If Document Required To Be Stamped Is Insufficiently Stamped, Copy Of Document Cannot Be Adduced As Secondary Evidence: Supreme Court

A bench of Justice Abhay S Oka and Justice Sanjay Karol referred to catena of decisions to observe as 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."

In the case at hand, the Plaintiff and Defendant entered into an agreement to sell on 04.02.1998. The Plaintiff subsequently filed a suit for specific performance of the contract. He also moved an application to file a copy of the agreement to sell, as secondary evidence. This application was dismissed by the Additional District Judge in review, wherein it was held that secondary evidence of an agreement to sell could not be allowed as it was not executed on a proper stamp and hence barred under section 35 of the Stamp Act. This was later upheld by the High Court. Challenging this, the Plaintiff approached the Apex Court in appeal.

Sr. Adv. Dr. Menaka Guruswamy, for the Appellant-Plaintiff, argued that the prohibition of Section 35 of the Stamp Act would not be applicable since there was no requirement to pay stamp duty at the time of execution of the agreement to sell, since it was executed before the Indian Stamp (Madhya Pradesh Amendment) Act, 1989 which introduced the requirement for payment of stamp duty. The Plaintiff should have been permitted to lead a copy of the agreement to sell as secondary evidence under Section 65 of the Evidence Act, it was argued.

The Defendant on the other hand argued that a copy of an original document that is unstamped cannot be admitted as secondary evidence and since the original document is inadmissible under the Stamp Act, the copy of the same cannot be allowed as secondary evidence.

Section 35 of the Stamp Act says that instruments that are not duly stamped are inadmissible in evidence. The Court considered in detail whether the bar of admissibility under Section 35 of the Indian Stamp Act would apply to said case.

The object of the Stamp Act is to collect proper stamp duty on an instrument or conveyance on which such stamp duty is payable, the Court said. Section 35 of the Stamp Act caters to instruments that are not properly stamped and, hence, not admissible in evidence. But if the documents sought to be admitted are not chargeable with duty, Section 35 has no application, the court explained:

To impose the bar of admissibility provided under this section (Section 35), the following twin conditions are required to be fulfilled:

(i) Instrument must be chargeable with duty;

(ii) It is not duly stamped

The Court concluded that in this case, the instrument was not chargeable with duty and since it was not required to be stamped, no bar could be imposed due to it being not duly stamped.

The Court then considered whether a copy of a document can be adduced as secondary evidence when the original instrument is not in possession of the party. 

The Court reiterated that if a document that is required to be stamped is not sufficiently stamped, then a copy of such document as secondary evidence cannot be adduced. In the said case however the Court concluded that the document in question was not liable to stamp duty at the time of its execution.

The Court then examined Section 65(a) of the Evidence Act which deals with cases in which secondary evidence relating to the document may be given:

a. Secondary evidence can be presented as a substitute when the original document/ primary evidence is in the possession of the opposing party or held by a third party

b. Such a person refuses to produce the document even after due notice

c. It must be ensured that the alleged copy is a true copy of the original

The Court observed that the exact status of the documents in the case in question could not be ascertained since one party claimed that the other had the said documents and the other stated that it was with her counsel. Since the said documents could not be recovered, the presentation of secondary evidence could be allowed, if other requirements are complied with, the Court said.

“..we are of the opinion that 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” the Court concluded.

Also Read : Principles On Admissibility Of Secondary Evidence : Supreme Court Explains

https://www.livelaw.in/supreme-court/principles-on-admissibility-of-secondary-evidence-supreme-court-explains-243306

Case Title: Vijay v. Union of India, Civil Appeal No. 4910 of 2023

Citation: 2023 LiveLaw (SC) 1022

Click here to read/download judgment