Supreme Court lays down procedure for impounding of document which is not duly stamped

Seemingly there is a divergence in opinion, but we do not see any conflict in the two decisions. In both the decisions, this Court unequivocally found that if an instrument is not duly stamped, it is inadmissible Under Section 34 and if it is brought before any person or authority empowered to receive evidence, then, it shall be impounded. It was also recognized that on such impounding; for expedition of the suit, the party who produces the document can seek for determination of the insufficient duty by the court itself in which circumstance, the instrument can be taken in evidence on payment of the deficit duty as also ten times the deficit duty determined as penalty. There is no discretion insofar as the quantum of penalty is concerned when the instrument is sought to be admitted in evidence before court without transmitting it to the District Commissioner. However, if the deficit and the penalty at ten times is paid, after admission in evidence, a copy of the instrument has to be transmitted to the Deputy Commissioner Under Section 37(1). The Deputy Commissioner on receipt of a copy of the instrument Under Section 37(1) has the discretion to refund any portion of the penalty in excess of five rupees Under Section 38. {Para 15}

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 3476 of 2026

Decided On: 23.03.2026

Krishnavathi Sharma Vs. Bhagwandas Sharma and Ors.

Hon'ble Judges/Coram:

P.V. Sanjay Kumar and K. Vinod Chandran, JJ.

Citation: MANU/SC/0514/2026

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From Possession to Paper: SC reaffirms adverse-possession title as a “pre‑existing right” (Mukesh v. State of M.P., 2024 INSC 1026) -A View point

 The Supreme Court in Mukesh v. State of Madhya Pradesh (decided 20 Dec 2024) held that where a compromise/consent decree merely recognises a litigant’s pre-existing right in the suit property (including a right that may have matured from continuous adverse possession), such a decree does not require compulsory registration under Section 17(2)(vi) of the Registration Act, 1908, and—on the facts—cannot be treated as a “conveyance” attracting stamp duty for mutation.

This is significant for adverse possession because the Court expressly relies on Ravinder Kaur Grewal to reiterate that continuous, uninterrupted adverse possession can confer right, title and interest and can be used as a sword—supporting the “pre-existing right” analysis.

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Supreme Court: No Registration Or Stamp Duty Required For Compromise Decree Acquiring Property With Pre-Existing Right

 According to the Court, a compromise decree would not require registration if the below mentioned three conditions mentioned under Section 17(2)(vi) are fulfilled: -

"(i)There must be a compromise decree as per the terms of the compromise without any collusion;

(ii)The compromise decree must pertain to the subject property in the suit; and

(iii)There must be a pre-existing right over the subject property, and the compromise decree should not create a right afresh."

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 14808 OF 2024

(Arising out of SLP (C)No. 4293 of 2021)

MUKESH Vs THE STATE OF MADHYA PRADESH & ANR. 

Author: R. MAHADEVAN, J.

Citation: 2024 INSC 1026

Dated: DECEMBER 20, 2024.

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Supreme court: Under which circumstances the party must pay stamp duty on agreement of sale treating it as Conveyance?

In the instant case, the agreement to sell executed between the Appellant and mother of the Respondent No. 1, specifically states that "this property is in your occupation on rental basis and it will not be part of the sale transaction. After completion of sale transaction, the possession of the said property will be given to you on the ownership basis. This makes it very clear that the suit property was occupied by the Appellant on a rental basis and it would not be a part of the sale transaction. Further, there was a clause, by which, timeline was given for execution of sale deed. Since the possession was admittedly given to the Appellant even before the date of agreement, implying acquisition of possessory rights protected Under Section 53A of the Transfer of Property Act, the same requires payment of proper stamp duty. As indicated above, the agreement to sell includes a Clause stating that physical possession had already been handed over to the Appellant, regardless of the basis of such possession. This satisfies the requirement to treat the instrument as a 'conveyance' within the meaning of Explanation I to Article 25 of Schedule I of Bombay Stamp Act, with only the formality of executing the sale deed remaining. Pertinently, it is to be pointed out that the Appellant filed a suit for specific performance of the agreement to sell against the Respondents; Respondent No. 1 filed a suit seeking eviction of the Appellant from the subject property; and both the suits are pending, which clearly establish the possession of the property by the Appellant. Therefore, the said document is liable for payment of stamp duty at the hands of the Appellant.  {Para 11}

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 2549 of 2025.

Decided On: 14.02.2025

Ramesh Mishrimal Jain Vs. Avinash Vishwanath Patne and Ors.

Hon'ble Judges/Coram:

J.B. Pardiwala and R. Mahadevan, JJ.

Author: R. Mahadevan, J.

Citation: 2025 INSC 213, MANU/SC/0218/2025.

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Maharashtra Govt clarification dated 30-10-2024: No stamp duty is applicable on affidavits and declarations before any Govt. authority.

 Vide notification dated 1.7.2004 Govt of Maharashtra had exempted stamp duty on affidavits and declarations before any Govt. authority. However, affidavits were being asked on stamp paper of Rs.500 (rate was increased from Rs.100 to Rs.500 w.e.f. 14.10.2024). Hence Govt has clarified that exemption notification is still in force and no stamp duty is applicable on affidavits and declarations before any Govt. authority.

https://drive.google.com/file/d/1I0raU5C1yhmImvDQO6Gk-F3sTASNPg_a/view?usp=sharing

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Allahabad HC: Oral gift deed under Muslim Law reduced in to writing which is not registered document can not be subjected to S. 47-A of Stamp Act

It is nobodies case that the hiba/gift deed was presented for registration. Once this fact is admitted by respondents that gift deed/hiba was not presented for registration, then proceedings under Section 47(A) of Indian Stamp Act cannot be pressed to service. Further, Section 47-A of the Act can only be applicable when any instrument/document is presented for registration and not otherwise. If the auhorities were of the view that hiba/git deed was required for payment of stamp duty, then the proceedings u/S 33 of the Stamp Act should have been initiated and not u/s 47-A of the Act. {Para 12}

13. This Court on various occasions has held that the proceedings under Section 47-A of the Stamp Act cannot be initiated for unregistered documents.

 In the High Court of Allahabad

(Before Piyush Agrawal, J.)

Writ - C No. - 41137 of 2010

Sahas Degree College,Vs State of U.P., 

Decided on August 8, 2024

Citation: 2024 SCC OnLine All 4199.

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Maharashtra stamp Act (Amendment 2021)

1)  https://drive.google.com/file/d/1eEEIh5KbXHMESyJVFgHWhe3rTGttRFgF/view?usp=sharing

2) https://drive.google.com/file/d/11QRQQJzRhAty7BSjRgZQuckpaxGAifde/view?usp=sharing

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How to calculate stamp duty payable for execution of various documents?

In the scheme of said Act, Section 3 is the charging section, which, in terms provides that subject to the provisions of said Act and the exemptions contained in Schedule-I thereto, the instruments mentioned in Schedule-I shall be chargeable with duty of the amount as indicated. This means that every instrument mentioned in Schedule-I (unless the same is exempted) would be chargeable to the stamp duty of the amount as indicated in Schedule-I. This is the general rule. Section 4 of the said Act, however constitutes a sort of an exception to the general rule contained in Section 3 of the said Act.

21. Section 4 of the said Act, inter alia, provides that where, in case of any specific instruments, i.e., development agreement, sale, mortgage or settlement, if several instruments are employed for completing the transaction, then the principal instrument only shall be chargeable with duty prescribed in Schedule-I and each of the other instruments shall be chargeable with duty of Rs.100/-instead of the duty, if any, prescribed for it in that schedule. Sub-section 2 of Section 4 of the said Act enables the parties determine for themselves which of the instruments so employed shall for the purposes of sub-section 1, be deemed to be the principal instrument. Sub-section 3 of Section 4 of the said Act provides that where parties fail to determine the principal instrument between themselves, then the officer before whom the instrument is produced may, for the purposes of this section, determine the principal instrument. The proviso to Section 4, which governs the entire Section provides that the duty chargeable on principal instrument so determined shall be the highest duty which would be chargeable in respect of any of the said instruments so employed.

25. From the scheme of Section 4 of the said Act, it is clear that the same is not intended to enable the parties to an instrument, to either evade or avoid payment of proper stamp duty thereon. The provisions of Section 4 of the said Act only exempt parties from rigors of Section 3 of the said Act, which would, in the absence of provisions contained in Section 4 of the said Act, require the parties to pay stamp duty as prescribed under Schedule-I upon each of the several instruments employed in completing one and the same transaction. The limited exemption is therefore, in respect of several instruments employed in completing one and the same transaction, so long as proper duty is paid upon any one of the instruments, which may either have been determined by the parties or by the Officer before whom such instrument is produced for registration as the 'principal instrument'. Further, notwithstanding such determination by the parties or the Officer and notwithstanding the character of such principal instrument, stamp duty thereon shall be the highest duty, which would be chargeable in respect of any of the several instruments so employed for completing one and the same transaction. Upon the remaining instruments again notwithstanding their nomenclature or character, instead of payment of entire stamp duty as prescribed under Schedule-I, there would be sufficient compliance, if duty of Rs.100/-as prescribed under Section 4 of the said Act is paid in respect thereof.

26. In case of Farida Memon and ors. Vs. The Collector of Stamps and ors. Writ Petition No. 1462 of 2008 decided on 18 July 2014 upon which reliance was placed by Mr. Godbole, this Court had the occasion to observe thus:

13] From the scheme of section 4 to the said Act, it appears that the liberty granted to the parties for determining which from out of the series of instruments employed in a single transaction, shall be principal instrument, is basically for sake of convenience of the parties. However, the scheme is not to enable the parties to either evade the stamp duty or for that matter pay stamp duty upon any one of the instruments, which would bear the lowest stamp duty in the series of instruments. On the contrary the proviso, which applies to the entire section makes it clear that the duty chargeable on the instrument, so determined shall be highest duty which would be chargeable in respect of 'any of the said instruments employed'. The expression 'any of the said instruments employed' as appearing in the proviso to section 4 makes it clear that the stamp duty, even upon the principal instrument which may have been determined by the parties themselves, shall be the highest duty which would be chargeable in respect of any of several instruments used in a single transaction of either sale, mortgage, settlement or development agreement.

 IN THE HIGH COURT OF BOMBAY

Writ Petition No. 9923 of 2014

Decided On: 30.01.2015

 Prasun Developers Vs. State of Maharashtra and Ors.

Hon'ble Judges/Coram:

M.S. Sonak, J.

Citation: MANU/MH/0111/2015,AIR 2015 (NOC) 541 Bom

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Whether Collector must impose ten times penalty for deficit stamp duty?

According to Section 40(1)(b) if the Collector is

of opinion that such instrument is chargeable with duty

and is not duly stamped, he shall require the payment

of the of the proper duty or the amount required to

make up the same, together with a penalty of the five

rupees; or, if he thinks fit, an amount not exceeding

ten times the amount of the proper duty or of the

deficient portion thereof. The statutory scheme of

Section 40(1)(b) as noticed above indicates that when

the Collector is satisfied that instrument is not duly

stamped, he shall require the payment of proper duty

together with a penalty of the five rupees. The

relevant part of Section 40(1)(b) which falls for

consideration in these appeals is: “or, if he thinks

fit, an amount not exceeding ten times the amount of

the proper duty or deficient portion thereof.”{Para 16 }

17. The amount of penalty thus can be an amount not

exceeding ten times. The expression “an amount not

exceeding ten times” is preceded by expression “if he

thinks fit”. The statutory scheme, thus, vest the

discretion to the Collector to impose the penalty

amount not exceeding ten times. Whenever statute

transfers discretion to an authority the discretion is

to be exercised in furtherance of objects of the

enactment. The discretion is to be exercised not on

whims or fancies rather the discretion is to be

exercised on rational basis in a fair manner. The

amount of penalty not exceeding ten times is not an

amount to be imposed as a matter of force. Neither

imposition of penalty of ten times under Section 40(1)

(b) is automatic nor can be mechanically imposed. 

21. The purpose of penalty generally is a deterrence

and not retribution. When a discretion is given to a

public authority, such public authority should exercise

such discretion reasonably and not in oppressive

manner. The responsibility to exercise the discretion

in reasonable manner lies more in cases where

discretion vested by the statute is unfettered.

Imposition of the extreme penalty i.e. ten times of the

duty or deficient portion thereof cannot be based on

the mere factum of evasion of duty. The reason such as

fraud or deceit in order to deprive the Revenue or

undue enrichment are relevant factors to arrive at a

decision as to what should be the extent of penalty

under Section 40(1)(b).

“6………The Collector has the power to

require the person concerned to pay the proper

duty together with a penalty amount which the

Collector has to fix in consideration of all

aspects involved. The restriction imposed on

the Collector in imposing the penalty amount is

that under no circumstances the penalty amount

shall go beyond ten times the duty or the

deficient portion thereof. That is the farthest

limit which meant only in very extreme

situations the penalty need be imposed up to

that limit. It is unnecessary for us to say

that the Collector is not required by law to

impose the maximum rate of penalty as a matter

of course whenever an impounded document is

sent to him. He has to take into account

various aspects including the financial

position of the person concerned.”

23. This Court in the above case categorically held

that it is only in the very extreme situation that

penalty needs to be imposed to the extent of ten times.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 3195-319 6 OF 2020

TRUSTEES OF H.C. DHANDA TRUST Vs  STATE OF MADHYA PRADESH 

Author: ASHOK BHUSHAN,J.

Dated: SEPTEMBER 17, 2020.

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When court should defer decision on admissibility of document for insufficient stamp duty till final decision of suit?

 We find that the trial court as well as the High Court returned the findings on the bare reading of the power of attorney and observed that since it is a registered document, therefore, it is properly stamped. But the question as to whether in terms of the explanation inserted by the Orissa Act, such power of attorney is liable to be stamped as conveyance, on account of the delivery of possession at the time of execution of power of attorney or thereafter has not been examined.

12. We find that the question whether possession was transferred at the time or after execution of such power of attorney is a question of fact which is required to be decided by the Court at the time of final decision being adjudicated, after evidence is led by the parties and not merely on the basis of recitals in the power of attorney. Such process would be fair and reasonable keeping in view the provisions of Orissa Act.

13. We find that in the facts of the present case, the objection related to deficiency in stamp duty on a power of attorney which the Appellants claim to be conveyance, depends upon the finding regarding delivery of possession in terms of the power of attorney. Generally speaking, such objection is required to be decided before proceeding further. However, in a case where evidence is required to determine the nature of the document, it is reasonable to defer the admissibility of a document for insufficient stamp duty at the time of final decision in the suit.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 1627 of 2019 

Decided On: 14.02.2020

Z. Engineers Construction Pvt. Ltd. Vs.  Bipin Bihari Behera 

Hon'ble Judges/Coram:

S. Abdul Nazeer and Hemant Gupta, JJ.

Citation: 2020 SCC OnLine SC 184

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Whether court can treat sale as nullity if auction purchaser fails to deposit value of stamp duty for drafting sale certificate along with purchase money?

 In Manilal Mohanlal Shah and others v. Sardar Sayed Ahmed Sayed Mohamad and others, MANU/SC/0005/1954 : AIR 1954 SC 349, the Apex Court observed thus:

"Having examined the language of the relevant rules and the judicial decisions bearing upon the subject we are of opinion that the provisions of the rules requiring the deposit of 25 per cent of the purchase-money immediately on the person being declared as a purchaser and the payment of the balance within 15 days of the sale are mandatory and upon non-compliance with these provisions there is no sale at all. The rules do not contemplate that there can be any sale in favour of a purchaser without depositing 25 per cent of the purchase-money in the first instance and the balance within 15 days. When there is no sale within the contemplation of these rules, there can be no question of material irregularity in the conduct of the sale. Non-payment of the price on the part of the defaulting purchaser renders the sale proceedings as a complete nullity. The very fact that the Court is bound to re-sell the property in the event of a default shows that the previous proceedings for sale are completely wiped out as if they do not exist in the eye of law. We hold, therefore, that in the circumstances of the present case there was no sale and the purchasers acquired. No rights at all."

15. (a) In Uttamchand Milapchand v. Balkrishna Ramnath, MANU/MH/0053/1961 : AIR 1961 Bom. 224, referring to Manilal Mohanlal Shah and others case (supra), the Bombay High Court expressed the similar view holding thus:

In Para No. 4 xxx....... In view of these observations of the Supreme Court it is clear that the provisions of Order 21 Rule 85 as well as Rule 86 are mandatory in the sense that in the event of the auction purchaser failing to deposit the full purchase price within 15 days from the date of the auction sale the Court will have no option but to order a re-sale of the property. This necessarily implies that the Court has no jurisdiction whatever to extend the time for the payment of the balance of the purchase price as fixed under Order 21 Rule 85 of the Code. Either the purchaser pays the price within 15 days of the sale or he does not. If he pays, the sale would be complete; if he does not pay then, as pointed out by the Supreme Court in the aforesaid decision, there is no sale at all and all the proceedings in respect of the auction sale would be a nullity. Applying the ratio of that decision to the facts of this case, it is clear that as auction purchaser, who is the applicant in the present revision application, failed to pay the full purchase price within 15 days of the auction sale, there was no sale at all in his favour and, therefore, there was no question of any irregularity in such a sale being waived on account of the consent of the judgment-debtor to the time being extended in favour of the auction purchaser. Following upon the default in the payment of the purchase price as required under Order 21 Rule 85 the Court had straightaway to order re-sale of the property which the learned Judge in the Court below has done in this case. Accordingly, in my opinion, the order passed by the learned Judge ordering re-sale of the property is perfectly valid.

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI

CRP No. 6528 of 2018

Decided On: 18.03.2019

 G. Venkata Ramana Naidu Vs.  K. Venkataramana Reddy and Ors.

Hon'ble Judges/Coram:

U. Durga Prasad Rao, J.

Citation: AIR 2019 AP 21

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Whether Criminal court can impound insufficiently stamped document?

 As discussed above, Section 33(2) proviso (a) and Section 35(d) of the Indian Stamp Act are made clear only for limited purpose of deciding the matters under Chapters IX and X of Cr.P.C. In other matters, the Court need not exercise discretion to impound the document and a Magistrate or a Judge of a criminal Court is not required to examine any instrument produced before him or come before him for the purpose of ascertaining whether or not instrument is properly stamped and not required to impound the same, if the same is found properly stamped, if such Magistrate or Judge of criminal Court does not think fit to do so. However, this exception is not applicable to Chapters IX and X of Cr.P.C., 1973. Thus exception created under proviso (a) is purely discretion of the Magistrate or Judge of a criminal Court. It is a settled law that whenever discretion is vested with the Court, it has to be exercised judiciously.

IN THE HIGH COURT OF JUDICATURE AT HYDERABAD 

Crl. P. No. 10057 of 2016

Decided On: 19.01.2017

 Preetesh Kumar Vs.  State of Telangana and Ors.

Hon'ble Judges/Coram:

M. Satyanarayana Murthy, J.

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Whether government is liable to pay stamp duty on documents executed in its behalf?

Section 3 in The Indian Stamp Act, 1899

3. Instruments chargeable with duty.—Subject to the provisions of this Act and the exemptions contained in Schedule I, the following instruments shall be chargeable with duty of the amount indicated in that Schedule as the proper duty therefore, respectively, that is to say—

(a) every instrument mentioned in that Schedule which, not having been previously executed by any person, is executed in ²⁰ [India] on or after the first day of July, 1899;

(b) every bill of exchange ²¹ [payable otherwise than on demand] ²² [***] or promissory note drawn or made out of ²⁰ [India] on or after that day and accepted or paid, or presented for acceptance or payment, or endorsed, transferred or otherwise negotiated, in ²⁰ [India]; and

(c) every instrument (other than a bill exchange ²² [***] or promissory note) mentioned in that Schedule, which, not having been previously executed by any person, is executed out of ²⁰ [India] on or after that day relates to any property situate, or to any matter or thing done or to be done, in ²⁰[India] and is received in ²⁰ [India]: Provided that no duty shall be chargeable in respect of—

(1) any instrument executed by, or on behalf of, or in favour of, the Government in cases where, but for this exemption, the Government would be liable to pay the duty chargeable in respect of such instrument;

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Whether tenant is bound to pay stamp duty on copy of lease agreement if it is insufficiently stamped?

 Countering the said submissions, Mr. Asan Ali Khan, learned Counsel for the respondent submitted that when admittedly Exs.R1 to R8 are copies of the originals of the lease deeds executed between the petitioner and the respondent and they are for a period not exceeding 11 months, they are not compulsorily registrable and as such they can be looked into for collateral purposes. According to the learned Counsel, the copy available with the respondent need not be stamped and the original available with the petitioner alone are liable to be stamped in accordance with Indian Stamp Act; even if it is insufficiently stamped, it can be looked into for collateral purpose, namely, to ascertain the address of the premises, which is leased out and the question of insufficiency of stamp duty can be gone into only at the time of final disposal of RCOP. 
At the outset it has to be pointed out that when an agreement of lease is executed between the landlord and tenant, normally, lease agreement is prepared in duplicate i.e., both are originals, signed by both the landlord and tenant. If that being so, it cannot be contended by the respondent that the agreement available with the tenant is only a copy and not the original and therefore it need not be sufficiently stamped. Therefore, the contention of the learned Counsel for the respondent that Exs.R1 to R8 need not be stamped as contemplated in the Indian Stamp Act but the original agreement available with the petitioner alone has to be stamped in accordance with Indian Stamp Act cannot be countenanced.
IN THE HIGH COURT OF MADRAS

C.R.P. (PD) No. 853 of 2010 and M.P. No. 1 of 2010

Decided On: 07.07.2010

V. Jayaraman Vs. K.A. Ubaidur Rahman

Hon'ble Judges/Coram:

K. Mohan Ram, J.

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Whether it is mandatory to pay stamp duty on lease agreement entered for 11 months?

 Here, in this case, the document viz., the lease agreement comes within the purview of Schedule I of Section 35(a) of the Indian Stamp Act. Though the lease agreement entered for 11 months need not be registered, for the purpose of marking the document even for collateral purpose, it should be duly stamped.Further, the Hon'ble Supreme Court in the decision reported in MANU/SC/0942/2008 : (2008) 2 MLJ 1115 (SC) (Thiruvengada Pillai Vs. Navaneethammal) has held that even if an agreement is not executed on requisite stamp paper, it is admissible in evidence on payment of duty and penalty under Section 35 or 37 of the Indian Stamp Act. Therefore, when an instrument which is not duly stamped is produced before the Court for the purpose of admitting the same in evidence, as per Section 35 of the Stamp Act, such instrument cannot be admitted in evidence and if the person who produces the document is willing to pay the stamp duty penalty, then a duty is cast upon the Court to impound the document and direct the party to pay penalty as per proviso (a) to Section 35 of the Act and follow the procedure contemplated under Section 38(1) of the Act. In case, the person refuses to pay penalty as fixed by the Court and requested the Court to send the document to the Collector for impounding and determination of penalty and also the stamp duty payable on that document, the Court has to send the document in original to the Collector as contemplated under Section 38(2) of the Stamp Act. On receipt of such document, the Collector has to follow the procedure contemplated under Section 40 of the Act."

IN THE HIGH COURT OF MADRAS

C.R.P. (PD)(MD) No. 1992 of 2017 and CMP (MD) No. 10029 of 2017

Decided On: 21.06.2018

 A. Rajaram  Vs.  P. Chinnakani

Hon'ble Judges/Coram:

J. Nisha Banu, J.

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Whether a party can adduce secondary evidence of photocopy of insufficiently stamped document after impounding it?

 It was the case of the appellant-tenant that the original copy of the agreement which was with him was stolen and thus he was unable to produce the original document dated 28.3.1988, but was in possession of a photostat copy of the agreement and made a prayer for receipt of the photocopy of the agreement as secondary evidence under Section 63 of the Indian Evidence Act, 1872.

The provisions of this section (section 35) which allow a document to be admitted in evidence on payment of penalty, have no application when the original document, which was unstamped or was insufficiently stamped, has not been produced; and, accordingly, secondary evidence of its contents cannot be given. To hold otherwise would be to add to the Act a provision which it does not contain. Payment of penalty will not render secondary evidence admissible, for under the stamp law penalty is leviable only on an unstamped or insufficiently stamped document actually produced in Court and that law does not provide for the levy of any penalty on lost documents . This Court had an occasion again to consider the scope and ambit of Sections 33(1), 35 and 36 of the Act and Section 63 of the Indian Evidence Act in Jupudi Kesava Rao v. Pulavarthi Venkata Subbarao and others AIR 1971 SC 1070 and held that :-

13. The first limb of Section 35 clearly shuts out from evidence any instrument chargeable with duty unless it is duly stamped. The second limb of it which relates to acting upon the instrument will obviously shut out any secondary evidence of such instrument, for allowing such evidence to be let in when the original admittedly chargeable with duty was not stamped or insufficiently stamped, would be tantamount to the document being acted upon by the person having by law or authority to receive evidence. Proviso (a) is only applicable when the original instrument is actually before the Court of law and the deficiency in stamp with penalty is paid by the party seeking to rely upon the document.

Clearly secondary evidence either by way of oral evidence of the contents of the unstamped document or the copy of it covered by Section 63 of the Indian Evidence Act would not fulfil the requirements of the proviso which enjoins upon the authority to receive nothing in evidence except the instrument itself. Section 35 is not concerned with any copy of an instrument and a party can only be allowed to rely on a document which is an instrument for the purpose of Section 35. `Instrument is defined in Section 2(14) as including every document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded. There is no scope for inclusion of a copy of a document as an instrument for the purpose of the Stamp Act.

14. If Section 35 only deals with original instruments and not copies Section 36 cannot be so interpreted as to allow secondary evidence of an instrument to have its benefit.

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 Indian Stamp Act, 1899.

SUPREME COURT OF INDIA

Hariom Agrawal Vs. Prakash Chand Malviya dated 8 October 2007.

B.N. Agrawal,P.P. Naolekar & P. Sathasivam

(arising out of Special Leave Petition (Civil)No.12573 of 2006)
Citation:(2007) 8 SCC 514
(2007)

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Supreme Court: Procedure to be followed by court for impounding of insufficiently stamped document

 It is clear from the first sub-section extracted above that the court has a power to admit the document in evidence if the party producing the same would pay the stamp duty together with a penalty amounting to ten times the deficiency of the stamp duty. When the court chooses to admit the document on compliance of such condition the court need forward only a copy of the document to the Collector, together with the amount collected from the party for taking adjudicatory steps. But if the party refuses to pay the amount aforesaid the Collector has no other option except to impound the document and forward the same to the Collector. On receipt of the document through either of the said avenues the Collector has to adjudicate on the question of the deficiency of the stamp duty. If the Collector is of the opinion that such instrument is chargeable with duty and is not duly stamped "he shall require the payment of the proper duty or the amount required to make up the same together with a penalty of an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof."

13. In the present case, an argument is raised that the instrument is not actually an agreement of sale as envisaged in the Schedule to the Stamp Act (subject to amendment made by the State of Andhra Pradesh) but it is only a deed of compromise entered into by two disputing persons. We refrain from expressing any opinion on the said plea as it is open to the parties to raise their contentions regarding the nature of the document before the trial court. In the present case the trial court should have asked the appellant, if it finds that the instrument is insufficiently stamped, as to whether he would remit the deficient portion of the stamp duty together with a penalty amounting to ten times the deficiency. If the appellant agrees to remit the said amount the court has to proceed with the trial after admitting the document in evidence. In the meanwhile, the court has to forward a copy of the document to the Collector for the purpose of adjudicating on the question of deficiency of the stamp duty as provided in Section 40(1)(b) of the Act. Only if the appellant is unwilling to remit the amount the court is to forward the original of the document itself to the Collector for the purpose of adjudicating on the question of deficiency of the stamp duty. The penalty of ten times indicated therein is the upper limit and the collector shall take into account all factors concerned in deciding as to what should be the proper amount of penalty to be imposed.

IN THE SUPREME COURT OF INDIA

Appeal (civil) 1800 of 2001

Decided On: 14.03.2001

Chilakuri Gangulappa vs. Revenue Divisional Officer, Madanpalle and Ors.

Hon'ble Judges/Coram:

K.T. Thomas and R.P. Sethi, Advs.

Citation: 2001 (4) SCC 197

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Whether it is necessary to pay stamp duty on consent decree?

 Whether, consent decree which transfers immovable property was "conveyance" within the meaning of Section 2(g) of the Act before its amendment - Held, relying on State of Mah. and Ors. v. M.S. Builders (Private) Limited, definition of conveyance even before its amendment would include consent decree which fulfils all requisites of conferring right, title and interest in favour of vendees - Admittedly consent decree conveyed property - Therefore, such consent decree would be liable to stamp duty under Entry 25 of Schedule I of the Act."Persons shall be liable to pay stamp duty on consent decree if confers right, title and interest in favour of vendee."

IN THE HIGH COURT OF BOMBAY

W.P. No. 939 of 2007

Decided On: 22.08.2007

Peacebird Premises Co-op. Society Ltd. Vs. Collector of Stamps of Mumbai and Ors.

Hon'ble Judges/Coram:

F.I. Rebello and J.P. Devadhar, JJ.

Citation: 2008(1) MHLJ 865

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Whether it is mandatory for arbitrator to impound insufficiently stamped document?

 Under Section 33 of the Maharashtra Stamp Act, a duty has been cast upon every person having by law or consent of parties authority to receive the evidence to examine any instrument, chargeable with duty and form an opinion about it being duly stamped or not and in the latter case, to impound the stamp as well and deal with it as per the procedure prescribed in Chapter IV of the Stamp Act. This duty is mandatory in nature as held by the Hon'ble Supreme Court in the cases of SMS Tea Estate and P. Laxmidevi (supra). The duty is imposed on every person having authority to receive evidence and that would include, in the present case, not only a Small Causes Court where an application under Section 8 was filed by the petitioners for the first time but also this Court where an appeal under Section 37 (1) of the Arbitration Act was filed by the petitioners. A duty to be performed by such person or the authority is, as found earlier, mandatory in nature. It is also independent of any act performed or to be performed or any objection taken or to be taken by any of the parties to the dispute. Whether any objection is taken or not and if taken, whether it is abandoned or not, the duty remains unaffected. The reason is that it is in the nature of an absolute obligation imposed on the person having authority to receive the evidence and not a privilege conferred upon a party to raise in its discretion such an objection. In SMS Tea Estate (supra), Hon'ble Supreme Court in the context of an objection about insufficiency of stamp duty paid upon the lease deed, observed in paragraph 21, that when a lease deed or any instrument is relied upon as containing an arbitration agreement, the court should consider at the outset whether an objection in that behalf is raised or not, whether the document is duly stamped or not. In the case of P. Laxmi Devi (supra), the Hon'ble Supreme Court in paragraph 16 held that the word "shall" used in Section 33 (1) does not mean "may", but "shall". It clarifies in other words, it is mandatory to impound a document produced before the person having authority to receive evidence.

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Writ Petition No. 3812 of 2018

Decided On: 23.08.2018

Milind  Vs. Pramod and Ors.

Hon'ble Judges/Coram:

S.B. Shukre, J.

Citation: AIR 2018 Bom 272

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Supreme Court: Stamping Not Necessary For Enforcement Of Foreign Arbitral Awards In India

 On the other hand, the Madhya Pradesh High Court judgment (supra)
hits nearer home. This judgment, in paragraph 12 thereof, states why foreign
awards do not have to suffer stamp duty in the following terms:
“12. The Law on Arbitration in India was substantially contained
in three enactments namely, The Arbitration Act, 1940, The

Arbitration (Protocol and Convention) Act, 1937 and The
Foreign Awards (Recognition and Enforcement) Act, 1961. It
was widely felt the 1940 Act, which contains the General Law of
Arbitration, has become outdated. The Arbitration and
Conciliation Act, 1996 came in force to consolidate and amend
the Law relating to Domestic Arbitrations, International
Commercial Arbitration, enforcement of foreign arbitral awards
and to define the law relating to conciliation, commission on
international trade in short (UNCITRAL) Model Law and Rules.
Apart from other object, the object of the Act is to provide that
every final arbitral award is enforced in the same manner as if it
were a decree of the Court. While Arbitration and Conciliation
Act, 1996 was enforced, no amendment was made in the
definition of award given in the Indian Stamp Act. Similarly, the
Schedule which lays down the stamp duty payable on award
was not amended by including the foreign award. It appears
that law makers while enforcing the Arbitration and Conciliation
Act, 1996 was of the view that foreign award shall be
enforceable as if it were a decree of the Court, no amendment
was brought either in the definition of award or in the Schedule
relating to payment of stamp duty on award. Since the
definition of award given at Entry No. 11 of the Schedule of the
Indian Stamp Act does not cover the foreign award and one of
the objects to enforce the new Act was to enforce final award
as if it was a decree and keeping in view the law laid down by
the Hon'ble Apex Court in the matter of Fuerst Day Lawson Ltd.
(supra), wherein the Hon'ble Supreme Court has held that
under the new Act the foreign award is already stamped as
decree, this Court is of the view that the petition filed by the
petitioner has no merits and deserves to be dismissed. In view
of this, the petition filed by the petitioner is disposed of holding
that foreign award is already stamped and is enforceable as
decree.”
We, therefore, hold that the learned Single Judge of the Madras High

Court is correct, and the fact that a foreign award has not borne stamp duty
under the Indian Stamp Act, 1899 would not render it unenforceable for the
reasons given in our judgment.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9515 of 2018
(ARISING OUT OF SLP (CIVIL) NO.13913 OF 2018)

M/S SHRIRAM EPC LIMITED Vs RIOGLASS SOLAR SA.

Dated:September 13, 2018.
R.F. NARIMAN, J.
Citation:AIR 2018 SC 4539

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