In a significant legal development, the Supreme Court recently delivered a landmark judgment on the interpretation and applicability of Section 35 of the Indian Stamp Act, 1899. The case revolved around the admissibility of documents and the conditions under which Section 35 comes into play. Justices Abhay S. Oka and Sanjay Karol formed the judicial panel, providing crucial insights into the nuances of stamp duty and its impact on evidentiary proceedings.

The dispute originated from an agreement between the Plaintiff and Defendant, leading to a claim for specific performance by the former. The Trial Court initially allowed a copy of the agreement as secondary evidence under Section 65 of the Indian Evidence Act. However, a subsequent review petition by the Defendant argued against the admissibility, citing improper stamping under Section 35 of the Stamp Act. This led to a legal battle that reached the Supreme Court.

The Court framed two essential issues for consideration:

• Whether Section 35 applies to the agreements dated 04.02.1988 between the parties.

• Can a copy of a document serve as secondary evidence when the original is not in the possession of the party?

The Plaintiff contended that Section 35 was not applicable as stamp duty was not required at the time of executing the agreement. Conversely, the Defendant argued against admitting a copy of an inadequately stamped document if the original was deemed inadmissible under the Stamp Act.

The Court delved into the intricacies of Section 35, emphasizing that its restrictions only apply to instruments subject to duty and not duly stamped. The critical factor was determining when a document becomes chargeable, clarifying that the relevant date is the execution date. The Court highlighted the constitutional framework granting concurrent power for stamp duty to the State Legislature and the Parliament.

In addressing the retrospective application of an Explanation added in 1990 to agreements executed in 1988, the Court asserted that such additions create new obligations and cannot be applied retrospectively. It concluded that Section 35 was not applicable to the case dated February 4, 1988.

The Court also underscored the distinction between primary and secondary evidence, emphasizing the priority of presenting primary evidence. It referred to Sections 63 and 65 of the Indian Evidence Act, which define and permit the use of secondary evidence under specific conditions.

The Court resolved the first issue by asserting that the documents in question were not required to be stamped during the relevant period, rendering Section 35 inapplicable. On the second issue, the Court affirmed that a copy of a document can be presented as secondary evidence when legal prerequisites are met.

Consequently, the Court allowed the appeal, nullifying the contested order.

Case: Vijay v Union Of India & Ors,

CIVIL APPEAL NO. 4910 OF 2023.

Click here to read/download order.