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2023 Supreme(P&H) 1872

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
ANIL KSHETARPAL, J.
Sandeep Kumar & Ors. – Petitioners
Versus
Chandigarh Overseas Pvt. Ltd. & Ors. – Respondents
CR No.5072 of 2022 (O&M)
Decided On : 03-08-2023

Advocates Appeared:
For the Petitioners: Mr. Anish Setia.
For the Respondents: Mr. Gourav Jangra, for Mr. Partap Singh.

Headnote:(A) Indian Stamp Act, 1899 - Section 36 - Specific performance of an agreement to sell - The petitioners challenged the trial court’s order directing payment of deficient stamp duty with a penalty of 10 times the duty, arguing that once admitted in evidence, the stamp duty cannot be questioned. - The amendment permitting good of stamp duty was allowed previously, and the trial court overlooked the section that bars questioning an admitted instrument. - Court ruled that recovery of deficient stamp duty with such a penalty is not mandatory and set aside the trial court's order. (Paras 2, 5, 6, 7)

(B) The court emphasizes the principle that once an instrument has been admitted in evidence, its admissibility cannot be disputed. (Paras 4, 6)

(C) The court also indicates that it is not necessary to impose a penalty equivalent to 10 times the actual stamp duty. (Para 6)

Facts of the case:
Petition for specific performance of an agreement dated 21.07.2008 which evidenced possession, with an application made to rectify stamp duty deficiency. The trial court later directed payment of 10 times the deficient stamp duty, which was contested.

Findings of Court:
The impugned order is set aside, and the trial court is instructed to decide the suit following the correct application of law.

Issues: Whether the trial court erred in enforcing a penalty after the agreement had been admitted in evidence?

Ratio Decidendi: The court held that per Section 36, once a document is admitted in evidence, its stamp duty cannot be questioned, highlighting that the imposition of a 10x penalty is not mandatory.

Result: Revision Petition allowed.

Table of Content
1. agreement to sell requires stamping and possession evidence. (Para 1)
2. challenge to order concerning stamp duty and its implications. (Para 2 , 3)
3. section 36 prevents questioning admitted evidence on stamp duty. (Para 4 , 5)
4. non-mandatory recovery of stamp duty deficiency with penalty. (Para 6)
5. order set aside; suit to be decided by trial court. (Para 7 , 8 , 9)

JUDGMENT :

(Anil Kshetarpal, J.)

The petitioners herein have filed the suit for specific performance of the agreement to sell dated 21.07.2008. The agreement to sell evidences delivery of possession. As per the amendment applicable to the State of Punjab, such agreement is required to be stamped in accordance therewith. During the pendency of the suit, an application was filed by the plaintiffs to prepare him to make good the deficiency, which was allowed, on 12.05.2022. Accordingly, the deficiency in stamp duty was made good and the agreement to sell was admitted in evidence as Ex.P40. However, when the case was at the stage of final arguments, the court passed the impugned order directing the plaintiff to pay the deficient stamp duty alongwith a penalty equivalent to 10 times of the actual stamp duty.

2. The correctness of the aforesaid order has been challenged in this revision petition. Learned counsel representing the petitioners contends that once the document was admitted in evidence, Section 36 of the Indian STAMP ACT , 1899 (hereinafter referred to as 'the 1899 Act') bars the same court from doubting the correctness of the stamp duty once it has been admitted in evidence. He submits that the plaintiff voluntarily filed application to make good the stamp duty which was allowed vide order dated 12.05.2022. Hence, the impugned order is not sustainable.

3. On the other hand, learned counsel representing respondent No.4 submits that the High Court should not interfere with the impugned order.

4. This Court has considered the submissions made by the learned counsel representing the parties. Section 36 of the 1899 Act is extracted as under:-

    "36. Admission of instrument where not to be questioned.- Where an instrument has been admitted in evidence, such admission shall not, except as provided in section 61, be called in question at any stage of the same suit or proceeding on the ground that the instrument has not duly stamped."

5. It is evident that Section 36 debars the court from calling in question, any instrument, which has been admitted in evidence on account of deficiency in the stamp duty. The trial court has overlooked Section 36 of the 1899 Act.

6. In any case, it is not mandatory that the deficiency in stamp duty must be recovered alongwith penalty equivalent to 10 times of the actual stamp duty. Reliance in this regard can be placed on the judgment rendered in ' Trustees of H.C. Dhanda Trust vs. State of Madhya Pradesh and Others , 2020(9) SCC 510 .

7. In view of the aforesaid facts, the impugned order is set aside. The trial court is requested to decide the suit.

8. The Revision Petition stands allowed.

9. All the pending miscellaneous applications, if any, are also disposed of.

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