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Moosa v/s Veeran Haji

    RFA No. 583 of 2007

    Decided On, 19 July 2022

    At, High Court of Kerala

    By, THE HONOURABLE MR. JUSTICE P. SOMARAJAN

    For the Petitioner: K.A. Hassan, Advocate. For the Respondent: A. Meena, Vinod Ravindranath, M.R. Mini, Ashwin Sathyanath, Rohit Nandakumar, K.C. Kiran, Advocates.



Judgment Text

1. The defendant came up in appeal against the decree and judgment of Sub Court, Manjeri granting a decree for recovery of an amount of Rs.7,00,000/- with interest thereof to the plaintiff. It was submitted that the due execution of Ext.A1 agreement relied on by the plaintiff was not proved. Further, it was executed in a stamp paper worth Rs.100/- instead of a stamp paper worth Rs.50/-. But during the course of argument of appeal, the insufficiency of stamp in Ext.A1 was taken up as a main ground of attack. Ext.A1 is an agreement under which the parties have agreed to repay an amount of Rs.7,00,000/- with interest and hence, it is submitted that Ext.A1 is an insufficiently stamped instrument and cannot be admitted in evidence. On the other hand, the learned counsel for the respondent submitted that the suit is based on the original transaction and not based on Ext.A1 instrument, but it was let in as a collateral evidence to the original transaction. Several points were argued by the learned counsel for the appellant, but for the disposal of this appeal, the main questions which require consideration at first are whether it is permissible to challenge the validity of a document which was found to be insufficiently stamped in a later stage of the proceedings, when it was accepted in evidence and acted upon by the trial court and what would be the legal position if it was marked and accepted in evidence, subject to the objection raised by the opposite party.

2. It is a case wherein a decree was passed by the trial court based on Ext.A1 agreement for recovery of an amount of Rs.7,00,000/-. It was prepared in a stamp paper worth Rs.100/-. The said document was marked and accepted in evidence and acted upon at the trial stage. Initially, the signature and thumb impression found affixed as that of the defendant was disputed and denied, but during the course of trial, he had admitted the signature as well as the thumb impression, but advanced a different version that it was actually handed over to some other person. The abovesaid admission was made after the receipt of two reports of experts regarding the genuineness of the finger print and the signature found affixed in the document. In short, the defendant proceeded with the trial of the suit by admitting his signature and thumb impression found affixed in Ext.A1 instrument. The question of insufficiency of stamp was not taken up at the time of trial of the suit or during the course of crossexamination. Section 36 of the Indian Stamp Act, 1899 makes an exception to the general rule that an 'unstamped document' or a 'document not duly stamped' or 'improperly stamped' shall not be admitted in evidence. When the instrument has been admitted in evidence, such admission shall not be called in question at any stage of the same suit or proceedings on the ground that the instrument has not been duly stamped, subject to the power of revision under Section 61 of the Act. Once the document has been marked as an exhibit in the case and has been used by the parties in examination and cross examination of their respective witnesses, the exception carved out under Section 36 of the Act would come into play and the parties cannot challenge the admissibility of such document on a later stage of the same proceedings or at the first appellate stage.

3. The Apex Court in Javer Chand and Others v. Pukhraj Surana (AIR 1961 SC 1655) had cautioned that it is upto the party to alert and see that the document is not admitted in evidence by the court, when it is found to be not duly stamped or improperly stamped. Necessarily, when there is failure to oppose and to see that the document is not admitted in evidence by the trial court, the opposite party will lose the right to oppose the said document on a later stage on the said ground. An exception can be drawn with respect to an unstamped instrument, which is inadmissible in evidence and incapable of curing that defect by payment of required stamp. But an 'improperly stamped' document or a document 'not duly stamped' stands on a different footing [see Thomas George v. V.V.Georgekutty (2019 (5) KHC 845)]. Section 36 of the Act would stand attracted when insufficiently stamped instrument is admitted in evidence. Whether a document is insufficiently stamped or duly stamped is a matter which requires judicial determination before admitting the document in evidence. The question of judicial determination would arise when objection was raised on tendering of the document/instrument in evidence and before getting it marked as an exhibit [see Shyamal Kumar Roy v. Sushil Kumar Agarwal (AIR 2007 SC 637)]. The court shall not mark such document without having a judicial determination regarding its admissibility or the question of insufficiency of stamp. It is also not permissible to adjourn the question to be decided along with the suit at the final stage. As such, the court cannot mark such document subject to the objection raised and permit the parties to go with the document in trial. Otherwise, it will cause prejudice to the parties in view of Section 36 of the Indian Stamp Act. The corollary is that when a document is tendered in evidence and if it is found to be not duly stamped or improperly stamped, there should be a judicial determination on that question before further proceeding with the trial of the suit. It is also laid down by the Apex Court in Hindustan Steel Ltd. v. M/s. Dilip Construction Company (AIR 1969 SC 1238) that Section 36 of the Act does not by itself create any bar against an instrument not duly stamped being acted upon after payment of stamp duty and penalty. But, when the document is not stamped, though acted upon and admitted in evidence at the trial stage, it cannot be brought under the purview of Section 36 of the Act and as such, the question of admission in evidence can be taken up at any stage of the proceedings or even at the first appellate stage. Being the legal position as discussed above, in so far as a document which is found to be insufficiently stamped/not duly stamped, when it was acted upon by the parties and proceeded with the trial of the suit by accepting the said document in evidence, they cannot at a later stage challenge the validity of the said document on the said ground. In the instant case, what is involved is an insufficiently stamped document, Ext.A1, which was got marked and subjected to examination and cross-examination at the trial stage and ended in a decree. Hence, the question of insufficiency of stamp on Ext.A1 document is not available for consideration at this stage.

4. Inter alia, it is contended by the learned counsel for the respondent/plaintiff that the suit is not based on Ext.A1 document, but on the original transaction alleged and that Ext.A1 document was produced as a collateral evidence. Section 36 of the Indian Stamp Act deals with an improperly or not duly stamped instrument, which was admitted in evidence without raising any objection and does not say anything with respect to its evidentiary value, but governs the field of estoppel (by the conduct/omission of the party). Hence, the question of execution or evidentiary value of Ext.A1 document should be established apart from the question of admissibility in evidence either under Section 36 of the Act or otherwise on account of deficiency of stamp.

5. Further, it is submitted that as per the endorsement, the stamp paper used for the

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preparation of Ext.A1 was purchased long before the execution of the document and hence, there should be sufficient explanation in that behalf, which is also a factor to be taken into consideration while evaluating the due execution of the document. The learned counsel for the plaintiff pressed for a remand of the matter so as to enable him to adduce additional evidence in proof of original transaction. It is submitted that there exists a fair chance for settlement of the matter. Hence, the decree and judgment of the trial court will stand set aside. The matter is remanded back to the trial court for fresh disposal. The trial court shall also explore the possibility of a settlement in the matter.The parties shall appear before the trial court on 09/08/2022. The appeal is allowed in part accordingly. No costs.
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