OMPRAKASH Vs LAXMINARAYAN .
Bench: CHANDRAMAULI KR. PRASAD,KURIAN JOSEPH
Case number: C.A. No.-009032-009032 / 2013
Diary number: 18730 / 2008
Advocates: NIRAJ SHARMA Vs
MUSHTAQ AHMAD
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REPORTABLE
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.9032 OF 2013 @SPECIAL LEAVE PETITION (C) NO. 20721 OF 2008)
OMPRAKASH … APPELLANT
VERSUS
LAXMINARAYAN & ORS. …RESPONDENTS
J U D G M E N T
CHANDRAMAULI KR. PRASAD, J.
Plaintiffs filed a suit for specific
performance of contract, possession and permanent
injunction in respect of un-irrigated land having
an area of 0.506 hectares bearing Survey No. 16012
in Village Arniapitha situated within Tahsil Jaora
in District Ratlam in the State of Madhya Pradesh.
It is founded on an agreement to sell dated 27th
December, 2000. It is the case of the plaintiffs
that the properties in question were delivered to
them on payment of the part consideration money in
pursuance of the agreement to sell and such a
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recital finds place in the said agreement.
Paragraph 1 of the agreement to sell reads as
under:
“1.That while selling the aforesaid land I the seller, have received Rs. 1,15,000/- (Rupees one lac fifteen thousand) cash as a token amount before the witnesses and, by remaining present at the spot, actual physical possession has been handed over to the purchaser, and after receiving remaining sale consideration amount Rs. 25,000/- (Rupees twenty five thousand) from the purchaser within a year I, the purchaser, will get the sale deed of the said land registered in the name of the purchaser.”
The defendants in the written statement,
however, denied the assertion of the plaintiffs and
stated that no agreement to sell was ever executed
and possession given. On the basis of the pleading
and the written statement, the trial court framed
several issues. During the course of the trial the
agreement to sell was sought to be proved and
admitted in evidence by the plaintiffs’ witness
Shankarlal. This was objected to by defendant no.
1. Its admissibility was questioned on the ground
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that the agreement to sell in question contains a
recital that possession has been handed over to the
purchaser and, therefore, it is a conveyance over
which the stamp duty as indicated in Schedule 1A of
the Indian Stamp Act, 1899 as substituted by M.P.
Act 22 of 1990 is required to be affixed. It is
pointed out that the agreement to sell in question
is on a stamp paper of Rs. 50 only. The submission
made by defendant no. 1 found favour with the trial
court and it held the agreement to sell to be
inadmissible in evidence as it has not been
sufficiently stamped. It further observed that if
the plaintiffs want to produce the said document in
evidence then they can make proper application as
envisaged under Section 35 of the Indian Stamp Act,
hereinafter referred to as ‘the Act’. While doing
so, the trial court observed as follows:
“………Therefore, it is found that sale agreement dated 27.12.2000 due to mention of possession being handed over, should be stamped like a conveyance. In the sale agreement the cost of the land is mentioned as Rs.1,40,000 and its 7 ½ per cent comes to Rs. 10,500/-. Therefore, it
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is concluded that the sale agreement can be admissible in evidence only on being on stamp of Rs. 10,500/-. Therefore, it is concluded that the sale agreement is not properly stamped, therefore, not admissible in evidence. Thus, objection of defendant No. 1 is allowed sale agreement dated 27.12.2000 is refused to be admitted in evidence. If the plaintiff wants to produce the said documents in evidence then he may make proper application under Section 35 of the Stamp Act on the next date.”
Plaintiffs challenged the aforesaid order
before the High Court in a writ petition filed
under Article 227 of the Constitution of India,
inter alia, contending that when defendants
themselves have asserted that possession of the
property was not delivered, the recital in
agreement is of no consequence. It was also
pointed out that plaintiffs themselves have claimed
relief of possession, which obviously means that
they are not in possession and when this fact is
taken into consideration, the view taken by the
trial court appears to be erroneous. The High
Court by its order dated 27th February, 2008 passed
in Writ Petition No. 7237 of 2007 accepted this
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contention and held the agreement to sell to be
admissible in evidence. The High Court, in this
connection, has observed as follows:
“Although there is no dispute with regard to the fact that in the document in question, which is an agreement alleged to have been executed by the defendants in favour of the plaintiffs, and which is basis of the suit, it is recited that possession of the property in question had been delivered to the plaintiffs, but the fact cannot be ignored that a specific plea has been raised by the defendants in their written statement denying the execution of the said agreement and also specifically denying that the possession of the property had ever been delivered to the plaintiff-petitioners. In these circumstances, once, the defendants themselves have claimed that possession of the property had not been delivered, then the recital in agreement looses all significance. In such a situation, the document cannot be held to be insufficiently stamped merely because it was not stamped in accordance with Article 23 of Stamp Act.”
Defendant no. 1 assails this order in the
present special leave petition.
Leave granted.
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We have heard Mr. Niraj Sharma on behalf of
the appellant and Mr. Fakhruddin, Senior Counsel on
behalf of the respondents.
Mr. Sharma contends that for admissibility of
the document what is relevant is the recital
therein. He submits that agreement to sell is
“conveyance” as defined under Section 2(10) of the
Act and shall be chargeable with duty as
contemplated under Section 3 of the Act. According
to him, as the agreement in question is not duly
stamped, it shall be inadmissible in evidence under
Section 35 of the Act. Mr. Fakhruddin, however,
submits that the defendants having joined the issue
with regard to the possession of the plaintiffs in
terms of the agreement to sell, the document in
question shall not come within the expression
“conveyance” as defined under the Act and, hence,
it cannot be said that it is not duly stamped.
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In view of the rival submission, the question
which falls for our determination is as to whether
the admissibility of a document produced by the
party would depend upon the recital in the document
or the plea of the adversary in the suit and
whether the document in question is “conveyance” as
defined under the Act and is duly stamped.
As stated earlier, the plaintiffs filed a
suit for specific performance of contract and their
case is founded on the agreement to sell executed
on 27th December, 2000. The agreement to sell
acknowledges payment of the part of consideration
money and further giving actual physical possession
to the purchaser by the seller. Though the
defendants dispute that, but in our opinion, for
determination of the question of admissibility of a
document, it is the recital therein which shall be
decisive. Whether the possession in fact was given
or not in terms of the agreement to sell is a
question of fact which requires adjudication. But,
at the time of considering the question of
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admissibility of document, it is the recital
therein which shall govern the issue. It does not
mean that the recital in the document shall be
conclusive but for the purpose of admissibility it
is the terms and conditions incorporated therein
which shall hold the field. Having said that, we
proceed to consider as to whether the document in
question is “conveyance” within the meaning of
Section 2(10) of the Act. Section 2(10) of the Act
reads as follows:
2. Definitions. -In this Act, unless there is something repugnant in the subject or context, -
xxx xxx xxx
(10)“Conveyance” includes a conveyance on sale and every instrument by which property, whether movable or immovable, is transferred inter vivos and which is not otherwise specifically provided for by Schedule I;
xxx xxx xxx”
From a plain reading of the aforesaid
provision, it is evident that an instrument by
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which movable or immovable property is transferred,
comes within the expression “conveyance”. In the
present case, an immovable property is transferred
on payment of part of the consideration and handing
over the possession of the property. It is
relevant here to state that by the Indian Stamp
(Madhya Pradesh Second Amendment) Act, 1990 (Act
No.22 of 1990) few Articles including Article 23 of
Schedule 1-A has been substituted and Explanation
has been added to Article 23. The Explanation
appended to Article 23 of Schedule 1-A of the Stamp
Act as substituted by Section (6) of Act 22 of 1990
reads as follows:
“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 or 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 47-A shall apply mutatis mutandis to such agreement which is
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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.”
The aforesaid Explanation has come into
effect with effect from 26th September, 1990. The
Explanation, therefore, creates a legal fiction.
The agreement to sell shall be deemed to be a
conveyance and stamp duty is leviable on an
instrument whereby possession has been transferred.
Thus the agreement to sell in question is a
conveyance within the meaning of Section 2(10) of
the Act and is to be duly stamped. Section 35 of
the Act makes instruments not duly stamped
inadmissible in evidence, the relevant portion
whereof reads as follows:
“35. Instruments not duly stamped inadmissible in evidence, etc.-No
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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;
xxx xxx xxx.”
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
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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. The view which we have taken finds
support from a decision of this Court in the case
of Avinash Kumar Chauhan v. Vijay Krishna Mishra, (2009) 2 SCC 532, in which it has been held as follows:
“21. 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
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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, but registration of the document has nothing to do with the validity thereof as provided for under the provisions of the Registration Act, 1908.
22. 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. 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.”
To put the record straight, the correctness of
the impugned judgment (Laxminarayan & Ors. v.
Omprakash & Ors., 2008 (2) MPLJ 416) came up for
consideration before a Division Bench of the High
Court itself in Writ Petition No. 6464 of 2008 (Man
Singh (deceased) through Legal Representatives Smt.
Sumranbai & Ors. v. Rameshwar) and same has been
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overruled by judgment dated January 22, 2010. The
High Court observed as follows:
“8. A document would be admissible on basis of the recitals made in the document and not on basis of the pleadings raised by the parties. In the matter of Laxminarayan (supra), the learned Single Judge with due respect to his authority we don’t think that he did look into the legal position but it appears that he was simply swayed away by the argument that as the defendant was denying the delivery of possession, the endorsement/recital in the document lost all its effect and efficacy.
9. It would be trite to say that if in a document certain recitals are made then the Court would decide the admissibility of the document on the strength of such recitals and not otherwise. In a given case, if there is an absolute unregistered sale deed and the parties say that the same is not required to be registered then we don’t think that the Court would be entitled to admit the document because simply the parties say so. The jurisdiction of the Court flows from Sections 33, 35 and 38 of the Indian Stamp Act and the Court has to decide the question of admissibility. With all humility at our command we over- rule the judgment in the matter of Laxminarayan (supra).”
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We respectfully agree with the conclusion of
the High Court in this regard.
In view of what we have observed above, the
order of the High Court is unsustainable and cannot
be allowed to stand.
In the result, the appeal is allowed, the
impugned order of the High Court is set aside and
that of the trial court is restored but without any
order as to costs.
……………………..………………………………..J. (CHANDRAMAULI KR. PRASAD)
…….….……….………………………………..J. (KURIAN JOSEPH)
NEW DELHI, OCTOBER 7, 2013
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