A) ABSTRACT / HEADNOTE
The case Bidyut Sarkar & Anr. v. Kanchilal Pal (Dead) Through LRs. & Anr. revolves around the inadmissibility of an insufficiently stamped agreement to sell under the provisions of the Indian Stamp Act, 1899. The respondent filed a suit for specific performance of a contract based on an agreement that was marked as Exhibit-1 with objections by the Trial Court due to insufficient stamp duty. The High Court allowed the appeal, relying on the respondent’s willingness to pay the deficient stamp duty and penalty. However, the Supreme Court overruled the High Court, emphasizing the necessity of paying the requisite duty and penalty, as mandated under Sections 35, 36, 40, and 42 of the Stamp Act, 1899. The Supreme Court restored the Trial Court’s decision to dismiss the suit due to the document’s inadmissibility and emphasized the statutory bar on enforcing insufficiently stamped instruments. The appellants were directed to return Rs. 5,00,000 as compensation for the advance received by the seller.
Keywords: Insufficiently stamped, Agreement to sell, Indian Stamp Act, 1899, Specific performance, Admissibility in evidence.
B) CASE DETAILS
i) Judgment Cause Title
Bidyut Sarkar & Anr. v. Kanchilal Pal (Dead) Through LRs. & Anr.
ii) Case Number
Civil Appeal Nos. 10509-10510 of 2013
iii) Judgment Date
28 August 2024
iv) Court
Supreme Court of India
v) Quorum
Justice Vikram Nath and Justice Prasanna B. Varale
vi) Author
Justice Vikram Nath
vii) Citation
[2024] 8 S.C.R. 984
viii) Legal Provisions Involved
- Stamp Act, 1899: Sections 35, 36, 40, 42
- Specific Relief Act, 1963: Section 16(c)
ix) Judgments Overruled by the Case (if any)
High Court of Calcutta judgment dated 05.12.2008
x) Case is Related to which Law Subjects
- Civil Law
- Property Law
- Procedural Law
C) INTRODUCTION AND BACKGROUND OF JUDGMENT
The dispute centers on the enforceability of an agreement to sell that was insufficiently stamped under the Stamp Act, 1899. The respondent-plaintiff sought specific performance of a property sale agreement dated 29.03.1999. The agreement was dismissed by the Trial Court on grounds of inadmissibility due to insufficient stamp duty. The High Court, however, ruled in favor of the respondent, considering the promise to pay the deficient duty sufficient. On appeal, the Supreme Court reiterated the strict procedural compliance required under the Stamp Act.
D) FACTS OF THE CASE
- The respondent entered into an agreement to purchase property from the seller (defendant no. 1) for Rs. 3,00,000, with an advance payment of Rs. 10,000.
- The seller sold the property to appellants through a registered sale deed dated 03.05.1999.
- The respondent filed a suit for specific performance of the initial agreement, claiming readiness and willingness to perform their part.
- The agreement was marked as Exhibit-1 in the Trial Court but with objections due to insufficient stamp duty.
- The Trial Court dismissed the suit based on the inadmissibility of the agreement in evidence.
- The High Court reversed this, accepting the respondent’s intention to pay the deficient stamp duty.
- The Supreme Court restored the Trial Court’s findings, emphasizing statutory compliance under the Stamp Act.
E) LEGAL ISSUES RAISED
- Is an insufficiently stamped agreement admissible in evidence under the Stamp Act, 1899?
- Can an agreement to sell be enforced without resolving deficiencies in stamp duty and penalties?
- Does the willingness to pay deficient stamp duty suffice to admit the document into evidence?
F) PETITIONER/APPELLANT’S ARGUMENTS
- Inadmissibility of Agreement: The agreement was insufficiently stamped, violating Section 35 of the Stamp Act. It cannot be admitted unless the deficiency is resolved.
- Non-compliance with Statutory Mandates: The respondent failed to comply with the statutory procedure of paying the deficient duty and penalty before the Collector.
- Improper Reliance by High Court: The High Court erred in relying on the respondent’s statement of willingness to pay the deficient stamp duty.
- Protection of Bona Fide Purchasers: The appellants, being bona fide purchasers for valuable consideration, should be protected under the law.
G) RESPONDENT’S ARGUMENTS
- Willingness to Rectify Deficiency: The respondent expressed willingness to pay the deficient stamp duty and penalty to validate the agreement.
- Equitable Relief: The respondent claimed readiness and willingness to perform under Section 16(c) of the Specific Relief Act.
- Neglect by Trial Court: The respondent alleged procedural failure on part of the Trial Court in not allowing the deficiency to be resolved.
H) JUDGMENT
a. Ratio Decidendi
The Supreme Court held that the agreement to sell was inadmissible due to insufficient stamp duty under Section 35 of the Stamp Act, 1899. The plaintiff’s willingness to pay the deficient duty could not override the statutory mandate requiring prior payment and endorsement by the Collector.
b. Obiter Dicta
Strict procedural compliance with statutory provisions ensures legal certainty and prevents misuse. Courts must adhere to statutory requirements to maintain judicial discipline.
c. Guidelines
- Admissibility of Insufficiently Stamped Documents: A document is inadmissible unless the deficient duty and penalty are paid, as endorsed by the Collector.
- Judicial Oversight: Courts must ensure compliance with statutory requirements before admitting documents into evidence.
I) CONCLUSION AND COMMENTS
The judgment underscores the primacy of statutory compliance under the Stamp Act, 1899. It reinforces the importance of adhering to procedural mandates to validate instruments before admitting them as evidence. By restoring the Trial Court’s decision, the Supreme Court ensures consistency in legal interpretation and procedural integrity.
J) REFERENCES
a. Important Cases Referred
- Ram Rattan (Dead) by LRs v. Bajrang Lal & Ors., AIR 1978 SC 1393
- Javer Chand & Ors. v. Pukhraj Surana, AIR 1961 SC 1655
b. Important Statutes Referred
- Stamp Act, 1899 (Sections 35, 36, 40, 42)
- Specific Relief Act, 1963 (Section 16(c))
