Tuesday, 13 October 2020

Whether the court can impound photocopy of the tenancy agreement?

 By these writ petitions, the original plaintiff as well

as defendant No.1 have challenged judgment and order dated

03/10/2019, passed by the District Judge-5, Nagpur, in

Miscellaneous Civil Application No. 208 of 2019, whereby

appeal filed by the original defendant No.1 has been allowed

and an agreement of tenancy has been impounded to pay

requisite stamp duty and penalty thereon and thereafter, it is

directed that the said document be exhibited for collateral

purpose. It is significant that the said document is not original

agreement dated 26/10/1999, but, a photo copy thereof.

17. Therefore, the position of law appears to be

absolutely clear to the effect that photo copy of a document

cannot be treated as an “instrument” under Section 2(l) of the

Maharashtra Stamps Act, 1958 and no order for impounding

such document can be passed. Thus, the Court below erred in

passing the impugned order directing that the document in

question i.e. photo copy of alleged agreement dated

26/10/1999, was to be impounded for payment of requisite

stamp duty and penalty thereon. As a result, the consequent

direction for exhibiting the document for collateral purpose

after payment of requisite stamp duty and penalty can also not

be sustained.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

NAGPUR BENCH AT NAGPUR

Writ Petition No. 8245 of 2019

Shri Pradeep Shyamrao Kakirwar, Vs.  Dr. Smt.Seema Arun Mankar,


CORAM : MANISH PITALE, J.

PRONOUNCED ON : 27.04.2020


Rule. Rule is made returnable forthwith. Heard

finally with the consent of learned counsel appearing for rival

parties.

2. By these writ petitions, the original plaintiff as well

as defendant No.1 have challenged judgment and order dated

03/10/2019, passed by the District Judge-5, Nagpur, in

Miscellaneous Civil Application No. 208 of 2019, whereby

appeal filed by the original defendant No.1 has been allowed

and an agreement of tenancy has been impounded to pay

requisite stamp duty and penalty thereon and thereafter, it is

directed that the said document be exhibited for collateral

purpose. It is significant that the said document is not original

agreement dated 26/10/1999, but, a photo copy thereof.

3. The petitioner in Writ Petition No. 7175/2019,

(original plaintiff), who is respondent No.1 in Writ Petition

No. 8245/2019, has filed Regular Civil Suit No. 277/2011,

before the Small Causes Court at Nagpur, against the

defendants seeking eviction and possession of the suit

property. The said plaintiff has claimed in the suit that the

suit property was an open plot when it was given on rent to

the defendant No.1 in the month of October, 1999. Although

it is not specified as to whether the suit property was given on

rent by an oral agreement, in the written statement the

defendant No.1 did not dispute the fact that an open plot was

given on rent from the month of October, 1999. It was claimed

by the defendant No.1 that a temporary structure was

constructed in May, 2000, in the suit property and that

defendants No.2 and 3 were inducted in partnership with

defendant No.1. It is further claimed that the defendants No.

2 and 3 did not have any independent right in the suit

property. The defendants No.2 and 3 also filed their written

statement before the Small Causes Court. The evidence of the

plaintiff was completed and when the cross-examination of

the defendant No.1 was being undertaken, the aforesaid

document claimed to be a tenancy agreement was tendered,

which was denied by the plaintiff. It was claimed that the said

document was a photo copy of the tenancy agreement dated

26/10/1999 and further that the original was with the

plaintiff. It was further claimed that notice to produce the

document was issued, but, the plaintiff had denied the very

existence of the same. When an attempt was made for

document to be exhibited, the plaintiff objected to the same by

disputing the document and denying its very existence. It was

further asserted on behalf of the plaintiff that the said

document was not duly stamped and that it was not a

registered document. The Small Causes Court accepted the

objections raised on behalf of the plaintiff and rejected a

request of defendant No.1 for exhibiting the said document

and the matter was posted for cross-examination of

defendants No.2 and 3.

4. At this stage, the defendant No.1 moved an

application for exhibiting document under Section 49 of the

Registration Act, for collateral purpose. This application was

marked as Exh.165. The plaintiff opposed the said application

and by order dated 19/09/2019, the Small Causes Court

rejected the application, holding that the defendant No.1

failed to state the collateral purpose for which document was

sought to be exhibited and on the basis of vague pleadings,

order under Section 49 of the Registration Act could not be

passed.

5. Aggrieved by the said order, defendant No.1 filed

Miscellaneous Civil Appeal No.208 of 2019, before the Court

below. By the impugned judgment and order, the Court below

partly allowed the appeal in the following manner :

“1. The appeal is partly allowed.

2. The agreement of tenancy dt. 26.10.1999 is

impounded to the payment of requisite stamp duty and

penalty thereon.


3. After payment of the requisite stamp duty and

penalty on the said document it be executed for the

collateral purpose.

4. The question whether the purpose for using the said

document amounts to collateral purpose is kept open

for the decision at the time of final hearing of the suit.

5. The appellant no.1 shall take necessary steps for

payment of stamp duty and penalty thereon as per the

provisions of law on or before next date.”

6. Aggrieved by the said order, both the plaintiff as

well as defendant No.1 had filed the present writ petitions.

The plaintiff i.e. the petitioner in Writ Petition No. 7175/2019,

has challenged impugned order on the ground that the

document sought to be exhibited was only a photo copy and

not the original and, therefore, no order for impounding such

a document could have been passed on proper reading of the

relevant provisions of the Maharashtra Stamps Act, 1958. It

was further submitted that when the defendant No.1 admitted

in written statement that the tenancy was created in October

1999, as claimed by the plaintiff and no reference was made

to the said alleged agreement, there was no question of

permitting photo copy of such an alleged document to be

exhibited and placed on record. It was further submitted that

the Court below committed a grave error in holding that the

said document could be exhibited for collateral purposes and

by further holding that the question whether the purpose for

using the said document amounts to collateral purpose was

kept open for decision at the time of final hearing of the suit,

was self-contradictory and wholly unsustainable. It was

submitted that when such a document could not be

impounded for payment of requisite stamp and penalty

thereon, there was no question of allowing the document to be

exhibited for collateral purpose. Mr. G.B. Sawal, learned

counsel appearing for the plaintiff placed reliance on the

judgment of the Hon’ble Supreme Court in the case of Hariom

Agrawal Vs. Prakash Chand Malviya (2007)8 SCC 514, to

contend that the question whether a photo copy of a

document could be impounded under Stamps Act was no

more res integra. It was submitted that although the said

judgment considered the Madhya Pradesh Stamps Act, the

provisions were similar to the provisions under the

Maharashtra Stamps Act, 1958 and that, therefore, the

impugned judgment and order deserved to be set aside. The

learned counsel also placed reliance on judgment of a learned

Single Judge of this Court in the case of Gayabai Hemlal

Jadhav Vs. Hiraman s/o Rama Chavan and another 2011 (4)

Mh.L.J. 798, to contend that a photo copy could not be said to

be “instrument” as defined under Section 2(l) of the

Maharashtra Stamps Act, 1958 and, therefore, Sections 32(A)

and 33 of the said Act, could not apply to the document in

question in the present case. Reliance was also placed on the

judgments of other High Courts to reiterate the said position

of law and to contend that the impugned order deserved to be

set aside.

7. The defendant No.1 i.e. petitioner in Writ Petition

No. 8245 of 2019, has also challenged the impugned order by

contending that the direction to impound the aforesaid

document ought not to have been passed by the Court below,

because under Section 55 of the Maharashtra Rent Control

Act, 1998, it was the duty of the landlord to get the document

registered and in case of failure, the terms and conditions of

the tenancy, as claimed by the tenant would prevail. On this

basis, it was contended on behalf of the defendant No.1 that

the Court below ought to have exhibited the document for

collateral purpose. It was contended that even if there were

certain admissions given in written statement by defendant

No.1, it was specifically stated in the affidavit in evidence by

the defendant No.1 that the said written statement was

drafted at the behest of original plaintiff, because the litigation

was initially filed by the plaintiff by giving a different

impression to the defendant No.1 and in the affidavit in

evidence, it was brought to the notice of the Small Causes

Court that the written statement was not on express

instructions of defendant No.1 and the correct situation on

facts was placed on record.

8. Mr. S.S. Sitani, learned counsel appearing for

defendant No.1 claimed that when the original document was

in possession of the plaintiff and he was deliberately

suppressing the same, the photo copy of the same ought to

have been permitted to be exhibited by the Court below,

without insistence of impounding the same for payment of

stamp duty and penalty thereon, in the interest of justice.

Reliance was placed on the judgment of the Hon’ble Supreme

Court in the case of Nalinikant Ramdas, Gujjar Vs. Tulasibai

(Dead) by LRs and others AIR 1997 SC 404, to contend that

the Maharashtra Rent Control Act, 1998, was applicable

although the tenancy was created before the Act came into

force, because the crucial date was as to when the right

conferred under the Act was sought to be enforced.

9. Heard learned counsel for rival parties and perused

the material on record. Although the learned counsel

appearing for defendant No.1 has sought to raise various

issues before this Court, including the question of the point in

time the aforesaid Rent Control Act, could be said to be

applicable in the present case, this Court is of the opinion that

the first question that needs to be decided in the present

petitions is, as to whether the document in question, which is

admittedly not the original, but, a photo copy of the alleged

agreement dated 26/10/1999, could have been directed to be

impounded for payment of stamp duty and penalty thereon. It

is only if the said direction could be sustained that the

consequent direction about exhibiting the document for

collateral purpose could be sustained.

10. The relevant provisions of the Maharashtra Stamps

Act, 1958, show that under Sections 32(A) and 33 of the said

Act, there is repeated reference made to the expression

“instrument”.

11. Section 2(l) of the said Act, defines “instrument”

and it reads as follows :

“instrument” includes every document by which any

right or liability is, or purports to be created,

transferred, limited, extended, extinguished or

recorded, but does not include a bill of exchange,

cheque, promissory note, bill of lading, letter of

credit, policy of insurance, transfer of share,

debenture, proxy and receipt;”

12. A perusal of the said definition makes it clear that

an “instrument” under the said Act is a document by which

any right or liability is created or extinguished. Such a

document would necessarily be the original of the said

document and in this context, when Section 32(A) of the said

Act is perused, it refers to “instrument” of conveyance,

exchange, gift, etc. In a situation, where there is a short fall in

payment of stamp duty, the Collector of the District has to give

the parties concerned a reasonable opportunity of being heard

and then determine the difference of amount of duty payable

along with penalty and on payment of such amounts,

“instrument” received shall be returned to the officer or the

person concerned.

13. Section 33 of the said Act pertains to examination

and impounding of instruments. This provision gives power to

the competent authority to impound the “instrument” if it is

found to be not duly stamped. The said provision repeatedly

refers to the “instrument”, which is under examination on the

aspect of requisite stamp duty. Reading of the said provision

does not in any manner indicate that a photo copy of an

original document would qualify to be an “instrument” or that

such photo copy could be impounded.

14. In the case of Hariom Agrawal (supra), the Hon’ble

Supreme Court was concerned with a similar question in the

backdrop of Madhya Pradesh Stamps Act, containing

provisions similar to the Maharashtra Stamps Act, 1958. In

the said case, the Trial Court had ordered a photo copy of the

document to be impounded and upon payment of requisite

stamp duty for such photo copy to be sent back to the Court

for consideration admitting the document for secondary

evidence. The order of the Trial Court was challenged before

the High Court and it was held that such photo copy could

neither be impounded nor be accepted in secondary evidence.

On a challenge raised before the Hon’ble Supreme Court, upon

analysis of the relevant provisions and earlier judgments of the

Hon’ble Supreme Court, it was held as follows :

“It is clear from the decisions of this Court and a plain

reading of Sections 33, 35 and 2(14) of the Act that in

instrument which is not duly stamped can be

impounded and when the required fee and penalty

has been paid for such instrument it can be taken in

evidence under Section 35 of the Stamp Act. Sections

33 or 35 are not concerned with any copy of the

instrument and party can only be allowed to rely on

the document which is an instrument within the

meaning of Section 2(14). There is no scope for the

inclusion of the copy of the document for the

purposes of the Stamp Act. Law is now no doubt well

settled that copy of the instrument cannot be

validated by impounding and this cannot be admitted

as secondary evidence under the Stamp Act, 1899.”

15. The following discussion in the said judgment is

also relevant.

“On a plain reading of Section 48-B, we do not find

that the submission of the learned counsel for the

appellant that by virtue of this provision the Collector

has been authorised to impound even copy of the

instrument, is correct. Under this section where the

deficiency of stamp duty is noticed from the copy of

any instrument, the Collector may call for the original

document for inspection, and on failure to produce

the original instrument could presume that proper

stamp duty was not paid on the original instrument

and, thus, recover the same from the person

concerned. Section 48-B does not relate to the

instrument i.e. the original document to be presented

before any person who is authorised to receive the

document in evidence to be impounded on

inadequacy of stamp duty found. The section uses the

phraseology “where the deficiency of stamp duty is

noticed from a copy of any instrument”. Therefore,

when the deficiency of stamp duty from a copy of the

instrument is noticed by the Collector, the Collector is

authorised to act under this Section. On deficiency of

stamp duty being noticed from the copy of the

instrument, the Collector would order production of

original instrument from a person in possession or in

custody of the original instrument. Production is

required by the Collector for the purpose of satisfying

himself whether adequate stamp duty had been paid

on the original instrument or not. In the notice given

to person in possession or in custody of original

instrument, the Collector shall provide for time within

which the original document is required to be

produced before him. If, in spite of the notice, the

original is not produced before the Collector, the

Collector would draw a presumption that original

document is not duly stamped and thereafter may

proceed in the manner provided in Chapter IV. By

virtue of the proviso, the step for recovery of adequate

stamp duty on the original instrument on insufficiency

of the stamp duty paid being noticed from the copy of

the instrument, can only be taken within five years

from the date of execution of such instrument. The

words “the Collector may proceed in the manner

provided in this Chapter” have reference to Section 48

of the Act. Under this section, all duties, penalties

and other sums required to be paid under Chapter IV,

which includes stamp duty, would be recovered by the

Collector by distress and sale of the movable property

of the person who has been called upon to pay the

adequate stamp duty or he can implement the method

of recovery of arrears of land revenue for the dues of

stamp duty. By virtue of provisio to Section 48-B, the

Collector’s power to adjudicate upon the adequacy of

stamp duty on the original instrument on the basis of

copy of the instrument is restricted to the period of

five years from the date of execution of the original

instrument. This section only authorises the Collector

to recover the adequate stamp duty which has been

avoided at the time of execution of the original

instrument. This section does not authorise the

Collector to impound the copy of the instrument.”

16. The said judgment of the Hon’ble Supreme Court

was followed by a learned Single Judge of this case of Gayabai

Hemlal Jadhav (supra) and after referring to the provisions of

the Maharashtra Stamps Act, 1958, applicable in the State of

Maharashtra, it was held as follows :

“16. It can, thus, be concluded that photocopy of the

document cannot be termed as an “instrument” within

the meaning of section 2(14) of the Indian Stamp Act,

1899 or Section 2(l) of the Bombay Stamp Act, 1958

and the provisions of section 33 of the Bombay Tamp

Act cannot be made applicable in respect of copy of

the document.

17. It is needless to say that the trial Court has

adopted a correct approach in the matter and was

justified in turning down the request made by the

petitioner herein. The trial Court would surely

consider the provisions relating to admissibility of the

document, contained in relevant Act, applicable to the

copy of a document and would render appropriate

decision.

18. Considering the limited scope of inquiry by the

trial Court while dealing with application for grant of

probate, determination of the question relating to

entitlement of deceased to the property, in reference

to the document placed on record by the probate

applicant – Respondent No.1 herein, is surely of a

secondary character. The trial Court, in the facts and

circumstances, was justified in rejecting the

application tendered by the petitioner herein.”

17. Therefore, the position of law appears to be

absolutely clear to the effect that photo copy of a document

cannot be treated as an “instrument” under Section 2(l) of the

Maharashtra Stamps Act, 1958 and no order for impounding

such document can be passed. Thus, the Court below erred in

passing the impugned order directing that the document in

question i.e. photo copy of alleged agreement dated

26/10/1999, was to be impounded for payment of requisite

stamp duty and penalty thereon. As a result, the consequent

direction for exhibiting the document for collateral purpose

after payment of requisite stamp duty and penalty can also not

be sustained.

18. The defendant No.1 has claimed that such

impounding of the document was not necessary by placing

reliance on Section 55 of the Maharashtra Rent Control Act,

1998. It was claimed that when such an agreement ought to

have been registered and it was the duty of the landlord to do

so under Section 55 of the aforesaid Act, the document in

question could have been exhibited for collateral purpose even

without impounding. But, the said question sought to be

raised on behalf of the defendant No.1 is irrelevant for the

present controversy, because the first and foremost question is,

as to whether such a photo copy of the original document

could at all be exhibited for collateral purpose and whether it

could be impounded for payment of requisite stamp duty and

penalty thereon. Therefore, reliance placed on the judgment

of the Hon’ble Supreme Court in the case of Nalinikant

Ramdas, Gujjar (supra) on behalf of defendant No.1 is of no

consequence.

19. This Court has not considered the other contentions

sought to be raised on behalf of defendant No.1 with regard to

his written statement and statement made in the affidavit in

evidence on his behalf. Such issues are still at large before the

Small Causes Court and any comment thereon, including on

the issue of applicability of the Maharashtra Rent Control Act,

1999, would not be proper at this stage. The limited question

before this Court is, as to whether the direction of impounding

the aforesaid document for payment of requisite stamp duty

and penalty thereon was itself sustainable.

20. On the basis of position of law clarified by the

Hon’ble Supreme Court and learned Single Judge of this Court

in the aforesaid judgments, it becomes clear that the

impugned judgment and order passed by the Court below

cannot be sustained.

21. In view of above, the writ petitions are disposed of

as follows :

A. The impugned judgment and order passed by the Court

below is quashed and set aside.

B. Consequently, order passed by the Small Causes Court

on Exh.165 is restored.

C. Considering that the suit in the present case is pending

before the Small Causes Court from the year 2011, the

said Court is directed to dispose of the suit expeditiously

and in any case within a period of one year from today.

22. Rule is made absolute in above terms. No order as

to costs.


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