once an unstamped instrument has been admitted in evidence, that admission cannot be called in question at any later stage of the proceedings on the ground of having not been duly stamped.
    • Section 61 of the Stamp Act empowers an appellate court, if it considers that an instrument should not have been admitted without payment, to determine duty, impound the instrument and send it to the Collector for collection of duty and penalty.
  2. Application of the law to the facts:
    • The court accepted that the Trial Court had mechanically marked Ex.B1 (an unstamped and unregistered xerox copy of a release deed) during PW1's cross-examination without objection at that time.
    • Because section 36 of the Indian Stamp Act bars subsequent challenge to the admissibility of an unstamped instrument once it has been admitted and marked, the plaintiff cannot now sustain a plea to recall Ex.B1 on the ground that it was not duly stamped.
    • However, the court distinguished the stamping issue from the registration issue: while section 36 bars later challenge on stamping, it does not operate to bar a later challenge on the ground of non-registration. That is, non-registration is governed by section 49 of the Registration Act and complaints about non-registration fall outside section 36's embargo.
    • Invoking K.B. Saha and related authorities, the court reiterated that an unregistered document can be used only for collateral purposes (and that an important clause which is not collateral cannot be admitted), so if the plaintiff challenges Ex.B1 on non-registration, the defendant must show the document was marked to prove a collateral transaction not requiring registration.
    • The court noted that collection of stamp duty and penalty under section 61 can be invoked by an appellate court where it finds the instrument should not have been admitted without payment; but such a remedy post-admission is an appellate (not trial-stage) mechanism and requires appeal proceedings to be active.
  3. Weighing procedural equities and precedents:
    • The court considered earlier decisions (including Mohammed Rafee and Avinash Kumar Chauhan) which permit a Trial Court to direct payment of duty and penalty if an objection is raised prior to marking; those authorities do not assist where the instrument has already been admitted and marked without objection.
    • Although the Trial Court had committed an apparent error in admitting an unstamped and unregistered xerox copy, the court found that section 36's prohibition on reopening the stamping admissibility question precluded the plaintiff's recall remedy in this instance.

Holding and Implications

Core Ruling: The Revision Petition is dismissed.

Additional immediate orders: the connected Miscellaneous Petition is also dismissed, and there is no order as to costs.

Direct Consequences for the Parties

  • The plaintiff's request to recall Ex.B1 from the record on the ground that it was unstamped is not sustainable in view of section 36 of the Indian Stamp Act, 1899, because Ex.B1 had already been admitted and marked without objection.
  • Challenges on the ground of non-registration remain open: the court expressly noted that non-registration is governed by section 49 of the Registration Act and such a challenge falls outside the embargo of section 36 of the Stamp Act. If the plaintiff pursues that line, the defendant must demonstrate that the document was used only to prove a collateral transaction not requiring registration.
  • The possibility of collecting stamp duty and penalty under section 61 of the Stamp Act is an appellate remedy; it becomes relevant only if an appeal is pursued and the appellate forum decides to act under section 61.

Broader Legal Implications (as stated in the opinion)

The opinion reinforces existing principles rather than establishing a new precedent: it reiterates the effect of section 36 (bar on challenging admissibility of an unstamped instrument once admitted) and the distinct operation of section 49 (non-registration and the collateral-transaction exception). The court emphasized the importance of timely objections at trial and pointed to appellate remedies (section 61) where appropriate.

Note: This summary is strictly limited to material contained in the provided opinion and does not add facts or legal authorities beyond that text.

Show full summary ...

    Kaliya Perumal Petitioner v. Dhandapani

    Aggrieved by the dismissal of the application filed by the plaintiff to recall the documents marked as Exs.B1 to B3 and B11 from the evidence of DW1 and PW1, the present civil revision petition is filed by the plaintiff.

    2. The plaintiff has filed the suit for declaration of title and for consequential injunction restraining the defendant from interfering with his enjoyment of the property. During the course of cross-examination of PW1, an unregistered and unstamped release deed dated 19.3.1999 was marked on behalf of the defendant through the plaintiff. Exs.B2, B3 and B11, which were only xerox copies, were also marked. Therefore, the plaintiff filed a petition praying to recall the documents marked as Exs.B1 to B3 and B11 from the evidence of DW1 and PW1. It has also been contended by the plaintiff that even before the petition filed under Order VII Rule 14(3) of the Code of Civil Procedure by the defendant to receive those documents was disposed of by the Trial Court, those documents were exhibited and marked.

    3. The defendant resisted the petition on the ground that the application filed by the defendant under Order VII Rule 14(3) of the Code of Civil Procedure was already allowed by the Trial Court, but, by mistake, the said order was inscribed on the notes paper of the suit. The documents have already been proved in earlier proceedings. Further, the original of Ex.B1 was marked later as Ex.B4 Therefore, it was contended by the defendant that the plaintiff cannot seek for recalling of those documents from the evidence of DW1 and PW1.

    4. The Trial Court, having observed that Ex.B1 was marked only through PW1 during the course of cross-examination, found that the question of recalling the document from the evidence part of it does not arise.

    5. Learned counsel appearing for the revision petitioner/plaintiff would submit that the unstamped and unregistered release deed, which requires to be stamped and registered, cannot be marked even for the purpose of establishing collateral transaction, unless the stamp duty and penalty is paid. Therefore, Ex.B1 will have to be recalled from the evidence of PW1. As regards other documents viz., Exs.B2, B3 and B11, he would submit that inasmuch as the originals of those documents were produced, the plaintiff does not press for recalling of Exs.B2, B3 and B11.

    6. Referring to section 36 of the Indian Stamp Act, the learned counsel appearing for the respondent/defendant would submit that once an unstamped document is admitted in evidence, such admission cannot be called in question at any stage of the proceedings of the suit on the ground that the instrument was not duly stamped. Inasmuch as Ex.B1 was marked through PW1 during cross-examination without any objection emanated from him, the question of recalling the said document in the face of the specific provision found under section 36 of the Indian Stamp Act, 1889 does not arise.

    7. The documents, which are compulsorily registerable, have been adumbrated under section 17 of the Registration Act, 1908. An instrument, except a non-testamentary instrument, which purports or operates to create, declare, assign, limit or extinguish any right, title or interest in immovable property of the value of Rs. 100/=or upwards, shall be compulsorily registered as per section 17(b) of the Registration Act.

    8. The effect of non-registration of the document which requires to be registered is dealt with under section 49 of the Registration Act. A document required by section 17 to be registered shall not be received as evidence of any transaction affecting such property unless it has been registered as per section 49(c) of the Registration Act. But, as per the proviso found thereunder, an unregistered document may be received as evidence of any collateral transaction which transaction is not required to be effected by registered instrument.

    9. It is relevant to refer to the decision of the Supreme Court in K.B Saha & Sons Private Limited v. Development Consultant Limited (2008 (5) CTC 260) wherein it has been held as follows:—

    “From the principles laid down in the various decisions of this court and the High Courts, as referred to hereinabove, it is evident that:

    1. A document required to be registered is not admissible into evidence under section 49 of the Registration Act.

    2. Such unregistered document can however be used as an evidence of collateral purpose as provided in he proviso to section 49 of the Registration Act.

    3. A collateral transaction must be independent of, or divisible from, the transaction to effect which the law required registration.

    4. A collateral transaction must be a transaction not itself required to be effected by a registered document, that is, a transaction creating, etc. any right, title or interest in immovable property of the value of one hundred rupees and upwards.

    5. If a document is inadmissible in evidence for want of registration, none of its terms can be admitted in evidence and that to use a document for the purpose of proving an important clause would not be using it as a collateral purpose.”

    10. As per the aforesaid ratio, a collateral transaction must be a transaction not itself required to be effected by a registered document. An important clause or term in the unregistered document which does not constitute collateral transaction cannot be admitted in evidence.

    11. Coming to the unstamped instruments, section 35 of the Indian Stamp Act, 1899 provides that an instrument chargeable with duty shall not be admitted in evidence for any purpose or shall be acted upon, unless such instrument is duly stamped. The proviso found thereunder reads that such an instrument which was not duly stamped shall be admitted in evidence on payment of the duty chargeable on the instrument with penalty adumbrated thereunder.

    12. But, once an unstamped instrument is admitted in evidence, it shall not be called in question at any stage of the proceedings of the suit on the ground that it has not been duly stamped as per section 36 of the Indian Stamp Act, 1899. In other words, if the admissibility of an unstamped document is not questioned when it is tendered and marked, it cannot be recalled from the records. The Trial Court also ceases to have jurisdiction to reject the document at a later stage of the suit on the sole ground that the instrument was not duly stamped. The plea that the unstamped instrument was wrongly admitted cannot be sustained in view of the embargo found under section 36 of the Indian Stamp Act 1899.

    13. As an unstamped instrument once admitted in evidence cannot be called in question at any stage of the suit proceedings on the ground that the instrument was not duly stamped, the plaintiff cannot legally sustain a plea that the document, Ex.B1 will have to be recalled as it was not duly stamped. But, the plaintiff can always throw a challenge that the instrument, Ex.B1 which was not registered as per section 17 of the Registration Act, is not admissible under section 49 of the Registration Act. As such, the challenge on the point of non-registration falls outside the scope of section 36 of the Indian Stamp Act, 1899.

    14. There is no provision under the Registration Act similar to section 36 of the Indian Stamp Act, 1899 to debar future challenge of an instrument already admitted. When the admissibility of the unregistered document, Ex.B1 is challenged by the plaintiff, then the defendant has to establish that the said unregistered document has been marked to establish a collateral transaction which transaction does not require registration.

    15. It is not as if the party who marks an unstamped document can go scot free without payment of the stamp duty due under the instrument forever. As per section 61 of the Indian stamp Act, 1899, if the appellate court is of the opinion that such instrument should not have been admitted in evidence, without payment of duty and penalty, the appellate court can determine the amount of duty chargeable and impound the instrument and record a declaration to that effect and send the instrument to the Collector for collecting stamp duty on the instrument.

    16. The Supreme Court in Javer Chand v. Pukhraj Surana (AIR 1961 SC 1655) has held as follows:—

    “That section is categorical in its terms that when a document has once been admitted in evidence, such admission cannot be called in question at any stage of the suit or the proceeding on the ground that the instrument had not been duly stamped. The only exception recognized by the section is the class of cases contemplated by S.61, which is not material to the present controversy. 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 be 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.”

    17. In the instant case, true it is that the Trial Court had mechanically marked Ex.B1 which is an unstamped and unregistered xerox copy of the release deed. Of course, now it is brought to the notice of this court that the original unstamped and unregistered release deed has been marked as Ex.B4 At any rate, the court should have been alert while Ex.B1 was produced by the defendant during the course of cross-examination of PW1. Now, the stamp duty can be collected only when an appeal is preferred before the appellate forum in terms of section 61 of the Indian Stamp Act, 1899. If appeal has not been preferred by either of the parties, the question of invocation of section 61 of the Stamp Act would not arise and the defendant would go scot free without paying the stamp duty on the instrument which was already produced before the court. Anyway, the aforesaid ratio reiterates the irretrievable situation arisen out of marking of an unstamped document in terms of section 36 of the Indian Stamp Act, 1899.

    18. The learned counsel appearing for the revision petitioner/plaintiff referred to a decision of this court in Mohammed Rafee, K. v. A. G. Akbar Sherief (2006 (2) CTC 121). Of course, this court has held that the Trial Court is perfectly in order in directing a party who produced an unstamped document to pay stamp duty and penalty.

    19. That was a case where an objection was raised even before an unregistered and unstamped document was marked. The Trial Court, having been alive to the provision of section 36 of the Stamp Act, directed the party to pay stamp duty and penalty. The said direction was found to be in order and therefore, it was confirmed in revision by this court. But, in the instant case, the document was already marked and therefore, the bar to raise future objection contemplated under section 36 of the Stamp Act operates.

    20. The Supreme Court in Avinash Kumar Chauhan v. Vijay Krishna Mishra. ((2000) 2 SCC 532), has held that the Trial Court is empowered to direct payment of stamp duty and penalty on an instrument before admitting the same. But, here, a document is challenged as inadmissible on the ground that it was not stamped as required after the document was admitted and marked as Exhibit before the Trial Court. Therefore, the aforesaid ratio will not apply to a situation arisen in this case where the document was already marked without any objection raised either by the court or by the other side.

    21. In view of the above, the court finds that though the Trial Court has committed an apparent error in admitting an unstamped and unregistered release deed, the same cannot be questioned by the other side who was also a party to such a lapse at the time of marking the document in the face of the embargo found under section 36 of the Indian Stamp Act. At any rate, the relief of recalling the document which form part of the evidence is not at all sustainable in the eye of law. Therefore, the Revision Petition is dismissed as it merits no consideration. The connected Miscellaneous Petition is also dismissed. There is no order as to costs.

    VCJ/VCS

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    Comments

    Kaliya Perumal Petitioner v. Dhandapani
    (Mar 2, 2010)