Supreme Court of India
Bidyut Sarkar vs Kanchilal Pal (Dead) Through Its Lrs on 28 August, 2024
Author: Vikram Nath
Bench: Vikram Nath
2024 INSC 704
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 10509-10510 OF 2013
BIDYUT SARKAR & ANR. …APPELLANTS
VERSUS
KANCHILAL PAL (DEAD)
THROUGH LRs. & ANR. …RESPONDENTS
ORDER
1. These appeals, by defendant nos.2 and 3, have been
filed assailing the correctness of the judgment and
order dated 05.12.2008 whereby the Division Bench
of Calcutta High Court allowed the First Appeal
No.282 of 2006, titled Kanchilal Pal vs. Sashti
Charan Banerjee & Others, and after setting aside
the judgment of the Trial Court dismissing the suit of
the respondent no.1, proceeded to decree the suit for
Signature Not Verified
specific performance of the contract in favour of
plaintiff -respondent no.1. Hereinafter will deal with
Digitally signed by
Neetu Khajuria
Date: 2024.09.19
17:10:42 IST
Reason:
Page 1 of 30
the parties as they have been referred in the Trial
Court.
2. Relevant facts giving rise to the present appeals are
as follows:
2.1. Sashti Charan Banerjee-respondent no.2,
was admittedly the owner of the property in
dispute. According to the appellants,
respondent no.1 filed a suit for specific
performance registered as Title Suit No.123
of 1999, Kanchilal Pal vs. Sashti Charan
Banerjee and two others in the Court of Civil
Judge (Senior Division), Barasat, for a decree
of specific performance of contract dated
29.03.1999. The plaint allegations are as
follows:
a) Defendant no.1 is the owner of property in
question being Premises No.126,
Rajkumar Mukherjee Road, Calcutta,
700035, within the JL No.5, Paragana
Calcutta, Khatian No.2292 bearing Plot
Nos. 2477 and 2478 measuring about 7
cottahs, 71/2 Chittack of land, including
the structures thereon.
Page 2 of 30
b) Defendant no.1 intended to sell the
premises in question for which the plaintiff
agreed to purchase the same for a
consideration of Rs.3,00,000/- (Rupees
three lakhs only). The plaintiff was
required to develop the property/premises
in question while dividing into plots and to
sell the same to different persons within
the period of one year and, after realizing
sale consideration from the proposed
purchasers, shall pay the balance amount
of Rs.2,90,000/-(Rupees two lakhs ninety
thousand only) whereupon defendant no.1
would transfer the land in favour of the
plaintiff or his nominees, as the case
would be.
c) An advance amount of Rs.10,000/-
(Rupees ten thousand only) is said to have
been paid in cash to defendant no.1. The
plaintiff was also empowered to make a
settlement for ejectment of the tenants
residing in the premises in question and
take possession from them. The plaintiff
was also authorized to carry out
Page 3 of 30
development work and to make
construction of common passage, drain,
etc. in the meantime and to collect money
from the proposed buyers of the plots to be
developed.
2.2. In due course, a sale deed would be executed
by defendant no.1 in favour of the nominees
or the plaintiff and in such sales, the plaintiff
would be a confirming party. The said
exercise was to be completed within one year.
In case defendant no.1 fails to execute the
sale deed, the plaintiff or his nominees would
be at liberty to file a suit for specific
performance.
2.3. It was further provided in the agreement that,
in case the plaintiff fails to pay the amount
as agreed within the time stipulated i.e. one
year, the agreement to sell would be treated
as cancelled.
2.4. Further, according to the plaint, the plaintiff
has spent an amount of Rs.2,00,000/-
(Rupees two lakhs only) for construction of
common passage, drain, etc. and has also
contacted with the tenants to purchase part
Page 4 of 30
of the property in question measuring three
cottahs and that they would pay an amount
of Rs.1,20,000/- (Rupees one lakh twenty
thousand only), out of which the plaintiff had
received Rs.50,000/- (Rupees fifty thousand
only) from one of the tenants. The plaintiff
also claimed to be in possession. He also
requested defendant no.1 to deliver the
original title deeds, which defendant no.1 did
not oblige.
2.5. The tenants, on 20.05.1999, came to the
plaintiff and showed him letter of an advocate
and, after going through the same, the
plaintiff learnt that defendant no.1 had
already transferred the property in question
vide sale deed dated 03.05.1999 in favour of
defendant nos.2 and 3 (appellants). The
plaintiff thereafter made inquiries and again
approached defendant nos.1 to 3 to execute
the sale deed in his favour but as they
declined, he was compelled to institute the
suit on 21.05.1999.
Page 5 of 30
2.6. It is also averred in the plaint in paragraph
10 that the plaintiff was always ready and
willing to perform his part of the contract.
3. Defendant no.1 filed his written statement denying
the plaint allegations. A separate written statement
was filed by defendant nos.2 and 3. Defendant no.1
in his written statement stated that he had entered
into an agreement to sell dated 10.03.1999 in favour
of defendant nos.2 and 3 and had also executed a
registered deed of conveyance on 03.05.1999 in
favour of defendant nos.2 and 3 for valuable
consideration received by him and, also handed over
possession to them. Thereafter, a letter of atonement
dated 18.05.1999 was served on the tenant of the
premises in question on behalf of all the three
defendants through their advocates which was duly
received by them informing them about the transfer
of title from defendant no.1 to defendant nos.2 and 3.
4. It is further stated in the written statement of
defendant no.1 that plaintiff approached him on
24.03.1999 with a proposal to purchase the said
property, however, defendant no.1 declined the said
Page 6 of 30
proposal informing him that he had already entered
into an agreement to sell with defendant nos.2 and 3.
The plaintiff, however, continued with his insistence
to purchase the property and in that respect on
29.03.1999 at about 04:30 PM, the plaintiff
compelled defendant no.1 to accompany him to the
machine shop of Ajit Bhattacharjee, where under
threat and pressure and surrounded by about ten
persons, he was compelled to sign some papers
against his will. He was not even allowed to read the
papers, and he was threatened not to disclose such
incident to any person, including police. Despite the
same, defendant no.1 reported the matter to the
police on the basis of which G.D. Entry no.713 was
made at the Talatola Police Station on 07.04.1999.
The plaintiff, along with his men and agents, tried to
cut the trees over the property in question on
03.04.1999, which being illegal and unlawful, was
again reported to the police station at Baranagar and
registered vide G.D. Entry no.496 dated 04.09.1999.
5. Defendant no.1 also moved an application under
section 144(2) Code of Criminal Procedure, 1973,
before the Executive Magistrate at Barrackpore,
Page 7 of 30
which was registered as M.P. Case No.894 of 1999.
The defendant also informed the Chairperson,
Baranagar Municipality, through advocates’ letter
dated 12.04.1999, against the illegal acts of the
plaintiff over the suit property.
6. Further, defendant no.1 also lodged a criminal case
no. C/1335 of 1999 before the Chief Metropolitan
Magistrate under sections 384/341/34 Indian Penal
Code, 1860 which was still pending at the time of
filing of the written statement. It was further stated
in the written statement of defendant no.1 that on
23.04.1999, the plaintiff came to his house and threw
some xerox copies of papers with a bundle of
currency notes of Rs.10,000/- (Rupees ten thousand
only) and threatened him with dire consequences if
he discloses anything to the police. It was only then
that defendant no.1 came to know of the alleged
agreement to sell dated 29.03.1999, which he was
compelled to sign under circumstances already
stated above.
7. It is also averred in the written statement that
defendant no.1 tried to return the amount of
Rs.10,000/- (Rupees ten thousand only) to the
Page 8 of 30
plaintiff by way of cheque which he received but later
returned. Despite best efforts, defendant no.1 could
not return the amount of Rs.10,000/- (Rupees ten
thousand only) to the plaintiff.
8. It was further averred that plaintiff was land
speculator and promoter. He wanted to grab the suit
property by hook or crook. The plaintiff joined hands
with the tenants and tried to create obstructions from
inspecting the premises in question by defendant
nos. 2 and 3. Defendant nos.2 and 3 also lodged a
complaint in that regard, being G.D. entry no.1434
dated 03.04.1999 at the Baranagar Police Station.
9. In para-wise reply, defendant no.1 denied the plaint
allegations, however, accepted the execution of sale
deed dated 03.05.1999 in favour of defendant nos.2
and 3. On such averments defendant no.1 sought
that suit deserves to be dismissed.
10. Defendant nos. 2 and 3 in their written statement
also denied the plaint allegations and more or less
reiterated the same facts as pleaded in the written
statement of defendant no.1. In addition, it was
stated that defendant nos. 2 and 3 filed Title suit
Page 9 of 30
No.235 of 1999 in the Court of Civil Judge (Junior
Division), Sealdah, against the plaintiff of which the
plaintiff had full knowledge.
11. Based upon the pleadings of the parties, the Trial
Court framed the following issues:
“ISSUES
1) Is the suit maintainable in its
present form and law?
2) Has the plaintiff any cause of action
to file this suit?
3) Is the suit barred by limitation?
4) Was there any concluded contract
in between the plaintiff and the
defendant no.1 on 29.03.1999
regarding sale of the ‘A’ schedule
property by defendant no.1 in
favour of the plaintiff?
5) Was the defendant no.1 compelled
to put signature under threat and
compulsion by the plaintiff and his
associates at Dharamtala Street,
Kolkata?
6) Are the defendant nos. 2 & 3
bonafide purchasers for value of
the suit premises without notice?
7) Is the agreement of sale dated
29.03.1999 which has marked as
Exbt.1 with objection be admitted
in evidence?
8) Is the plaintiff entitled to get the
benefit of section 36 of the Indian
Stamp Act?
Page 10 of 30
9) Is the plaintiff ready and willing to
perform his part of the contract
inviting Section 16(c) of the specific
Relief Act?
10) Was there any part performance of
the said contract?
11) Is the plaintiff entitled to get relief
as prayed for?
12) To what other relief/reliefs, if any,
is the plaintiff entitled?”
12. The parties led evidence, both documentary and oral.
The plaintiff examined himself as PW-1 and proved
the agreement to sell dated 29.03.1999 which was
although marked as Exhibit-1 but with objections, as
defendant no.1 had raised an objection regarding the
said agreement to sell being not properly stamped.
On behalf of the defendants, defendant no.1
examined himself as DW-1, whereas on behalf of
defendant nos.2 and 3, their father entered the
witness box as DW-2. Various documents on behalf
of the defendants were proved by the respective
witnesses.
13. The Trial Court decided all the issues relating to
maintainability of the suit, cause of action, limitation,
validity of agreement to sell dated 29.03.1999,
Page 11 of 30
defendant nos.2 and 3 being bona fide purchasers or
not, readiness and willingness of the plaintiff to
perform his part of the contract, in favour of the
plaintiff and against the defendants. However, the
Trial Court dealt in detail with regard to the
admissibility of the agreement to sell dated
29.03.1999 and whether the plaintiff was entitled to
get the benefit of section 36 of Indian Stamp Act,
18991. The Trial Court dismissed the suit of the
plaintiff on the finding that the agreement to sell
dated 29.03.1999 was not admissible in evidence as
the defendants had raised objections regarding the
same. Once the same was held not admissible, the
suit for enforcement of the same was held liable to be
dismissed.
14. Aggrieved by the same, the plaintiff filed an appeal
under section 96 of the Code of Civil Procedure,
registered as Appeal from Original Decree No.282 of
2006. Further, defendant nos.2 and 3 filed cross-
objections against the findings of the Trial Court
recorded against them, which was registered as COT
1
The Stamp Act
Page 12 of 30
No.2304 of 2005. The Division Bench of the Calcutta
High Court allowed the First Appeal and dismissed
the cross-objections. The Division Bench affirmed the
findings recorded by the Trial Court on all issues
already decided in favour of the plaintiff and
accordingly dismissed the cross-objections. However,
with regard to issue of admissibility of the agreement
to sell dated 29.03.1999, the Division Bench was of
the view that as the plaintiff had accepted that he
would pay the deficient stamp duty and penalty as
may be assessed by the competent
authority/collector, the Trial Court had erred in
dismissing the suit on the ground that Ex.-1-the
agreement to sell, could not be enforced being
executed on insufficiently stamped paper.
15. Aggrieved, the present appeals have been preferred
by defendant nos.2 and 3 against the judgment of the
High Court in allowing the first appeal of the plaintiff
and further on dismissing their cross-objections.
16. Learned counsel for the appellants has not only
challenged the findings of the High Court on the
admissibility of the agreement to sell dated
29.03.1999 but also the concurrent findings of both
Page 13 of 30
the courts on other issues regarding the validity of
agreement to sell, circumstances under which it was
executed and defendants 2 and 3 not being bona fide
purchasers for value.
17. Upon considering the submissions, we are of the view
that the findings of the High Court regarding the
admissibility of the agreement to sell dated
29.03.1999 were neither based on a detailed
consideration of the relevant statutory provisions nor
supported by established legal principles. It appears
that the High Court, without thoroughly examining
the applicable legal provisions, 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. However, it
is evident that the plaintiff made no concrete effort to
initiate or pursue the necessary proceedings before
the competent authority or the Collector to determine
the deficient stamp duty and penalty. The High
Court, therefore, failed to recognize that an
insufficiently stamped document can only be
admitted into evidence after the deficiency in stamp
Page 14 of 30
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.
18. At the time of deposition of the plaintiff on
07.03.2003, he stated in his examination-in-chief
while referring to the agreement to sell dated
29.03.1999, that this was the original agreement to
sell executed by defendant no.1 Sashti Charan
Banerjee in his favour in respect of the suit property
and it had the signature of defendant no.1 on all
pages which he had signed in his presence. The
agreement to sell was drafted by Prasanta Pal and
typed by Neel Kamal Mallick in his presence. He paid
Rs.10,000/- (Rupees ten thousand only) to defendant
no.1 as per the said agreement and it was marked as
Ex.-1 with objection. He further stated that he was
ready to deposit the deficient stamp duty as per order
of the Collector. The Trial Court marked the
document as Ex.-1 with objection which is also
reflected in the Exhibit list similarly. Simultaneously,
the Trial Court in the order sheet dated 07.03.2003
noted the said document as Ex.-1 with objection and
had further issued notice to the Collector to assess
Page 15 of 30
the deficient stamp duty and penalty as per the
provisions of section 40 of the Stamp Act and to
submit the report accordingly. Further, a copy of the
order dated 07.03.2003, along with xerox copy of the
disputed agreement to sell dated 29.03.1999, was
sent to the Collector vide letter no.63 dated
28.03.2003. However, no reply was received from the
Collector till the date the judgment was delivered by
the Trial Court.
19. The Trial Court thereafter proceeded to consider the
statutory provisions of the Stamp Act namely
sections 35, 36, 40 and 42. After discussing the same
in detail, it proceeded to hold that the document was
inadmissible in evidence, as the plaintiff failed to
further pursue the proceedings before the Collector
resulting into non-determination of the deficiency
and the penalty and consequently, the non-deposit of
the deficiency and penalty, which could have been
determined by the Collector. The High Court,
unfortunately, has not considered the statutory
provisions and only proceeded to rely upon the
statement of the plaintiff that he had accepted to
deposit the deficiency in stamp duty and penalty, if
Page 16 of 30
any, imposed by the Collector. It would be worthwhile
to mention here that even till date, the plaintiff has
not made any efforts before the Collector to get the
deficiency and penalty determined on the impounded
document and to clear the same.
20. The relevant provisions of the Stamp Act, namely,
sections 35, 36, 40 and 42 are reproduced
hereunder:
“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 any
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;
Page 17 of 30
(b) where any person from whom
a stamped receipt could have been
demanded, has given an unstamped
receipt and such receipt, if stamped,
would be admissible in evidence
against him, then such receipt shall
be admitted in evidence against him
on payment of a penalty of one rupee
by the person tendering it;
(c) Where a contract or agreement
of any kind is effected by
correspondence consisting of two or
more letters and any one of the letters
bears the proper stamp, the contract
or agreement shall be deemed to be
duly stamped;
(d) nothing herein contained
shall prevent the admission of any
instrument in evidence in any
proceeding in a Criminal Court, other
than a proceeding under Chapter XII
or Chapter XXXVI of the Code of
Criminal Procedure 1898 (5 of 1898);
(e) nothing herein contained shall
prevent the admission of any
instrument in any Court when such
instrument has been executed by or
on behalf of [(the) (Government)], or
where it bears the certificate of the
Collector as provided by section 32 or
any other provision of this Act.
36. Admission of instrument where not
to be questioned. —
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
Page 18 of 30
same suit or proceeding on the ground that
the instrument has not duly stamped.
xxx xxx xxx
40. Collectors power to stamp
instruments impounded. —
(1) When the Collector impounds any
instrument under section 33, or receives
any instrument sent to him under section
38, sub-section (2), not being an
instrument chargeable [with a duty not
exceeding ten naye paise] only or a bill of
exchange or promissory note, he shall
adopt the following procedure: —
(a) if he is of opinion that such
instrument is duly stamped or is not
chargeable with duty, he shall certify
by endorsement thereon that it is duly
stamped, or that it is not so
chargeable, as the case may be;
(b) if he is of opinion that such
instrument is chargeable with duty
and is 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 five rupees; or, if he thinks fit, [an
amount not exceeding] ten times the
amount of the proper duty or of the
deficient portion thereof, whether
such amount exceeds or falls short of
five rupees:
Provided that, when such instrument
has been impounded only because it has
been written in contravention of section 13Page 19 of 30
or section 14, the Collector may, if he
thinks fit, remit the whole penalty
prescribed by this section.
(2) Every certificate under clause (a) of
sub-section (1) shall, for the purposes of
this Act, be conclusive evidence of the
matters stated therein.
(3) Where an instrument has been
sent to the Collector under section 38,
sub-section (2), the Collector shall, when
he has dealt with it as provided by this
section, return it to the impounding officer.
xxx xxx xxx
42. Endorsement of instruments in
which duty has been paid under
sections 35, 40 or 41—
(1) When the duty and penalty (if any)
leviable in respect of any instrument have
been paid under section 35, section 40 or
section 41, the person admitting such
instrument in evidence or the Collector, as
the case may be, shall certify by
endorsement thereon that the proper duty
or, as the case may be, the proper duty and
penalty (stating the amount of each) have
been levied in respect thereof, and the
name and residence of the person paying
them.
(2) Every instrument so endorsed
shall thereupon be admissible in evidence,
and may be registered and acted upon and
authenticated as if it had been duly
stamped, and shall be delivered on his
application in this behalf to the person
Page 20 of 30
from whose possession it came into the
hands of the officer impounding it, or as
such person may direct:
Provided that—
(a) no instrument which has been
admitted in evidence upon payment of
duty and a penalty under section 35,
shall be so delivered before the
expiration of one month from the date
of such impounding, or if the Collector
has certified that its further detention
is necessary and has not cancelled
such certificate;
(b) nothing in this section shall
affect the Code of Civil
Procedure,1882 (14 of 1882), section
144 clause 3.”
21. According to the language of the section 35 of the
Stamp Act, instruments not duly stamped would be
inadmissible in evidence, and any instrument
chargeable with duty would be admissible in evidence
only and only if such instrument is duly stamped.
The proviso gives illustration as to how the
instrument would become admissible upon payment
of duty with which it was chargeable or in case of
instruments insufficiently stamped, the payment is
made to make up such duty along with penalty
mentioned therein. It also refers to exceptions where
Page 21 of 30
a document could be admissible in evidence under a
given situation. As elaborated in clauses (b), (c), (d)
and (e) of the proviso, the instrument in question i.e.
agreement to sell dated 23.03.1999 does not fall
under any exception.
22. Section 36 of the Stamp Act provides for admissibility
of an instrument not being questioned if the same
had been admitted in evidence on the ground that it
is not duly stamped except as provided under section
61 of the Stamp Act. In the present case, the
instrument in question was admitted subject to
objection as noted in the deposition of the plaintiff
(PW-1) and recorded in the order sheet of the Trial
Court dated 07.03.2003. As such section 36 of the
Stamp Act will not come to the rescue of the plaintiff.
23. Section 40 of the Stamp Act gives power to the
Collector to stamp such instruments which have
been impounded. The Collector will determine the
proper duty payable on such instrument along with
penalty as provided in clause (b) of section 41.
24. Section 42 of the Stamp Act provides that when duty
and penalty, if any, leviable in respect of any
Page 22 of 30
instrument has been paid under sections 35, 40 or
41 upon endorsement by the Collector that such duty
has been paid, instrument shall thereupon be
admissible in evidence.
25. In the present case, the agreement to sell dated
29.03.1999 was found by the Trial Court to be
insufficiently stamped. Consequently, the matter was
referred to the Collector for determination of proper
stamp duty and any applicable penalty. As per the
provisions of Section 42 of the Stamp Act, such a
document can only become admissible in evidence
after deficiency in stamp duty and the penalty, if any,
have been assessed by the Collector, and the
requisite amounts have been paid. Once the
deficiency and penalty are cleared, the Collector is
required to certify the document by endorsement,
indicating that the required duty and penalty have
been paid. Only upon such certification can the
document be admitted into evidence and acted upon
legally.
26. Despite the Trial Court’s referral of the matter to the
Collector, no determination regarding the deficiency
in stamp duty or penalty was made by the Collector
Page 23 of 30
under Section 40 of the Samp Act. As a result, the
document remains inadmissible in evidence under
the express bar imposed by Section 35 of the Stamp
Act. Failure to resolve the deficiency in stamp duty
prevents the document from being considered as
admissible and valid in evidence. Therefore, until the
necessary stamp duty and penalty are duly paid and
endorsed by the Collector, the instrument remains
legally barred from being admitted in evidence.
27. 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.
28. In this connection, following cases are cited:
Page 24 of 30
Ram Rattan (dead) by L.Rs. vs. Bajrang Lal and
others2;
Javer Chand and others vs. Pukhraj Surana3;
29. The Trial Court had placed reliance upon the
aforesaid two judgments and had also extracted the
relevant part from the said judgments. The facts in
the 1978 case of Ram Rattan (dead) by L.Rs.(supra)
were quite similar wherein an instrument had been
exhibited with objection but therein also the said
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. The relevant paras of this
judgement are reproduced below:
“6. When the document was tendered in evidence by
the plaintiff while in witness box, objection having been
raised by the defendants that the document was
inadmissible in evidence as it was not duly stamped
and for want of registration, it was obligatory upon the
learned trial Judge to apply his mind to the objection
raised and to decide the objects in accordance with2
AIR 1978 SC 1393
3
AIR 1961 SC 1655Page 25 of 30
law. Tendency sometimes is to postpone the decision
to avoid interruption in the process of recording
evidence and, therefore, a very convenient device is
resorted to, of marking the document in evidence
subject to objection. This, however would not mean
that the objection as to admissibility on the ground
that the instrument is not duly stamped is judicially
decided; it is merely postponed. In such a situation at
a later stage before the suit is finally disposed of it
would none-the-less be obligatory upon the court to
decide the objection. If after applying mind to the rival
contentions the trial court admits a document in
evidence, Section 36 of the Stamp Act would come into
play and such admission cannot be called in question
at any stage of the same suit or proceeding on the
ground that the instrument has not been duly
stamped. The court, and of necessity it would be trial
court before which the objection is taken about
admissibility of document on the ground that it is not
duly stamped, 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 and where
a document has been inadvertently admitted without
the court applying its mind as to the question of
admissibility, the instrument could not be said to have
been admitted in evidence with a view to attracting
Section 36 (see Javer Chand v. Pukhraj Surana) [AIR
1961 SC 1655] . The endorsement made by the
learned trial Judge that “Objected, allowed subject
to objection”, clearly indicates that when the
objection was raised it was not judicially
determined and the document was merelyPage 26 of 30
tentatively marked and in such a situation Section
36 would not be attracted.
7. Mr Desai then contended that where an instrument
not duly stamped or insufficiently stamped is tendered
in evidence, the court has to impound it as obligated
by Section 33 and then proceed as required by Section
35 viz. to recover the deficit stamp duty along with
penalty. Undoubtedly, if a person having by law
authority to receive evidence and the civil court is
one such person before whom any instrument
chargeable with duty is produced and it is found
that such instrument is not duly stamped, the
same has to be impounded. The duty and penalty
has to be recovered according to law. Section 35,
however, prohibits its admission in evidence till
such duty and penalty is paid. The plaintiff has
neither paid the duty nor penalty till today.
Therefore, stricto sensu the instrument is not
admissible in evidence. Mr Desai, however, wanted
us to refer the instrument to the authority competent
to adjudicate the requisite stamp duty payable on the
instrument and then recover the duty and penalty
which the party who tendered the instrument in
evidence is in any event bound to pay and, therefore,
on this account it was said that the document should
not be excluded from evidence. The duty and the
penalty has to be paid when the document is tendered
in evidence and an objection is raised. The difficulty in
this case arises from the fact that the learned trial
Judge declined to decide the objection on merits and
then sought refuge under Section 36. The plaintiff was,
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therefore, unable to pay the deficit duty and penalty
which when paid subject to all just exceptions, the
document has to be admitted in evidence. In this
background while holding that the document Ext. I
would be inadmissible in evidence as it is not duly
stamped, we would not decline to take it into
consideration because the trial court is bound to
impound the document and deal with it according to
law.”
[emphasis added]
30. 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. Consequently, the suit must be
dismissed, as it is based on an instrument that is
legally inadmissible as evidence. The plaintiff cannot
claim relief on the basis of a document that has not
satisfied the legal requirements for admissibility.
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31. We need not deal with other arguments on merits
regarding the validity of the instrument dated
29.03.1999 and deal with the issue of coercion as
alleged by defendant no.1.
32. Accordingly, the appeals are liable to be allowed. The
amount of Rs.10,000/- (Rupees ten thousand only)
admittedly received by defendant no.1 although
under abnormal conditions as alleged by defendant
no.1 in the interest of the parties would be liable to
be returned to the plaintiff. The said amount has
remained with defendant no.1 for almost 25 years
right from 1999 till the present. Now that the
appellants have purchased the property from
defendant no.1, we fasten the liability on the
appellants to return the amount to the plaintiff. We
quantify the said amount to be a rounded of figure at
Rs.5,00,000/- (Rupees five lakhs only) to be paid
within a period of three months.
33. In view of the above the appeals are allowed, the
impugned order of the High Court is set aside and
that of the Trial Court dismissing the suit is restored.
Additionally, it is directed that the appellants shall
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pay Rs.5,00,000/-(Rupees five lakhs only) to the
plaintiff-respondent no.1 within three months from
today.
..……………………………….J.
[VIKRAM NATH]
…………………………………..J.
[PRASANNA B. VARALE]
NEW DELHI
AUGUST 28, 2024.
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