This is the defendant’s appeal arising from a suit for recovery of money, based on a handloan agreement dated 11.05.2007. The respondent instituted the suit, to pass decree for recovery of Rs.2,71,000/-, with interest at 18% p.a. from the date of loan and the costs. Suit was contested on multiple grounds. 4 issues were raised. During the course of trial, suit document – handloan agreement dated 11.05.2007 was produced. Marking of the suit document was objected, on the ground that it is insufficiently stamped and is liable to be impounded. The said document was marked subject to the objection. At the conclusion of the trial, without deciding the objection raised on the said document, the suit was decreed and the defendant was directed to pay Rs.2,71,000/- with interest at 6% p.a. from the date of availment of loan, till the date of realisation, to the plaintiff.

2. An appeal was filed by the defendant, assailing the decree, inter alia contending that the Trial Judge should not have received the suit document and admitted it in evidence as Ex.P1. It was contended that the suit document having been marked ‘subject to objection’, without passing the order on the objection, the decree passed is illegal. Considering the rival contentions, three points were raised for consideration. However, no point was raised with regard to the aforesaid material ground. Despite observing that the objection raised ought to have been decided first i.e., before admitting the document, it was erroneously concluded that objection was not raised while marking the document. The said finding being contrary to the record is perverse. The appeal was allowed in part and the impugned Decree was modified, entitling the plaintiff to interest at 6% p.a. from the date of the suit, till realisation.

3. This second appeal was filed to set aside the said decrees by raising substantial question of law with regard to the illegality committed in the matter of receiving the suit document in evidence and its marking as Ex.P1.

4. Considering the rival contentions and the record of the case, the following substantial question of law arises for consideration:

“Whether there is breach of the provisions as per Ss.33 and 34 of the Karnataka Stamp Act, 1957 (Act for short), in the matter of receiving and admitting as evidence the suit document and in passing the impugned decrees?”

5. With the consent of the learned advocates, by dispensing with the filing of paper book the appeal is taken up for final hearing. Heard the arguments of the learned advocates appearing for the parties and perused the record.

6. S.33 of the Act provides for examination and impounding of an instrument which is not duly stamped. Once, on examination, it is found that the instrument is not duly stamped, S.34 comes into operation and places a complete embargo on the admissibility of such instrument in evidence.

7. In the case of RAM RATHAN (DEAD) BY LRS. Vs. BHAJARANGLAL AND OTHERS, (1978) 3 SCC 236, Apex Court, after considering the observations made in the case of JAVER CHAND AND OTHERS Vs. PUKHRAJ SURANA, AIR 1961 SC 1655, has held as follows:

“6. When the document was tendered in evidence by the plaintiff while in witness box, objection having been raised by the defendants that the document was inadmissible in evidence as it was not duly stamped and for want of registration, it was obligatory upon the learned trial Judge to apply his mind to the objection raised and decide the objection in accordance with law. Tendency sometimes is to postpone the decision to avoid interruption in the process of recording evidence and, therefore, a very convenient device is resorted to, of marking the document in evidence subject to objection. This, however, would not mean that the objection as to admissibility on the ground that the instrument is not duly stamped is judicially decided; it is merely postponed. In such a situation at a later stage before the suit is finally disposed of it would none-the-less be obli