REPORTABLE

2024 INSC 493

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1188/2015

G.M. SHAHUL HAMEED …APPELLANT

VERSUS

JAYANTHI R. HEGDE …RESPONDENT

JUDGMENT

DIPANKAR DATTA, J.

1. The substantial question arising for decision in this civil appeal is

whether upon admission of an instrument in evidence and its marking as

an exhibit by a court (despite the instrument being chargeable to duty but

is insufficiently stamped), such a process can be recalled by the court in

exercise of inherent powers saved by section 151 of the Code of Civil

Procedure1 for the ends of justice or to prevent abuse of the process of the

court.

Signature Not Verified

Digitally signed by
Neetu Sachdeva
Date: 2024.07.09
16:45:12 IST
Reason:

1
CPC, hereafter

Page 1
 2. Assail in this civil appeal is to the judgment and order dated 26th

September, 20112 passed by a learned Single Judge of the High Court of

Karnataka at Bengaluru3 whereby His Lordship set aside the order dated

19th October, 2010 passed by the Court of Additional Senior Judge-III,

Mangalore4 and allowed the petition5 preferred by the respondent under

Article 227 of the Constitution.

3. The facts, relevant for the disposal of the present appeal, are

adverted to in brief hereunder:

a. First Sale Agreement and Sale Deed: On 3rd October, 2003, a

Sale Deed was executed regarding the suit property by one B.

Ramesh Hegde in favour of his wife, who is the respondent here.

This Sale Deed was executed on the strength of a General Power

of Attorney6 dated 16th September, 2003, which was allegedly

executed by one Praveen Shetty in favour of B. Ramesh Hegde in

respect of the suit property, authorizing him with power to sell the

suit property.

b. Second Sale Agreement and Sale Deed: An agreement to sell

the suit property was executed between the appellant and

Praveen Shetty on 11th September, 2003. The appellant paid the

consideration, and a Sale Deed was executed on 8th October, 2003

between the appellant and Praveen Shetty.

2
impugned order, hereafter
3
High Court, hereafter
4
Trial Court, hereafter
5
Writ Petition No. 11653 of 2011 (GM-CPC)
6
GPA, hereafter

Page 2
 c. Civil Suit by the appellant: The appellant instituted a civil suit7

against the respondent, B. Ramesh Hegde, and Praveen Shetty,

seeking a declaration that the Sale Deed dated 3rd October, 2003

was null and void, and not binding on the appellant.

d. Civil Suit by the respondent: Conversely, the respondent also

instituted a civil suit8 against the appellant and Praveen Shetty,

seeking a declaration that the Sale Deed dated 8th October, 2003

was null and void, and not binding on the respondent.

e. Filing of GPA before the Trial Court: In the suit instituted by

the respondent, witness action commenced. B. Ramesh Hegde, in

whose favour the GPA was executed by the respondent, on 6th

June, 2010 tendered the GPA in course of his examination-in-

chief. The appellant’s counsel was engaged in another court;

hence, he was unable to appear. The junior counsel did not object

that the GPA was insufficiently stamped and, thus, inadmissible in

evidence. The Trial Court, in the absence of objection, admitted

the GPA in evidence and marked it as an exhibit whereafter the

matter stood adjourned for cross-examination.

f. Interlocutory Applications: On the next hearing date, 25th

June, 2010 to be precise, the appellant filed two interlocutory

applications9 in the suit filed by the respondent. In I.A. No. IX, the

appellant sought a review of the order dated 6th June, 2010, and

7
O.S. No. 301 of 2003
8
O.S. No. 134 of 2005
9
I.A.s, hereafter

Page 3
 in I.A. No. X, it was prayed that the GPA be impounded on the

ground that it has been insufficiently stamped. The appellant

contended that since the GPA was executed in favour of a third

party with power to sell the property, article 41 of the Schedule

to the Karnataka Stamp Act, 195710 was applicable, necessitating

payment of requisite stamp duty based on the market value of the

property. The GPA was prepared only on a stamp paper worth

Rs.100, rendering it insufficiently stamped and in accordance with

section 34 of the 1957 Act, an insufficiently stamped document

had to be impounded and a penalty of ten times the duty value

paid.

g. The respondent objected to the I.A.s asserting that the appellant

had to avail his remedy under section 58 of the 1957 Act and that

being available, the appellant could not seek a review. Further, it

was claimed that no proof had been furnished that the appellant’s

counsel was otherwise engaged at that time. Lastly, it was

contended that once a document had been admitted in evidence,

the stamp duty could not subsequently be questioned on the

ground that it has been insufficiently stamped, as per section 35

of the 1957 Act.

4. Vide order dated 19th October, 2010, the Trial Court allowed the

I.A.s and directed the respondent to pay the deficit stamp duty, along with

10
1957 Act, hereafter

Page 4
the penalty, as required for a power of attorney under article 41(eb) of the

Schedule to the 1957 Act.

5. Dissatisfied with the aforesaid order of the Trial Court, the

respondent approached the High Court whereupon the petition was allowed

by the impugned order, inter alia, recording that:

“2. It is evident from the material that the document has been
marked and admitted in evidence and exhibited. It is the
contention of the respondent under order 13 rule 4 there should
be a specific statement to the effect that the document has been
so admitted and endorsement shall be signed and initialed by the
Judge. In the absence of the said requirement, marking of
document does not mean admission of document in evidence. The
argument of the counsel for the respondent is untenable. In the
normal procedure when the document is produced, it is marked
and exhibit number has assigned and beneath the said exhibit
Judge puts his initial. This procedure fully complies with the
requirement under Order 13 Rule 4 of the Act. Therefore, the
contention that the document has not been properly marked and
it should be rejected in evidence on the ground of insufficiently
stamped is untenable. The trial court will have no jurisdiction to
reconsider the issue. The remedy available for the respondent is
only under section 58 of the Stamp Act. Accordingly, the writ
petition is allowed.”

6. It is the legality of the impugned order that we are tasked to

examine while answering the question formulated at the beginning of this

judgment.

7. Mr. Chaturvedi, learned counsel for the appellant, while laying a

challenge to the impugned order argued that admission of an insufficiently

stamped instrument in a casual manner by mechanically marking it as an

exhibit, without any application of judicial mind, should not preclude the

court seized of the proceedings from reconsidering whether such document

is sufficiently stamped and could have at all been admitted in evidence.

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Various provisions of the 1957 Act were referred to by him for persuading

us to hold that the view taken by the High Court was grossly erroneous.

Accordingly, it was prayed by him that the impugned order be set aside and

the civil appeal be allowed with liberty to the respondent to take steps in

accordance with the order of the Trial Court.

8. Mr. Guru, learned counsel for the respondent, defended the

impugned order by asserting that it is correct both in law as well as on facts.

It was argued that setting aside of the Trial Court’s order by the impugned

order was indeed justified since the GPA having been admitted in evidence,

such admission could not have been reviewed by the same court under any

circumstance. Emphasis was placed on the need for an objection to the

document's admissibility being raised when it was first tendered for being

admitted and then marked as an exhibit. Citing section 35 of the 1957 Act,

it was contended that once an instrument is admitted in evidence, the

admission cannot be questioned by the trial court or any appellate or

revisional court; and that the only remedy that the 1957 Act provides is a

revision under section 58 thereof in the manner as provided. Thus, he

submitted that the civil appeal being devoid of any merit deserved outright

dismissal.

9. A short but interesting question has engaged our consideration.

There is no doubt that the GPA is insufficiently stamped. What we need to

consider on facts and in the circumstances is, which of the two conflicting

views taken by the Trial Court and the High Court is right.

Page 6
10. Despite the GPA having been admitted in evidence and marked as

an exhibit without objection from the side of the appellant, we propose to

hold for the reasons to follow that the Trial Court did have the authority to

revisit and recall the process of admission and marking of the instrument,

not in the sense of exercising a power of review under section 114 read with

Order XLVII, CPC but in exercise of its inherent power saved by section 151

thereof, and that the other remedy made available by the 1957 Act was not

required to be pursued by the appellant to fasten the respondent with the

liability to pay the deficit duty and penalty.

11. We may refer to the statutory framework of the 1957 Act. Sections

33, 34, 35 and 58, to the extent relevant for a decision on this appeal, read

as follows:

“33. Examination and impounding of instruments.-

(1) Every person having by law or consent of parties authority
to receive evidence, and every person in charge of a public office,
except an officer of police, before whom any instrument,
chargeable in his opinion, with duty, is produced or comes in the
performance of his functions, shall, if it appears to him that such
instrument is not duly stamped, impound the same.
(2) For that purpose every such person shall examine every
instrument so chargeable and so produced or coming before him,
in order to ascertain whether it is stamped with a stamp of the
value and description required by the law in force in the State of
Karnataka when such instrument was executed or first executed:
Provided that,—
(a) ***
(b) ***
(3) For the purposes of this section, in cases of doubt, the
Government may determine,—
(a) what offices shall be deemed to be public offices; and
(b) who shall be deemed to be persons in charge of public
offices.

Page 7
34. Instruments not duly stamped inadmissible in
evidence, etc.- No instrument chargeable with duty shall be
admitted in evidence for any purpose by any person having by law
or consent of parties authority to receive evidence, or shall be
acted upon, registered or authenticated by any such person or by
any public officer, unless such instrument is duly stamped:
Provided that,—
(a) ***
(b) ***
(c) ***
(d) ***

35. Admission of instrument where not to be questioned. –

Where an instrument has been admitted in evidence such
admission shall not, except as provided in section 58, be called in
question at any stage of the same suit or proceeding on the
ground that the instrument has not been duly stamped.

58. Revision of certain decisions of Courts regarding the

sufficiency of stamps. –

(1) When any Court in the exercise of its Civil or Revenue

jurisdiction or any Criminal Court in any proceeding under Chapter
XII or Chapter XXXVI of the Code of Criminal Procedure, 1898,
makes any order admitting any instrument in evidence as duly
stamped or as not requiring a stamp, or upon payment of duty
and a penalty under Section 34, the Court to which appeals lie
from, or references are made by, such first mentioned Court may,
of its own motion or on the application of the Deputy
Commissioner, take such order into consideration.

(2) If such Court, after such consideration, is of opinion that such

instrument should not have been admitted in evidence without the
payment of duty and penalty under Section 34, or without the
payment of a higher duty and penalty than those paid, it may
record a declaration to that effect, and determine the amount of
duty with which such instrument is chargeable, and may require
any person in whose possession or power such instrument then is,
to produce the same, and may impound the same when produced.

(3) When any declaration has been recorded under sub-section

(2), the Court recording the same shall send a copy thereof to the
Deputy Commissioner and, where the instrument to which it
relates has been impounded or is otherwise in the possession of
such Court, shall also send him such instrument.

Page 8
 (4) The Deputy Commissioner may thereupon, notwithstanding
anything contained in the order admitting such instrument in
evidence, or in any certificate granted under Section 41, or in
Section 42, prosecute any person for any offence against the
stamp law which the Deputy Commissioner considers him to have
committed in respect of such instrument.

Provided that, -

(a) no such prosecution shall be instituted where the amount

(including duty and penalty) which, according to the
determination of such Court, was payable in respect of the
instrument under Section 34, is paid the Deputy
Commissioner, unless he thinks that the offence was
committed with an intention of evading payment of the
proper duty;
(b) except for the purpose of such prosecution, no declaration
made under this section shall affect the validity of any order
admitting any instrument in evidence, or of any certificate
granted under Section 41.”

(emphasis ours)

12. Read in isolation, a literal interpretation of section 35 of the 1957

Act seems to make the position in law clear that once an instrument has

been admitted in evidence, then its admissibility cannot be contested at any

stage of the proceedings on the ground of it not being duly stamped. A

fortiori, it would follow that any objection pertaining to the instrument’s

insufficient stamping must be raised prior to its admission.

13. However, section 35 of the 1957 Act is not the only relevant

section. It is preceded by sections 33 and 34 and all such sections are part

of Chapter IV, tiled “Instruments Not Duly Stamped”. Certain obligations

are cast by section 33 on persons/officials named therein. Should the

presiding officer of the court find the instrument to be chargeable with duty

but it is either not stamped or is insufficiently stamped, he is bound by

Page 9
 section 33 to impound the same. Section 34 places a fetter on the court’s

authority to admit an instrument which, though chargeable with duty, is not

duly stamped. The statutory mandate is that no such instrument shall be

admitted in evidence unless it is duly stamped.

14. The presiding officer of a court being authorised in law to receive

an instrument in evidence, is bound to give effect to the mandate of sections

33 and 34 and retains the authority to impound an instrument even in the

absence of any objection from any party to the proceedings. Such an

absence of any objection would not clothe the presiding officer of the court

with power to mechanically admit a document that is tendered for admission

in evidence. The same limitation would apply even in case of an objection

regarding admissibility of an instrument, owing to its insufficient stamping,

being raised before a court of law. Irrespective of whether objection is

raised or not, the question of admissibility has to be decided according to

law. The presiding officer of a court when confronted with the question of

admitting an instrument chargeable with duty but which is either not

stamped or is insufficiently stamped ought to judicially determine it.

Application of judicial mind is a sine qua non having regard to the express

language of sections 33 and 34 and interpretation of pari materia provisions

in the Indian Stamp Act, 189911 by this Court. However, once a decision on

the objection is rendered – be it right or wrong – section 35 would kick in

to bar any question being raised as to admissibility of the instrument on the

ground that it is not duly stamped at any stage of the proceedings and the

11
1899 Act, hereafter

Page 10
 party aggrieved by alleged improper admission has to work out its remedy

as provided by section 58 of the 1957 Act.

15. Profitable reference may be made to the decision of this Court in

Javer Chand and others v. Pukhraj Surana12. There, provisions of

section 36 of the 1899 Act, which is pari materia section 35 of the 1957 Act,

came up for consideration. A Bench of four Hon’ble Judges of this Court held

that when a document’s admissibility is questioned due to improper

stamping, it must be decided immediately when presented as evidence. The

relevant paragraph is extracted hereunder:

“4. *** Where a question as to the admissibility of a document is

raised on the ground that it has not been stamped, or has not
been properly stamped, it has to be decided then and there when
the document is tendered in evidence. Once the court, rightly or
wrongly, decides to admit the document in evidence, so far as the
parties are concerned, the matter is closed. Section 35 is in the
nature of a penal provision and has far-reaching effects. Parties to
a litigation, where such a controversy is raised, have to be
circumspect and the party challenging the admissibility of the
document has to be alert to see that the document is not admitted
in evidence by the court. The court has to judicially determine the
matter as soon as the document is tendered in evidence and
before it is marked as an exhibit in the case. The record in this
case discloses the fact that the hundis were marked as Exts. P-1
and P-2 and bore the endorsement ‘admitted in evidence’ under
the signature of the court. It is not, therefore, one of those cases
where a document has been inadvertently admitted, without the
court applying its mind to the question of its admissibility. Once a
document has been marked as an exhibit in the case and the trial
has proceeded all along on the footing that the document was an
exhibit in the case and has been used by the parties in
examination and cross-examination of their witnesses, Section 36
of the Stamp Act comes into operation. Once a document has been
admitted in evidence, as aforesaid, it is not open either to the trial
court itself or to a court of appeal or revision to go behind that
order. Such an order is not one of those judicial orders which are
liable to be reviewed or revised by the same court or a court of
superior jurisdiction.”

12
(1962) 2 SCR 333

Page 11
 (emphasis ours)

16. Once again, addressing a matter concerning section 36 of the

1899 Act, a Bench of three Hon’ble Judges of this Court in Ram Rattan v.

Bajrang Lal13 held as follows:

“6. When the document was tendered in evidence by the plaintiff

while in witness box, objection having been raised by the
defendants that the document was inadmissible in evidence as it
was not duly stamped and for want of registration, it was
obligatory upon the learned trial Judge to apply his mind to the
objection raised and to decide the objects in accordance with law.
Tendency sometimes is to postpone the decision to avoid
interruption in the process of recording evidence and, therefore, a
very convenient device is resorted to, of marking the document in
evidence subject to objection. This, however would not mean that
the objection as to admissibility on the ground that the instrument
is not duly stamped is judicially decided; it is merely postponed.
In such a situation at a later stage before the suit is finally
disposed of it would none-the-less be obligatory upon the court to
decide the objection. If after applying mind to the rival contentions
the trial court admits a document in evidence, Section 36 of the
Stamp Act would come into play and such admission cannot be
called in question at any stage of the same suit or proceeding on
the ground that the instrument has not been duly stamped. The
court, and of necessity it would be trial court before which the
objection is taken about admissibility of document on the ground
that it is not duly stamped, has to judicially determine the matter
as soon as the document is tendered in evidence and before it is
marked as an exhibit in the case and where a document has been
inadvertently admitted without the court applying its mind as to
the question of admissibility, the instrument could not be said to
have been admitted in evidence with a view to attracting Section
36 (see Javer Chand v. Pukhraj Surana) [AIR 1961 SC 1655] . The
endorsement made by the learned trial Judge that ‘Objected,
allowed subject to objection’, clearly indicates that when the
objection was raised it was not judicially determined and the
document was merely tentatively marked and in such a situation
Section 36 would not be attracted.”

(emphasis ours)

13
(1978) 3 SCC 236

Page 12
17. The pivotal aspect emerging for consideration on the terms of

sections 33 and 34 of the 1957 Act, with which we are concerned, is that

whether the Trial Court did judicially determine the question of

admissibility. It is here that we need to ascertain the rationale behind the

Trial Court’s approach to go behind admission of the GPA in evidence and

marking thereof as an exhibit, leading to the order under challenge before

the High Court. Relevant portions of the order of the Trial Court read thus:

“2. *** There are two suits before this court, one is the present
suit and another suit is OS No. 301/03. In the present suit, the
GPA holder of plaintiff filed an affidavit by way of chief examination
in the morning session and the documents were marked. While
marking the documents he was held up in the court of Civil Judge
(Jr. Dn.), Mangalore and hence no objection regarding the
deficiency of stamp duty on GPA could be raised before this court.
Accordingly the matter has been adjourned for cross examination
of PW1. The alleged GPA is in favour of third party with power to
sell the property and hence article 41 of the Karnataka Stamp Act
1957 is applicable and stamp duty on the market value has to be
paid on the same. The GPA is executed on a stamp paper of value
of Rs.100/- only. As per Section 33 of the Karnataka Stamp Act,
1957, the court shall impound the said GPA even without the
objections by the advocate for 1st defendant. His absence at the
time of chief examination of PW1 is not intentional but as he was
held up in another court.

3. The 1st defendant has also filed IA No. IX under Sec. 114, R/w.
Sec. 151 of CPC to review the order of marking Ex.P2 which is
insufficiently stamped and to hear the objections regarding
inadequacy of stamp duty on the similar grounds.

7. The points that arise for consideration are:-

1. Whether Ex.P2 GPA is insufficiently stamped and plaintiff is
liable to pay deficit duty and penalty?
2. Whether the order permitting the plaintiff to mark the
document requires to be reviewed?

8. The points are answered in affirmative for the following:

Reasons

Page 13
 9. *** The clauses are very specific that the power of attorney
has been given powers to sell the properties and the power of
attorney has acted upon the GPA and has execute the sale deed
in favour of the plaintiff as per Ex.P3. Under Article 41(e), when
the power of attorney is given for consideration and authorizing
the attorney to sell the immovable property, the duty payable is
same duty as a conveyance for a market value equal to the
amount of the consideration. As stated above, no consideration
has been mentioned in the GPA., but the GPA has been given
authorizing to sell the immovable property. The GPA has been
issued to a third party, … article 41(ab) is applicable. The learned
counsel for plaintiff objected for considering these applications on
the ground that document is already marked with out any
objections and hence the question of reviewing the order
considering the question of stamp duty at this stage does not
arise. As seen from the order sheet, the plaintiff was examined on
6.6.2010 and document was marked on same day. Immediately
on the next date of hearing the counsel has filed IA No. IX and X
to consider the aspect of payment of stamp duty and penalty i.e.,
on the day on which the matter was posted for cross examination
of PW1. It is certain that the senior counsel appearing for the
plaintiff was not present at the time of examination of PW1 in chief
as the court remembers that the junior counsel was present and
probably being unaware of the question of stamp duty has not
raised any objections. The court has marked the document as an
exhibit and has put the seal for having marked the document as
to who has produced the document and admitted through which
witness and marked for plaintiff. No doubt, there is mention that
the document is admitted through PW1 and Ex.P2, but the court
has not applied its mind while marking the document as to
whether document is sufficiently stamped or insufficiently
stamped.
10. *** The circumstances under which the application is being
filed and circumstances under which the document came to be
marked, clearly show that the document was marked without
application of the mind of the court and without objection of the
other side and this court is of the view that the admissibility of the
document could be considered at this stage.

ORDER
The IA Nos. IX and X are allowed.”

18. On the face of such an order, it does not leave any scope for doubt

that on the date the GPA was admitted in evidence and marked as an

exhibit, the Trial Court did not deliberate on its admissibility, much less

Page 14
applied its judicial mind, resulting in an absence of judicial determination.

In the absence of a ‘decision’ on the question of admissibility or, in other

words, the Trial Court not having ‘decided’ whether the GPA was sufficiently

stamped, section 35 of the 1957 Act cannot be called in aid by the

respondent. For section 35 to come into operation, the instrument must

have been “admitted in evidence” upon a judicial determination. The words

“judicial determination” have to be read into section 35. Once there is such

a determination, whether the determination is right or wrong cannot be

examined except in the manner ordained by section 35. However, in a case

of “no judicial determination”, section 35 is not attracted.

19. In the light of the aforesaid reasoning of the Trial Court of

admitted failure on its part to apply judicial mind coupled with the absence

of the counsel for the appellant before it when the GPA was admitted in

evidence and marked exhibit, a factor which weighed with the Trial Court,

we have no hesitation to hold that for all purposes and intents the Trial

Court passed the order dated 19th October, 2010 in exercise of its inherent

power saved by section 151, CPC, to do justice as well as to prevent abuse

of the process of court, to which inadvertently it became a party by not

applying judicial mind as required in terms of sections 33 and 34 of the

1857 Act. We appreciate the approach of the Trial Court in its judicious

exercise of inherent power.

20. Reference to section 58 of the 1957 Act by learned counsel for the

respondent is without substance. The clear language of section 58 refers to

a situation, where an order is passed admitting an instrument in evidence

as duly stamped or as one not requiring a stamp, for its attraction. As

Page 15
evident from a bare reading of the order dated 19th October, 2010, the Trial

Court did neither hold the GPA as duly stamped or as not requiring a stamp

and, therefore, its applicability was not attracted.

21. We may not turn a blind eye to the fact that the revenue would

stand the risk of suffering huge loss if the courts fail to discharge the duty

placed on it per provisions like section 33 of the 1957 Act. Such provision

has been inserted in the statute with a definite purpose. The legislature has

reposed responsibility on the courts and trusted them to ensure that

requisite stamp duty, along with penalty, is duly paid if an unstamped or

insufficiently stamped instrument is placed before it for admission in

support of the case of a party. It is incumbent upon the courts to uphold

the sanctity of the legal framework governing stamp duty, as the same are

crucial for the authenticity and enforceability of instruments. Allowing an

instrument with insufficient stamp duty to pass unchallenged, merely due

to technicalities, would undermine the legislative intent and the fiscal

interests of the state. The courts ought to ensure that compliance with all

substantive and procedural requirements of a statute akin to the 1957 Act

are adhered to by the interested parties. This duty of the court is

paramount, and any deviation would set a detrimental precedent, eroding

the integrity of the legal system. Thus, the court must vigilantly prevent

any circumvention of these legal obligations, ensuring due compliance and

strict adherence for upholding the rule of law.

22. Having regard to the aforesaid discussion, we answer the

substantial question in the affirmative. Finding no error in the order of the

Trial Court dated 19th October, 2010, we set aside the impugned order of

Page 16
 the High Court dated 26th September, 2011, meaning thereby that the order

of the Trial Court is restored. Since proceedings of the civil suit remained

stalled because of pendency of this appeal, we expect the Trial Court to

proceed expeditiously and in accordance with law.

23. The appeal is, accordingly, allowed without any order for costs.

………………………………J
(DIPANKAR DATTA)

………………………………J
(PANKAJ MITHAL)

New Delhi.

9th July, 2024

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