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 27th 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 14th November, 2006 and 9th 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 4th 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 9th 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  8 [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 15th 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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