2023 (11) TMI 1272 - SC - Indian Laws

Section 35 Indian Stamp Act doesn't bar secondary evidence when original document not chargeable with stamp duty

Vijay Versus Union of India (UOI) and Ors.

The SC held that Section 35 of the Indian Stamp Act 1899 does not bar admissibility of secondary evidence when the original document is not chargeable ... Bar of admissibility created by Section 35 of the Indian Stamp Act 1899 applies to the agreement(s) to sell dated 04.02.1988 executed by the parties - copy of a document be adduced as secondary evidence when the original instrument is not in possession of the party or not - applicability of decision of this Court in Jupadi Kesava Rao v. Pulavarthi Venkata Subha Rao [1971 (1) TMI 111 - SUPREME COURT]. Whether the bar of admissibility created by Section 35 of the Indian Stamp Act 1899 (Stamp Act) applies to the agreement(s) to sell dated 04.02.1988 executed by the parties? - HELD THAT:- The Explanation inserted in Article 23 of Schedule I-A contained in the Act creates a new obligation for the party and, therefore, cannot be given retrospective application. Thus, it will not affect the agreement(s) executed prior to such amendments - If the documents sought to be admitted are not chargeable with duty, Section 35 has no application. Thus, in the present case, since the document was dated 04.02.1988, the instrument was not chargeable with duty. It follows therefrom that when such document(s) are not required to be stamped, then no bar could be imposed due to it being not duly stamped. Can a copy of a document be adduced as secondary evidence when the original instrument is not in possession of the party? - Whether, in the facts of the present case, would the decision of this Court in Jupadi Kesava Rao v. Pulavarthi Venkata Subha Rao be binding as held by both the Courts below? - HELD THAT:- Section 35 of the Stamp Act which forbids the letting of secondary evidence in proof of its contents. The Section excludes both the original instrument and secondary evidence of its contents if it needs to be stamped or sufficiently stamped. This bar as to the admissibility of documents is absolute. Where a document cannot be received in evidence on the ground that it is not duly stamped, the secondary evidence thereof is equally inadmissible in evidence. In relation to secondary evidence of unstamped/insufficiently stamped documents, the position has been succinctly explained by this Court in Jupudi Kesava Rao wherein it dealt with an issue, i.e., whether reception of secondary evidence of a written agreement to grant a lease is barred by the provisions of Sections 35 and 36 of the Stamp Act and answered it in affirmative. Thus, if a document that is required to be stamped is not sufficiently stamped, then the position of law is well settled that a copy of such document as secondary evidence cannot be adduced. The present facts, however, differ - The Trial Court and the High Court have relied on Jupadi Kesava Rao to hold that the Plaintiffs cannot lead secondary evidence as the document sought to be produced needed to be duly stamped. It is a settled position of law that where the question is whether the document is liable to stamp duty and penalty, it has to be decided at the threshold even before marking a document. In the present case, the document in question was not liable to stamp duty - in the instant case, the Plaintiff's prayer for leading the secondary evidence ought to be allowed in so far as the documents sought to be introduced as secondary evidence be taken by the concerned Court and exhibited, with its admissibility being decided independently, in accordance with law under the Evidence Act. Appeal allowed. Issues Involved:1. Whether the bar of admissibility created by Section 35 of the Indian Stamp Act 1899 applies to the agreement(s) to sell dated 04.02.1988 executed by the parties.2. Can a copy of a document be adduced as secondary evidence when the original instrument is not in possession of the party.3. Whether the decision of this Court in Jupadi Kesava Rao v. Pulavarthi Venkata Subha Rao (1971) 1 SCC 545 is binding as held by both the Courts below.Issue-Wise Detailed Analysis:Issue 1: Admissibility under Section 35 of the Stamp Act- Section 35 Overview: Section 35 of the Indian Stamp Act prohibits the admission of instruments chargeable with duty unless they are duly stamped. 'Duly stamped' means that the instrument bears a stamp affixed or used in accordance with the law in force in India.- Chargeability and Execution Date: The chargeability of an instrument with duty is determined by the date of execution. The relevant date for stamp duty is the date of execution, not the date of adjudication or presentation.- Constitutional Provisions: Entry 44 of List III of the Constitution of India pertains to stamp duties, with the power to levy stamp duty on all documents being concurrent between the Parliament and the State Legislature. However, the power to prescribe the rate of such levy lies with the Parliament.- Article 23 of Schedule 1A: At the time of execution (1988), conveyances were subjected to stamp duty under Article 23 of Schedule 1A, which was later amended in 1989 and 1990. The amendment included an explanation that agreements to sell immovable property with possession transferred would be deemed conveyances.- Retrospective Application: The Court held that the explanation added in 1990 could not be applied retrospectively to agreements executed in 1988. Amendments creating new obligations are generally prospective unless expressly stated otherwise.- Conclusion on Issue 1: Since the document dated 04.02.1988 was not chargeable with duty at the time of execution, Section 35's bar of admissibility does not apply.Issue 2: Admissibility of Secondary Evidence- Relevant Provisions: Sections 61, 63, and 65 of the Evidence Act outline the conditions under which secondary evidence can be admitted. Secondary evidence is permissible when the original is unavailable, provided proper documentation and authentication are met.- Principles for Secondary Evidence: The Court outlined several principles, including the necessity of primary evidence first, the admissibility of secondary evidence in exceptional cases, and the requirement to prove the non-availability of the original document.- Application to Present Case: The Plaintiff claimed the original document was with the Defendant or her counsel, who could not produce it. Therefore, secondary evidence could be allowed if other legal requirements are met.- Section 35 of the Stamp Act: The bar on admissibility under Section 35 also applies to secondary evidence if the original document is unstamped or insufficiently stamped. However, since the document in question was not chargeable with duty at the time of execution, this bar does not apply.- Conclusion on Issue 2: The Plaintiff's prayer for leading secondary evidence is allowed, and the concerned Court should exhibit the documents, with admissibility decided independently under the Evidence Act.Issue 3: Binding Nature of Jupadi Kesava Rao Case- Distinguishing Facts: The decision in Jupadi Kesava Rao dealt with a document chargeable with duty, whereas the present case involves a document not chargeable with duty at the time of execution.- Conclusion on Issue 3: The principle of law held in Jupadi Kesava Rao does not apply to the instant case due to the material difference in facts.Judgment:1. The first issue is answered negatively as the documents in question were not required to be stamped at the relevant period to attract the bar of Section 35 of the Stamp Act.2. The second issue is answered in the affirmative. A copy of a document can be adduced as secondary evidence if other legal requirements are met.3. The third issue is answered negatively, distinguishing the present case from Jupadi Kesava Rao.Final Order:The appeal is allowed, setting aside the order dated 16.12.2003 by the 19th Additional District Judge and the High Court's order dated 30.11.2009. The order dated 17.07.2001 by the 4th Additional District Judge is restored. No order as to costs.