An agreement not liable for stamp duty at execution is admissible as secondary evidence despite provisions prohibiting unstamped documents.

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 applies to the

1 Hereinafter referred to as ‘Stamp Act’

Digitally signed by

Deepak Singh

Date: 2023.11.29

17:31:44 IST

Reason:

Signature Not Verified

2-Civil Appeal No. 4910 of 2023

agreement(s) 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 v.

Pulavarthi Venkata Subha Rao² 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.

2 (1971) 1 SCC 545 (2-Judge Bench)

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3. Initially, the said application was allowed by the 4^th

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

4-Civil Appeal No. 4910 of 2023

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