Evidence – Admissibility of Document not duly stamped – Agreement to sell – Karnataka Stamp Act, 1957.

A suit was filed by one Sri Raghavendra against Sri C. Harish and three others for permanent injunction in respect of certain property.

The first respondent sought to produce as evidence an agreement to sell dated 26-5-95 and a general power of attorney dated 30-5-95. An objection was raised by the plaintiff against admitting these documents as evidence on the ground that they were not duly stamped. The trial court held that there was no possession of the immovable property delivered under the agreement to sell dated 26-5-1995 and as such it was admissible in evidence and it was also held stamp duty paid on agreement to sell was proper and sufficient. It further held that power of attorney dated 30-5-1995 is to be impounded with a direction to pay proper stamp duty and penalty as required under Article 41(ea) of the Karnataka Stamp Act, 1957.

The Hon’ble Court, while considering the admissibility of the documents as evidence, observed that difference between section 34 of the Karnataka Stamp Act and section 49 of the Registration Act would have to be borne in mind. Section 34 of the Karnataka Stamp Act mandates that no instrument chargeable with duty should be admitted in evidence for any purpose by any person having by law or by consent of parties authority to receive evidence if instrument is not duly stamped. In effect it would mean that a document which is not duly stamped cannot be admitted at all in evidence for any purpose if not duly stamped. Thus, under sec. 34 of the Stamp Act there is an absolute bar for the document being received in evidence itself.

Section 49 of the Registration Act deals with the effect of non-registration of a document and provides that if a document which requires to be registered under law is not registered, then such document shall not affect any immovable property comprised therein, nor can it confer any power to adopt or be received as evidence of any transaction affecting such property or conferring such power. However, proviso to Section 49 provides that an unregistered instrument may be received as evidence of a contract in a suit for specific performance or as evidence as part performance of a contract for the purpose of Section 53A of the Transfer of Property Act or as evidence of any collateral transaction not required to be effected by a registered instrument. The only area of controversy in regard to the use of such documents lies in determining whether the purpose for which it is sought to be used is really a collateral purpose.

Even when a document is inadmissible for want of registration, the same is admissible to show the character of the possession of the person in whose favour it is executed. There is therefore no gainsaid that the unregistered sale deed relied upon by the petitioner could for the limited purpose of proving the nature of his possession be let into evidence notwithstanding the fact that the deed was compulsorily registrable u/s. 17, but had not been so registered. So long as an instrument is chargeable with duty, the provisions of section 34 would render it inadmissible in evidence for any purpose unless the same is duly stamped. It can be seen that the under the agreement in question the vendor has agreed to handover vacant possession of the property agreed to be sold therein even before the execution of the sale deed in favour of the purchasers. Hence, the agreement to sell dated 26-5-1995 is admissible in evidence, only after payment of appropriate stamp duty as required under Article 15(e)(i) of the Karnataka Stamp Act 1957.