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It is reasonable to defer the admissibility of a document for insufficient stamp duty at the time of

M/s. Z. Engineers Construction Pvt Ltd & Anr. Vs. Bipin Bihari Behera and Ors., Civil Appeal No. 1627 of 2019 arising out of SLP (Civil) No. 5036 of 2019 – February 14, 2020.

The Supreme Court Bench comprising of Justice S. Abdul Nazeer and Justice Hemant Gupta pronounced the judgment.

The present appeal is the challenge to an order passed for the petition filed by the appellant under Article 227 of the Constitution of India, dismissing an application filed by the appellant under Order XIII Rule 8 of the Code of Civil Procedure, 1908 to impound the power of attorneys was dismissed.

Facts: The respondents instituted a suit for partition through their power of attorney holder Kishore Chandra Behera (PW 1). During the cross-examination PW-1, the present appellant filed an application under Order XII 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 to be treated as Conveyance within the meaning of the Article 23 of the Indian Stamp Act, 1899 as amended by Orissa Act No.1 of 2003 w.e.f. 20th January 2003. Similarly, clause (f) of Article 48 was substituted by the amending Act, contemplating levy of stamp duty as conveyance when such power of attorney is given for consideration and authorising the attorney to sell any immovable property.

The power of attorney which was produced by the PW-1 was objected by the appellants. The other power of attorney which was dated later was again objected by the present appellants. The appellants filed an application seeking direction to impound the two power of attorneys on the ground that they are insufficiently stamped. Therefore, in terms of Section 35 of the Act, the same were liable to be impounded and can be admitted in evidence only if appropriate stamp duty and penalty is paid.

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 possession is transferred before or at the time or after the execution of a power of attorney. It is contended though, that the cumulative reading of the power of attorneys shows that the intention is to give an unequivocal right to the attorney to sell the land. However, the fact that the possession was transferred to the attorney was admitted when the attorney appeared as PW-1. Therefore, in terms of explanation to Article 23, the power of attorney is liable to be impounded and cannot be admitted unless an appropriate stamp duty is paid.

The Court observed that Section 36 of the Act could come into play only when an objection 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, though an objection was raised at the time of evidence. The Court held that in the facts of the present case, the objection related to deficiency in stamp duty on a power of attorney which the appellants claim to be conveyance, depends upon the finding regarding delivery of possession in terms of the power of attorney. Generally speaking, such objection is required to be decided before proceeding further.  However, in a case where evidence is required to determine the nature of the document, it is reasonable to defer the admissibility of a document for insufficient stamp duty at the time of final decision in the suit.

And the matter is remitted to the trial court to decide the objection of admissibility of the document on account of being insufficiently stamped in light of the findings recorded, after evidence is led by the parties

Therefore, the appeal is disposed.

– Vydurya Selvi Baskaran

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