Case Note & Summary
Background: The writ petition arose from a challenge to concurrent orders granting temporary injunction in Special Civil Suit No.93 of 2022. The petitioner was the original defendant, and the respondent was the original plaintiff. The dispute concerned a notarised agreement dated 26.06.2020 relating to the sale and development of agricultural land. Facts: The defendant, owner of the suit property, agreed to sell the land to the plaintiff for Rs.92,50,000. A notarised agreement styled as tabe-isar-pavti was executed. The plaintiff paid earnest money of Rs.2,00,000 and later further installments, totalling Rs.22,00,000, which the defendant admitted. The agreement contemplated that the plaintiff would develop the land, carve out saleable plots, sell them, and pay the consideration in instalments; the defendant was to execute bharna-pavtis, clear encumbrances, and execute a sale deed by 25.06.2022 after receiving the total consideration. The plaintiff claimed readiness to pay the balance but alleged that the defendant failed to clear loans and execute the sale deed. The defendant contended that the plaintiff failed to develop the property within the specified time, denied delivery of possession, and asserted that the document was unregistered and insufficiently stamped, being merely notarised on a Rs.100 bond paper. Procedurally, the trial court allowed the temporary injunction application Exhibit-5 on 21.09.2022, restraining the defendant from alienating the suit property or disturbing the plaintiff's possession except by due process. The District Judge dismissed the defendant's Misc. Civil Appeal No.91 of 2022 on 10.05.2023, affirming that order. Legal Issues: The core questions were whether an insufficiently stamped and unregistered agreement could be considered for granting temporary injunction, particularly for possession, and whether the courts below erred in relying on the contents of such a document without impounding. Arguments: The petitioner's counsel argued that the document was not an agreement to sell in the strict sense but a development agreement, that it was unregistered and insufficiently stamped, that possession was never delivered, and that the courts below relied on an inadmissible document; he cited Avinash Kumar Chauhan v. Vijay Krishna Mishra. The respondent's counsel contended that the issue of stamp duty and registration could not be looked into at the preliminary stage, that the court has power to impound under Section 35 at the stage of evidence, and relied on Ameer Minhaj and Merces Builders. Court's Analysis: The High Court noted that execution of the agreement and receipt of Rs.22,00,000 were admitted, but the defendant disputed the nature of the agreement and delivery of possession. Section 35 of the Indian Stamp Act imposes an absolute bar against admitting an unstamped instrument for any purpose, including collateral purpose, unless the proviso is complied with. The Court referred to Avinash Kumar Chauhan, Dyavamma, and Yellapu Uma Maheswari, and held that an unstamped instrument cannot be acted upon for temporary injunction. Since the contents of the agreement were inadmissible, there was no evidence to establish the plaintiff's possession, and the exact nature of the transaction could not be ascertained. The courts below had erroneously observed that the prima facie value of the document could be adjusted. Decision: The writ petition was partly allowed. The impugned orders were modified to restrain the defendant from alienating the suit property by any mode, but the order restraining the defendant from disturbing the plaintiff's possession was quashed and set aside. Rule was made absolute accordingly.
Headnote
A) Evidence - Admissibility of Unstamped Instruments - Section 35 of Indian Stamp Act, 1899 - Absolute bar on admitting or acting upon unstamped chargeable instruments for any purpose, including collateral purpose, unless duty and penalty are paid under proviso - The High Court considered two concurrent orders that relied upon an unregistered, insufficiently stamped notarized agreement to find the plaintiff in possession. It held that under Section 35, a court cannot act upon an unstamped instrument even for collateral purpose, and that the exact nature of transaction and possession cannot be ascertained from such a document. Held that the possession injunction based on the unstamped agreement was liable to be set aside; however, the defendant was still restrained from alienating the suit property because execution of the document and receipt of Rs.22,00,000 were admitted (Paras 14-21). B) Civil Procedure - Temporary Injunction - Prima Facie Possession and Alienation - Section 35 of Indian Stamp Act, 1899 - Unstamped agreement cannot ground possession injunction, but admitted execution and part consideration can justify alienation restraint - The trial court and appellate court had granted injunction against alienation and against disturbing possession. The High Court modified the orders to only restrain alienation, quashing the restraint on disturbing possession, because possession was not independently established apart from the inadmissible agreement (Paras 19-22).
Issue of Consideration
Whether an unregistered and insufficiently stamped notarized agreement can be relied upon for granting temporary injunction, particularly regarding possession; whether the courts below erred in acting upon such document without impounding under Section 35 of Indian Stamp Act, 1899
Final Decision
Writ petition partly allowed. The impugned judgment and order dated 21.09.2022 passed by learned Joint Civil Judge Senior Division, Beed below Exhibit-5 in Special Civil Suit No.93 of 2022, confirmed by learned District Judge, Beed vide order dated 10.05.2023 in Misc. Civil Appeal No.91 of 2022, was modified. The respondent (defendant) or anybody on his behalf was temporarily restrained from alienating the suit property by any mode of transaction. The order of temporary injunction passed against the defendant not to disturb possession of plaintiff over the suit property was quashed and set aside. Rule was made absolute in the aforesaid terms.
Law Points
- An instrument chargeable with duty but not duly stamped is inadmissible for any purpose
- including collateral purpose
- unless duty and penalty are paid under proviso to Section 35 of Indian Stamp Act
- 1899
- court cannot act upon an unstamped instrument for temporary injunction
- possession must be established by other evidence
- admitted execution and part payment can support alienation restraint
