A) ABSTRACT / HEADNOTE

This case addresses the admissibility of an insufficiently stamped instrument, particularly a General Power of Attorney (GPA), into evidence and whether such admission can be recalled under Section 151 of the Code of Civil Procedure, 1908. The case underscores the duty of courts under Sections 33 and 34 of the Karnataka Stamp Act, 1957 to ensure compliance with stamp duty requirements before admitting a document into evidence. The Supreme Court held that in the absence of judicial determination during the instrument’s admission, Section 35 of the Karnataka Stamp Act does not bar the trial court from revisiting its earlier order. The inherent power under Section 151 CPC can be invoked to rectify such procedural lapses to uphold justice and prevent abuse of process.

Keywords:

1. Inherent powers
2. Insufficiently stamped instrument
3. Judicial determination
4. General Power of Attorney
5. Karnataka Stamp ActB) CASE DETAILS

i) Judgment Cause Title:
G.M. Shahul Hameed v. Jayanthi R. Hegde

ii) Case Number:
Civil Appeal No. 1188 of 2015

iii) Judgment Date:
July 9, 2024

iv) Court:
Supreme Court of India

v) Quorum:
Justice Dipankar Datta and Justice Pankaj Mithal

vi) Author:
Justice Dipankar Datta

vii) Citation:
[2024] 7 S.C.R. 316; 2024 INSC 493

viii) Legal Provisions Involved:

• Code of Civil Procedure, 1908: Section 151
• Karnataka Stamp Act, 1957: Sections 33, 34, 35, 58

ix) Judgments Overruled by the Case (if any):
None

x) Case is Related to Which Law Subjects:
Civil Procedure, Evidence Law, Stamp Duty Compliance

C) INTRODUCTION AND BACKGROUND OF JUDGMENT

The appeal arises from conflicting judgments regarding the procedural validity of admitting an insufficiently stamped General Power of Attorney (GPA) as evidence in a civil suit. While the trial court exercised inherent powers under Section 151 CPC to impound the document, the High Court of Karnataka overturned this decision, asserting that once admitted, the instrument’s admissibility could not be questioned per Section 35 of the Karnataka Stamp Act. The case emphasizes the judiciary’s role in balancing statutory compliance with procedural justice.

D) FACTS OF THE CASE

1. Sale Deeds and GPA Transactions:

   • A Sale Deed dated October 3, 2003, was executed by B. Ramesh Hegde in favor of his wife, based on a GPA executed by Praveen Shetty.
   • The appellant executed another Sale Deed on October 8, 2003, based on an agreement with Praveen Shetty.

2. Civil Suits Filed:

   • The appellant sought a declaration invalidating the respondent’s Sale Deed.
   • The respondent initiated a counter-suit, seeking to nullify the appellant’s Sale Deed.

3. Trial Proceedings:

   • The respondent tendered the GPA during witness examination, which was admitted into evidence without objection.
   • The appellant later filed interlocutory applications to impound the GPA, citing its insufficient stamping.

4. Trial Court’s Ruling:

   • Directed the respondent to pay the deficit stamp duty and penalty under Article 41 of the Karnataka Stamp Act.

5. High Court’s Decision:

   • Overruled the trial court, holding that the GPA’s admission into evidence could not be revisited under Section 35 of the Karnataka Stamp Act.

E) LEGAL ISSUES RAISED

i) Can an insufficiently stamped instrument admitted into evidence be recalled under Section 151 CPC, despite Section 35 of the Karnataka Stamp Act?
ii) What constitutes “judicial determination” for admitting an instrument under Sections 33 and 34 of the Karnataka Stamp Act?

F) PETITIONER/APPELLANT’S ARGUMENTS

The appellant contended:

1. Statutory Duty to Impound:
   The trial court failed to examine the GPA’s compliance with stamp duty requirements, violating Sections 33 and 34 of the Karnataka Stamp Act.

2. Absence of Judicial Determination:
   Admission without judicial application of mind cannot preclude revisitation. Section 35 applies only to instruments admitted after due consideration.

3. Inherent Powers Justified:
   Section 151 CPC allows courts to rectify procedural errors to uphold justice and prevent abuse of process.

4. Fiscal Impact on State Revenue:
   Allowing insufficiently stamped instruments undermines legislative intent and affects state revenue.

G) RESPONDENT’S ARGUMENTS

The respondent asserted:

1. Bar on Reconsideration:
   Section 35 precludes questioning admissibility once the instrument is admitted into evidence.

2. Remedies Under Section 58:
   The appellant should have pursued remedies under Section 58, rather than invoking inherent powers.

3. Procedural Regularity:
   The GPA was properly marked as an exhibit, and objections could not be entertained subsequently.

H) JUDGMENT

a. Ratio Decidendi

The Supreme Court upheld the trial court’s order, emphasizing:

1. No Judicial Determination:
   The trial court admitted the GPA without deliberating on its sufficiency of stamp duty, failing to satisfy the requirements under Sections 33 and 34.

2. Scope of Section 35:
   Section 35 does not apply when an instrument is admitted without judicial consideration.

3. Inherent Powers:
   Courts can invoke Section 151 CPC to address procedural lapses and ensure justice.

4. State Revenue Protection:
   Compliance with stamp duty laws is imperative to safeguard fiscal interests.

b. Obiter Dicta

The judiciary must be vigilant to prevent circumvention of legal obligations, ensuring procedural and substantive compliance with laws governing stamp duty.

c. Guidelines

1. Courts must scrutinize instruments for stamp duty compliance before admission.
2. Absence of objection does not absolve the court of its statutory duty.
3. Section 35 presupposes judicial application of mind during admission.

I) CONCLUSION & COMMENTS

The judgment reaffirms the judiciary’s responsibility to ensure procedural and substantive compliance with legal mandates. It underscores the importance of balancing inherent powers with statutory provisions to uphold justice.

J) REFERENCES

a. Important Cases Referred:

1. Javer Chand v. Pukhraj Surana, [1962] 2 SCR 333
2. Ram Rattan v. Bajrang Lal, [1978] 3 SCR 963

b. Important Statutes Referred:

1. Code of Civil Procedure, 1908: Section 151
2. Karnataka Stamp Act, 1957: Sections 33, 34, 35, 58