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Cites 3 docs
The Promissory Notes (Stamp) Act, 1926
The Code Of Civil Procedure (Amendment) Act, 1956
Javer Chand And Others vs Pukhraj Surana on 25 April, 1961

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Bombay High Court
Shri Gruha Nirman Sahakari ... vs Aged About 51 Years on 7 May, 2012
Bench: Ravi K. Deshpande

1

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY, NAGPUR BENCH, NAGPUR

Writ Petition No.803 of 2012

Shri Gruha Nirman Sahakari Sanstha Ltd., Nagpur,

Registration No.NGP/HSG/517/89-90,

Through its President

Shri Rajiv s/o Prabhakarrao Dhoble,

Aged about 44 years,

Occupation - Business,

R/o. 277, Reshimbagh, Nagpur. ... Petitioner Versus

1. Smt. Chandrakala w/o Late Chakradhar Dhage, Aged about 44 years,

Occupation - Household.

2. Atul s/o Chakradhar Dhage,

Aged about 25 years,

Occupation - Nil.

3. Pravin s/o Chakradhar Dhage,

Aged about 21 years,

Occupation - Nil.

4. Ku. Sarika d/o Chakradhar Dhage,

Aged about 28 years,

Occupation - Nil.

5. Ku. Gauri d/o Chakradhar Dhage,

Aged about 24 years,

Occupation - Nil.

All R/o. Dhage Building,

Navi Shukrawari, Nagpur.

6. M/s. Ratan Constructions,

Through proprietor Shri Madan Balaji Ratan, 2

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Aged about 51 years,

Occupation - Business,

R/o 558, Navi Shukrawari,

Fawara Chowk, Nagpur. ... Respondents Shri V.N. Kedar, Advocate for Petitioner. Shri S.P. Bhandarkar, Advocate for Respondents. CORAM : R.K. Deshpande, J.

DATED : 7th May, 2012

Oral Judgment :

1. Rule, made returnable forthwith. Heard Shri V.H. Kedar, the learned counsel appearing for the petitioner; and Shri S.P. Bhandarkar, the learned counsel appearing for the respondents.

2. The challenge in this petition is to the order dated 31-1-2012 passed below application Exhibit 139 in Special Civil Suit No.979 of 2006 by the learned 2nd Joint Civil Judge, Senior Division, Nagpur. The said application under Section 151 of the Civil Procedure Code filed by the petitioner, who is the plaintiff, for calling back the document, i.e. the agreement of development and sale dated 27-3-2002 (for short, "the said document") from the office of the Collector of 3

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Stamps, Nagpur, for the purposes of tendering it in the evidence, has been rejected.

3. In Special Civil Suit No.979 of 2006 filed by the petitioner/plaintiff, a specific performance of the said document is claimed. The said document was found to be insufficiently stamped and unregistered. Hence, the application Exhibit 86 for impounding of the said document was filed by the respondent Nos.1 to 5/defendants. It was rejected by the Trial Court on 1-9-2009. Hence, the respondent Nos.1 to 5/defendants preferred Writ Petition No.5337 of 2009 before this Court. This Court recorded the finding in its judgment dated 24-2-2010 that the said document grants permission to the petitioner/plaintiff to take possession and to develop the land in question and hence it was required to be compulsorily registered. In view of this, it was held that the said document was required to be impounded and sent for determination of the stamp duty in accordance with law. The order dated 1-9-2009 was accordingly quashed and set aside and the application Exhibit 86 for impounding of the said document was allowed.

4. The learned 2nd Joint Civil Judge, Senior Division, 4

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Nagpur, who was dealing with the matter, forwarded the said document to the Collector of Stamps for impounding the same in view of the order passed below Exhibit 86 and directed to send the report to him within a period of 15 days. The Collector of Stamps accordingly passed an order on 30-7-2011, holding that the stamp duty payable on the said document was Rs.17,81,933/-, whereas the penalty payable thereon was Rs.35,63,866/- and thus the total demand for an amount of Rs.53,45,799 was given to the petitioner/plaintiff for impounding of the said document. The petitioner/plaintiff has disputed the assessment of stamp duty and penalty and has preferred an appeal against the order dated 30-7-2011 passed by the Collector of Stamps, Nagpur, before the Chief Controlling Revenue Authority, Pune, which is an Appellate Authority under Section 53(1A) of the Bombay Stamp Act, 1958. The said appeal is pending for adjudication.

5. When the said document was sent for impounding by the Trial Court to the Collector of Stamps, the matter was at the stage of recording of evidence of the petitioner/plaintiff. After the order was passed by the Collector of Stamps, the Trial Court took up the matter for recording the further evidence. At that stage, the petitioner/plaintiff filed an application 5

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Exhibit 131 under Section 151 of the Civil Procedure Code on 31-1-2012 for calling back the said document from the office of the Collector of Stamps, Nagpur, for being tendered in evidence. This application has been rejected by the Trial Court by the impugned order dated 31-1-2012. It has been held that the said document has not been impounded as yet and hence it cannot be called. The Trial Court, therefore, passed an order to proceed further with the matter for recording of evidence.

6. According to the petitioner/plaintiff, the stamp duty and penalty payable on the said document comes to Rs.4,15,714.14 and the Collector of Stamps has committed an error in assessing the stamp duty of Rs.17,18,933/- and also in imposing the penalty of Rs.35,63,866/-. Hence, the appeal challenging the order of the Collector of Stamps is pending. The learned counsel for the petitioner, therefore, proposes that either the proceedings before the Trial Court be stayed, awaiting the adjudication in appeal under Section 53(1A) of the Bombay Stamp Act or to allow the application and permit the petitioner/plaintiff to tender the said document in evidence subject to all such objections as to the admissibility of the said document. He further submits that the petitioner/plaintiff is prepared to deposit an amount of Rs.4,15,714.14, as assessed 6

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by him, towards the stamp duty and penalty leviable for impounding of the said document.

7. The suit for specific performance of contract is based upon the said document. The said document is sought to be tendered in evidence by the petitioner/plaintiff. I have gone through the copy of the said document placed on record. The said document is notarized and it on the stamp paper of Rs.50/-. It is not a registered document. In Writ Petition No.5337 of 2009, this Court has already held that the said document is required to be impounded. The Collector of Stamps has given a demand of Rs.17,81,933/- for stamp duty and of Rs.35,63,866/- for penalty to impound the said document. The assessment of stamp duty and penalty by the Collector of Stamps is disputed by the petitioner/plaintiff and it is the subject-matter of appeal, which is pending. The petitioner/plaintiff has himself assessed the stamp duty and penalty, which, according to him, comes to Rs.4,15,714.14 and he is prepared to pay the same to get the said document impounded.

8. In the background of the aforesaid situation, neither the Collector of Stamps can be directed to impound the said 7

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document by accepting the stamp duty and penalty of Rs. 4,15,714.14 assessed by the petitioner/plaintiff, nor the petitioner/plaintiff can be directed to pay the amount of stamp duty and penalty of total Rs.53,45,799/- demanded by the Collector of Stamps to impound the said document. If the suit is permitted to be proceeded with, without calling for the said document, then it is likely to fail. Unless the said document is impounded by the Competent Authority, it cannot be permitted to be tendered in evidence. Even if it is permitted to be tendered, it will be inadmissible in evidence for the reason that it is insufficiently stamped.

9. Shri Bhandarkar, the learned counsel appearing for the respondents, has relied upon the Full Bench decision of this Court in the case of Hemendra Rasiklal Ghia v. Subodh Mody, reported in 2008(6) Mh.L.J. 886. The question of impounding of the document or admissibility of the document, which is insufficiently stamped, is dealt with in paras 71 to 73 of the said decision and the conclusions are stated in para 92 thereof. This Court has held that the objection regarding admissibility of insufficiently stamped document, has to be judicially determined as soon as such document is tendered in evidence and before it is marked as an exhibit. It has further been held 8

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that once the document has been marked as an exhibit and has been used by the parties in examination and cross-examination of their witnesses, Section 36 comes into operation. Once the document is admitted in evidence, it is not open either to the Trial Court itself or to the Court of Appeal or Revision to go behind that order. It is further held that such an order is not one of those judicial orders, which are liable to be reviewed or revised by the same Court or a Court of superior jurisdiction. Referring to the decision of the Apex Court in the case of Ram Rattan (dead) by legal representatives v. Bajrang Lal and others, reported in AIR 1978 SC 1393, it has been held that the objection relating to the deficiency of stamp duty cannot be raised or decided at the later stage of the suit and it has to be decided then and there unless taken on record subject to objection so as to avoid the rigour of Section 36 of the Stamp Act.

10. In the decision of the Apex Court in the case of Ram Rattan, cited supra, it has been held in para 6 as under : "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 9

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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 objection in accordance with 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 making 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, S.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 10

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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 S.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 merely tentatively marked and in such a situation S. 36 would not be attracted." From the aforesaid observations of the Apex Court, it is apparent that if the endorsement is made on the document that it is allowed to be tendered in evidence subject to objection as to its admissibility and the document is tentatively marked as an exhibit, then the rigour of Section 36 of the Indian Stamp Act will not be attracted. 11

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11. In the present case, the objection regarding admissibility of the said document has already been decided. It has been held that the said document is insufficiently stamped and it was required to be impounded so as to tender it in evidence. Thus, the adjudication is very clear to the effect that unless the said document is impounded, it is not admissible in evidence. The objection has in fact been decided then and there only and accordingly the said document is sent for impounding to the Collector of Stamps. The decision in appeal preferred against the order of the Collector of Stamps is likely to take some time, which is uncertain. In such a situation, the said document can be called from the Collector of Stamps as it is. Obviously, it will not bear the certificate to the effect that the proper duty and penalty has been paid, as contemplated by Section 37(2) of the Bombay Stamp Act evidencing that it is impounded by the Competent Authority of the Collector of Stamps.

12. Upon receipt of the said document, the learned Judge of the Trial Court shall make an endorsement thereon, permitting tentatively the said document to be tendered in evidence subject to impounding of the said document from the Collector of Stamps, Nagpur. The Trial Court shall, however, 12

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neither make an endorsement of admission of the said document in evidence, nor shall make an endorsement of inadmissibility of the said document in evidence, as required by Order XIII, Rules 4 and 6 respectively of the Civil Procedure Code. In such a situation, even if the parties are permitted to examine or cross-examine the witnesses, the rigour of Section 35 of the Bombay Stamp Act, which is in pari materia with Section 36 of the Indian Stamp Act, shall not come into operation, as has been held by the Apex Court in Ram Rattan's case, cited supra.

13. On the contrary, it shall be permissible for the Trial Court to allow the parties to complete the further process of evidence without putting the mark of 'Exhibit' on the said document. The Trial Court shall also decide all such objections, other than the objection of insufficiently stamped document, as to the admissibility of the said document in evidence in accordance with law, including the effect of non-registration of the said document. The Trial Court can proceed to record further evidence as permissible in law and shall wait for an order of impounding the said document, to finally decide the suit. The petitioner/plaintiff has agreed to deposit the amount of Rs.4,15,714.14 with the Collector of Stamps, Nagpur, who 13

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can release the said document after giving a receipt about deposit of the said amount to the petitioner/plaintiff and not the receipt of amount to impound the said document.

14. For the reasons stated above, this writ petition is allowed and the following order is passed : (i) The order dated 31-1-2012 passed by the learned 2nd Civil Judge, Senior Division, Nagpur, in Special Civil Suit No.979 of 2006 rejecting the application for calling the said document from the office of the Collector of Stamp, Nagpur, is hereby quashed and set aside.

(ii) The Trial Court is directed to call for the said document from the office of the Collector of Stamps, Nagpur, by accepting the deposit of an amount of Rs.4,15,714.14 by the petitioner/plaintiff. (iii) The Collector of Stamps, Nagpur, shall release the said document upon receipt of an amount of Rs.4,15,714.14 deposited by the petitioner/plaintiff and shall issue an acknowledgment in respect 14

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thereof.

(iv) Upon receipt of the said document, the Trial Court shall permit the petitioner/plaintiff to tender the said document in evidence and proceed further with recording of the evidence without marking the said document as an exhibit and shall further decide all other objections as to the admissibility of the said document, including the effect of non-registration of the said document, in accordance with law.

(v) After the evidence is concluded, the Trial Court shall forward the said document back to the Collector of Stamps, Nagpur, who shall deal with it in accordance with the decision to be given in appeal filed by the petitioner/plaintiff under Section 53(1A) of the Bombay Stamp Act, which is pending, after adjusting the amount deposited by the petitioner/plaintiff.

(vi) The Trial Court shall not finally decide the suit unless the said document is impounded or the order 15

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rejecting the application for impounding the said document is received from the office of the Collector of Stamps, Nagpur.

(vii) The parties shall be at liberty to approach this Court by filing a separate application in this case only, in case of any difficulty.

15. Rule is made absolute in above terms. No order as to costs.

Judge.