Supreme Court of India
G.M. SHAHUL HAMEEDversusJAYANTHI R. HEGDE
- Citation
- 2024 INSC 493
- Decided
- 9 July 2024
- Disposal
- Appeal(s) allowed
- Bench
- DIPANKAR DATTA
Holding
A court may recall the admission and marking of an insufficiently stamped instrument in exercise of its inherent power under CPC s.151 when no judicial determination on its admissibility has been made, and section 35 does not preclude such recall.
Summary
The appellant filed a civil suit challenging a sale deed, while the respondent filed a counter suit. During the respondent's suit, a General Power of Attorney (GPA) that was insufficiently stamped was tendered as evidence; the trial court admitted it and marked it as an exhibit without any objection or judicial determination of its stamp adequacy. The appellant subsequently moved interlocutory applications seeking the GPA’s impoundment and payment of deficit stamp duty and penalty, which the trial court allowed, invoking its inherent power under CPC s.151. The respondent appealed, arguing that once an instrument is admitted, section 35 of the Karnataka Stamp Act, 1957 bars any further challenge and that the proper remedy was a revision under section 58. The Supreme Court held that the trial court had not exercised a judicial determination on the instrument’s admissibility, so section 35 did not apply, and the court was entitled to recall the admission using its inherent power to prevent abuse of process. Consequently, the Supreme Court restored the trial court’s order and set aside the High Court’s decision, allowing the appeal.
Issues considered
- Whether a court can recall the admission and marking of an instrument as an exhibit when the instrument is chargeable to stamp duty but is insufficiently stamped, using its inherent powers under CPC s.151.
- Whether section 35 of the Karnataka Stamp Act, 1957 bars any subsequent challenge to an instrument once it has been admitted in evidence without a judicial determination of its stamp adequacy.
- Whether the remedy under section 58 of the Karnataka Stamp Act, 1957 is the exclusive recourse for challenging the admission of an insufficiently stamped instrument.
Legislation cited
- Code of Civil Procedure, 1908s. 151
- Indian Stamp Act, 1899
- Karnataka Stamp Act, 1957s. 33, s. 34, s. 35, s. 58
Subjects
Inherent powersInherent powers saved by Section 151 of the Code of Civil Procedure, 1908Stamp dutyInstrument chargeable with dutyInstrument not stamped/insufficiently stampedAdmission of instrument in evidenceObjection to the instrument’s insufficient stampingGeneral Power of AttorneyGPA insufficiently stampedGPA admitted in evidence and marked as exhibitRecall of process of admission of instrument in evidence and marking of the instrumentImpounding of instrumentsLiability to pay the deficit duty and penaltyApplication of judicial mindJudicial determinationPrevent abuse of the process of the court
Judgment
[2024] 7 S.C.R. 316 : 2024 INSC 493
G.M. Shahul Hameed
v.
Jayanthi R. Hegde
(Civil Appeal No. 1188 of 2015)
09 July 2024
[Dipankar Datta* and Pankaj Mithal, JJ.]
Issue for Consideration
Whether upon admission of an instrument in evidence and its
marking as an exhibit by a court (despite the instrument being
chargeable to duty but is insufficiently stamped), such a process
can be recalled by the court in exercise of inherent powers saved
by Section 151 of the Code of Civil Procedure, 1908 for the ends
of justice or to prevent abuse of the process of the court.
Headnotes†
Code of Civil Procedure, 1908 – s.151 – Karnataka Stamp Act,
1957 – ss.33-35, 58 – GPA insufficiently stamped, admitted
in evidence and marked as exhibit – No objection from the
appellant – Trial Court if can recall such process of admission
and marking of the instrument in exercise of its inherent power
saved by s.151 or the remedy available under the 1957 Act
was required to be pursued by the appellant to fasten the
respondent with the liability to pay the deficit duty and penalty:
Held: The presiding officer of a court being authorised in law to
receive an instrument in evidence, is bound to give effect to the
mandate of ss.33 and 34 and retains the authority to impound
an instrument even in the absence of any objection from any
party to the proceedings – Irrespective of whether objection is
raised or not regarding admissibility of an instrument, owing to
its insufficient stamping, the question of admissibility has to be
decided according to law – The presiding officer of a court when
confronted with the question of admitting an instrument chargeable
with duty but which is either not stamped or is insufficiently
stamped ought to judicially determine it – Application of judicial
mind is a sine qua non having regard to the express language
of ss.33 and 34 – However, once a decision on the objection is
rendered- right or wrong, s.35 would kick in to bar any question
* Author
[2024] 7 S.C.R. 317
G.M. Shahul Hameed v. Jayanthi R. Hegde
being raised as to admissibility of the instrument on the ground
that it is not duly stamped at any stage of the proceedings and
the party aggrieved by alleged improper admission has to work
out its remedy as provided by s.58 of the 1957 Act – On the date
the GPA was admitted in evidence and marked as an exhibit,
the Trial Court did not deliberate on its admissibility, much less
applied its judicial mind, resulting in an absence of judicial
determination – Trial Court not having ‘decided’ whether the GPA
was sufficiently stamped, s.35 of the 1957 Act cannot be called
in aid by the respondent – For s.35 to come into operation, the
instrument must have been “admitted in evidence” upon a judicial
determination – The words “judicial determination” have to be
read into s.35 – Once there is such a determination, whether the
determination is right or wrong cannot be examined except in
the manner ordained by s.35 – However, in a case of “no judicial
determination”, s.35 is not attracted – No error in the order dated
19.10.2010 passed by the Trial Court in exercise of its inherent
power saved by s.151, CPC to do justice as well as to prevent
abuse of the process of court and allowing the interlocutory
applications filed by the appellant and directing the respondent
to pay the deficit stamp duty with penalty – Impugned order of
the High Court set aside. [Paras 14, 18, 4, 22]
Karnataka Stamp Act, 1957 – s.35 – When not attracted –
Discussed.
Karnataka Stamp Act, 1957 – s.33 – Examination and
impounding of instruments – Duty of the court:
Held: s.33 has been inserted in the statute with a definite purpose –
The revenue would stand the risk of suffering huge loss if the
courts fail to discharge the duty placed on it per provisions like
s.33 – The legislature has reposed responsibility on the courts
and trusted them to ensure that requisite stamp duty, along with
penalty, is duly paid if an unstamped or insufficiently stamped
instrument is placed before it for admission in support of the case
of a party – It is incumbent upon the courts to uphold the sanctity of
the legal framework governing stamp duty, as the same are crucial
for the authenticity and enforceability of instruments – Allowing
an instrument with insufficient stamp duty to pass unchallenged,
merely due to technicalities, would undermine the legislative intent
and the fiscal interests of the State – The courts ought to ensure
that compliance with all substantive and procedural requirements
318 [2024] 7 S.C.R.
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of a statute akin to the 1957 Act are adhered to by the interested
parties – This duty of the court is paramount, and any deviation
would set a detrimental precedent, eroding the integrity of the
legal system. [Para 21]
Case Law Cited
Javer Chand and Others v. Pukhraj Surana [1962] 2 SCR 333;
Ram Rattan v. Bajrang Lal [1978] 3 SCR 963 : (1978) 3 SCC
236 – referred to.
List of Acts
Code of Civil Procedure, 1908; Karnataka Stamp Act, 1957; Indian
Stamp Act, 1899; Constitution of India.
List of Keywords
Inherent powers; Inherent powers saved by Section 151 of the Code
of Civil Procedure, 1908; Stamp duty; Instrument chargeable with
duty; Instrument not stamped/insufficiently stamped; Admission of
instrument in evidence; Objection to the instrument’s insufficient
stamping; Objection regarding admissibility of instrument owing to its
insufficient stamping; Question of admitting instrument chargeable
with duty but not stamped/insufficiently stamped; General Power
of Attorney; GPA; GPA insufficiently stamped; GPA admitted in
evidence and marked as exhibit; Instrument marked as exhibit;
Recall of process of admission of instrument in evidence and
marking of the instrument; Impounding of instruments; Liability
to pay the deficit duty and penalty; Application of judicial mind;
Judicial determination; Prevent abuse of the process of the court.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1188 of 2015
From the Judgment and Order dated 26.09.2011 of the High Court of
Karnataka at Bangalore in WP No. 11653 of 2011
Appearances for Parties
D.P. Chaturvedi, Tarun Kumar Thakur, Ms. Parvati Bhat, Vivek Ram,
Abhay Choudhary M, Ms. Anuradha Mutatkar, Advs. for the Appellant.
Mrs. Rekha Pandey, Suyash Mohan Guru, Ms. Sharmistha Choudhury,
Raghav Pandey, Ms. Gauri Pandey, Advs. for the Respondent.
[2024] 7 S.C.R. 319
G.M. Shahul Hameed v. Jayanthi R. Hegde
Judgment / Order of the Supreme Court
Judgment
Dipankar Datta, J.
1. The substantial question arising for decision in this civil appeal is
whether upon admission of an instrument in evidence and its marking
as an exhibit by a court (despite the instrument being chargeable to
duty but is insufficiently stamped), such a process can be recalled
by the court in exercise of inherent powers saved by section 151
of the Code of Civil Procedure1 for the ends of justice or to prevent
abuse of the process of the court.
2. Assail in this civil appeal is to the judgment and order dated 26th
September, 20112 passed by a learned Single Judge of the High
Court of Karnataka at Bengaluru3 whereby His Lordship set aside
the order dated 19th October, 2010 passed by the Court of Additional
Senior Judge-III, Mangalore4 and allowed the petition5 preferred by
the respondent under Article 227 of the Constitution.
3. The facts, relevant for the disposal of the present appeal, are adverted
to in brief hereunder:
a. First Sale Agreement and Sale Deed: On 3rd October, 2003,
a Sale Deed was executed regarding the suit property by one
B. Ramesh Hegde in favour of his wife, who is the respondent
here. This Sale Deed was executed on the strength of a
General Power of Attorney6 dated 16th September, 2003, which
was allegedly executed by one Praveen Shetty in favour of B.
Ramesh Hegde in respect of the suit property, authorizing him
with power to sell the suit property.
b. Second Sale Agreement and Sale Deed: An agreement to
sell the suit property was executed between the appellant and
Praveen Shetty on 11th September, 2003. The appellant paid the
1 CPC, hereafter
2 impugned order, hereafter
3 High Court, hereafter
4 Trial Court, hereafter
5 Writ Petition No. 11653 of 2011 (GM-CPC)
6 GPA, hereafter
320 [2024] 7 S.C.R.
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consideration, and a Sale Deed was executed on 8th October,
2003 between the appellant and Praveen Shetty.
c. Civil Suit by the appellant: The appellant instituted a civil suit7
against the respondent, B. Ramesh Hegde, and Praveen Shetty,
seeking a declaration that the Sale Deed dated 3rd October,
2003 was null and void, and not binding on the appellant.
d. Civil Suit by the respondent: Conversely, the respondent also
instituted a civil suit8 against the appellant and Praveen Shetty,
seeking a declaration that the Sale Deed dated 8th October,
2003 was null and void, and not binding on the respondent.
e. Filing of GPA before the Trial Court: In the suit instituted by
the respondent, witness action commenced. B. Ramesh Hegde,
in whose favour the GPA was executed by the respondent, on
6th June, 2010 tendered the GPA in course of his examination-
in-chief. The appellant’s counsel was engaged in another court;
hence, he was unable to appear. The junior counsel did not object
that the GPA was insufficiently stamped and, thus, inadmissible in
evidence. The Trial Court, in the absence of objection, admitted
the GPA in evidence and marked it as an exhibit whereafter the
matter stood adjourned for cross-examination.
f. Interlocutory Applications: On the next hearing date, 25th
June, 2010 to be precise, the appellant filed two interlocutory
applications9 in the suit filed by the respondent. In I.A. No. IX,
the appellant sought a review of the order dated 6th June, 2010,
and in I.A. No. X, it was prayed that the GPA be impounded
on the ground that it has been insufficiently stamped. The
appellant contended that since the GPA was executed in
favour of a third party with power to sell the property, article
41 of the Schedule to the Karnataka Stamp Act, 195710 was
applicable, necessitating payment of requisite stamp duty based
on the market value of the property. The GPA was prepared
only on a stamp paper worth Rs.100, rendering it insufficiently
stamped and in accordance with section 34 of the 1957 Act,
7 O.S. No. 301 of 2003
8 O.S. No. 134 of 2005
9 I.A.s, hereafter
10 1957 Act, hereafter
[2024] 7 S.C.R. 321
G.M. Shahul Hameed v. Jayanthi R. Hegde
an insufficiently stamped document had to be impounded and
a penalty of ten times the duty value paid.
g. The respondent objected to the I.A.s asserting that the appellant
had to avail his remedy under section 58 of the 1957 Act and
that being available, the appellant could not seek a review.
Further, it was claimed that no proof had been furnished that the
appellant’s counsel was otherwise engaged at that time. Lastly,
it was contended that once a document had been admitted in
evidence, the stamp duty could not subsequently be questioned
on the ground that it has been insufficiently stamped, as per
section 35 of the 1957 Act.
4. Vide order dated 19th October, 2010, the Trial Court allowed the I.A.s
and directed the respondent to pay the deficit stamp duty, along with
the penalty, as required for a power of attorney under article 41(eb)
of the Schedule to the 1957 Act.
5. Dissatisfied with the aforesaid order of the Trial Court, the respondent
approached the High Court whereupon the petition was allowed by
the impugned order, inter alia, recording that:
“2. It is evident from the material that the document has
been marked and admitted in evidence and exhibited. It
is the contention of the respondent under order 13 rule 4
there should be a specific statement to the effect that the
document has been so admitted and endorsement shall
be signed and initialed by the Judge. In the absence of
the said requirement, marking of document does not mean
admission of document in evidence. The argument of the
counsel for the respondent is untenable. In the normal
procedure when the document is produced, it is marked
and exhibit number has assigned and beneath the said
exhibit Judge puts his initial. This procedure fully complies
with the requirement under Order 13 Rule 4 of the Act.
Therefore, the contention that the document has not been
properly marked and it should be rejected in evidence
on the ground of insufficiently stamped is untenable. The
trial court will have no jurisdiction to reconsider the issue.
The remedy available for the respondent is only under
section 58 of the Stamp Act. Accordingly, the writ petition
is allowed.”
322 [2024] 7 S.C.R.
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6. It is the legality of the impugned order that we are tasked to examine
while answering the question formulated at the beginning of this
judgment.
7. Mr. Chaturvedi, learned counsel for the appellant, while laying
a challenge to the impugned order argued that admission of an
insufficiently stamped instrument in a casual manner by mechanically
marking it as an exhibit, without any application of judicial mind, should
not preclude the court seized of the proceedings from reconsidering
whether such document is sufficiently stamped and could have at all
been admitted in evidence. Various provisions of the 1957 Act were
referred to by him for persuading us to hold that the view taken by
the High Court was grossly erroneous. Accordingly, it was prayed
by him that the impugned order be set aside and the civil appeal be
allowed with liberty to the respondent to take steps in accordance
with the order of the Trial Court.
8. Mr. Guru, learned counsel for the respondent, defended the impugned
order by asserting that it is correct both in law as well as on facts.
It was argued that setting aside of the Trial Court’s order by the
impugned order was indeed justified since the GPA having been
admitted in evidence, such admission could not have been reviewed
by the same court under any circumstance. Emphasis was placed on
the need for an objection to the document’s admissibility being raised
when it was first tendered for being admitted and then marked as
an exhibit. Citing section 35 of the 1957 Act, it was contended that
once an instrument is admitted in evidence, the admission cannot be
questioned by the trial court or any appellate or revisional court; and
that the only remedy that the 1957 Act provides is a revision under
section 58 thereof in the manner as provided. Thus, he submitted that
the civil appeal being devoid of any merit deserved outright dismissal.
9. A short but interesting question has engaged our consideration. There
is no doubt that the GPA is insufficiently stamped. What we need
to consider on facts and in the circumstances is, which of the two
conflicting views taken by the Trial Court and the High Court is right.
10. Despite the GPA having been admitted in evidence and marked as an
exhibit without objection from the side of the appellant, we propose
to hold for the reasons to follow that the Trial Court did have the
authority to revisit and recall the process of admission and marking
of the instrument, not in the sense of exercising a power of review
[2024] 7 S.C.R. 323
G.M. Shahul Hameed v. Jayanthi R. Hegde
under section 114 read with Order XLVII, CPC but in exercise of
its inherent power saved by section 151 thereof, and that the other
remedy made available by the 1957 Act was not required to be
pursued by the appellant to fasten the respondent with the liability
to pay the deficit duty and penalty.
11. We may refer to the statutory framework of the 1957 Act. Sections
33, 34, 35 and 58, to the extent relevant for a decision on this appeal,
read as follows:
“33. Examination and impounding of instruments.-
(1) Every person having by law or consent of parties
authority to receive evidence, and every person in charge
of a public office, except an officer of police, before whom
any instrument, chargeable in his opinion, with duty, is
produced or comes in the performance of his functions,
shall, if it appears to him that such instrument is not duly
stamped, impound the same.
(2) For that purpose every such person shall examine
every instrument so chargeable and so produced or coming
before him, in order to ascertain whether it is stamped with
a stamp of the value and description required by the law
in force in the State of Karnataka when such instrument
was executed or first executed:
Provided that,—
(a) ***
(b) ***
(3) For the purposes of this section, in cases of doubt, the
Government may determine,—
(a) what offices shall be deemed to be public offices; and
(b) who shall be deemed to be persons in charge of public
offices.
34. 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
324 [2024] 7 S.C.R.
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authenticated by any such person or by any public officer,
unless such instrument is duly stamped:
Provided that,—
(a) ***
(b) ***
(c) ***
(d) ***
35. 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 58, be called in question at any stage of the
same suit or proceeding on the ground that the instrument
has not been duly stamped.
58. Revision of certain decisions of Courts regarding
the sufficiency of stamps. –
(1) When any Court in the exercise of its Civil or Revenue
jurisdiction or any Criminal Court in any proceeding
under Chapter XII or Chapter XXXVI of the Code of
Criminal Procedure, 1898, makes any order admitting
any instrument in evidence as duly stamped or as not
requiring a stamp, or upon payment of duty and a penalty
under Section 34, the Court to which appeals lie from, or
references are made by, such first mentioned Court may,
of its own motion or on the application of the Deputy
Commissioner, take such order into consideration.
(2) If such Court, after such consideration, is of opinion
that such instrument should not have been admitted in
evidence without the payment of duty and penalty under
Section 34, or without the payment of a higher duty and
penalty than those paid, it may record a declaration to that
effect, and determine the amount of duty with which such
instrument is chargeable, and may require any person
in whose possession or power such instrument then is,
to produce the same, and may impound the same when
produced.
[2024] 7 S.C.R. 325
G.M. Shahul Hameed v. Jayanthi R. Hegde
(3) When any declaration has been recorded under sub-
section (2), the Court recording the same shall send a
copy thereof to the Deputy Commissioner and, where the
instrument to which it relates has been impounded or is
otherwise in the possession of such Court, shall also send
him such instrument.
(4) The Deputy Commissioner may thereupon,
notwithstanding anything contained in the order admitting
such instrument in evidence, or in any certificate granted
under Section 41, or in Section 42, prosecute any person
for any offence against the stamp law which the Deputy
Commissioner considers him to have committed in respect
of such instrument.
Provided that, -
(a) no such prosecution shall be instituted where the
amount (including duty and penalty) which, according
to the determination of such Court, was payable in
respect of the instrument under Section 34, is paid
the Deputy Commissioner, unless he thinks that the
offence was committed with an intention of evading
payment of the proper duty;
(b) except for the purpose of such prosecution, no
declaration made under this section shall affect the
validity of any order admitting any instrument in
evidence, or of any certificate granted under Section
41.”
(emphasis ours)
12. Read in isolation, a literal interpretation of section 35 of the 1957
Act seems to make the position in law clear that once an instrument
has been admitted in evidence, then its admissibility cannot be
contested at any stage of the proceedings on the ground of it not
being duly stamped. A fortiori, it would follow that any objection
pertaining to the instrument’s insufficient stamping must be raised
prior to its admission.
13. However, section 35 of the 1957 Act is not the only relevant section.
It is preceded by sections 33 and 34 and all such sections are part of
Chapter IV, tiled “Instruments Not Duly Stamped”. Certain obligations
326 [2024] 7 S.C.R.
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are cast by section 33 on persons/officials named therein. Should the
presiding officer of the court find the instrument to be chargeable with
duty but it is either not stamped or is insufficiently stamped, he is bound
by section 33 to impound the same. Section 34 places a fetter on
the court’s authority to admit an instrument which, though chargeable
with duty, is not duly stamped. The statutory mandate is that no such
instrument shall be admitted in evidence unless it is duly stamped.
14. The presiding officer of a court being authorised in law to receive
an instrument in evidence, is bound to give effect to the mandate
of sections 33 and 34 and retains the authority to impound an
instrument even in the absence of any objection from any party
to the proceedings. Such an absence of any objection would not
clothe the presiding officer of the court with power to mechanically
admit a document that is tendered for admission in evidence. The
same limitation would apply even in case of an objection regarding
admissibility of an instrument, owing to its insufficient stamping,
being raised before a court of law. Irrespective of whether objection
is raised or not, the question of admissibility has to be decided
according to law. The presiding officer of a court when confronted
with the question of admitting an instrument chargeable with duty
but which is either not stamped or is insufficiently stamped ought
to judicially determine it. Application of judicial mind is a sine qua
non having regard to the express language of sections 33 and 34
and interpretation of pari materia provisions in the Indian Stamp Act,
189911 by this Court. However, once a decision on the objection is
rendered – be it right or wrong – section 35 would kick in to bar any
question being raised as to admissibility of the instrument on the
ground that it is not duly stamped at any stage of the proceedings
and the party aggrieved by alleged improper admission has to work
out its remedy as provided by section 58 of the 1957 Act.
15. Profitable reference may be made to the decision of this Court in Javer
Chand and others v. Pukhraj Surana12. There, provisions of section
36 of the 1899 Act, which is pari materia section 35 of the 1957 Act,
came up for consideration. A Bench of four Hon’ble Judges of this
Court held that when a document’s admissibility is questioned due to
11 1899 Act, hereafter
12 [1962] 2 SCR 333
[2024] 7 S.C.R. 327
G.M. Shahul Hameed v. Jayanthi R. Hegde
improper stamping, it must be decided immediately when presented
as evidence. The relevant paragraph is extracted hereunder:
“4. *** Where a question as to the admissibility of a document
is raised on the ground that it has not been stamped, or has
not been properly stamped, it has to be decided then and
there when the document is tendered in evidence. Once the
court, rightly or wrongly, decides to admit the document in
evidence, so far as the parties are concerned, the matter is
closed. Section 35 is in the nature of a penal provision and
has far-reaching effects. Parties to a litigation, where such a
controversy is raised, have to be circumspect and the party
challenging the admissibility of the document has to be alert
to see that the document is not admitted in evidence by the
court. The court has to judicially determine the matter as
soon as the document is tendered in evidence and before it
is marked as an exhibit in the case. The record in this case
discloses the fact that the hundis were marked as Exts. P-1
and P-2 and bore the endorsement ‘admitted in evidence’
under the signature of the court. It is not, therefore, one
of those cases where a document has been inadvertently
admitted, without the court applying its mind to the question
of its admissibility. Once a document has been marked as
an exhibit in the case and the trial has proceeded all along
on the footing that the document was an exhibit in the case
and has been used by the parties in examination and cross-
examination of their witnesses, Section 36 of the Stamp Act
comes into operation. Once a document has been admitted
in evidence, as aforesaid, it is not open either to the trial
court itself or to a court of appeal or revision to go behind
that order. Such an order is not one of those judicial orders
which are liable to be reviewed or revised by the same court
or a court of superior jurisdiction.”
(emphasis ours)
16. Once again, addressing a matter concerning section 36 of the 1899
Act, a Bench of three Hon’ble Judges of this Court in Ram Rattan
v. Bajrang Lal13 held as follows:
13 [1978] 3 SCR 963 : (1978) 3 SCC 236
328 [2024] 7 S.C.R.
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“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 to decide the
objects 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 obligatory upon the court to decide the objection.
If after applying mind to the rival contentions the trial
court admits a document in evidence, Section 36 of the
Stamp Act would come into play and such admission
cannot be called in question at any stage of the same
suit or proceeding on the ground that the instrument has
not been duly stamped. The court, and of necessity it
would be trial court before which the objection is taken
about admissibility of document on the ground that it is
not duly stamped, has to judicially determine the matter
as soon as the document is tendered in evidence and
before it is marked as an exhibit in the case and where
a document has been inadvertently admitted without the
court applying its mind as to the question of admissibility,
the instrument could not be said to have been admitted
in evidence with a view to attracting Section 36 (see
Javer Chand v. Pukhraj Surana) [AIR 1961 SC 1655] .
The endorsement made by the learned trial Judge that
‘Objected, allowed subject to objection’, clearly indicates
that when the objection was raised it was not judicially
determined and the document was merely tentatively
marked and in such a situation Section 36 would not be
attracted.”
(emphasis ours)
[2024] 7 S.C.R. 329
G.M. Shahul Hameed v. Jayanthi R. Hegde
17. The pivotal aspect emerging for consideration on the terms of
sections 33 and 34 of the 1957 Act, with which we are concerned,
is that whether the Trial Court did judicially determine the question
of admissibility. It is here that we need to ascertain the rationale
behind the Trial Court’s approach to go behind admission of the
GPA in evidence and marking thereof as an exhibit, leading to the
order under challenge before the High Court. Relevant portions of
the order of the Trial Court read thus:
“2. *** There are two suits before this court, one is the
present suit and another suit is OS No. 301/03. In the
present suit, the GPA holder of plaintiff filed an affidavit
by way of chief examination in the morning session
and the documents were marked. While marking the
documents he was held up in the court of Civil Judge (Jr.
Dn.), Mangalore and hence no objection regarding the
deficiency of stamp duty on GPA could be raised before
this court. Accordingly the matter has been adjourned for
cross examination of PW1. The alleged GPA is in favour
of third party with power to sell the property and hence
article 41 of the Karnataka Stamp Act 1957 is applicable
and stamp duty on the market value has to be paid on the
same. The GPA is executed on a stamp paper of value of
Rs.100/- only. As per Section 33 of the Karnataka Stamp
Act, 1957, the court shall impound the said GPA even
without the objections by the advocate for 1st defendant.
His absence at the time of chief examination of PW1 is
not intentional but as he was held up in another court.
3. The 1st defendant has also filed IA No. IX under Sec. 114,
R/w. Sec. 151 of CPC to review the order of marking Ex.P2
which is insufficiently stamped and to hear the objections
regarding inadequacy of stamp duty on the similar grounds.
7. The points that arise for consideration are:-
1. Whether Ex.P2 GPA is insufficiently stamped and
plaintiff is liable to pay deficit duty and penalty?
2. Whether the order permitting the plaintiff to mark
the document requires to be reviewed?
8. The points are answered in affirmative for the following:
330 [2024] 7 S.C.R.
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Reasons
9. *** The clauses are very specific that the power of
attorney has been given powers to sell the properties
and the power of attorney has acted upon the GPA and
has execute the sale deed in favour of the plaintiff as per
Ex.P3. Under Article 41(e), when the power of attorney is
given for consideration and authorizing the attorney to sell
the immovable property, the duty payable is same duty
as a conveyance for a market value equal to the amount
of the consideration. As stated above, no consideration
has been mentioned in the GPA., but the GPA has been
given authorizing to sell the immovable property. The
GPA has been issued to a third party, … article 41(ab) is
applicable. The learned counsel for plaintiff objected for
considering these applications on the ground that document
is already marked with out any objections and hence the
question of reviewing the order considering the question of
stamp duty at this stage does not arise. As seen from the
order sheet, the plaintiff was examined on 6.6.2010 and
document was marked on same day. Immediately on the
next date of hearing the counsel has filed IA No. IX and
X to consider the aspect of payment of stamp duty and
penalty i.e., on the day on which the matter was posted
for cross examination of PW1. It is certain that the senior
counsel appearing for the plaintiff was not present at the
time of examination of PW1 in chief as the court remembers
that the junior counsel was present and probably being
unaware of the question of stamp duty has not raised
any objections. The court has marked the document as
an exhibit and has put the seal for having marked the
document as to who has produced the document and
admitted through which witness and marked for plaintiff.
No doubt, there is mention that the document is admitted
through PW1 and Ex.P2, but the court has not applied its
mind while marking the document as to whether document
is sufficiently stamped or insufficiently stamped.
10. *** The circumstances under which the application is
being filed and circumstances under which the document
came to be marked, clearly show that the document was
[2024] 7 S.C.R. 331
G.M. Shahul Hameed v. Jayanthi R. Hegde
marked without application of the mind of the court and
without objection of the other side and this court is of
the view that the admissibility of the document could be
considered at this stage.
ORDER
The IA Nos. IX and X are allowed.”
18. On the face of such an order, it does not leave any scope for doubt
that on the date the GPA was admitted in evidence and marked
as an exhibit, the Trial Court did not deliberate on its admissibility,
much less applied its judicial mind, resulting in an absence of judicial
determination. In the absence of a ‘decision’ on the question of
admissibility or, in other words, the Trial Court not having ‘decided’
whether the GPA was sufficiently stamped, section 35 of the 1957 Act
cannot be called in aid by the respondent. For section 35 to come
into operation, the instrument must have been “admitted in evidence”
upon a judicial determination. The words “judicial determination”
have to be read into section 35. Once there is such a determination,
whether the determination is right or wrong cannot be examined
except in the manner ordained by section 35. However, in a case
of “no judicial determination”, section 35 is not attracted.
19. In the light of the aforesaid reasoning of the Trial Court of admitted
failure on its part to apply judicial mind coupled with the absence of
the counsel for the appellant before it when the GPA was admitted
in evidence and marked exhibit, a factor which weighed with the Trial
Court, we have no hesitation to hold that for all purposes and intents
the Trial Court passed the order dated 19th October, 2010 in exercise
of its inherent power saved by section 151, CPC, to do justice as well
as to prevent abuse of the process of court, to which inadvertently
it became a party by not applying judicial mind as required in terms
of sections 33 and 34 of the 1857 Act. We appreciate the approach
of the Trial Court in its judicious exercise of inherent power.
20. Reference to section 58 of the 1957 Act by learned counsel for the
respondent is without substance. The clear language of section 58
refers to a situation, where an order is passed admitting an instrument
in evidence as duly stamped or as one not requiring a stamp, for
its attraction. As evident from a bare reading of the order dated
19th October, 2010, the Trial Court did neither hold the GPA as duly
332 [2024] 7 S.C.R.
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stamped or as not requiring a stamp and, therefore, its applicability
was not attracted.
21. We may not turn a blind eye to the fact that the revenue would stand
the risk of suffering huge loss if the courts fail to discharge the duty
placed on it per provisions like section 33 of the 1957 Act. Such
provision has been inserted in the statute with a definite purpose. The
legislature has reposed responsibility on the courts and trusted them to
ensure that requisite stamp duty, along with penalty, is duly paid if an
unstamped or insufficiently stamped instrument is placed before it for
admission in support of the case of a party. It is incumbent upon the
courts to uphold the sanctity of the legal framework governing stamp
duty, as the same are crucial for the authenticity and enforceability
of instruments. Allowing an instrument with insufficient stamp duty
to pass unchallenged, merely due to technicalities, would undermine
the legislative intent and the fiscal interests of the state. The courts
ought to ensure that compliance with all substantive and procedural
requirements of a statute akin to the 1957 Act are adhered to by
the interested parties. This duty of the court is paramount, and any
deviation would set a detrimental precedent, eroding the integrity
of the legal system. Thus, the court must vigilantly prevent any
circumvention of these legal obligations, ensuring due compliance
and strict adherence for upholding the rule of law.
22. Having regard to the aforesaid discussion, we answer the substantial
question in the affirmative. Finding no error in the order of the Trial
Court dated 19th October, 2010, we set aside the impugned order of
the High Court dated 26th September, 2011, meaning thereby that
the order of the Trial Court is restored. Since proceedings of the civil
suit remained stalled because of pendency of this appeal, we expect
the Trial Court to proceed expeditiously and in accordance with law.
23. The appeal is, accordingly, allowed without any order for costs.
Result of the case: Appeal allowed.
†
Headnotes prepared by: Divya Pandey
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