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SUPREME COURT OF INDIA
VIKRAM NATH, PRASANNA B. VARALE, JJ.
Bidyut Sarkar & Anr. - Appellants
Versus
Kanchilal Pal (Dead) through Lrs. & Anr. - Respondents
Civil Appeal Nos. 10509-10510 of 2013
Decided On : 28-08-2024
Stamp Act, 1899 – Sections 35, 36, 40 and 42 – Agreement to Sell – Suit for Specific Performance – Instruments not duly stamped – Insufficiently stamped document can only be admitted into evidence after deficiency in stamp duty and any applicable penalty has been duly paid and cleared – Findings of High Court regarding admissibility of agreement to sell were neither based on a detailed consideration of relevant statutory provisions nor supported by established legal principles – High Court, without thoroughly examining applicable legal provisions, cursorily concluded that document would be admissible simply because plaintiff had expressed willingness to pay deficient stamp duty and any penalty imposed by competent authority or Collector – This lapse of procedure was not properly addressed in High Court's judgment – Plaintiff made no concrete effort to initiate or pursue necessary proceedings before competent authority or Collector to determine deficient stamp duty and penalty – Even till date, plaintiff has not made any efforts before Collector to get deficiency and penalty determined on impounded document and to clear the same – Failure to resolve deficiency in stamp duty prevents the document from being considered as admissible and valid in evidence – As document is foundational to suit, failure to comply with statutory requirements renders entire claim unenforceable – Plaintiff cannot claim relief on the basis of a document that has not satisfied legal requirements for admissibility – Impugned order of High Court set aside and that of Trial Court dismissing suit restored – Appellants shall pay Rs.5,00,000/- to plaintiff-respondent no.1 within three months. (Paras 17, 19, 26, 30, 32 and 33)
Facts of the case:
Present appeals, by defendant nos.2 and 3, have been filed assailing correctness of judgment and order dated 05.12.2008 whereby Division Bench of Calcutta High Court allowed First Appeal and after setting aside judgment of Trial Court dismissing suit of respondent no.1, proceeded to decree suit for specific performance of contract in favour of plaintiff -respondent no.1.
Findings of Court:
Amount of Rs.10,000/- received by defendant no.1 although under abnormal conditions as alleged by defendant no.1 in interest of parties would be liable to be returned to plaintiff.
Result : Appeals allowed.
ORDER :
1. These appeals, by defendant nos.2 and 3, have been filed assailing the correctness of the judgment and order dated 05.12.2008 whereby the Division Bench of Calcutta High Court allowed the First Appeal No.282 of 2006, titled Kanchilal Pal vs. Sashti Charan Banerjee & Others, and after setting aside the judgment of the Trial Court dismissing the suit of the respondent no.1, proceeded to decree the suit for specific performance of the contract in favour of plaintiff -respondent no.1. Hereinafter will deal with the parties as they have been referred in the Trial Court.
2. Relevant facts giving rise to the present appeals are as follows:
2.1. Sashti Charan Banerjee-respondent no.2, was admittedly the owner of the property in dispute. According to the appellants, respondent no.1 filed a suit for specific performance registered as Title Suit No.123 of 1999, Kanchilal Pal vs. Sashti Charan Banerjee and two others in the Court of Civil Judge (Senior Division), Barasat, for a decree of specific performance of contract dated 29.03.1999. The plaint allegations are as follows:
(b) Defendant no.1 intended to sell the premises in question for which the plaintiff agreed to purchase the same for a consideration of Rs.3,00,000/- (Rupees three lakhs only). The plaintiff was required to develop the property/premises in question while dividing into plots and to sell the same to different persons within the period of one year and, after realizing sale consideration from the proposed purchasers, shall pay the balance amount of Rs.2,90,000/-(Rupees two lakhs ninety thousand only) whereupon defendant no.1 would transfer the land in favour of the plaintiff or his nominees, as the case would be.
(c) An advance amount of Rs.10,000/- (Rupees ten thousand only) is said to have been paid in cash to defendant no.1. The plaintiff was also empowered to make a settlement for ejectment of the tenants residing in the premises in question and take possession from them. The plaintiff was also authorized to carry out development work and to make construction of common passage, drain, etc. in the meantime and to collect money from the proposed buyers of the plots to be developed.
2.2. In due course, a sale deed would be executed by defendant no.1 in favour of the nominees or the plaintiff and in such sales, the plaintiff would be a confirming party. The said exercise was to be completed within one year. In case defendant no.1 fails to execute the sale deed, the plaintiff or his nominees would be at liberty to file a suit for specific performance.
2.3. It was further provided in the agreement that, in case the plaintiff fails to pay the amount as agreed within the time stipulated i.e. one year, the agreement to sell would be treated as cancelled.
2.4. Further, according to the plaint, the plaintiff has spent an amount of Rs.2,00,000/- (Rupees two lakhs only) for construction of common passage, drain, etc. and has also contacted with the tenants to purchase part of the property in question measuring three cottahs and that they would pay an amount of Rs.1,20,000/- (Rupees one lakh twenty thousand only), out of which the plaintiff had received Rs.50,000/- (Rupees fifty thousand only) from one of the tenants. The plaintiff also claimed to be in possession. He also requested defendant no.1 to deliver the original title deeds, which defendant no.1 did not oblige.
2.5. The tenants, on 20.05.1999, came to the plaintiff and showed him letter of an advocate and, after going through the same, the plaintiff learnt that defendant no.1 had already transferred the property in question vide sale deed dated 03.05.1999 in favour of defendant nos.2 and 3 (appellants). The plaintiff thereafter made
(1) Agreement to Sell – Suit for Specific Performance must be dismissed when it is based on an instrument that is legally inadmissible as evidence – Plaintiff cannot claim relief on the basis of a do....
The plaintiff must demonstrate both readiness and willingness to perform a contract for specific performance, including financial capacity, and agreements must be duly stamped to be enforceable.
Under the Indian Stamp Act, once a document is found to be insufficiently stamped, the court is duty-bound to impound the document and send it to the Collector for proper assessment and payment of th....
The court upheld that an agreement to sell not duly stamped is inadmissible in evidence, and emphasized the necessity of proving continuous readiness and willingness for granting specific performance....
The court must determine the admissibility of documents based on the stamping requirements before relying on them in judgments, failing which can constitute a material irregularity.
Documents marked as exhibits can be subsequently objected to for admissibility if not duly stamped, requiring judicial determination on the issue of admissibility.
A sale agreement must comply with the Indian Stamp Act requirements to be admissible in evidence; failure to do so invalidates the agreement's enforceability.
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