REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1627   OF 2019 (ARISING OUT OF SLP (CIVIL) NO. 5036 OF 2019)

M/S. Z. ENGINEERS CONSTRUCTION PVT.  LTD. & ANR. .....APPELLANT(S)

VERSUS

BIPIN BIHARI BEHERA & ORS. .....RESPONDENT(S)

J U D G M E N T

HEMANT GUPTA, J.

1. Leave granted.

2. The challenge in the present appeal is to an order passed by the

High Court of Orissa on 24th January, 2019 whereby the petition

filed by the appellant under Article 227 of the Constitution of India,

dismissing an application filed by the appellant under Order XIII

Rule 8 of the Code of Civil Procedure, 19081 to impound the power

of attorneys (Exts. 4 and 5), was dismissed.   

3. The  plaintiffs-respondents  instituted  a  suit  for  partition  through

their  power  of  attorney  holder  Kishore  Chandra  Behera  (PW-1).

During the cross-examination of PW-1, the present appellants filed

1  for short, ‘Code’

1

an application under Order XIII Rule 8 of the Code to impound the

power of attorneys, Exts. 4 and 5,  inter alia, for the reason that

such power of attorney is to be treated as Conveyance within the

meaning of Article 23 of the Indian Stamp Act, 18992 as amended

by Orissa Act No. 1 of 2003 w.e.f. 20th January, 2003.  The amended

Schedule IA reads as under:

            Schedule IA

23 Conveyance,  as  defined by  Section 2(10)  not  being a transfer  charged or exempted under No. 62: (a) in respect of movable property. Four  per  centum  of

the  amount  or  value of  the  consideration as  set  forth  in  the instrument.

(b) in respect of immovable property. Eight  per  centum  of the  amount  or  value of  the  consideration for  such  conveyance as set forth therein or the  marked  value  of the  property whichever is higher.

xxx xxx

Explanation – For the purpose of this article,  an  agreement  to  sell  any immovable  property  or  a  power  of attorney shall, in case of transfer of the  possession  of  such  property before or at the time of or after the execution  of  such  agreement  or power of attorney, be deemed to be a  conveyance  and  the  stamp duty thereon  shall  be  chargeable accordingly.

Provided  that  the  stamp  duty already paid on such agreement or power of attorney shall, at the time of the execution of a conveyance in pursuance  of  such  agreement  or power  of  attorney,  be  adjusted

2  for short, ‘Act’

2

towards  the  total  amount  of  duty chargeable on the conveyance.

4. Similarly, clause (f) of Article 48 was substituted by the amending

Act, contemplating levy of stamp duty as conveyance when such

power of  attorney is  given for consideration and authorising the

attorney to sell any immovable property.   

5. The power of attorney dated 21st February, 2011 was produced in

evidence  as  Ex.4  on  9th July,  2008  by  PW  1-  Kishore  Chandra

Behera.  It was objected to by the present appellants.  The other

power of attorney dated 4th October, 2008 was produced as Ex.5 in

evidence on 7th August, 2018 which was again objected to by the

present appellants.   The relevant part  of  the evidence from the

statement of PW 1 reads as under:

“15.   …This is  the original  general  power of  attorney dtd.21.02.2011 marked Ext-4 (with obj.).

16.   This  is  the  original  general  power  of  attorney bearing No. 10676 dtd.04.10.2008 marked Ext-5 (with obj.).”

6. It  is  thereafter  an application was filed by the appellants  on 3 rd

September, 2018 seeking direction to impound the two power of

attorneys  on  the  ground  that  they  were  insufficiently  stamped.

Therefore, in terms of Section 35 of the Act, the same were liable to

be impounded and can be admitted in evidence only if appropriate

stamp duty and penalty is paid.  It is argued that in terms of the

Act as amended in the Orissa State, the power of attorney shall be

treated to be conveyance if the possession is transferred before or

3

at the time or after  the execution of  a power of  attorney.  It  is

contended though,  that  the  cumulative  reading of  the power  of

attorneys shows that the intention is to give an unequivocal right to

the attorney to sell the land.  However, the fact that the possession

was transferred to the attorney was admitted when the attorney

appeared as PW-1.  Therefore, in terms of explanation to Article 23,

the power of  attorney is  liable  to be impounded and cannot  be

admitted unless an appropriate stamp duty is paid.

7. In  a  judgment  reported  as  Ram  Rattan  (Dead)  by  LRs.  v.

Bajrang Lal  & Ors.3, the  question  regarding  admissibility  of  a

document  was  examined  for  the  reason  that  it  was  not  duly

stamped  and  registered.   The  learned  trial  court  made  an

endorsement that the document was “Objected, allowed subject to

objection”.   However,  the  learned  trial  court  at  the  stage  of

arguments  rejected  the  documents  to  be  admitted  for

consideration, by taking recourse to Section 36 of the Act.  This

Court found that Section 36 of the Act could come into play only

when an objection regarding insufficient stamp duty was judicially

determined.  Since  an  objection  was  raised  which  was  not  still

judicially determined, the recourse to Section 36 of  the Act was

found to be not tenable, though an objection was raised at the time

of evidence.  

8. In  Omprakash  v.  Laxminarayan & Ors.4,  the plaintiff  claimed

3  (1978) 3 SCC 236 4  (2014) 1 SCC 618

4

that possession was delivered to him on the basis of an agreement

to  sell.  The  defendant  denied  the  delivery  of  possession.   The

question  examined  was  as  to  whether  the  admissibility  of

document produced by party would depend upon recitals  in  the

documents  or  whether  documents  are  to  be  considered  as

conveyance  as  defined  under  the  Act  as  amended  by  Stamp

(Madhya Pradesh Second Amendment) Act, 1990.  The amendment

in the Madhya Pradesh Act is similar to that made in Orissa Act No.

1 of 2003. The High Court accepted the plaintiff’s petition and set

aside  the  demand  of  stamp  duty  treating  the  document  to  be

conveyance as ordered by the trial court. The distinguishing factor

is that, in the aforesaid case, possession was said to be delivered

to the  prospective  vendee in  the  agreement  to  sell  itself.   This

Court held as under:

“16.  From a plain reading of the aforesaid provision, it is  evident that an authority to  receive evidence shall not admit any instrument unless it is duly stamped. An instrument  not  duly  stamped  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  penalty.  As  we  have observed earlier,  the deed of agreement having been insufficiently  stamped,  the  same  was  inadmissible  in evidence.  The  court  being  an  authority  to  receive  a document  in  evidence  to  give  effect  thereto,  the agreement  to  sell  with  possession  is  an  instrument which requires payment of the stamp duty applicable to a deed of conveyance. Duty as required, has not been paid and, hence, the trial court rightly held the same to be inadmissible in evidence.”

9. Learned counsel for the respondents referred to a judgment of this

5

Court  reported as  R.V.E.  Venkatachala  Gounder  v.  Arulmigu

Viswesaraswami  &  V.P.  Temple  &  Anr.5 to  contend  that

admissibility  of  document  in  evidence  can  be  classified  in  two

classes:  (i) an objection that the document which is sought to be

proved  is itself  inadmissible in  evidence;  and  (ii)  where  the

objection  does  not  dispute  the  admissibility  of  the  document  in

evidence but  is  directed  towards  the mode of  proof alleging  the

same  to  be  irregular  or  insufficient.  It  was  held  that  such

objections are required to be raised when the document has been

admitted in evidence in terms of provisions of Order XIII Rule 4 of

the  Code.   However,  the  said  judgment  does  not  deal  with  the

objection  regarding  impounding  of  a  document  for  insufficient

stamp duty as required under the Act.  Therefore, such judgment

has no applicability to the facts of the present case.

10. Learned counsel for the respondents refers to another judgment

reported  as  Bipin  Shantilal  Panchal  v.  State  of  Gujarat  &

Anr.6 wherein  the  appellant  was  facing a  trial  for  the  offences

under the Narcotic Drugs and Psychotropic Substances (NDPS) Act.

During the course of  trial,  the trial  court  had chosen to decide

questions  of  admissibility  of  documents  or  other  items  of

evidence, as and when objections thereto were raised.  This Court

found that it is an archaic practice that whenever any objection is

raised regarding the admissibility of any material in evidence, the

Court does not proceed further without passing an order on such

5  (2003) 8 SCC 752 6  (2001) 3 SCC 1

6

objection.  This  Court  found  that  any  decision  on  objection  is

challenged in appeal or revision which unnecessarily prolongs the

trial.  Such practices proved to be hindrance which impede and

restrict the progress of trial proceedings. Such proceedings must

be recast and remodeled to give way to the acceleration of trial

proceedings. It is thereafter, the Court held as under:  

“14.  When so recast, the practice which can be a better substitute  is  this:  Whenever  an  objection  is  raised during  evidence-taking  stage  regarding  the admissibility of any material  or  item of  oral  evidence the trial court can make a note of such objection and mark the objected document tentatively as an exhibit in the  case  (or  record  the  objected  part  of  the  oral evidence) subject to such objections to be decided at the last stage in the final judgment. If the court finds at the  final  stage  that  the  objection  so  raised  is sustainable  the  Judge  or  Magistrate  can  keep  such evidence excluded from consideration. In our view there is no illegality in adopting such a course. (However, we make it clear that if the objection relates to deficiency of stamp duty of a document the court has to decide the  objection  before  proceeding  further.  For  all  other objections  the  procedure  suggested  above  can  be followed.)”

11. We find that the trial court as well as the High Court returned the

findings on the bare reading of the power of attorney and observed

that  since  it  is  a  registered  document,  therefore,  it  is  properly

stamped.  But  the  question  as  to  whether  in  terms  of  the

explanation inserted by the Orissa Act, such power of attorney is

liable to be stamped as conveyance, on account of the delivery of

possession  at  the  time  of  execution  of  power  of  attorney  or

thereafter has not been examined.   

12. We find that the question whether possession was transferred at

7

the time or after execution of such power of attorney is a question

of fact which is required to be decided by the Court at the time of

final decision being adjudicated, after evidence is led by the parties

and not merely on the basis of recitals in the power of attorney.

Such process  would  be fair  and reasonable keeping in  view the

provisions of Orissa Act.  

13. We find that in the facts of the present case, the objection related

to  deficiency  in  stamp duty  on  a  power  of  attorney  which  the

appellants  claim  to  be  conveyance,  depends  upon  the  finding

regarding delivery of possession in terms of the power of attorney.

Generally speaking, such objection is required to be decided before

proceeding further.  However, in a case where evidence is required

to determine the nature of the document, it is reasonable to defer

the admissibility of a document for insufficient stamp duty at the

time of final decision in the suit.   

14. Therefore, we find that the order passed by the trial court on 14 th

December,  2018  and  the  High  Court  on  24th January,  2019  are

liable  to  be  set  aside  and  are,  thus,  set  aside.   The  matter  is

remitted to the trial court to decide the objection of admissibility of

the document on account of being insufficiently stamped in light of

the findings recorded, after evidence is led by the parties.   The

application dated 3rd September, 2018 filed by the appellants shall

be decided along with the main suit, when the question of delivery

of possession at the time of the execution of the power of attorney

8

or thereafter shall be determined.   

15. In view of the above, the appeal is disposed of.

.............................................J. (S. ABDUL NAZEER)

.............................................J. (HEMANT GUPTA)

NEW DELHI; FEBRUARY 14, 2020.

9