Writ Petition No. 8245 of 2019

27th April 2020

Petitioner Counsel: Mr. G.B. Sawal
Respondent Counsel: Mr. S.S. Sitani Mr. Fidvi I. Abid
Act Name: Registration Act, 1908 Maharashtra Stamps Act, 1958 Maharashtra Rent Control Act, 1998

HeadLine : Maharashtra Stamps Act (1958), Ss. 32(A), 33, 2(l) – Impounding of photocopy of tenancy agreement – For payment of stamp duty and penalty – Validity – As per S. 33 only instrument as defined u/S. 2(l) can be impounded if found to be not duly stamped – Photo copy of document cannot be treated as ‘instrument’ u/S. 2(l) – No order for impounding of such document can be passed.

Section :
Section 49 Registration Act, 1908 Section 2(l) Maharashtra Stamps Act, 1958 Section 2(l4) Maharashtra Stamps Act, 1958 Section 32(A) Maharashtra Stamps Act, 1958 Section 33 Maharashtra Stamps Act, 1958 Section 35 Maharashtra Stamps Act, 1958 Section 55 Maharashtra Rent Control Act, 1998

Cases Cited :
Paras 6, 14: Hariom Agrawal Vs. Prakash Chand Malviya, (2007)8 SCC 514
Paras 6, 16: Gayabai Hemlal Jadhav Vs. Hiraman s/o Rama Chavan and another, 2011 (4) Mh.L.J. 798
Paras 8, 18: Nalinikant Ramdas, Gujjar Vs. Tulasibai (Dead) by LRs and others, AIR 1997 SC 404

JUDGEMENT

1. Rule. Rule is made returnable forthwith. Heard finally with the consent of learned counsel appearing for rival parties.

2. By these writ petitions, the original plaintiff as well as defendant No.1 have challenged judgment and order dated 03/10/2019, passed by the District Judge-5, Nagpur, in Miscellaneous Civil Application No. 208 of 2019, whereby appeal filed by the original defendant No.1 has been allowed and an agreement of tenancy has been impounded to pay requisite stamp duty and penalty thereon and thereafter, it is directed that the said document be exhibited for collateral purpose. It is significant that the said document is not original agreement dated 26/10/1999, but, a photo copy thereof.

3. The petitioner in Writ Petition No. 7175/2019, (original plaintiff), who is respondent No.1 in Writ Petition No. 8245/2019, has filed Regular Civil Suit No. 277/2011, before the Small Causes Court at Nagpur, against the defendants seeking eviction and possession of the suit property. The said plaintiff has claimed in the suit that the suit property was an open plot when it was given on rent to the defendant No.1 in the month of October, 1999. Although it is not specified as to whether the suit property was given on rent by an oral agreement, in the written statement the defendant No.1 did not dispute the fact that an open plot was given on rent from the month of October, 1999. It was claimed by the defendant No.1 that a temporary structure was constructed in May, 2000, in the suit property and that defendants No.2 and 3 were inducted in partnership with defendant No.1. It is further claimed that the defendants No. 2 and 3 did not have any independent right in the suit property. The defendants No.2 and 3 also filed their written statement before the Small Causes Court. The evidence of the plaintiff was completed and when the cross-examination of the defendant No.1 was being undertaken, the aforesaid document claimed to be a tenancy agreement was tendered, which was denied by the plaintiff. It was claimed that the said document was a photo copy of the tenancy agreement dated 26/10/1999 and further that the original was with the plaintiff. It was further claimed that notice to produce the document was issued, but, the plaintiff had denied the very existence of the same. When an attempt was made for document to be exhibited, the plaintiff objected to the same by disputing the document and denying its very existence. It was further asserted on behalf of the plaintiff that the said document was not duly stamped and that it was not a registered document. The Small Causes Court accepted the objections raised on behalf of the plaintiff and rejected a request of defendant No.1 for exhibiting the said document and the matter was posted for cross-examination of defendants No.2 and 3.

4. At this stage, the defendant No.1 moved an application for exhibiting document under Section 49 of the Registration Act, for collateral purpose. This application was marked as Exh.165. The plaintiff opposed the said application and by order dated 19/09/2019, the Small Causes Court rejected the application, holding that the defendant No.1 failed to state the collateral purpose for which document was sought to be exhibited and on the basis of vague pleadings, order under Section 49 of the Registration Act could not be passed.

5. Aggrieved by the said order, defendant No.1 filed Miscellaneous Civil Appeal No.208 of 2019, before the Court below. By the impugned judgment and order, the Court below partly allowed the appeal in the following manner :
“1. The appeal is partly allowed.
2. The agreement of tenancy dt. 26.10.1999 is impounded to the payment of requisite stamp duty and penalty thereon.
3. After payment of the requisite stamp duty and penalty on the said document it be executed for the collateral purpose.
4. The question whether the purpose for using the said document amounts to collateral purpose is kept open for the decision at the time of final hearing of the suit.
5. The appellant no.1 shall take necessary steps for payment of stamp duty and penalty thereon as per the provisions of law on or before next date.”

6. Aggrieved by the said order, both the plaintiff as well as defendant No.1 had filed the present writ petitions. The plaintiff i.e. the petitioner in Writ Petition No. 7175/2019, has challenged impugned order on the ground that the document sought to be exhibited was only a photo copy and not the original and, therefore, no order for impounding such a document could have been passed on proper reading of the relevant provisions of the Maharashtra Stamps Act, 1958. It was further submitted that when the defendant No.1 admitted in written statement that the tenancy was created in October 1999, as claimed by the plaintiff and no reference was made to the said alleged agreement, there was no question of permitting photo copy of such an alleged document to be exhibited and placed on record. It was further submitted that the Court below committed a grave error in holding that the said document could be exhibited for collateral purposes and by further holding that the question whether the purpose for using the said document amounts to collateral purpose was kept open for decision at the time of final hearing of the suit, was self-contradictory and wholly unsustainable. It was submitted that when such a document could not be impounded for payment of requisite stamp and penalty thereon, there was no question of allowing the document to be exhibited for collateral purpose. Mr. G.B. Sawal, learned counsel appearing for the plaintiff placed reliance on the judgment of the Hon’ble Supreme Court in the case of Hariom Agrawal Vs. Prakash Chand Malviya (2007)8 SCC 514, to contend that the question whether a photo copy of a document could be impounded under Stamps Act was no more res integra. It was submitted that although the said judgment considered the Madhya Pradesh Stamps Act, the provisions were similar to the provisions under the Maharashtra Stamps Act, 1958 and that, therefore, the impugned judgment and order deserved to be set aside. The learned counsel also placed reliance on judgment of a learned Single Judge of this Court in the case of Gayabai Hemlal Jadhav Vs. Hiraman s/o Rama Chavan and another 2011 (4) Mh.L.J. 798, to contend that a photo copy could not be said to be “instrument” as defined under Section 2(l) of the Maharashtra Stamps Act, 1958 and, therefore, Sections 32(A) and 33 of the said Act, could not apply to the document in question in the present case. Reliance was also placed on the judgments of other High Courts to reiterate the said position of law and to contend that the impugned order deserved to be set aside.

7. The defendant No.1 i.e. petitioner in Writ Petition No. 8245 of 2019, has also challenged the impugned order by contending that the direction to impound the aforesaid document ought not to have been passed by the Court below, because under Section 55 of the Maharashtra Rent Control Act, 1998, it was the duty of the landlord to get the document registered and in case of failure, the terms and conditions of the tenancy, as claimed by the tenant would prevail. On this basis, it was contended on behalf of the defendant No.1 that the Court below ought to have exhibited the document for collateral purpose. It was contended that even if there were certain admissions given in written statement by defendant No.1, it was specifically stated in the affidavit in evidence by the defendant No.1 that the said written statement was drafted at the behest of original plaintiff, because the litigation was initially filed by the plaintiff by giving a different impression to the defendant No.1 and in the affidavit in evidence, it was brought to the notice of the Small Causes Court that the written statement was not on express instructions of defendant No.1 and the correct situation on facts was placed on record.

8. Mr. S.S. Sitani, learned counsel appearing for defendant No.1 claimed that when the original document was in possession of the plaintiff and he was deliberately suppressing the same, the photo copy of the same ought to have been permitted to be exhibited by the Court below, without insistence of impounding the same for payment of stamp duty and penalty thereon, in the interest of justice. Reliance was placed on the judgment of the Hon’ble Supreme Court in the case of Nalinikant Ramdas, Gujjar Vs. Tulasibai (Dead) by LRs and others AIR 1997 SC 404, to contend that the Maharashtra Rent Control Act, 1998, was applicable although the tenancy was created before the Act came into force, because the crucial date was as to when the right conferred under the Act was sought to be enforced.

9. Heard learned counsel for rival parties and perused the material on record. Although the learned counsel appearing for defendant No.1 has sought to raise various issues before this Court, including the question of the point in time the aforesaid Rent Control Act, could be said to be applicable in the present case, this Court is of the opinion that the first question that needs to be decided in the present petitions is, as to whether the document in question, which is admittedly not the original, but, a photo copy of the alleged agreement dated 26/10/1999, could have been directed to be impounded for payment of stamp duty and penalty thereon. It is only if the said direction could be sustained that the consequent direction about exhibiting the document for collateral purpose could be sustained.

10. The relevant provisions of the Maharashtra Stamps Act, 1958, show that under Sections 32(A) and 33 of the said Act, there is repeated reference made to the expression “instrument”.

11. Section 2(l) of the said Act, defines “instrument” and it reads as follows :
“instrument” includes every document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded, but does not include a bill of exchange, cheque, promissory note, bill of lading, letter of credit, policy of insurance, transfer of share, debenture, proxy and receipt;”

12. A perusal of the said definition makes it clear that an “instrument” under the said Act is a document by which any right or liability is created or extinguished. Such a document would necessarily be the original of the said document and in this context, when Section 32(A) of the said Act is perused, it refers to “instrument” of conveyance, exchange, gift, etc. In a situation, where there is a short fall in payment of stamp duty, the Collector of the District has to give the parties concerned a reasonable opportunity of being heard and then determine the difference of amount of duty payable along with penalty and on payment of such amounts, “instrument” received shall be returned to the officer or the person concerned.

13. Section 33 of the said Act pertains to examination and impounding of instruments. This provision gives power to the competent authority to impound the “instrument” if it is found to be not duly stamped. The said provision repeatedly refers to the “instrument”, which is under examination on the aspect of requisite stamp duty. Reading of the said provision does not in any manner indicate that a photo copy of an original document would qualify to be an “instrument” or that such photo copy could be impounded.

14. In the case of Hariom Agrawal (supra), the Hon’ble Supreme Court was concerned with a similar question in the backdrop of Madhya Pradesh Stamps Act, containing provisions similar to the Maharashtra Stamps Act, 1958. In the said case, the Trial Court had ordered a photo copy of the document to be impounded and upon payment of requisite stamp duty for such photo copy to be sent back to the Court for consideration admitting the document for secondary evidence. The order of the Trial Court was challenged before the High Court and it was held that such photo copy could neither be impounded nor be accepted in secondary evidence. On a challenge raised before the Hon’ble Supreme Court, upon analysis of the relevant provisions and earlier judgments of the Hon’ble Supreme Court, it was held as follows :
“It is clear from the decisions of this Court and a plain reading of Sections 33, 35 and 2(14) of the Act that in instrument which is not duly stamped can be impounded and when the required fee and penalty has been paid for such instrument it can be taken in evidence under Section 35 of the Stamp Act. Sections 33 or 35 are not concerned with any copy of the instrument and party can only be allowed to rely on the document which is an instrument within the meaning of Section 2(14). There is no scope for the inclusion of the copy of the document for the purposes of the Stamp Act. Law is now no doubt well settled that copy of the instrument cannot be validated by impounding and this cannot be admitted as secondary evidence under the Stamp Act, 1899.”

15. The following discussion in the said judgment is also relevant.
“On a plain reading of Section 48-B, we do not find that the submission of the learned counsel for the appellant that by virtue of this provision the Collector has been authorised to impound even copy of the instrument, is correct. Under this section where the deficiency of stamp duty is noticed from the copy of any instrument, the Collector may call for the original document for inspection, and on failure to produce the original instrument could presume that proper stamp duty was not paid on the original instrument and, thus, recover the same from the person concerned. Section 48-B does not relate to the instrument i.e. the original document to be presented before any person who is authorised to receive the document in evidence to be impounded on inadequacy of stamp duty found. The section uses the phraseology “where the deficiency of stamp duty is noticed from a copy of any instrument”. Therefore, when the deficiency of stamp duty from a copy of the instrument is noticed by the Collector, the Collector is authorised to act under this Section. On deficiency of stamp duty being noticed from the copy of the instrument, the Collector would order production of original instrument from a person in possession or in custody of the original instrument. Production is required by the Collector for the purpose of satisfying himself whether adequate stamp duty had been paid on the original instrument or not. In the notice given to person in possession or in custody of original instrument, the Collector shall provide for time within which the original document is required to be produced before him. If, in spite of the notice, the original is not produced before the Collector, the Collector would draw a presumption that original document is not duly stamped and thereafter may proceed in the manner provided in Chapter IV. By virtue of the proviso, the step for recovery of adequate stamp duty on the original instrument on insufficiency of the stamp duty paid being noticed from the copy of the instrument, can only be taken within five years from the date of execution of such instrument. The words “the Collector may proceed in the manner provided in this Chapter” have reference to Section 48 of the Act. Under this section, all duties, penalties and other sums required to be paid under Chapter IV, which includes stamp duty, would be recovered by the Collector by distress and sale of the movable property of the person who has been called upon to pay the adequate stamp duty or he can implement the method of recovery of arrears of land revenue for the dues of stamp duty. By virtue of provisio to Section 48-B, the Collector’s power to adjudicate upon the adequacy of stamp duty on the original instrument on the basis of copy of the instrument is restricted to the period of five years from the date of execution of the original instrument. This section only authorises the Collector to recover the adequate stamp duty which has been avoided at the time of execution of the original instrument. This section does not authorise the Collector to impound the copy of the instrument.”

16. The said judgment of the Hon’ble Supreme Court was followed by a learned Single Judge of this case of Gayabai Hemlal Jadhav (supra) and after referring to the provisions of the Maharashtra Stamps Act, 1958, applicable in the State of Maharashtra, it was held as follows :
“16. It can, thus, be concluded that photocopy of the document cannot be termed as an “instrument” within the meaning of section 2(14) of the Indian Stamp Act, 1899 or Section 2(l) of the Bombay Stamp Act, 1958 and the provisions of section 33 of the Bombay Tamp Act cannot be made applicable in respect of copy of the document.
17. It is needless to say that the trial Court has adopted a correct approach in the matter and was justified in turning down the request made by the petitioner herein. The trial Court would surely consider the provisions relating to admissibility of the document, contained in relevant Act, applicable to the copy of a document and would render appropriate decision.
18. Considering the limited scope of inquiry by the trial Court while dealing with application for grant of probate, determination of the question relating to entitlement of deceased to the property, in reference to the document placed on record by the probate applicant – Respondent No.1 herein, is surely of a secondary character. The trial Court, in the facts and circumstances, was justified in rejecting the application tendered by the petitioner herein.”

17. Therefore, the position of law appears to be absolutely clear to the effect that photo copy of a document cannot be treated as an “instrument” under Section 2(l) of the Maharashtra Stamps Act, 1958 and no order for impounding such document can be passed. Thus, the Court below erred in passing the impugned order directing that the document in question i.e. photo copy of alleged agreement dated 26/10/1999, was to be impounded for payment of requisite stamp duty and penalty thereon. As a result, the consequent direction for exhibiting the document for collateral purpose after payment of requisite stamp duty and penalty can also not be sustained.

18. The defendant No.1 has claimed that such impounding of the document was not necessary by placing reliance on Section 55 of the Maharashtra Rent Control Act, 1998. It was claimed that when such an agreement ought to have been registered and it was the duty of the landlord to do so under Section 55 of the aforesaid Act, the document in question could have been exhibited for collateral purpose even without impounding. But, the said question sought to be raised on behalf of the defendant No.1 is irrelevant for the present controversy, because the first and foremost question is, as to whether such a photo copy of the original document could at all be exhibited for collateral purpose and whether it could be impounded for payment of requisite stamp duty and penalty thereon. Therefore, reliance placed on the judgment of the Hon’ble Supreme Court in the case of Nalinikant Ramdas, Gujjar (supra) on behalf of defendant No.1 is of no consequence.

19. This Court has not considered the other contentions sought to be raised on behalf of defendant No.1 with regard to his written statement and statement made in the affidavit in evidence on his behalf. Such issues are still at large before the Small Causes Court and any comment thereon, including on the issue of applicability of the Maharashtra Rent Control Act, 1999, would not be proper at this stage. The limited question before this Court is, as to whether the direction of impounding the aforesaid document for payment of requisite stamp duty and penalty thereon was itself sustainable.

20. On the basis of position of law clarified by the Hon’ble Supreme Court and learned Single Judge of this Court in the aforesaid judgments, it becomes clear that the impugned judgment and order passed by the Court below cannot be sustained.

21. In view of above, the writ petitions are disposed of as follows :
A. The impugned judgment and order passed by the Court below is quashed and set aside.
B. Consequently, order passed by the Small Causes Court on Exh.165 is restored.
C. Considering that the suit in the present case is pending before the Small Causes Court from the year 2011, the said Court is directed to dispose of the suit expeditiously and in any case within a period of one year from today.

22. Rule is made absolute in above terms. No order as to costs.

Decision : Order accordingly.