Apex Court Decision on Insufficiently Stamped Documents as Secondary Evidence

Introduction 

• Vijay vs Union of India, Civil Appeal No. 4910 of 2023, Supreme Court of India
• On November 29, 2023, the Supreme Court restated that when a document mandated to bear a stamp lacks sufficient stamping, presenting a copy of such a document as secondary evidence is not permissible. Justice Abhay S Oka and Justice Sanjay Karol cited a series of decisions affirming the established legal principle that if a document requiring a stamp is inadequately stamped, its copy cannot be introduced as secondary evidence.
• In the present case, the Plaintiff and the Defendant executed a sale agreement on February 4, 1988. Following this, the Plaintiff initiated legal action seeking specific performance of the contract. Simultaneously, Plaintiff applied to present a copy of the agreement as secondary evidence. The Additional District Judge, in a review, dismissed this application, citing that secondary evidence of the agreement to sell couldn't be admitted due to improper stamping, invoking Section 35 of the Stamp Act, 1899. The High Court later affirmed this decision. Dissatisfied, the Plaintiff appealed to the Supreme Court to challenge this ruling.

Arguments Submitted

• Senior Advocate Dr. Menaka Guruswamy, representing the Appellant-Plaintiff, contended that Section 35 of the Stamp Act, 1899, should not apply in this case, as there was no obligation to pay stamp duty at the time of the execution of the agreement as it was executed before the Indian Stamp (Madhya Pradesh Amendment) Act, 1989, which imposed the stamp duty requirement. The argument maintained that the Plaintiff should have been allowed to present a copy of the agreement to sell as secondary evidence under Section 65 of the Indian Evidence Act.
• The Advocate for the Non-Appealant-Defendant contended that an unstamped copy of an original document cannot be accepted as secondary evidence. They argued that since the original document is deemed inadmissible under the Stamp Act, any copy should similarly be disallowed as secondary evidence.

Analysis and Order by the Supreme Court

• Application of Section 35 of the Stamp Act
  • Section 35 of the Stamp Act stipulates that instruments which are chargeable with duty but not duly stamped are ineligible for admission as evidence. The Court extensively examined whether the prohibition on admissibility under Section 35 of the Indian Stamp Act applies to the present case. The primary aim of the Stamp Act is to ensure the proper collection of stamp duty on instruments or conveyances where such duty is applicable, clarified the Court. Section 35 of the Stamp Act addresses instruments that are not adequately stamped, rendering them inadmissible as evidence in court. 
  • However, if the documents in question are not subject to duty, Section 35 does not apply. To invoke the admissibility restriction outlined in this section (Section 35), two essential conditions must be met: (i) the instrument must be liable to duty; (ii) it is not appropriately stamped.
  • The Court determined that, in this particular instance, the instrument was not subject to duty, it did not require stamping; hence, no admissibility restriction could be imposed due to its lack of proper stamping.
  • The Court then examined the possibility of introducing a copy of a document as secondary evidence when the original instrument was not in the possession of the party.
  • The Court restated that if a document, which should be stamped, lacks sufficient stamping, a copy of such a document as secondary evidence cannot be presented. However, in the present case, the Court concluded that the document in question was not liable for stamp duty at the time of its execution.
• Application of Section 65(a) of the Evidence Act
  • The Court then analyzed Section 65(a) of the Indian Evidence Act, which addresses scenarios permitting the introduction of secondary evidence related to a document in the present case.
  • Secondary evidence may be presented as a substitute when the original document or primary evidence is in the possession of the opposing party or held by a third party.
  • Suppose such a person refuses to produce the document even after due notice. It is essential to verify that the alleged copy is an accurate reproduction of the original.
  • The Court noted that the precise status of the documents in the case under consideration remained uncertain, as one party asserted that the other possessed the documents. The other party claimed they were in possession of her counsel. Since the documents in question could not be retrieved, the Court stated that the presentation of secondary evidence could be permitted, provided other stipulated conditions were met.
• Order: The Supreme Court ruled in favor of the Plaintiff, thereby allowing the application presented by the Plaintiff for consideration of secondary evidence. However, the Court clarified that the admissibility of such evidence would be determined independently by the concerned Court in accordance with the law. For legal assistance, contact us.

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