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SUPREME COURT OF INDIA
ABHAY S. OKA, SANJAY KAROL, JJ.
Vijay – Appellant
Versus
Union of India and Others – Respondents
Civil Appeal No. 4910 of 2023
Decided On : 29-11-2023
(1) Stamp Act, 1899 -- S. 2(6) -- relevant date for charging stamp duty -- is date of execution -- not date of adjudication or date of presentation and registration of document. [Paras 10 & 11]
(2) Stamp Act, 1899 -- S. 35 and Sch. 1A Art. 23 Explanation (as inserted in 1990) -- applicability of bar u/s. 35 -- sale agreement handing over possession executed prior to causal amendment in 1990 -- Explanation inserted in Art. 23 creates new obligation for party therefore cannot be given retrospective application -- it will not affect agreements executed prior to such amendments -- if documents sought to be admitted are not chargeable with duty, S. 35 has no application -- since document was dated 4.2.1988, it was not chargeable with duty -- when such document is not required to be stamped, then no bar could be imposed due to it being not duly stamped -- plaintiff's prayer for leading secondary evidence ought to be allowed. (2012) 1 SCC 656, (2022) 12 SCC 321, (2017) 1 SCC 599, Civil Appeal No. 10327 of 2011, 2023 SCC Online SC 640, (2007) 9 SCC 665, (1976) 1 SCC 906 and (2015) 1 SCC 1 referred to. (1971) 1 SCC 545 distinguished. [Paras 18, 26, 28, 40, 42 & 43.1]
(3) Interpretation of Statute -- explanation or clarification -- only because provision is described as clarification or explanation, Court not bound by said statement -- must analyse nature of amendment to conclude whether it is indeed clarificatory or declaratory, or whether it is substantive amendment intended to change law and would apply prospectively -- mere description of provision as "explanation" or "clarification" does not determine its actual effect -- clarification or explanation must not have effect of imposing unanticipated duty or depriving party of anticipated benefit. (2007) 9 SCC 665, (1976) 1 SCC 906 and (2015) 1 SCC 1 relied on. [Paras 22, 23 & 25]
(4) Interpretation of Statute -- nature of amendment -- amendments that create rights and obligations are generally prospective in nature. (2015) 1 SCC 1 relied on. [Para 25]
(5) Evidence Act, 1872 -- Ss. 61, 63 and 65 -- terms "primary evidence" and "secondary evidence" -- apply to kinds of proof that may be given to contents of document, irrespective of purpose for which such contents, when proved, may be received. (2004) 8 SCC 270 relied on. [Para 31]
(6) Evidence Act, 1872 -- Ss. 61, 63 and 65 -- secondary evidence -- admissibility -- relevant principles enumerated. (2023) 4 SCC 731, (2007) 5 SCC 730, (2010) 9 SCC 712, 1935 SCC Online PC 56 and (2011) 4 SCC 240 relied on. [Para 33]
(7) Evidence Act, 1872 -- S. 65(a) -- secondary evidence -- plaintiff claimed that defendant has original document -- defendant stated that it was with her counsel but could not be recovered from said counsel -- presentation of secondary evidence could be allowed if other requirements are complied with. [Paras 35 & 43.2]
(8) Stamp Act, 1899 -- S. 35 -- applicability of bar -- excludes both original instrument and secondary evidence of its contents if it needs to be stamped or sufficiently stamped -- this bar as to admissibility of document is absolute -- where document cannot be received in evidence on ground that it is not duly stamped, secondary evidence thereof equally inadmissible. [Para 36]
(9) Evidence Act, 1872 -- S. 65 -- secondary evidence -- unstamped/insufficiently stamped document -- copy of such document as secondary evidence cannot be adduced. (1971) 1 SCC 545 and (2007) 8 SCC 514 relied on. [Para 39]
(10) Practice -- question whether document is liable to stamp duty and penalty -- has to be decided at threshold even before marking document. [Para 41]
The case involves a dispute over an agreement to sell property executed on February 4, 1988, between the plaintiff and the defendant. The plaintiff claims to have been put into possession of the property pursuant to this agreement. The defendant, however, denied the existence of the agreement. The plaintiff sought to file a copy of the agreement as secondary evidence in a suit for specific performance. Initially, the court allowed this, but later reviewed the decision and held that the secondary evidence was inadmissible because the original agreement was not properly stamped, thus invoking the bar under the relevant stamp duty law (!) (!) .
The plaintiff challenged this review order and the constitutional validity of the applicable stamp duty section. The case then proceeded through various courts, examining whether the agreement needed to be stamped at the time of execution, and whether the document could be admitted as secondary evidence given its stamp status. The core issue was whether the agreement, executed in 1988, was subject to stamp duty under the law as amended later, and whether the secondary evidence could be admitted if the original was not properly stamped.
The factual matrix also includes the fact that the defendant claimed the original agreement was with her counsel and could not be recovered, which raised questions about the admissibility of secondary evidence. The legal proceedings involved detailed consideration of the applicable law regarding the timing of stamp duty liability, the nature of secondary evidence, and the interpretation of amendments and explanations in the law related to documents executed prior to certain amendments. Ultimately, the courts examined whether the agreement was liable for stamp duty at the time of execution and whether secondary evidence could be admitted under the law, given the circumstances of the case.
JUDGMENT :
SANJAY KAROL, J.
1. The issues that arise for consideration of this Court in the present appeal are:
1.1 Whether the bar of admissibility created by Section 35 of the Indian Stamp Act 18991 [hereinafter referred to as ‘Stamp Act’] applies to the agreements to sell dated 04.02.1988 executed by the parties?
1.2 Can a copy of a document be adduced as secondary evidence when the original instrument is not in possession of the party?
1.3 Whether, in the facts of the present case, would the decision of this Court in Jupadi Kesava Rao vs. Pulavarthi Venkata Subha Rao, (1971) 1 SCC 545 (2-Judge Bench) be binding as held by both the Courts below?
FACTUAL MATRIX
2. Plaintiff and Defendant entered into an agreement to sell on 04.02.1998 and pursuant to that, Plaintiff was allegedly put in possession by Defendant. When Defendant denied the existence of such an agreement, Plaintiff filed a suit for specific performance of contract. In the said suit, Plaintiff moved an application to file a copy of the agreement to sell, among other documents, as secondary evidence.
3. Initially, the said application was allowed by the 4th Additional District Judge vide order dated 17.07.2001. But when Defendant sought review of this order, the Court vide its order dated 16.12.2003 reviewed it and held that secondary evidence of an agreement to sell could not be allowed as it was not executed on a proper stamp, thus barred under section 35 of the Stamp Act. While holding so, it relied on the decision of this Court in Jupadi Kesava Rao (supra).
4. Subsequently, the Plaintiff filed a writ petition before the High Court of Madhya Pradesh challenging the review order and the constitutional validity of Section 35 of the Stamp Act. The High Court, vide the impugned order dated 30.11.2009 in W.P. No. 741/2004, upheld the validity of the said section and the order of the Review Court.
5. The present appeal is preferred against this order of the High Court.
6. Learned Senior Counsel Dr. Menaka Guruswamy, for the Appellant-Plaintiff, submits that the prohibition of Section 35 of the Stamp Act is not applicable as there was no requirement for either party to have paid stamp duty at the time of execution (before the 1989 Amendment) of the agreement to sell. Thus, the Plaintiff ought to have been permitted to lead a copy of the agreement to sell as secondary evidence under Section 65 of the Evidence Act.
7. Respondent no. 2/Defendant, in its counter affidavit, has stated that a copy of an original document that is unstamped or deficiently stamped can neither be impounded nor validated or admitted as secondary evidence. Once the original document is inadmissible under the Stamp Act, the photocopy or any other copy cannot be allowed as secondary evidence.
ISSUE 1
8. To adjudicate this issue, it is pertinent to reproduce Section 35 of the Stamp Act:
“Section 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 instruments are 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”
9. It is evident from a bare perusal of the section that it prohibits admission in evidence of instruments that are chargeable with duty unless they are “duly stamped.” Duly stamped as defined under Section 2(11) of the Stamp Act
Secondary evidence of agreements not duly stamped cannot be admitted in court unless the original instrument is produced and corrected as per legal requirements.
Suit for declaration – Unregistered document -Secondary Evidence – Admissibility of - Secondary evidence is an evidence which may be given in the absence of that better evidence which law requires to....
Secondary evidence must be of a document which is admissible in evidence.
Only original documents can be validated under the Indian Stamp Act; photocopies are inadmissible for legal purposes, reinforcing established principles regarding document admissibility.
A photocopy of a document is inadmissible as secondary evidence if the original document is not duly stamped, per the Indian Stamp Act.
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