The Karnataka High Court has held that once an instrument is admitted in evidence, even by inadvertence, the admissibility of the document on the ground it was insufficiently stamped cannot be questioned thereafter.

A Single Bench of Justice N.S. Sanjay Gowda observed, “… it is clear that once an instrument is admitted in evidence, even by inadvertence, the admissibility of the document on the ground it was insufficiently stamped cannot be questioned thereafter.”

In this case, the bench observed that the procedure adopted by the respondent for filing a Revision is completely erroneous.

The Court further said, “… the power available under Section 58 to the Appellate Court is only to consider the correctness of a decision actually taken by the Trial Court determining the duty and penalty payable while admitting the instrument in evidence. If there is no decision taken at all by the Trial Court regarding the duty and penalty payable, while admitting the instrument in evidence, the question of invoking the revisional power under Section 58 would not arise.”

It was also noted by the Court that there can be no question of considering the correctness of a non-existent order and that the District Court had no jurisdiction to direct the Trial Court to examine the admissibility of a document after the same had been admitted in evidence under Section 58 of the Karnataka Stamp Act, 1957.

Advocate Srinand A. Pachhapure appeared on behalf of the petitioner while Advocate Rajashekhar Burji represented the respondent.

Facts of the Case –

An agreement of sale was executed between the petitioner and the respondent, whereby the respondent agreed to sell the suit property for a sum of Rs.6,00,000/-. The petitioner instituted a suit seeking for specific performance of the agreement and thereafter, during the trial, the agreement of sale was admitted into evidence due to which the respondent filed a revision petition for the same.

The Trial Court, pursuant to the order of the District Court, passed the impugned order holding that the Trial Court had ample power to impound a document for the purpose of collection of stamp duty and penalty, even if the document had already been admitted into evidence.

The petitioner was, therefore, before the High Court questioning the legality of the said order.

The High Court after hearing both parties asserted, “The order passed in exercise of the revisional power under Section 58 would not enable the collection of duty and penalty payable on an instrument but it only facilitates the prosecution of a wrongdoer by the Deputy Commissioner.”

The Court further said that the instrument should not have been admitted without payment of duty and penalty or a higher duty and penalty.

The Court further observed, “… the certificate that had been issued by the Deputy Commissioner that the instrument had been duly stamped under Section 41 would not be annulled and would still be valid, thereby, meaning that the instrument would be considered as duly stamped and could thus be admitted in evidence or be registered, acted upon or authenticated.”

It was also noted by the Court that an order passed by the Appellate Court cannot be the basis for the collection of duty and penalty in respect of an instrument that has been admitted on payment of duty or penalty.

The Court, therefore said, “… it is thus clear as on the date the instrument was produced, which was nearly seven years after the instrument was executed, even the State had lost its right to recover the stamp duty. As a natural consequence, it will also have to be held that the impounding officer had also the right to impound the document.”

Accordingly, the Court allowed the writ petition and quashed the impugned order.

Cause Title- Anil v. Babu & Anr.

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Karnataka High CourtJustice N.S. Sanjay GowdaEvidence

Swasti Chaturvedi