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Guni Ram and anr. Vs. Kodai and ors. - Court Judgment

LegalCrystal Citation
SubjectContract;Civil
CourtAllahabad High Court
Decided On
Case NumberSecond Appeal No. 2773 of 1969
Judge
Reported inAIR1971All434
ActsStamp Act, 1899 - Sections 35; Code of Civil Procedure (CPC) , 1908 - Order 13, Rule 4
AppellantGuni Ram and anr.
RespondentKodai and ors.
Appellant AdvocateG.P. Mathur and ;Ambika Prasad, Advs.
Respondent AdvocateSant Prakash, Adv.
DispositionAppeal dismissed
Excerpt:
civil - document - section 35 of stamp act, 1899 - admitting an instrument in evidence or acting upon it are same thing - contents of documents become evidence in the suit - enforcing right or title amount to acting upon document - receiving of evidence in proof of due execution would be extraneous to the contents thereof. - .....document which is produced before the court unstamped, being a document required to be executed on stamped paper under the indian stamp act, can be adduced without the court first admitting it in evidence or acting upon it on payment of the requisite stamp duty and the penalty? the answer to this question would depend upon as to what is the meaning to be given to the words 'admitted in evidence for any purpose' and the words 'shall be acted upon' used in section 35 of the indian stamp act. section 35 of the said act makes instruments not duly stamped inadmissible in evidence. under rule 3 of order xiii. c. p. code the court is empowered at any stage to reject any document which is inadmissible. it may be within the power of the court to reject a document which section 35 of the stamp act.....
Judgment:

K.B. Asthana, J.

1. The suit giving rise to this appeal was for specific performance of a contract of sale of certain Bhumidhari plots. The plaintiffs-respondents alleged that on 15-6-1964 the first defendant-appellant, Guniram, executed an agreement to sell his half share In certain Bhumidhari plots and in a house for a consideration of Rs. 4000/- on receiving an earnest of Rs. 1500/- from the plaintiffs, but Guniram seemed to have changed his mind and executed a sale-deed on 10-2-1965 of the Bhumidhari plots in favour of the second defendant-respondent. Akhila Prasad. On 30-4-1965 the plaintiffs instituted the suit for specific performance of the contract. During the pendency of the suit the first defendant Guniram executed another sale-deed on 20-9-1965 in favour of the third, fourth, fifth and sixth defendants-respondents in respect of the house and they were also impleaded as defendants to the suit. It was also alleged by the plaintiffs that Rampati and Sheopati, who were the nephews of Guniram had already sold their one-half share in the properties to the plaintiffs by a sale-deed dated 30-9-1963 and the plaintiffs being desirous of acquiring full rights in the properties negotiated with Guniram for the sale of his half share and sometime in January 1964. Guniram agreed but as the plaintiffs had not sufficient funds with them, applied for loan from the Land Mortgage Bank and it was settled between the parties that a sale-deed would be executed by March, 1965.

It was alleged by the plaintiffs that in May, 1964 the Bank agreed to advance the loan to them and paid the first instalment of Rs. 1500/-, armed with which they approached Guniram on 15th June, paid the said sum as earnest, on accepting which Guniram executed the agreement to sell. The balance, of Rs. 2500/-was left to be paid when the sale-deed was executed,

2. The suit was contested by all the defendants, inter alia, it was pleaded by the defendants in their written statement that Guniram had not executed any agreement to sell, his signatures having been obtained under duress on blank sheets which subsequently appears to have been converted into an agreement to sell his half share in the properties. Thus the defence was a denial of the existence of any agreement to sell,

3. The plaintiff did not file the document evidencing the said agreement along with the plaint. On 17-9-1965 the defendants filed their written statement and on that date the issues were struck. The plaintiffs also filed an application on the same date asking the permission of the court for filing certain documents and in the list appended to the application the agreement alleged to have been executed by Guniram on 15-6-1964 was included. The court granted the application and permitted the documents to be filed by 17-9-1965 on which date the plaintiffs filed the document dated 15-6-1964 alleged to have been executed by Guniram and prayed that the same be kept in a sealed envelope. This document was marked as paper No. 30/A.1 and kept on record. Whether there was any agreement between the plaintiffs and defendant No. 1 for the sale of the property in, suit was the main issue for determination in the suit. The parties led evidence in support of their respective cases. Raghoram, one of the plaintiffs, examined himself as a witness. Siaram the scribe of the document, and Harbans, a marginal witness, were also examined.

On behalf of the defendant evidence was led in support of his case that on 26-4-1965 he was ambushed by the plaintiffs, threatened and coerced physically into appending his signatures on three blank sheets. A copy of the report lodged at the Police Station of the incident was also produced. Though in the written statement of the defendants it was said that the document dated 15-6-1964 was not stamped and registered, it does not appear from the record that any objection was raised before taking of the evidence that it was inadmissible in evidence being unstamped.

4. The learned Munsif believed the evidence adduced on behalf of the defendants and held that Guniram had not executed any agreement. The learned Munsif further rejected the document. Paper No. 30/A.1, as he found it to be unstamped. The result was that the plaintiffs' suit was dismissed.

5. The plaintiffs went up in appeal. The learned Judge of the lower appellate court called upon the plaintiffs to pay the necessary stamp duty and ten-times the penalty thereon, which was paid. The learned Judge then admitted document, paper No. 30/A.1, in evidence but did not number it as an exhibit. Reversing the finding of the learned Munsif on the question of execution of the said document by Guniram, he held Guniram had executed the agreement to sell the properties in suit. The appeal was allowed and the plaintiffs' suit for specific performance of the contract was decreed. Now the defendants have come up in second appeal from the judgment and decree of the lower appellate court.

6. The main argument advanced by the learned counsel for the defendants-appellants in support of the appeal was that the paper No. 30/A-1, the document evidencing the alleged agreement to sell, not being duly stamped was not admissible in evidence, the court was not entitled to act upon the evidence in regard to its execution which evidence could not be said to have formed a part of the record and in any view of the matter if the lower appellate court permitted the document to be admitted in evidence on payment of the requisite duty and penalty it ought to have remanded the case for fresh trial and ought not to have taken into consideration the evidence relating to its execution which was illegally brought on record by the trial court.

Another argument which was faintly pressed was that only two of the plaintiffs being signatories to the agreement to sell, the suit as brought by three plaintiffs, one of whom was not a party to the contract, could not be decreed for specific performance in favour of all three of them. It was pointed out by the learned counsel for the plaintiffs-respondents that no such plea was raised in the written statement and the parties were never at issue on this question. I think this argument is more academic than substantive in nature as in any case the suit for specific performance could be decreed at the instance of the two plaintiffs who were parties to the contract.

7. Now coming to the main argument mentioned above, the question that falls for determination is whether evidence in proof of due execution of a document which is produced before the court unstamped, being a document required to be executed on stamped paper under the Indian Stamp Act, can be adduced without the court first admitting it in evidence or acting upon it on payment of the requisite stamp duty and the penalty? The answer to this question would depend upon as to what is the meaning to be given to the words 'admitted in evidence for any purpose' and the words 'shall be acted upon' used in Section 35 of the Indian Stamp Act. Section 35 of the said Act makes instruments not duly stamped inadmissible in evidence. Under Rule 3 of Order XIII. C. P. Code the court is empowered at any stage to reject any document which is inadmissible. It may be within the power of the court to reject a document which Section 35 of the Stamp Act makes inadmissible. But the appropriate course will be to impound it when produced. It cannot be said that the learned Munsif who tried the suit wrongly rejected from evidence paper No. 30/A-1. But can it be said that the evidence as to the execution of the said document, that is, on the factuni of Guniram having signed it after understanding its contents was inadmissible and the learned Munsif legally erred in law permitting such evidence to be adduced and in making it a part of the record?

In other words, will the ultimate rejection of paper No. 30/A-1. from evidence at a later stage make the evidence relating to its execution adduced at an earlier stage illegal and such evidence for any purpose could not be taken into consideration by the court? Learned counsel for the defendants-appellants contended that the evidence adduced by the plaintiffs relating to the execution of the agreement by Guniram cannot be deemed to be a part of the record thus in the eye of law there was no material before the lower appellate court to prove its due execution by Guniram even though the lower appellate court admitted the document paper No. 30/A-1 in evidence on payment of requisite stamp duty and penalty by the plaintiffs. Reliance was placed on a Division Bench decision of the Bombay High Court in the case of Rustomji Ardeshir Irani v. Vinayak Gangadhar Bhat, (1911) ILR 35 Bom 29. The learned Judges after noticing Section 35 of the Stamp Act observed that as an unstamped document cannot be admitted in evidence, it must, in the suit, be taken to be nonexistent. It was submitted by the learned counsel on the basis of the said observations of the learned Judges of the Bombay High Court that when paper No. 30/A-1 was non-existent, that is, was not a part of the record, no evidence to prove its execution could be adduced and admitted by the trial court.

This submission on behalf of the appellants was countered by the learned counsel for the plaintiffs-respondents by putting reliance on Section 36 of the Stamp Act. It was submitted that when the document was produced in evidence after taking permission from the court without demur on the part of the defendants, and evidence as to its execution was allowed to be adduced, it would be deemed that the document was duly admitted evidence, therefore, such admission cannot be called in question now on the ground that the instrument had not been duly stamped. A reference was made to the case of Brijraj v. Rajaram, AIR 1957 Hyd 35, in which Section 34 of the Hyderabad Stamp Act, which was similar to Section 36 of the Indian Stamp Act, was considered. I do not think the decision of that case is of any help as would appear from the facts of that case that in the trial court itself on the promissory note in suit the requisite stamp duty and penalty was paid. I do not think the provisions of Section 36 of the Stamp Act serve as a sound foundation for accepting the contention of the learned counsel for respondents. Section 36, to my mind, comes into play only when a court admits an unstamped document or insufficiently stamped document on holding that it did not require any stamp or fell within the proviso of Section 35, though that decision may be faulty or erroneous.

Here is a case where the learned Munsif trying the suit appears to have always been conscious of the fact that paper No. 30/A-1 was an instrument requiring stamp duty and it was not stamped when produced before the court on 17-9-1965. The learned Munsif did not consider the question whether any stamp duty was chargeable or the document was acquired to be executed on a stamped paper, or that it was covered by any of the provisos to Section 35 but kept it on record and ultimately rejected it from evidence. Section 36, therefore, cannot be a sufficient answer to the problem posed on the arguments of the learned counsel for the appellants.

8. It appeared to be somewhat surprising why the learned Munsif did not impound the paper No. 30/A-1 under Section 35 of the Stamp Act as that would have afforded an opportunity to the plaintiffs if they wanted to rely on the agreement evidenced by the document by paying penalty under Section 35 or duty as provided by Section 37, and get it admitted in evidence. As the case proceeded, at the trial it appears to me that though no specific order was passed by the learned Munsif impounding the document yet the parties adduced evidence on the factum of its due execution as the document had been produced and the parties were at issue on the question of due execution of the agreement. There appears some force in the submission of the learned counsel for the respondents that the duty and the penalty having been paid before the appellate court, the appeal being in continuation of the suit, unless the defendants were to establish some prejudice, this court in appeal ought not to interfere with the judgment and decree of the court below.

9. Reverting to the question whether the trial court was competent in admitting evidence relating to the due execution by Guniram of the agreement to sell dated 15-6-1964, I find there is no bar under any law for taking the evidence that Guniram put his signature on paper No. 30/A-l after fully understanding what was written on it unless it could be said that the mere taking of such evidence by the court amounted to acting upon the instrument (paper No. 30/A-l) or amounted to admitting it in evidence within the meaning of Section 35 of the Stamp Act. It is difficult for me to agree with the submissions of the learned counsel for the appellants that paper No. 30/ A-1 be treated as non-existent, that is to say, it was never on the record of the suit. What the learned Judges of the Bombay High Court in (1911) ILR 35 Bom 29 (supra) meant was that an unstamped instrument ought to be treated as non-existent, that is to say, no right or title can be founded upon it as that would amount to acting upon it and using its contents as establishing that right or title. I do not think the dictum laid down in the said case goes to the extent of saying that for all purposes it should be non est.

10. It would be noticed that while Section 33 of the Stamp Act uses the words 'produced' in respect of an instrument chargeable to stamp duty, in Section 35 it uses the words 'admitted in evidence' or 'acted upon' in regard to an unstamped instrument. The law, therefore, makes a distinction between production of an instrument and its admission in evidence or in acting upon it. That is also the distinction made under the scheme of the Civil Procedure Code. Order XIII, Rule 1 lays down when the documentary evidence is to be produced. Then Rule 2 deals with the effect of non-production of documents. Then there is a catena of rules following dealings with inadmissble documents and documents being admitted in evidence. Rule 7 lays down that when a document had been admitted in evidence then it shall form part of the record of the suit and the documents not admitted in evidence shall not form part of the record and shall be returned to the persons producing them. Rule 8 empowers the court to impound the document when produced.

Thus the substantive law in the Stamp Act and the procedural law in the C. P. Code do make a clear distinction between production of a document and its admission in evidence. To my mind under Section 35 of the Stamp Act admitting an instrument in evidence or acting upon it mean the same thing and are synonimous. When a document is said to be admitted in evidence it would mean that the contents of it have become evidence in the suit or proceedings in which that document is evidence of the right or title founded on them and enforcing that right or title would amount to acting upon the document. The receiving of evidence in proof of the due execution of the document which would always be extraneous to the contents or recitals thereof and would not amount to acting upon the document as the evidence of its due execution by itself would not serve as a foundation for any right or title. Section 35 of the Stamp Act, therefore, does not place any embargo on the power of the court to receive evidence of the circumstances under which a particular instrument was prepared and signed. The embargo is on the enforcement of rights or title or acting upon an instrument which is unstamped.

Under para 42 of the General Rules (Civil) 1957 for Civil Courts a party desiring to produce any document in court shall before producing it in court obtain admission or denial recorded on the back pf the document by the opposite party's lawyer. Paper No. 30/A-1 bears an endorsement 'not admitted'. Presumably It is the endorsement by the defendants' lawyer. When the said paper was produced before the court by the plaintiffs as not admitted by the defendants, the plaintiffs were required to prove its due execution before they could rely on its contents evidencing an agreement to sell. Under para 53 of the General Rules (Civil) the duty of the court upon production of a document is given. Documents which are not admitted by the party against whom they are produced in evidence are to be kept on the record pending proof and shall be rejected at the close of the evidence if not proved or admitted. The court if it finds a document to be irrelevant or otherwise inadmissible in evidence will reject it forthwith. There is an injunction in the note appended to the said rule that no document unless admitted in evidence shall be marked as an exhibit. As the learned Munsif did not find paper No. 30/A-1 irrelevant or otherwise inadmissible he did not reject it forthwith. He rightly kept it on record pending proof. It is only when a document is proved that it shall be admitted in evidence by the court and marked as exhibit.

The scheme under General Rules (Civil) is based on the scheme under Order XIII. C. P. Code which requires certain endorsements on every document which has been admitted in evidence. The state of endorsing under Rule 4 of Order XIII arises when a document has been proved and is to be admitted in evidence by the court. The due execution of a document is the proof thereof. It cannot be admitted in evidence unless proved. Thus the evidence in proof of due execution of a document is a stage which is prior to the stage of admitting it in evidence. In the case of Gordhansingh v. Suwalal and Kalyanbux, AIR 1959 Raj 156 it has been held that a document can only be said to be admitted in evidence when it is formally proved and tendered in evidence. There are two stages relating to documents filed in court. One is the stage when all the documents are filed by the parties in court. The next stage is when the documents are formally proved and tendered in evidence. It is after the document is formally proved that the endorsement referred in Rule 4 of Order XIII of the Code of Civil Procedure is to be made, I am clear in my mind that the admission of evidence by a court to prove due execution of an instrument chargeable to duty under the Stamp Act, though produced unstamped, is permitted to be received by the court but such instrument will not be admitted in evidence or acted upon, that is to say, its recitals cannot be used either in favour of the party relying on it or against his adversary.

Under Section 5 of the Stamp Act there is a prohibition that no court shall admit in evidence an instrument chargeable with duty. The argument of the learned counsel for the defendants-appellants that the learned Munsif erred in law in allowing the plaintiffs to adduce evidence for proving the signature of Guniram on paper No. 30/A-l and for establishing the circumstances in which it was written out and signed by Guniram, has no substance and is not acceptable.

11. It was then urged for the appellants that as paper No. 30/A-1 does not bear any endorsement and exhibit number even though the requisite duty and penalty was paid by the plaintiffs, it would be deemed not to have been admitted in evidence as that is the requirement of the procedural law, hence the plaintiffs' suit ought to be dismissed as paper No. 30/A-l cannot be read in evidence. I am unable to appreciate this argument. An omission to mark a document admitted in evidence as exhibited and giving it a number will be a mere curable procedural irregularity. Such an omission would not amount to any illegality. It appears to me that it was a mere oversight on the part of the learned Judge of the court below that he did not direct the requisite endorsement to be made and exhibit number marked on paper No. 30/A-1. For the omission or mistake of a court a party ought not to be penalised. Moreover, the learned counsel for the appellants has not been able to show what prejudice was caused to the defendants merely because paper No. 30/A-1 does not bear any exhibit number,

12. As a result of the discussion above, I find no force in this appeal and dismiss it with costs.


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