{"id":128853,"date":"1969-02-18T00:00:00","date_gmt":"1969-02-17T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/hindustan-steel-ltd-vs-ms-dalip-construction-company-on-18-february-1969"},"modified":"2015-12-07T02:37:00","modified_gmt":"2015-12-06T21:07:00","slug":"hindustan-steel-ltd-vs-ms-dalip-construction-company-on-18-february-1969","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/hindustan-steel-ltd-vs-ms-dalip-construction-company-on-18-february-1969","title":{"rendered":"Hindustan Steel Ltd vs M\/S. Dalip Construction Company on 18 February, 1969"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Hindustan Steel Ltd vs M\/S. Dalip Construction Company on 18 February, 1969<\/div>\n
Equivalent citations: 1969 AIR 1241, \t\t 1969 SCR (3) 796<\/div>\n
Author: S C.<\/div>\n
Bench: Shah, J.C.<\/div>\n
           PETITIONER:\nHINDUSTAN STEEL LTD.\n\n\tVs.\n\nRESPONDENT:\nM\/S.  DALIP CONSTRUCTION COMPANY\n\nDATE OF JUDGMENT:\n18\/02\/1969\n\nBENCH:\nSHAH, J.C.\nBENCH:\nSHAH, J.C.\nRAMASWAMI, V.\nGROVER, A.N.\nRAMASWAMI, V.\nGROVER, A.N.\n\nCITATION<\/a>:\n 1969 AIR 1241\t\t  1969 SCR  (3) 796\n 1969 SCC  (1) 616\n\n\nACT:\nIndian Stamp Act, ss. 35, 36 and 42-Unstamped document filed\nin  Court-Impounded-Whether can be acted upon after  payment\nof duty and penalty.\n\n\n\nHEADNOTE:\nThe  dispute  between the appellant and the  respondents  in\nrelation  to  a contract were referred\tin  accordance\twith\ntheir  contract to arbitration.\t The award was filed in\t the\nDistrict  Court\t and  notice  of filing\t was  given  to\t the\nparties.   The appellant applied to the Court under  ss.  30\nand 33 of the Indian Arbitration Act, 1940 to have the award\nset  aside on the ground inter alia that it  was  unstamped.\nThe District Judge ordered the document to be impounded\t and\ndirected  that\tan authenticated copy of the  instrument  be\nsent to the Collector together with a certificate in writing\nstating\t the  receipt  of the amount of\t duty  and  penalty.\nAgainst\t that  order the appellant moved the High  Court  of\nMadhya\tPradesh in exercise of its revisional  jurisdiction.\nThe  High  Court rejected the petition.\t  By  special  leave\nappeal\twas filed in this Court.  Relying on the  difference\nin  the phraseology between ss. 35 and 36 it was urged\tthat\nan  instrument which is not duly stamped may be admitted  in\nevidence  on payment of duty and penalty, but it  cannot  be\nacted upon because s. 35 operates as a bar to the  admission\nin evidence of an instrument not duly stamped as well as  to\nits  being acted upon, and the Legislature has by s.  36  in\nthe conditions set out therein removed the bar only  against\nadmission in evidence of the instrument.\nHELD  : The appellant's argument ignored the true import  of\ns.  36.\t  By  that section an instrument  once\tadmitted  in\nevidence shall not be called in question at any stage of the\nsame suit or proceedings on the ground that it has not\tbeen\nduly  stamped.\t Section 36 does not, prohibit\ta  challenge\nagainst\t an  instrument\t that it shall\tnot  be\t acted\tupon\nbecause it is not duly stamped, but on that account there is\nno  bar against an instrument not duly 'stamped being  acted\nupon  after payment of the stamp duty and penalty  according\nto the procedure prescribed by the Act.\t The doubt if any is\nresolved  by  the  terms of s. 42(2) which  enact  in  terms\nunmistakable,\tthat  every  instrument\t endorsed   by\t the\nCollector under s. 42(1) shall be admissible in evidence and\nmay be acted upon as if it had been duly stamped. [740 C-E]\nThe Stamp Act is a fiscal measure enacted to secure  revenue\nfor the State on certain classes of instruments : it is\t not\nenacted\t to arm a litigant with a weapon of technicality  to\nmeet  the case of his opponents The stringent provisions  of\nthe Act are conceived in the interest of the revenue.\tOnce\nthat  object is secured according to law, the party  staking\nhis  claim  on the instrument will not be  defeated  on\t the\nground\tof the initial defect in the instrument.  Viewed  in\nthat light the scheme is clear.\t Section 35 of the Stamp Act\noperates as a bar to an unstamped instrument being  admitted\nin  evidence  or  being\t acted\tupon,  s.  40  provides\t the\nprocedure for the instrument being impounded, sub-s. (1)  of\ns.  42\tprovides for certifying that an instrument  is\tduly\nstamped,  and  sub-s. (2) of s. 42 enacts  the\tconsequences\nresulting from such certification. [740 F--G]\n\t\t\t    737\nObservations  of Desai, J. in Mst. Bittan Bibi and  Anr.  v.\nKantu Lal and Anr., I.L.R. [1952] 2 All, 984, disapproved.\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL  APPELLATE JURISDICTION : Civil Appeal, ‘No,  2425  of
\n1968.\n<\/p>\n
Appeal\tby special leave from the judgment and\torder  dated
\nAugust\t30, 1968 of the Madhya Pradesh High Court  in  Civil
\nRevision No. 764 of 1967.\n<\/p>\n
C. K. Daphtary, and I. N. Shroff for the appellant.
\nRameshwar Nath and Mahinder Narain for the respondents
\nThe Judgment of the Court was delivered by
\nShah,  J.  The\trespondents entered  into  a  contract\twith
\nHindustan  Steel  Ltd. for ‘raising, stacking,\tcarting\t and
\nloading\t into wagons limestone at Nandini  Mines”.   Dispute
\nwhich arose between the parties was referred to arbitration,
\npursuant  to  cl.  61 of  the  agreement.   The\t arbitrators
\ndiffered, and the dispute was referred to an umpire who made
\nand published his award on April 19, 1967.  The umpire filed
\nthe award in the Court of the District Judge, Rajnandgaon in
\nthe State of Madhya Pradesh and gave notice of the filing of
\nthe  award to the parties to the dispute.  On July 14,\t1967
\nthe  appellant\tfiled an application for setting  aside\t the
\nward  under  ss. 30 and 33 of the  Indian  Arbitration\tAct,
\n1940.\tOne of the contentions raised by the appellants\t was
\nthat  the award was unstamped and on that  account  “invalid
\nand  illegal and liable to be set aside”.   The\t respondents
\nthen  applied  to  the\tDistrict Court\tthat  the  award  be
\nimpounded  and validated by levy of stamp duty and  penalty.
\nBy  order  dated  September 29,\t 1967,\tthe  District  Judge
\ndirected  that the award be impounded.\tHe then called\tupon
\nthe  respondents  to pay the appropriate stamp duty  on\t the
\naward and penalty and directed that an authenticated copy of
\nthe instrument be sent to the Collector, Durg, together with
\na  certificate in writing stating the receipt of the  amount
\nof duty and penalty., Against that order the appellant moved
\nthe  High  Court  of  Madhya  Pradesh  in  exercise  of\t its
\nrevisional  jurisdiction.   The\t High  Court  rejected\t the
\npetition  and  the  appellant appeals  to  this\t Court\twith
\nspecial leave.\n<\/p>\n
It is urged by Counsel for the appellant that an  instrument
\nwhich  is not stamped as. required by the Indian Stamp\tAct,
\nmay, on payment of stampduty  and penalty, be  admitted\t in
\nevidence, but cannot be acted upon, for, “the instrument has
\nno  existence in the eye of law”. Therefore, counsel  urged,
\nin  proceeding to entertain the application for\t filing\t the
\naward,\tthe  District  Judge,  Rajnandgaon,  acted   without
\njurisdiction.\n<\/p>\n
The relevant provisions of the Stamp Act may be\t summarised.
\nSection 3 of the Act provides
\n738<\/span>
\n\t      “Subject\tto  the provisions of this  Act\t the
\n\t      following instruments shall be chargeable with
\n\t      duty of the amount indicated in that  Schedule
\n\t      as  the proper duty  therefore,  respectively,
\n\t      that is to say–\n<\/p>\n
\t      (a)   every   instrument\tmentioned  in\tthat
\n\t      Schedule\twhich,\tnot having  been  previously
\n\t      executed\tby any person, is executed in  India
\n\t      on or after the first day of July, 1899;
\n\t      “Instrument”   is\t defined  in  s.  2(14)\t  as
\n\t      including: “every document by which any  right
\n\t      or  liability is, or purports to be,  created,
\n\t      transferred,  limited, extended,\textinguished
\n\t      or  recorded”.   An instrument is said  to  be
\n\t      “duly stamped” within the meaning of the Stamp
\n\t      Act  when the instrument bears an adhesive  or
\n\t      impressed\t stamp of not less than\t the  proper
\n\t      amount and that such stamp has been affixed or
\n\t      used  in accordance with the law for the\ttime
\n\t      being in force in India : s. 2 (11).  Item  12
\n\t      of  Sch.\t2 prescribes the stamp duty  payable
\n\t      in   respect  of\tan  award.   Section   33(1)
\n\t      provides, insofar as it is relevant :\n<\/p>\n
\t      “(1) Every person having by law or consent  of
\n\t      whom any instrument, chargeable with duty,  is
\n\t      produced\tor comes in the performance  of\t his
\n\t      functions,  shall, if it appears to  him\tthat
\n\t      such  instrument is not duly stamped,  impound
\n\t      the same.”\n<\/p>\n
\t      Section 35 of the Stamp Act provides,  insofar
\n\t      as it is relevant
\n\t      “No  instrument chargeable with duty shall  be
\n\t      admitted\tin evidence for any purpose  by\t any
\n\t      person  having  by law or consent\t of  parties
\n\t      authority\t to  receive evidence, or  shall  be
\n\t      acted upon, registered or authenticated by any
\n\t      such  person or by any public officer,  unless
\n\t      such instrument is duly stamped:\n<\/p>\n
\t      Provided that…………………”
\n\t      Section 36 provides :\n<\/p>\n
\t      “Where an instrument has been admitted in evi-
\n\t      dence,  such  admission shall not,  except  as
\n\t      provided in section 61, be called in  question
\n\t      at any stage of the same suit or proceeding on
\n\t      the  ground that the instrument has  not\tbeen
\n\t      duly stamped.”\n<\/p>\n
\t      Section  38 deals with the impounding  of\t the
\n\t      instruments: provides :\n<\/p>\n
\t      “(1) When the person impounding an  instrument
\n\t      under section 33 has authority to receive evi-
\n\t      dence  and admits such instrument in  evidence
\n\t      upon  payment  of\t a penalty  as\tprovided  by
\n\t      section 35 or
\n\t      739<\/span>
\n\t      ………he  shall  send to the  Collector  an
\n\t      authenticated   copy   of\t  such\t instrument,
\n\t      together\t with  a  certificate  in   writing,
\n\t      stating the amount of duty and penalty  levied
\n\t\t\t    in respect thereof……”\n<\/p>\n
\t      By  S.  39  the  Collector  is  authorised  to
\n\t      adjudge  proper  penalty\tand  to\t refund\t any
\n\t      portion of the penalty which has been paid  in
\n\t      respect  of  the\tinstrument,  sent  to\thim.
\n\t      Section  40  prescribes the  procedure  to  be
\n\t      followed\tby  the Collector in respect  of  an
\n\t      instrument  impounded  by him or sent  to\t him
\n\t      under  s.\t 38.   If the Collector\t is  of\t the
\n\t      opinion  that  the ‘instrument  is  chargeable
\n\t      with  duty and is not duly stamped,  he  shall
\n\t      require  the  payment of proper  duty  or\t the
\n\t      amount  required to make up the same  together
\n\t      with  a  penalty\tof five rupees;\t or,  if  he
\n\t      thinks fit, an amount not exceeding ten  times
\n\t      the  ‘amount  of\tthe proper duty\t or  of\t the
\n\t      deficient\t  portion   thereof.\tSection\t  42
\n\t      provides :\n<\/p>\n
\t      ”\t (1)  When the duty and\t penalty  (if  any),
\n\t      leviable\tin  respect of any  instrument\thave
\n\t      been paid under section 35, section 40 or\t the
\n\t      person  admitting such instrument in  evidence
\n\t      or  the Collector, as the case may be,  shall
\n\t      certify by endorsement thereon that the proper
\n\t      duty  or, as the case may be, the proper\tduty
\n\t      and penalty (stating the amount of each)\thave
\n\t      been levied in respect thereof
\n\t      (2)Every\t instrument   so   endorsed    shall
\n\t      thereupon\t be admissible in evidence, and\t may
\n\t      be registered and acted upon and authenticated
\n\t      as  if it had been duly stamped, and shall  be
\n\t      delivered on his application in this behalf to
\n\t      the person from whose possession it came\tinto
\n\t      the hands of the officer impounding it, or  as
\n\t      such person may direct:\n<\/p>\n
\t      Provided that–\n<\/p>\n
The  award, which is an “instrument” within the\t meaning  of
\nthe Stamp Act was required to be stamped.  Being  unstamped,
\nthe  award could not be received in evidence by\t the  Court,
\nnor could it be acted upon.  But the Court was competent  to
\nimpound\t it  and  to  send  it\tto  the\t Collector  with   a
\ncertificate  in\t writing  Stating the amount  of  duty\tand
\npenalty\t levied thereon.  On the Instrument so received\t the
\nCollector may adjudge whether it is duly stamped and he\t may
\nrequire\t penalty to be paid thereon, if in his view  it\t has
\nnot  been duly stamped.\t If the duty and. penalty are  paid,
\nthe Collector will certify by endorsement on the  instrument
\nthat the proper duty and penalty have been paid.\n<\/p>\n
740<\/span><\/p>\n
An  instrument which is not duly stamped cannot be  received
\nin evidence by any person who has authority to receive\tevi-
\ndence, and it cannot be acted upon by that person or by\t any
\npublic officer.\t Section 35 provides that the  admissibility
\nof an instrument once admitted in evidence shall not, except
\nas provided in s. 61, be called in question at any stage  of
\nthe  same  suit\t or  proceeding\t on  the  ground  that\t the
\ninstrument  has\t not been duly stamped.\t  Relying  upon\t the
\ndifference  in the phraseology between ss. 35 and 36 it\t was
\nurged  that an instrument which is not duly stamped may\t be
\nadmitted in evidence on payment of duty and penalty, but  it
\ncannot be acted upon because s. 35 operates as a bar to\t the
\nadmission in evidence of the instrument not duly stamped  as
\nwell as to its being acted upon, and the Legislature has  by
\nS. 36 in the conditions set out therein removed the bar only
\nagainst\t admission  in\tevidence  of  the  instrument.\t The
\nargument ignores the true import of S. 36.  By that  section
\nan instrument once admitted in evidence shall not be  called
\nin  question at any stage of the same suit or proceeding  on
\nthe  ground that it has not been duly stamped.\t Section  36
\ndoes not prohibit a challenge against an instrument that  it
\nshall not be acted upon because it is not duly stamped,\t but
\non  that account there is no bar against an  instrument\t not
\nduly  stamped being acted upon after payment of\t the  stamp
\nduty  and penalty according to the procedure  prescribed  by
\nthe  Act.  The doubt, if any, is removed by the terms of  s.
\n42(2)  which  enact,  in  terms\t unmistakable,\tthat   every
\ninstrument endorsed by the Collector under S. 42(1) shall be
\nadmissible  in evidence and may be acted upon as if  it\t had
\nbeen duly stamped.\n<\/p>\n
The Stamp Act is a fiscal measure enacted to secure  revenue
\nfor the State on certain classes of instruments : it is\t not
\nenacted\t to arm a litigant with a weapon of technicality  to
\nmeet the case of his opponent.\tThe stringent provisions  of
\nthe Act are conceived in the interest of the revenue.\tOnce
\nthat  object is secured according to law, the party  staking
\nhis  claim  on the instrument will not be  defeated  on\t the
\nground\tof the initial defect in the instrument.  Viewed  in
\nthat  light  the Scheme is clear : s. 35 of  the  Stamp\t Act
\noperates as a bar to an unstamped instrument being  admitted
\nin  evidence  or being acted upon section  40  provides\t the
\nprocedure for instruments ‘being impounded, sub-s. (1) of S.
\n42  provides  for  certifying that  an\tinstrument  is\tduly
\nstamped,  and  sub-s. (2) of s. 42 enacts  the\tconsequences
\nresulting from such certification.\n<\/p>\n
Our  attention was invited to the statement of law  by\tM.C.
\nDesai J., in Mst.  Bittan Bibi and Another v. Kuntu Lal and
\nAnother(1) that :\n<\/p>\n
(1)  I.L.R.[1952] 2 All. 984.\n<\/p>\n
741<\/span><\/p>\n
\t      “A  court\t is  prohibited\t from  admitting  an
\n\t      ‘instrument  in  evidence and a  Court  and  a
\n\t      public officer both are prohibited from acting
\n\t      upon it.\tThus a Court is prohibited from both
\n\t      admitting\t it in evidence and acting upon\t it.
\n\t      It  follows  that\t the  acting  upon  is\t not
\n\t      included in the admission and that a  document
\n\t      can  be admitted in evidence but not be  acted
\n\t      upon.   Of  course  it cannot  be\t acted\tupon
\n\t      without  its  being admitted, but\t it  can  be
\n\t      admitted and yet be not acted upon.  It  every
\n\t      document, upon admission, became automatically
\n\t      liable  to be acted upon, the provision in  S.
\n\t      35 that an instrument chargeable with duty but
\n\t      not  duly stamped, shall not be acted upon  by
\n\t      the Court, would be rendered redundant by\t the
\n\t      provision\t that  it shall not be\tadmitted  in
\n\t      evidence\tfor  any purpose.  To  act  upon  an
\n\t      instrument  is  to  give effect to  it  or  to
\n\t      enforce it.”\n<\/p><\/blockquote>\n
In  our\t judgment, the learned Judge attributed to S.  36  a
\nmeaning which the Legislature did not intend.  Attention  of
\nthe learned Judge was apparently not invited to S. 42(2)  of
\nthe   Act  which  expressly  renders  an  instrument,\twhen
\ncertified  by endorsement that proper duty and penalty\thave
\nbeen levied in respect thereof, capable of being acted\tupon
\nas if it had ‘been duly stamped.\n<\/p>\n
The appeal fails and is dismissed with costs.\n<\/p>\n
G.C.\t\t\t Appeal dismissed.\n742<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Hindustan Steel Ltd vs M\/S. Dalip Construction Company on 18 February, 1969 Equivalent citations: 1969 AIR 1241, 1969 SCR (3) 796 Author: S C. Bench: Shah, J.C. PETITIONER: HINDUSTAN STEEL LTD. Vs. RESPONDENT: M\/S. DALIP CONSTRUCTION COMPANY DATE OF JUDGMENT: 18\/02\/1969 BENCH: SHAH, J.C. BENCH: SHAH, J.C. RAMASWAMI, V. GROVER, A.N. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-128853","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nHindustan Steel Ltd vs M\/S. Dalip Construction Company on 18 February, 1969 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/hindustan-steel-ltd-vs-ms-dalip-construction-company-on-18-february-1969\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hindustan Steel Ltd vs M\/S. 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