Case Note & Summary
The dispute arose from a rice mill site in Bhimavaram, West Godavari District, originally leased by K.N. Raju from the guardian of respondents 1 and 2 on 21st December 1941. The appellant and respondents 3, 4 and 5 succeeded to the lessee's rights, and the lease was to expire on 17th July 1956. Respondents 1 and 2 served notice of ejectment. According to the lessees, negotiations resulted in an agreement dated 6th January 1957 between the appellant and respondent 5 on behalf of all lessees and respondents 1 and 2 for a new thirty-year lease at Rs. 5,400 per annum, with an option for lessors to purchase the mill and provision for lessees to remove structures if option not exercised. The agreement was written on two stamp papers of Rs. 0-12-0 each and delivered to respondent 1. The appellant claimed he made improvements worth Rs. 30,000 and purchased shares of respondents 3 and 4. Respondents 1 and 2 filed O.S. No. 81 of 1957 for recovery of possession, O.S. No. 100 of 1957 for damages, and the appellant and respondent 5 filed O.S. No. 92 of 1958 for specific performance of the agreement. The three suits were tried together; the original agreement was not produced by respondents, so oral evidence was led by the appellant. The trial court held that oral evidence was inadmissible and finding the agreement not proved, dismissed specific performance and decreed possession and damages. On appeal, the Subordinate Judge reversed and decreed specific performance, finding that respondents suppressed the agreement and that oral evidence should be admitted. The High Court in second appeal held oral evidence inadmissible and not capable of being acted upon under Section 36. Before the Supreme Court, the appellant argued that secondary evidence was admissible under Section 65(a) of the Indian Evidence Act because the original was suppressed and that the Stamp Act allowed such evidence if penalty was offered. The Court rejected this, holding that Section 35 of the Indian Stamp Act clearly shuts out unstamped or insufficiently stamped instruments from evidence and from being acted upon; proviso (a) applies only when the original instrument is produced and duty and penalty paid; a copy is not an instrument under the Stamp Act; and Section 36 only applies when the original instrument was admitted without objection at the initial stage. Consequently, the appeals were dismissed, and the High Court's judgment was affirmed.
Headnote
A) Stamp Act - Interpretation - Section 35 Indian Stamp Act, 1899 - First limb bars unstamped or insufficiently stamped instruments from evidence; second limb bars acting upon such instruments, including secondary evidence - Proviso (a) applies only when original instrument is before the court and deficiency of stamp with penalty is paid - Held that oral or copy evidence of unstamped agreement cannot be received under Section 35 (Paras 1-12). B) Stamp Act - Definition of Instrument - Sections 35 and 36 Indian Stamp Act, 1899 - Copy of document is not an instrument for purpose of Stamp Act - Secondary evidence either by oral evidence of contents or copy under Section 63 Indian Evidence Act does not fulfil proviso (a) which requires production of instrument itself - Held that no scope for inclusion of copy as instrument under Stamp Act (Paras 1-12). C) Stamp Act - Section 36 - Admission without objection - Section 36 only relaxes strict provisions of Section 35 where original instrument admitted in evidence without objection at initial stage - Words 'an instrument' in Section 36 have same meaning as in Section 35 and refer to original instrument - Held that Section 36 cannot be interpreted to allow secondary evidence of instrument to have its benefit (Paras 1-12). D) Evidence Act - Secondary evidence - Sections 63, 65(a) Indian Evidence Act, 1872 - Although secondary evidence may be generally admissible under Evidence Act when original suppressed, Stamp Act creates independent bar to oral or copy evidence of unstamped or insufficiently stamped documents - Held that reception of such secondary evidence barred unless original produced and duty and penalty paid under proviso (a) to Section 35 (Paras 1-12).
Issue of Consideration
Whether reception of secondary evidence of a written agreement to grant a lease, insufficiently stamped, is barred by the provisions of sections 35 and 36 of the Indian Stamp Act, 1899
Final Decision
The Supreme Court dismissed the civil appeals, affirmed the High Court's judgment, and held that oral or secondary evidence of the insufficiently stamped lease agreement was inadmissible and could not be acted upon under Sections 35 and 36 of the Indian Stamp Act, 1899. Specific performance was therefore denied.
Law Points
- Section 35 of Indian Stamp Act
- 1899 bars unstamped or insufficiently stamped instruments from evidence
- secondary evidence of such instruments is also barred
- proviso (a) to Section 35 requires original instrument and payment of duty and penalty
- copy of document is not an instrument for Stamp Act purposes
- Section 36 only applies when original instrument admitted in evidence without objection at initial stage
- secondary evidence cannot be let in under Section 36
