[Section 35 Stamp Act] Insufficiently stamped documents cannot be prohibited from admission in evidence, if not chargeable with stamp duty: Supreme Court

Section 35 Stamp Act

Supreme Court: In an appeal against the order of Madhya Pradesh High Court, wherein the Court upheld the validity of Section 35 of the Stamp Act, 1899 and the order of the Review Court, the division bench of Abhay S. Oka and Sanjay Karol*, JJ. while setting aside the impugned order, held that the documents in question were not required to be stamped at the relevant period to attract the bar of Section 35 of the Stamp Act. Further, a copy of a document can be adduced as secondary evidence if other legal requirements are met


The parties entered an agreement to sell on 04-02-1998, and pursuant to that, the appellant was allegedly put in possession by respondent. When respondent. denied the existence of such an agreement, appellant filed a suit for specific performance of contract. In the said suit, appellant moved an application to file a copy of the agreement to sell, among other documents, as secondary evidence. Initially, the said application was allowed by the Additional District Judge. But when respondent sought review of this order, the Court reviewed it and held that secondary evidence of an agreement to sell could not be allowed as it was not executed on a proper stamp, thus barred under Section 35 of the Stamp Act. Subsequently, the appellant filed a writ petition before the Madhya Pradesh High Court challenging the review order and the constitutional validity of Section 35 of the Stamp Act. The High Court upheld the validity of the said Section and the order of the Review Court. Thus, the present appeal is filed.

Issues and Analysis:

  • Whether the bar of admissibility created by Section 35 of the Stamp Act applies to the agreement to sell dated 04-02-1988 executed by the parties?

After perusing Section 35 of the Stamp Act, the Court said that it prohibits admission in evidence of instruments that are chargeable with duty unless they are “duly stamped.” Duly stamped as defined under Section 2(11) of the Stamp Act means that the instrument bears a stamp and that such stamp has been affixed or used in accordance with law for the time being in force in India.

Concerning when the document becomes chargeable with duty—during its execution or when it is produced before the Court, the Court said that for stamp duty, the relevant date is the date of execution and not the date of adjudication or the date of presentation and registration of the document.

Further, the Court observed that now, in many states, amendments were brought in whereby agreements of sale acknowledging delivery of possession are charged with the same duty as leviable on conveyance.

The Court referred to CIT v. Vatika Township (P) Ltd., (2015) 1 SCC 1, wherein it was reiterated that the amendments which create rights and obligations are generally prospective in nature. It is a well-established principle of law that clarification or Explanation must not have the effect of imposing an unanticipated duty or depriving a party of an anticipated benefit.

Thus, the Court viewed that the Explanation inserted in Article 23 of Schedule I-A contained in the Act creates a new obligation for the party and, therefore, cannot be given retrospective application. Thus, it will not affect the agreement executed prior to such amendments.

The Bench said that to impose the bar of admissibility provided under Section 35, the following twin conditions are required to be fulfilled:

(i) Instrument must be chargeable with duty;

(ii) It is not duly stamped.

Thus, if the documents sought to be admitted are not chargeable with duty, Section 35 has no application. Thus, in the present case, since the document was not chargeable with duty, then no bar could be imposed, due to it not being duly stamped.

  • Can a copy of a document be adduced as secondary evidence when the original instrument is not in the possession of the party?

After perusing the law relating to secondary evidence, the Court deduce the following principles relevant for examining the admissibility of secondary evidence:

  1. Law requires the best evidence to be given first, that is, primary evidence.

  2. Section 63 of the Evidence Act, 1872 provides a list of the kinds of documents that can be produced as secondary evidence, which is admissible only in the absence of primary evidence.

  3. If the original document is available, it has to be produced and proved in the manner prescribed for primary evidence. So long as the best evidence is within the possession or can be produced or can be reached, no inferior proof can be given.

  4. A party must endeavor to adduce primary evidence of the contents, and only in exceptional cases will secondary evidence be admissible.

  5. When the non-availability of a document is sufficiently and properly explained, then secondary evidence can be allowed.

  6. Secondary evidence could be given when the party cannot produce the original document for any reason not arising from his default or neglect

  7. When the copies are produced in the absence of the original document, they become good secondary evidence. Still, there must be foundational evidence that the alleged copy is a true copy of the original.

  8. Before producing secondary evidence of the contents of a document, the non-production of the original must be accounted for in a manner that can bring it within one or other of the cases provided for in the Section.

  9. Mere production and marking of a document as an exhibit by the Court cannot be held to be due proof of its contents. It has to be proved in accordance with the law.

After perusing Section 65(a) of the Evidence Act, the Court noted that:

  1. 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;

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

The Court said that the exact status of the documents in question could not be ascertained as one-party claims that the other has the said documents and the other has allegedly stated that it was with her counsel. However, the said documents could not be recovered from the said counsel, as per records. Therefore, the presentation of secondary evidence could be allowed, if other requirements are complied with, ensured that the alleged copy is a true copy of the original.

Considering whether Section 35 of the Stamp Act forbids the letting of secondary evidence in proof of its contents, the Court said that Section 35 excludes both the original instrument and secondary evidence of its contents, if it needs to be stamped or sufficiently stamped. This bar as to the admissibility of documents is absolute. Where a document cannot be received in evidence on the ground that it is not duly stamped, the secondary evidence thereof is equally inadmissible in evidence.

The Court reiterated that 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.

  • Whether, in the facts of the present case, would the decision of this Court in Jupadi Kesava Rao v. Pulavarthi Venkata Subha Rao, (1971) 1 SCC 545 be binding as held by both the Courts below?

The Court noted that the Trial Court and the High Court have relied on Jupadi Kesava Rao (supra) to hold that the appellants cannot lead secondary evidence as the document sought to be produced needed to be duly stamped. However, it said that Jupadi Kesava Rao (supra) is distinguishable on facts as the document which the Court was concerned with therein was one which was chargeable with duty, but in the case at hand, such is not the case, that is, the document to be produced is not one which was chargeable with duty at the time of its execution i.e., 04-02-1988. Thus, the principle of law held in this case, correct as it may be, shall not apply to the instant case.

[Vijay v. Union of India, 2023 SCC OnLine SC 1585, decided on 29-11-2023]

*Judgment Authored by: Justice Sanjay Karol

Know Thy Judge | Supreme Court of India: Justice Sanjay Karol

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