Writ Petition No.7509 of 2009

1st April, 2010

Petitioner Counsel: Mr. SATYAJEET MIRAJKAR
Respondent Counsel: Mr. V. Z. KANKARIA, Mr. S. D. RAYRIKAR

JUDGMENT

JUDGMENT :- Heard the learned counsel for the parties. Taken up for final disposal at admission stage. The petitioner is the original defendant and the respondent is the original plaintiff. The respondent filed a suit for recovery of a sum of Rs.6,19,000/- together with interest thereon. An application was made at Exhibit-45 by the respondent contending that the documents produced along with the list at Exhibit-3 have been proved by the respondent and therefore, the same may be marked as exhibits. Thereafter, an application was made by the respondent at Exhibit-46. In the said application it is contended that the respondent is relying upon a letter in which the petitioner has allegedly acknowledged the debt in the sum of Rs.6,19,000/-. In the application, the respondent himself stated that the said document amounts to "acknowledgment" and it is insufficiently stamped in the sense that instead of executing the document on a stamp of Rs.50/- the same has been executed on a stamp paper of denomination of Rs.20/-. A reference was made to the provisions to section 34 of the Bombay Stamp Act, 1958 (hereinafter referred to as the said Act). The respondent showed willingness to pay penalty as well as deficit stamp duty. By the impugned order dated 3rd December, 2008, the said document which was marked as Exhibit-50 was impounded and the respondent was directed to pay stamp duty of Rs.90/- inclusive of deficit stamp duty and penalty.

2. The submission of the learned counsel for the petitioner is that even according to the case of the respondent the document was insufficiently stamped and therefore, the same ought not to have exhibited. He submitted that in any case, Civil Court does not possess any power to decide the issue regarding correct stamp duty and penalty, if any, payable on document in accordance with the said Act. He submitted that if such document was impounded and thereafter read in evidence, it will result into allowing vexatious suit filed by the respondent at premature stage.

3. I have given careful consideration to the submissions. It will be necessary to advert to the provisions of the said Act. Under section 31 of the said Act, a power is conferred on the Collector to make adjudication as regards proper stamp duty payable on an instrument. The power can be exercised by the Collector in respect of an instrument whether it is executed or not or whether it is previously stamped or not. Under section 32 of the said Act, the Collector is required to issue a certificate in accordance with the said section. If the Collector is of the opinion that the instrument is already fully stamped, or if the duty as determined by the Collector in accordance with section 31 of the said Act is already paid, a certificate is required to be endorsed on such an instrument that the full duty with which it is chargeable has been paid. If the Collector is of the opinion that the instrument is not chargeable with duty, certificate to that effect will have to be endorsed by the Collector.

4. Section 32-A of the said Act deals with instruments set out therein which are undervalued. Section 33 of the said Act reads thus :

"33.Examination and impounding of instruments -

(1) [Subject to the provisions of section 32-A, 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 [or any other officer, empowered by law to investigate offences under any law for the time being in force,] 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 [irrespective whether the instrument is or is not valid in law].

(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 for the time being in force in the State when such instrument was executed or first executed.

Provided that -

(a) nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound if he does not think fit so to do any instrument coming before him in the course of any proceeding other than a proceeding under [Chapter IX or Part D of Chapter X of the Code of Criminal Procedure, 1973]

(b) in the case of a Judge of a High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court may appoint in this behalf.

(3) For the purposes of this section, in cases of doubt,-

(a) the State Government may determine what offices shall be deemed to be public offices; and

(b) the State Government may determine who shall be deemed to be persons in-charge of public offices.The Section imposes a duty on a person empowered to receive evidence to examine the documents produced before him and if he is of the opinion that a document is not duly stamped he has to impound the same irrespective of the fact whether the document is or is not valid in law.

Section 34 of the said Act provides for prohibition on admitting in evidence for any purpose an instrument which is not duly stamped. Section 34 reads thus :

"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 authenticated by any such person or by any public officer unless such instrument is duly stamped [or if the instrument is written on sheet or paper with impressed stamp [such stamp per is purchased in the name of one of the parties to the instrument].

"Provided that -

(a) any such instrument shall, subject to all just exceptions, be admitted in evidence on payment of,-

(i) the duty with which the same is chargeable, or in the case of any instrument insufficiently stamped, the amount required to make up such duty, and

(ii) a penalty at the rate of 2 per cent of the deficient portion of the stamp duty for every month or part thereof, from the date of execution of such instrument :

Provided that, in no case, the amount of the penalty shall exceed double the deficient portion of the stamp duty]

(b) where a contract or agreement of any kind is effected by correspondence consisting of two or more letters and any one of the letters bears the proper stamp; the contract or agreement shall be deemed to be duly stamped;

(c) nothing herein contained shall prevent the admission of any instrument in evidence in any proceeding in a Criminal Court, other than a proceeding [under Chapter IX or Part D of Chapter X of the Code of Criminal Procedure, 1973]

(d) nothing herein contained shall prevent the admission of any instrument in any Court when such instrument has been executed by or on behalf of the Government or where it bears the certificate of the Collector as provided by section 32 or any other provision of this Act;

(e) nothing herein contained shall prevent the admission of a copy of any instrument or of an oral admission of the contents of any instrument, if the stamp duty or a deficient portion of the stamp duty and penalty as specified in clause (a) is paid]."

5. When a document is sought to be tendered in evidence before the Court, if it is found that the document/instrument is not sufficiently stamped, it is the duty of the Court to impound the said document in accordance with section 33 of the said Act. In view of section 34 of the said Act, the said document cannot be admitted in evidence. Proviso makes it clear that if the deficit stamp duty is paid and if penalty as provided therein is paid, the document can be admitted in evidence. Under the said Act, no power is conferred on the Court to determine the stamp duty chargeable in respect of any instrument. In view of sections 31 and 32 of the said Act, the said power is vested in the Collector. Jurisdiction of the Civil Court is confined to recording a finding on the question whether an instrument is duly stamped. The Civil Court cannot determine the stamp duty payable on a particular instrument.

6. If the Civil Court finds that the document which is not duly stamped is sought to be tendered in evidence, the power under section 33 of the said Act will have to be exercised and the document will have to be impounded. After impounding the document, the Court is under an obligation to send a true copy of the said document to the adjudication of the Collector in accordance with sub-section (3) of section 32-A of the said Act. Only after adjudication is made by the Collector, the party relying upon the document will have to pay deficit stamp duty and penalty. After a certificate issued by the Collector regarding compliance with the requirement of payment of deficit stamp duty and penalty, Civil Court can exercise power under proviso (a) to section 34 of the said Act. Thereafter, the document can be admitted in evidence if the same is proved and if it is otherwise admissible in evidence.

7. There is nothing wrong if a party relying upon a document applies for impounding his own document to enable the Court to exercise power under proviso (a) to section 34. In the present case, though the trial Court was justified in impounding the document, further exercise made by the trial Court of determining of deficit stamp duty and penalty is without jurisdiction and to that extent, the impugned order will have to be modified. A grievance has been made by the learned counsel for the petitioner that the document is already marked as exhibit. Even if the document is marked as exhibit, it cannot be read in evidence unless the procedure as laid down above is followed.

8. Subject to what is observed above, impugned order needs modification. Hence, I pass following order :

i) Impugned order dated 3rd December, 2008 passed below applications at Exhibits-45 and 46 is modified.

ii) The trial Court shall impound the document at Exhibit-50 and shall forward a true copy thereof to the Collector in accordance with sub-section 3 of section 32-A of the said Act. After adjudication is made by the Collector, it will be open for the respondent to pay deficit stamp duty and penalty and to produce a certificate to that effect before the trial Court. Only after such certificate is produced, the document at Exhibit-50 can be read in evidence provided it is duly proved and is otherwise admissible in evidence.

iii) Impugned order stands modified in above terms.

iv) It is made clear that no adjudication has been made by this Court as regards the proof and evidentiary value of the said document.

v) Writ Petition is partly allowed in above terms.

Petition partly allowed.