M/S. Z. ENGINEERS CONSTRUCTION PVT. LTD. & ANR versus BIPIN BIHARI BEHERA & ORS. on 14 February 2020

1. Leave granted.

2. The challenge in the present appeal is to an order passed by theHigh Court of Orissa on 24[th] January, 2019 whereby the petition filed bythe appellant under Article 227 of the Constitution of India, dismissing anDapplication filed by the appellant under Order XIII Rule 8 of the Code ofCivil Procedure, 1908[1] to impound the power of attorneys (Exts. 4 and5), was dismissed.

3. The plaintiffs-respondents instituted a suit for partition throughtheir power of attorney holder Kishore Chandra Behera (PW-1). DuringEthe cross-examination of PW-1, the present appellants filed an applicationunder Order XIII Rule 8 of the Code to impound the power of attorneys,Exts. 4 and 5, inter alia, for the reason that such power of attorney is tobe treated as Conveyance within the meaning of Article 23 of the IndianStamp Act, 1899[2] as amended by Orissa Act No. 1 of 2003 w.e.f. 20[th]FJanuary, 2003. The amended Schedule IA reads as under:

Schedule IA

G

23Conveyance, as defined by Section 2(10) not being a transfer charged or exempted under No. 62:

(a) in respect of movable property.

Four per centum of the amount or value of the consideration as set forth in the instrument.

1 for short, ‘Code’

2 for short, ‘Act’H

M/S. Z. ENGINEERS CONSTRUCTION PVT. LTD. & ANR.v.BIPIN BIHARI BEHERA & ORS. [HEMANT GUPTA, J.]

(b) in respect of immovable property.

xxx

Explanation – For the purpose of this article, an agreement to sell any immovable property or a power of attorney shall, in case of transfer of the possession of such property before or at the time of or after the execution of such agreement or power of attorney, be deemed to be a conveyance and the stamp duty thereon shall be chargeable accordingly.

Eight per centum of the Aamount or value of the consideration for such conveyance as set forth therein or the marked value of the property whichever is higher.

B

xxx

C

Provided that the stamp duty already paid on such agreement or power of attorney shall, at the time of the execution of a conveyance in pursuance of such agreement or power of attorney, be adjusted towards the total amount of duty chargeable on the conveyance.

4. Similarly, clause (f) of Article 48 was substituted by theamending Act, contemplating levy of stamp duty as conveyance whensuch power of attorney is given for consideration and authorising theattorney to sell any immovable property.

5. The power of attorney dated 21[st] February, 2011 was producedin evidence as Ex.4 on 9[th] July, 2008 by PW 1- Kishore Chandra Behera.It was objected to by the present appellants. The other power of attorneydated 4[th] October, 2008 was produced as Ex.5 in evidence on 7[th] August,2018 which was again objected to by the present appellants. The relevantpart of the evidence from the statement of PW 1 reads as under:

“15. …This is the original general power of attorney dtd.21.02.2011marked Ext-4 (with obj.).

16. This is the original general power of attorney bearing No.10676 dtd.04.10.2008 marked Ext-5 (with obj.).”

6. It is thereafter an application was filed by the appellants on 3[rd]September, 2018 seeking direction to impound the two power of attorneyson the ground that they were insufficiently stamped. Therefore, in termsof Section 35 of the Act, the same were liable to be impounded and can D

E

F

G

H

Abe admitted in evidence only if appropriate stamp duty and penalty ispaid. It is argued that in terms of the Act as amended in the Orissa State,the power of attorney shall be treated to be conveyance if the possessionis transferred before or at the time or after the execution of a power ofattorney. It is contended though, that the cumulative reading of the powerof attorneys shows that the intention is to give an unequivocal right toBthe attorney to sell the land. However, the fact that the possession wastransferred to the attorney was admitted when the attorney appeared asPW-1. Therefore, in terms of explanation to Article 23, the power ofattorney is liable to be impounded and cannot be admitted unless anappropriate stamp duty is paid.C

7. In a judgment reported as Ram Rattan (Dead) by LRs. v.Bajrang Lal & Ors.[3], the question regarding admissibility of a documentwas examined for the reason that it was not duly stamped and registered.The learned trial court made an endorsement that the document was“Objected, allowed subject to objection”. However, the learned trial courtDat the stage of arguments rejected the documents to be admitted forconsideration, by taking recourse to Section 36 of the Act. This Courtfound that Section 36 of the Act could come into play only when anobjection regarding insufficient stamp duty was judicially determined.Since an objection was raised which was not still judicially determined,the recourse to Section 36 of the Act was found to be not tenable, thoughEan objection was raised at the time of evidence.

8. In Omprakash v. Laxminarayan & Ors.[4], the plaintiff claimedthat possession was delivered to him on the basis of an agreement tosell. The defendant denied the delivery of possession. The questionexamined was as to whether the admissibility of document produced byFparty would depend upon recitals in the documents or whether documentsare to be considered as conveyance as defined under the Act as amendedby Stamp (Madhya Pradesh Second Amendment) Act, 1990. Theamendment in the Madhya Pradesh Act is similar to that made in OrissaAct No. 1 of 2003. The High Court accepted the plaintiff’s petition andGset aside the demand of stamp duty treating the document to beconveyance as ordered by the trial court.The distinguishing factor isthat, in the aforesaid case, possession was said to be delivered to theprospective vendee in the agreement to sell itself. This Court held asunder:

3 (1978) 3 SCC 236H4 (2014) 1 SCC 618

M/S. Z. ENGINEERS CONSTRUCTION PVT. LTD. & ANR.v.BIPIN BIHARI BEHERA & ORS. [HEMANT GUPTA, J.]

“16. From a plain reading of the aforesaid provision, it is evidentthat an authority to receive evidence shall not admit any instrumentunless it is duly stamped. An instrument not duly stamped shall beadmitted in evidence on payment of the duty with which the sameis chargeable or in the case of an instrument insufficiently stamped,of the amount required to make up such duty together with penalty.As we have observed earlier, the deed of agreement having beeninsufficiently stamped, the same was inadmissible in evidence.The court being an authority to receive a document in evidence togive effect thereto, the agreement to sell with possession is aninstrument which requires payment of the stamp duty applicableto a deed of conveyance. Duty as required, has not been paidand, hence, the trial court rightly held the same to be inadmissiblein evidence.”

9. Learned counsel for the respondents referred to a judgment ofthis Court reported as R.V.E. Venkatachala Gounder v. ArulmiguViswesaraswami & V.P. Temple & Anr.[5] to contend that admissibilityof document in evidence can be classified in two classes: (i) an objectionthat the document which is sought to be proved is itself inadmissible inevidence; and (ii) where the objection does not dispute the admissibilityof the document in evidence but is directed towards the mode of proofalleging the same to be irregular or insufficient. It was held that suchobjections are required to be raised when the document has been admittedin evidence in terms of provisions of Order XIII Rule 4 of the Code.However, the said judgment does not deal with the objection regardingimpounding of a document for insufficient stamp duty as required underthe Act. Therefore, such judgment has no applicability to the facts of thepresent case.

10. Learned counsel for the respondents refers to another judgmentreported as Bipin Shantilal Panchal v. State of Gujarat & Anr.[6] whereinthe appellant was facing a trial for the offences under the NarcoticDrugs and Psychotropic Substances (NDPS) Act. During the course oftrial, the trial court had chosen to decide questions of admissibility ofdocuments or other items of evidence, as and when objections theretowere raised. This Court found that it is an archaic practice that wheneverany objection is raised regarding the admissibility of any material in 5 (2003) 8 SCC 7526 (2001) 3 SCC 1

A

B

C

D

E

F

G

H

Aevidence, the Court does not proceed further without passing an orderon such objection. This Court found that any decision on objection ischallenged in appeal or revision which unnecessarily prolongs the trial.Such practices proved to be hindrance which impede and restrict theprogress of trial proceedings. Such proceedings must be recast andremodeled to give way to the acceleration of trial proceedings. It isBthereafter, the Court held as under:

“14. When so recast, the practice which can be a better substituteis this: Whenever an objection is raised during evidence-takingstage regarding the admissibility of any material or item of oralevidence the trial court can make a note of such objection andCmark the objected document tentatively as an exhibit in the case(or record the objected part of the oral evidence) subject to suchobjections to be decided at the last stage in the final judgment. Ifthe court finds at the final stage that the objection so raised issustainable the Judge or Magistrate can keep such evidenceDexcluded from consideration. In our view there is no illegality inadopting such a course. (However, we make it clear that if theobjection relates to deficiency of stamp duty of a document thecourt has to decide the objection before proceeding further. Forall other objections the procedure suggested above can befollowed.)”E

11. We find that the trial court as well as the High Court returnedthe findings on the bare reading of the power of attorney and observedthat since it is a registered document, therefore, it is properly stamped.But the question as to whether in terms of the explanation inserted bythe Orissa Act, such power of attorney is liable to be stamped asFconveyance, on account of the delivery of possession at the time ofexecution of power of attorney or thereafter has not been examined.

12. We find that the question whether possession was transferredat the time or after execution of such power of attorney is a question offact which is required to be decided by the Court at the time of finalGdecision being adjudicated, after evidence is led by the parties and notmerely on the basis of recitals in the power of attorney. Such processwould be fair and reasonable keeping in view the provisions of OrissaAct.

13. We find that in the facts of the present case, the objectionHrelated to deficiency in stamp duty on a power of attorney which the

appellants claim to be conveyance, depends upon the finding regardingdelivery of possession in terms of the power of attorney. Generallyspeaking, such objection is required to be decided before proceedingfurther. However, in a case where evidence is required to determinethe nature of the document, it is reasonable to defer the admissibility ofa document for insufficient stamp duty at the time of final decision in thesuit.

14. Therefore, we find that the order passed by the trial court on14[th] December, 2018 and the High Court on 24[th] January, 2019 are liableto be set aside and are, thus, set aside. The matter is remitted to the trialcourt to decide the objection of admissibility of the document on accountof being insufficiently stamped in light of the findings recorded, afterevidence is led by the parties. The application dated 3[rd] September, 2018filed by the appellants shall be decided along with the main suit, whenthe question of delivery of possession at the time of the execution of thepower of attorney or thereafter shall be determined.

15. In view of the above, the appeal is disposed of.

Devika Gujral

Appeal disposed of.

A

B

C

D

E

F

G

H