While filling for a suit for specific performance of an agreement objection regarding the agreement being unstamped or unregistered can be entertained or not. A single-judge bench comprising of Justice Prakash Gupta adjudicating the matter in Dulli Ram and Ors v. Ghasia and Ors ( S.B. Civil Writ Petition No.1013 of 2011) dealt with the issue of dismissal of agreement and application under Section- 33 & 36 of the Stamp Act,1988, Section 17 of Registration Act,1908 and Order 14 Rule 2 of CPC filed by the Petitioners.
The Petitioners filed a suit for specific performance of an agreement to sell and permanent injunction against the defendant dated 06.01.2005 to which the Respondents replied with a written statement and objected that the said agreement was unregistered and unstamped and hence is inadmissible as evidence in court. They stated that the purported agreement was insufficiently stamped and was required to be impounded. The Respondents also submitted that the agreement was fabricated and forged, and claimed that they never executed any agreement in favor of the Petitioners nor any possession was given them and neither they received any consideration of the sale. According to the Respondents as per clause(bb) of Sr. No. 5 of Schedule appended to the Registration Act,1908, 3% of the total consideration of the property would be set forth as the stamp duty which turns out to be Rs 4530/- only and since the Petitioners only paid the Stamp duty of Rs.100, they are required to pay an amount of Rs. 4430/- along with the penalty.
The Petitioners contended in their reply that the sale consideration was received by the Respondent and also the possession was transferred. In defense to the contention made by the Respondent regarding the stamp duty, the Petitioners stated that in the present case clause(c) of Sr. No. 5 of Schedule appended to the Registration Act,1908 would attract as the possession was delivered. Clause(bb) of Sr. No. 5 of Schedule appended to the Registration Act,1908 relates to the purpose of sale of immovable property when possession is to not transferred nor agreed to be transferred. Hence the Petitioner has paid the right amount of Stamp duty of Rs. 100.
The court after looking upon the contentions of both the sides concluded that” This Court thinks that the controversy has a complete solution in the bare reading of the provisions of Section 49 of the Act of 1908 and Sections 37 and 39 of the Act of 1998. Proviso to Section 49 of the Act of 1908 provides that an unregistered document affecting immovable property and required by this Act (Registration Act) or the Transfer of Property Act, 1882 (4 of 1882), to be registered, may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (1 of 1877) or as evidence of any collateral transaction not required to be effected by registered instrument.”
Since the suit in which the agreement in question is sought to be admitted as evidence is a suit for specific performance, the agreement despite its being unregistered was admissible in evidence.
Therefore, an agreement that is in dispute because it is not properly stamped or is under stamped could not be admitted as evidence unless a proper stamp duty is determined. Also in cases where the stamp duty payable on a document is disputed, a systematic course must be undertaken considering Section 37(1) of the Registration Act,1908 and reference should be made to the collector under 37(4) regarding the determination of proper stamp duty so that the disputed document can be certified by the Collector u/s 44 &46 can be taken as evidence.
The court allowed the petition and directed to deal with the agreement in accordance with the provision of Section 37 of the Act of 1998 and refer it to the Collector (Stamps) for determination of proper stamp duty and endorsement as per the provisions of Section 44 or 46 thereof.