1966 Supreme(AP) 197

Andhra Pradesh High Court
Judges : GOPALRAO EKBOLE
Pulavarthi Venkata Subba Rao - Appellant
Versus
Jupudi Kesava Rao - Respondent
Decided On : 09-22-66

Headnote:

STAMP ACT - SECTION 35 - SECONDARY EVIDENCE - INADMISSIBILITY - SUIT FOR SPECIFIC PERFORMANCE OF AGREEMENT TO LEASE - ORAL EVIDENCE TO PROVE AGREEMENT - AGREEMENT INSUFFICIENTLY STAMPED - SECONDARY EVIDENCE INADMISSIBLE - SECTION 36, STAMP ACT - NO OBJECTION TO ADMISSIBILITY OF SECONDARY EVIDENCE - IRRELEVANT - SPECIFIC RELIEF ACT, SECTION 27-A - TRANSFER OF PROPERTY ACT, SECTION 53-A - ORAL EVIDENCE INADMISSIBLE FOR ANY PURPOSE.

Fact of the Case:

Plaintiffs and defendants 3 and 4 were partners in a rice mill. The lease period of the mill expired on 31st December, 1956. Plaintiffs and defendants 3 and 4 requested defendants 1 and 2, the owners of the mill, to extend the lease period. After negotiations, plaintiffs and defendants 1 and 2 entered into an agreement of lease during the first week of January, 1957. According to that lease, which would be in continuation of the old one, the defendants 1 and 2 would lease the site to the plaintiffs for 30 years commencing from 1st January, 1957. The plaintiffs agreed not only on their behalf but on behalf of defendants 3 and 4. It was also agreed that after the expiry of the said period if defendants 1 and 2 desired to purchase the said mill it should be sold by the plaintiffs and defendants 3 and 4 to defendants 1 and 2 at the price that may be fixed by the President of the Bhimavaram Rice Millers association. In case such a purchase was not made, the lessees would remove the superstructure and the building and the materials of the mill and deliver vacant possession of the site to defendants 1 and 2. The rent was fixed at Rs. 540 per year payable every two months. It was also agreed that a lease deed would be executed. A stamped agreement of lease was written and signed by the plaintiffs and the 1st defendant and the lease deed was delivered to the 1st defendant. The plaintiff, therefore continued in possession in pursuance of that lease and effected improvements investing a huge sum of Rs. 30,000. Subsequent to the lease agreement, the 1st plaintiff purchased the shares of the 3rd and 4th defendants in the said mill. Since the plaintiffs were always ready and willing to fulfil their part of the lease agreement, the 1st and 2nd defendants are going back upon their contract in executing a formal lease deed and contrary to this contract on account of some illwill the 1st and 2nd defendants have instituted the two suits for recovery of possession and for damages. Upon these facts relief of specific performance was sought.

Finding of the Court:

1. Secondary evidence in regard to the alleged lease of 6th January, 1957, is not admissible as the agreement to lease was insufficiently stamped. 2. Even on evidence it was found that the evidence of P. Ws. 1 to 5 and 7 is an interested one and on the basis of that evidence, the agreement cannot be said to have been proved. 3. The oral evidence which was received by the trial Court was not admissible at all. 4. The lower appellate Court therefore was wrong in acting upon that evidence and holding that the agreement to lease was established and consequently decreeing the plaintiff s suit. 5. Although the objection was raised by defendants 1 and 2 in the trial Court at the time of the final arguments and not before the oral evidence was received in regard to the admissibility of oral evidence, even then since section 36 is not attracted to such an objection, the oral evidence cannot be acted upon. It is inadmissible in evidence and it cannot be received for any purpose. 6. The defendants i and 2, who have unreasonably withheld the agreement to lease, cannot be permitted to raise an objection about the inadmissibility of parol secondary evidence. 7. The oral secondary evidence is inadmissible for any purpose under section 35 of the Stamp Act, it can be used for the purpose of section 53-A of the Transfer of Property Act. 8. It can also be used for at least showing that the relationship of landlord and tenant continued because of that agreement.

Issues: 1. Whether secondary evidence in regard to the alleged lease of 6th January, 1957, is admissible as the agreement to lease was insufficiently stamped? 2. Whether the oral evidence which was received by the trial Court was admissible at all? 3. Whether the lower appellate Court was wrong in acting upon that evidence and holding that the agreement to lease was established and consequently decreeing the plaintiff s suit? 4. Whether although the objection was raised by defendants 1 and 2 in the trial Court at the time of the final arguments and not before the oral evidence was received in regard to the admissibility of oral evidence, even then since section 36 is not attracted to such an objection, the oral evidence cannot be acted upon? 5. Whether the defendants i and 2, who have unreasonably withheld the agreement to lease, cannot be permitted to raise an objection about the inadmissibility of parol secondary evidence? 6. Whether the oral secondary evidence is inadmissible for any purpose under section 35 of the Stamp Act, it can be used for the purpose of section 53-A of the Transfer of Property Act? 7. Whether it can also be used for at least showing that the relationship of landlord and tenant continued because of that agreement?

Ratio Decidendi: 1. Section 35 of the Stamp Act prohibits admission in evidence of any instrument chargeable with duty (but not stamped or insufficiently stamped) unless such instrument is duly stamped. 2. The section not only prohibits admission in evidence of any such document for any purpose but it also prohibits acting upon such document for any purpose. 3. When the original is insufficiently stamped and is not before the Court, no question of its admission in evidence arises. 4. In such a case, no secondary evidence is possible in regard to such an unstamped or insufficiently stamped document. 5. The reason is that the secondary evidence is only admissible where primary evidence is admissible. 6. Furthermore, the admitting of secondary evidence of a document not duly stamped would be equivalent to acting on such documents which is prohibited by section 35. 7. Section 36, Stamp Act, is applicable only when an unstamped or insufficiently stamped instrument has to be admitted in evidence, but where the instrument itself is not produced, the section has no application to the secondary evidence.

Final Decision: Appeals allowed; trial Court decrees rtstored.