REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7350 OF 2008

(Arising out of SLP (C) No. 8651 of 2007)

Avinash Kumar Chauhan ….

Appellant

Versus

Vijay Krishna Mishra …. Respondent

J U D G M E N T

S.B. SINHA, J.

1.Leave granted.

2.Interpretation of Sections 33 and 35 of the Indian Stamp Act 1899

(for short ‘the Act’) calls for our consideration in this appeal which arises

out of a judgment and order dated 27

th

February, 2007 passed by a learned

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Single Judge of the High Court of Chattisgarh at Bilaspur dismissing a

petition filed by the appellant herein under Article 227 of the Constitution

of India against the orders dated 14

th

November, 2006 and 9

th

January, 2007

passed in Civil Suit No.1-B/2006 by the Additional District Judge,

Gariaband, Raipur.

3.The undisputed fact of the matter is that the respondent herein, who is

said to be a member of the Scheduled Tribe intended to transfer a house and

land admeasuring 10150 sq. ft. situated at Village Gariyaband, District

Raipur. A sum of Rs.2,70,000/- fixed by way of consideration towards the

aforementioned transfer was paid to the respondent by the appellant.

Possession of the said property had also been delivered.

4.Indisputably for the purpose of effecting transfer of the said land,

permission of the Collector was required to be obtained in terms of Section

165 (6) of the C.G. Land Revenue Code, 1959, which was applied for but

rejected.

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5.Appellant herein filed a suit for recovery of Rs.2,70,000/-. In support

of his case, the agreement dated 4

th

August, 2003 which was sought to be

registered as a sale-deed has been relied upon.

The same was directed to be impounded by an order dated 9

th

January,

2007, stating :-

“ Under the Section 35(a) of the Stamp Act

there is a provision that for any such instrument or

bill of exchange or promissory note, subject to all

just exceptions, will 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.

In the matter the agreement of sell produced

is valued Rs.2,70,000/- which as per Article 23 of

Indian Stamp Act and as per Schedule 5, on the

said amount stamp duty of 5.6% is leviable and the

7.5% of Rs.2,70,000/- comes to Rs.20,250/-. In

the agreement to sell Rs.60/- is mentioned as

stamp which means reducing the Rs.20,250 -

Rs.60 = Rs.20,190 is less stamp duty paid, 10

times penalty of which will be leviable as per

Section 35 of the Stamp Act means Rs.201900/-

stamp duty will be leviable. In this regard relevant

case law is ‘Kapur Constructions vs. Lita Nagraj

and Ors.,’ AIR 2005 Karnataka 032. The plaintiff

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has paid Rs.20,850/- in the C.C.D. so the rest of

the amount of Rs.181050 be deposited within the

next date of hearing and the Opposite Party shall

also file its counter reply by the next date of

hearing.”

6.As noticed hereinbefore the High Court by reason of the impugned

judgment refused to interfere with the said order.

7.Mr. A.K. Bajpai, learned counsel appearing on behalf of the appellant

would submit that having regard to the fact that the said unregistered deed

of sale was sought to be put in evidence not for the purpose of enforcement

of the contract but only for the purpose of recovery of the amount of

consideration, which indisputably has been paid to the respondent and such

a purpose, it was urged, being a collateral one, the provisions of Sections 33

and 35 of the Act shall not be attracted.

Reliance in this behalf has been placed on the proviso appended to

Section 49 of the Indian Registration Act as also on the decision of this

Court in Bondar Singh v. Nihal Singh, [ (2003) 4 SCC 161 ],

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8.Mr. Suhail Dutt, learned counsel appearing on behalf of the

respondent, on the other hand, would support the impugned judgment.

9.The Act was enacted to consolidate and amend the law relating to

Stamps.

“Conveyance” has been defined in Section 2(10) to mean :-

“ “conveyance” includes a conveyance on sale

and every instrument by which property, whether

moveable or immoveable, is transferred inter vivos

and which is not otherwise specifically provided

for by Schedule I ;”

“Receipt” has been defined in section 2(23) of the Act to mean :-

“ “receipt” includes any note, memorandum

or writing-

(a) whereby any money, or any bill of exchange,

cheque or promissory note is acknowledged to

have been received, or

(b) whereby any other moveable property is

acknowledged to have been received in

satisfaction of a debt, or

(c) whereby any debt or demand, or any part of a

debt or demand, is acknowledged to have been

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satisfied or discharged, or

(d) which signifies or imports any such

acknowledgement ;

and whether the same is or is not signed with the

name of any person.”

“Stamp” has been defined in Section 2(26) to mean :-

“ “Stamp” means any mark, seal or

endorsement by any agency or person duly

authorised by the State Government, and includes

an adhesive or impressed stamp, for the purposes

of duty chargeable under this Act.”

10.Chapter II of the Act provides for stamp-duties.

Section 3, which is the charging Section reads as under :-

“3. Instruments chargeable with duty. - Subject to

the provisions of this Act and the exemptions

contained in Schedule I, the following instruments

shall be chargeable with duty of the amount

indicated in that Schedule as the proper duty

therefor, respectively, that is to say-

(a)every instrument mentioned in that

Schedule which, not having been previously

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executed by any person, is executed in India

on or after the first day of July, 1899;

(b)every bill of exchange payable otherwise

than on demand or promissory note drawn

or made out of India on or after that day and

accepted or paid, or resented for acceptance

or payment, or endorsed, transferred or

otherwise negotiated, in India; and

(c)every instrument (other than a bill of

exchange or promissory note) mentioned in

that Schedule, which, not having been

previously executed by any person, is

executed out of India on or after that day,

relates to any property situate, or to any

matter or thing done or to be done, in

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[India] and is received in India.

Provided that no duty shall be chargeable in

respect of-

(1)any instrument executed by, or on behalf of,

or in favour of, the Government incases where, but

for this exemption, the Government would be

liable to pay the duty chargeable in respect of such

instrument;

(2)any instrument for the sale, transfer or other

disposition, either absolutely or byway of

mortgage or otherwise, of any ship or vessel, or

any part, interest, share or property of or in any

ship or vessel registered under the Merchant

Shipping Act 1894, or under Act 19 of 1838, or

the Indian Registration of Ships Act, 1841, as

amended by subsequent Acts.

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(3) any instrument executed ,by, or , on behalf

of, or, in favour of, the Developer , or Unit or in

connection with the carrying out of purposes of

the Special Economic Zone,

Explanation- For the purposes of this clause, the

expressions "Developer", "Special Economic

Zone" and "Unit" shall have meanings respectively

assigned to them in clause(g), (za) and (zc) of

Section 2 of the Special Economic Zones Act,

2005.”

The other provisions contained in the said chapter deal with the mode

and manner of payment etc.

Chapter III of the Act provides for adjudication with regard to proper

stamps; whereas Chapter IV deals with instruments not duly stamped.

Section 33 casts a duty upon every person who has authority to

receive evidence and every person incharge of a public office before whom

the instrument is produced, if it appears to him that the same is not duly

stamped, to impound the same. Sub-section (2) of Section 33 of the Act

lays down the procedure for undertaking the process of impounding.

Section 35 provides that an instrument shall be inadmissible in evidence if

the same is not duly stamped in the following terms :-

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“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 ;

(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

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proceeding in a Criminal Court, other than a

proceeding under Chapter XII or Chapter

XXXVI of the Code of Criminal Procedure

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.”

11.Section 36 of the Act provides that where an instrument has been

admitted in evidence, such admission shall not, except as provided in

Section 21 thereof, be called in question at any stage of same suit or

proceeding on the ground that the instrument has not been duly stamped.

Section 38 provides for the mode and manner in which the instrument

impounded is to be dealt with.

12.The Parliament has, in Section 35 of the Act, advisedly used the

words “for any purpose whatsoever”. Thus, the purpose for which a

document is sought to be admitted in evidence or the extent thereof would

not be a relevant factor for not invoking the aforementioned provisions.

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13.The land in the instant case is situated in a Scheduled Area.

Execution of a deed of conveyance in respect of the land situated in the

scheduled area is statutorily barred. All transactions can be affected only

upon obtaining the permission of the collector in terms of the provisions of

Section 165 (6) of the C.G. Land Revenue Code, 1959. We are, however,

not concerned with the said provisions.

14.Indisputably an instrument was executed. By reason of such an

instrument not only the entire amount of consideration was paid but

possession of the property had also been transferred.

Explanation appended to Article 23 of Schedule IA of the Stamp Act

as substituted by M.P. Act No. 19 of 1989 reads as under :-

“Explanation.- For the purpose of this Article,

where in the case of agreement to sell immovable

property, the possession of any immovable

property is transferred to the purchaser before

execution after execution of such agreement

without executing the conveyance in respect

thereof, then such agreement to sell shall be

deemed to be a conveyance and stamp duty

thereon shall be leviable accordingly:

Provided that the provisions of section 47A shall

apply mutatis mutandis to such agreement which

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is deemed to be a conveyance as aforesaid, as they

apply to a conveyance under that section:

Provided further that where subsequently a

conveyance is effected in pursuance of such

agreement of sale, the stamp duty, if any, already

paid and recovered on the agreement of sale,

which is deemed to be a conveyance shall be

adjusted towards the total duty leviable on the

conveyance subject to a minimum of Rs.10.”

15.The said explanation has been inserted by M.P. Act 19 of 1989 with

effect from 15

th

November, 1989. By reason of the said provision, thus, a

legal fiction has been created. Although ordinarily an agreement to sell

would not be subject to payment of stamp duty which is payable on a sale

deed, but having regard to the purpose and object it seeks to achieve the

legislature thought it necessary to levy stamp duty on an instrument

whereby possession has been transferred.

The validity of the said provision is not in question.

16.It is not in dispute that the possession of the property had been

delivered in favour of the appellant. He has, thus, been exercising some

right in or over the land in question. We are not concerned with the

enforcement of the said agreement. Although the same was not registered,

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but registration of the document has nothing to do with the validity thereof

as provided for under the provisions of the Indian Registration Act, 1908.

17.We have noticed heretobefore that Section 33 of the Act casts a

statutory obligation on all the authorities to impound a document. The court

being an authority to receive a document in evidence is bound to give effect

thereto.

18.The unregistered deed of sale was an instrument which required

payment of the stamp duty applicable to a deed of conveyance. Adequate

stamp duty admittedly was not paid. The court, therefore, was empowered

to pass an order in terms of Section 35 of the Act.

19.The contention of learned counsel for the appellant that the document

was admissible for collateral purpose, in our opinion, is not correct. In

Bondar Singh (supra) this Court was not concerned with the provisions of

the Act. Only interpretation of the provisions of the Registration Act, 1908

was in question. It was opined :-

“ The main question, as we have already

noted, is the question of continuous possession of

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the plaintiffs over the suit lands. The sale deed

dated 9-5-1931 by Fakir Chand, father of the

defendants in favour of Tola Singh, the

predecessor-in-interest of the plaintiffs, is an

admitted document in the sense its execution is not

in dispute. The only defence set up against the said

document is that it is unstamped and unregistered

and therefore it cannot convey title to the land in

favour of the plaintiffs. Under the law a sale deed

is required to be properly stamped and registered

before it can convey title to the vendee. However,

legal position is clear law that a document like the

sale deed in the present case, even though not

admissible in evidence, can be looked into for

collateral purposes. In the present case the

collateral purpose to be seen is the nature of

possession of the plaintiffs over the suit land. The

sale deed in question at least shows that initial

possession of the plaintiffs over the suit land was

not illegal or unauthorized…”

In this case, by reason of the statutory interdict, no transfer at all is

permissible. Even transfer of possession is also not permissible. [See

Pandey Oraon v. Ram Chander Sahu 1992 Supp (2) SCC 77 and Amrendra

Pratap Singh v. Tej Bahadur Prajapati and Others (2004) 10 SCC 65]

20.The Registration Act, 1908 provides for such a contingency in terms

of the proviso appended to Section 49 thereof, which reads as under :-

“49. Effect of non-registration of documents

required to be registered.-

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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.”

21.Section 35 of the Act, however, rules out applicability of such

provision as it is categorically provided therein that a document of this

nature shall not be admitted for any purpose whatsoever. If all purposes for

which the document is sought to be brought in evidence are excluded, we

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fail to see any reason as to how the document would be admissible for

collateral purposes.

22.The view we have taken finds support from the decision of the Privy

Council in Ram Rattan v. Parmananad, [AIR 1946 PC 51] wherein it was

held :-

“That the words ‘for any purpose’ in Section 35 of

the Stamp Act should be given their natural

meaning and effect and would include a collateral

purpose and that an unstamped partition deed

cannot be used to corroborate the oral evidence for

the purpose of determining even the factum of

partition as distinct from its terms.”

The said decision has been followed in a large number of decisions by

the said Court. In Bhaskarabhotla Padmanabhaiah and others v. B.

Lakshminarayana and others [ AIR 1962 A.P. 132 ], it has been held :-

“9.In this case, the learned Subordinate Judge

has observed that what the plaintiff was trying to

prove was not the division in status but to show

that the property was divided under the partition

deed. In any case, the fact that the document is

inadmissible due to want of being stamped is

clear. For, in Ram Rattan v. Parmanand, AIR

1946 PC 51, their Lordships of the Privy Council

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held that the words ‘for any purpose’ in S. 35 of

the Stamp Act should be given their natural

meaning and effect and would include a collateral

purpose and that an unstamped partition deed

cannot be used to corroborate the oral evidence for

the purpose of determining even the factum of

partition as distinct from its terms.”

It was furthermore held :-

“10.In the result, I agree with the learned

Munsif-Magistrate that the document is ‘an

instrument of partition’ under Sec. 2(15) of the

Indian Stamp Act and it is not admissible in

evidence because it is not stamped. But, I further

held that if the document becomes duly stamped,

then it would be admissible to evidence to prove

the division in status but not the terms of the

partition.”

In Sanjeeva Reddi v. Johanputra Reddi, [ AIR 1972 A.P. 373 ], it

has been held :-

“9. While considering the scope of Section 35 of

the Indian Stamp Act we cannot bring in the effect

of non-registration of a document under Section

49 of the Indian Registration Act. Section 17 of

the Indian Registration Act deals with documents,

the registration of which is compulsory and

Section 49 is concerned only with the effect of

such non-registration of the documents which

require to be registered by Section 17 or by any

provision of the Transfer of Property Act. The

effect of non-registration is that such a document

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shall not affect any immovable property covered

by it or confer any power to adopt and it cannot be

received as evidence of any transaction affecting

such property or conferring such power. But there

is no prohibition under Section 49 to receive such

a document which requires registration to be used

for a collateral purpose i.e. for an entirely different

and independent matter. There is a total and

absolute bar as to the admission of an unstamped

instrument whatever be the nature of the purpose

or however foreign or independent the purpose

may be for which it is sought to be used, unless

there is compliance with the requirements of the

provisos to Section 35. In other words if an

unstamped instrument is admitted for a collateral

purposes. It would amount to receiving such a

document in evidence for a purpose which Section

35 prohibits. There is nothing in the case of B.

Rangaiah v. B. Rangaswamy, (1970) 2 Andh WR

181 which supports the contention of the

petitioner. That was a case as pointed out by

Kuppuswami, J., where there were two

instruments though contained in one document

one a settlement in favour of the 4th defendant

therein and the other a will. It was therefore held

that part of the instrument which constitutes a will

did not require any stamp and will be admissible

in evidence for proving the bequest contained

therein. It was for that reason that the learned

Judge said that Sec. 35 of the Stamp Act has no

application to a case where one of the separate

instruments relating to one such matters would not

at all be chargeable under the Act as in the case

before him.”

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In T. Bhaskar Rao v. T. Gabriel and others, [ AIR 1981 A.P. 175 ], it

has been held :-

“5. Section 35 of the Stamp Act mandates that an

instrument chargeable with duty should be

stamped so as to make it admissible in evidence.

Proviso A to Section 35 of the Stamp Act enables

a document to be received in evidence on payment

of stamp duty and penalty if the document is

chargeable, but not stamped or on payment of

deficit duty and penalty, if it is insufficiently

stamped. The bar against the admissibility of an

instrument which is chargeable with stamp duty

and is not stamped is of course absolute whatever

be the nature of the purpose, be it for main or

collateral purpose, unless the requirements of

proviso (A) to Section 35 are complied with. It

follows that if the requirements of proviso (A) to

Section 35 are satisfied, then the document which

is chargeable with duty, but not stamped, can be

received in evidence.”

It was further held :-

“7. It is now well settled that there is no

prohibition under Section 49 of the Registration

Act, to receive an unregistered document in

evidence for collateral purpose. But the document

so tendered should be duly stamped or should

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comply with the requirements of Section 35 of the

Stamp Act, if not stamped, as a document cannot

be received in evidence even for collateral purpose

unless it is duly stamped or duty and penalty are

paid under Section 35 of the Stamp Act.”

(See also Firm Chuni Lal Tukki Mal v. Firm Mukat Lal Ram Chanda

and others, [ AIR 1965 All. 164 ] and Chandra Sekhar Misra v. Gobinda

Chandra Das, [ AIR 1966 Ori. 18 ] ).

23.For the reasons aforementioned, there is no merit in this appeal which

fails and is dismissed. However, in the facts and circumstances of the case,

there shall be no order as to costs.

………………………..J.

[ S.B. Sinha ]

………………………..J.

[ Cyriac Joseph ]

New Delhi

December 17, 2008

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