Ground Water -- Legal Control

(By Jose Vikas Yesudasan, Assistant Manager (Legal), The South Indian Bank Ltd.)

Introduction

Ground water is one of the indispensable sources of drinking water.1 But now-a-days, people extract ground water for not only drinking purpose but also commercial one. In fact, ground water is getting depleted and contaminated, thanks to its indiscriminate exploitation for the latter purpose. This precarious situation calls for a perusal and analysis of the existing legal control of ground water.

a) Statutory control

With the emergence of privatization and globalization, over-exploitation of ground water by the multinationals is posing a threat to the quantity of ground water, available for the common man’s consumption. Apprehending that the unprecedented over-exploitation of ground water will pave the way for the exhaustion and gradual extinction of ground water, the Kerala Government enacted the Kerala Ground Water (Control and Regulation) Act, 2002 for the regulation of its exploitation.

The Kerala Ground Water (Control and Regulation) Act, 2002 provides for the constitution of the State Ground Water Authority, comprising members like an expert in Water Resources, a member belonging to scheduled caste/scheduled tribe, a woman, a public man, an environmentalist, a member of Municipal Council, Secretaries of Departments of Water Resources, Finance and Local Self-government as well as the Director of Ground Water Department2. Based upon the recommendation of this authority, representing multiple interests, the Government may notify areas for the regulation of ground water consumption3. Any person, who is desirous of digging a well or converting an existing well into a pumping well or registering an existing well in the notified area, is expected to obtain a permit from the authority4. The latter will issue a permit, if it does not offend public interest5. But, except, in the case of registration of the existing wells, the permit shall be deemed to have been granted to the applicant, if the authority procrastinates for more than ninety days6. This implies that the applicant will be blessed with a permit, even if it infringes public interest, if the application is kept pending for more than ninety days after its receipt. The Act proposes to protect public drinking water resources by requiring persons to get permit for digging wells within thirty metres from such resources7. But in this case also, if the decision of the authority is not communicated to the applicant within ninety days from the date of the application for permission, it shall be deemed to have been granted to the applicant8. To make matters worse, the gravity of the object of the Act appears to be diluted by the provision for penalty, which ranges from five hundred to two thousand rupees9 only. This nominal sum will go on tempting multi-nationals to ascend the ladder of prosperity by violating the Act and escaping its clutches through the loophole of petty penalty.

b) Judicial Control

F.K.Hussain v. Union of India10 which was the first important case, pertaining to the regulation of ground water exploitation. In this case, the Lakshadweep administration evolved a scheme to augment water supply by extracting water from wells. The petitioner smelled a rat and wanted to smother it, as it will lead to the intrusion of salt water into the ground water of the area and upset the fresh water equilibrium there. The Kerala High Court held that the contamination of potable water is a breach of the fundamental right to life under Article 21 of the Constitution, because the right to life does not only mean mere animal existence but also has many dimensions attached to it. The right to sweet water and right to free air are the attributes of the right to life, for these are the basic elements, which sustain life itself. Hence, the administrative agency cannot be permitted to function in such a manner as to make inroads into the fundamental right under Article 21. The agency should exploit other alternatives like rain water harvesting, reverse osmosis and desalination for augmenting the water supply of the region. This is because human interference with nature should not exceed its capacity for regeneration.

InM.C. Mehta v. Union of India11 the question for consideration was the impact of mining on the ground water table. The ground water scenario within 5 kilometres of Delhi-Haryana border and Aravalli hills was highly deplorable, thanks to illegal and indiscriminate mining. The mining agency did not take measures to pump back the mined water into the abandoned pits to recharge the ground water, thereby catalyzing depletion of ground water. As a consequence, the local people found themselves between the devil and the deep sea. The Supreme Court, therefore directed the monitoring committee to come to the rescue of these people by lending them a helping hand.

In Ashok Kademani And Anr.v. State of Karnataka12 the petitioners were agriculturists who used borewells in their properties for agricultural purposes. However, the Municipal Council directed the petitioners to hand over the borewells to it under the pretext that bore wells in and around the petitioners’ lands had dried. The Karnataka High Court held that although there is a provision in the municipal legislation to transfer immovable property to the Municipality on payment of compensation, this does not empower the Municipality to take over the borewells of the petitioners. The petitioners have a fundamental right to life, which includes the right to all those aspects of life, which make a man’s life meaningful, complete and worth living. So, they are entitled to dig borewells for drawing water for drinking, cultivation etc. It does not become the Municipality to poke its dirty nose into their right and trample under foot the same.

In Hindustan Coca-Cola Beverages (P) Ltd. v. Perumatty Grama Panchayat13 the usage of ground water by Hindustan Coca-Cola in Perumatty Grama Panchayat was scrutinized by Kerala High Court. The local people complained to the panchayat about the over-exploitation of ground water by the company. So the Panchayat cancelled the latter’s licence. The Single Judge of Kerala High Court held that ground water belongs to the public, as per public trust doctrine. So the State and its instrumentalities should act as trustees of this great wealth. The inaction of the State in this regard is tantamount to infringement of the right to life guaranteed under Article 21 of the Constitution. Hence, the Single Judge restrained the company from draining ground water for its use. However, strangely enough, the Division Bench of the court threw cold water on the bubbling judicial dynamism of the Single Judge and questioned the justification for the Panchayat’s action and decided in favour of the company.

In Howrah Ganatantrik Nagarik Samithy & Others v. State of West Bengal14 the Calcutta High Court was confronted with the problem of water pollution, resulting from excessive use of ground water by soft drink companies. However, the court could not but appreciate the steps, taken by the companies to recharge ground water, but added that there must be a State agency to monitor the same.

In John v. Kalamassery Municipality15,John dug a well in his private property and started Aqua Line Fresh to supply water to different institutions in the Edappally village. The unregulated extraction of ground water by him led to acute water scarcity in the surrounding region. According to the Kerala Ground Water (Control and Regulation) Act, 2002, people have the right to draw ground water from their wells, provided they are registered. But the petitioner has not done this registration exercise. The court opined that of the two usages of water, it is the maintenance of the available resource that is more important than its mindless exploitation, thereby echoing the Stockholm Declaration, 197216.

In Pepsico India Holdings Pvt. Ltd. v. State of Kerala and Ors17,the petitioner set up his industry in Palghat after taking the required permission from the concerned State authority and the Panchayat. But the Panchayat refused to renew the licence of the company on the ground that the company had been extracting too much ground water, thereby causing water shortage in the nearby region. The Kerala High Court decided in favour of the petitioner, but could not give a blind eye to the concern of the panchayat for the ground water protection. So, it permitted the Panchayat to bring the problem to the notice of the State Ground Water Authority.

Conclusions and Suggestions

The fact that the Kerala Ground Water (Control and Regulation) Act, 2002 provides for the constitution of the State Ground Water Authority, representing multiple interests, is laudable. But it is doubtful whether the voice of the sole woman sans any qualification, experience or expertise will be heeded by the other well-equipped members. Besides, the deeming provisions relating to the grant of permit and the provision incorporating petty penalty require reconsideration for helping the Act materialize its purpose. It is gratifying to note that the judiciary except the Division Bench of the Kerala High Court in Hindustan Coca-Cola Beverages (P) Ltd. v. Perumatty Grama Panchayat has gone a long way in adding flesh and blood to the statutory skeleton by widening the horizon of Article 21 of the Constitution, holding aloft and applying the principles of public trust and inter-generational equity, embedded in international documents like the Stockholm Declaration.

FootNote:

1. See P.B. Sahasranaman, Handbook of Environmental Law, Oxford University Press, New Delhi, 2009, P.145.

2. The Kerala Ground Water (Control and Regulation) Act, 2002, Section 3.

3. Id., Section 6.

4.Id., Sections 7(1), 8(1).

5. Id. , Sections 7(4), 8(3).

6 . Id., Section 7(6).

7. Id., Section 10.

8.    Id. , Section 10(3), Proviso.

9.    Id. , Section 21.

10.  AIR 1990 Ker.321.

11.  2004(3) KLT SN 69 (C.No.97) SC = AIR 2004 SC 4016.

12.  AIR 2005 Kant.124.

13.  2005 (2) KLT 554.

14.  2005 (2) CHN 596.

15.  2006 (2) KLT 386.

16.  See Principle 2.

17.  2007(2) KLT 835.

Timing of Impounding of Insufficiently Stamped Instruments;
An Analysis of the Conflicting Judicial Views and Some Incidental Matters

 (By Nizam Azeez Sait, Advocate, Alappuzha)

As regards the interpretation of Section 33 of the Kerala Stamp Act 1959, which deals with the examination and impounding of insufficiently stamped instruments, different benches of the High Court of Kerala have come up with different views with respect the timing/stage of such impounding by a Court, which requires an analysis on the touchstone of the views expressed and the interpretation put on the above Section 33 by the Supreme Court in its judgments having precedential significance.

Relevant portions of Sections 33, 34 and 35 of the Kerala Stamp Act 1959 read as follows:

Section 33: Examination and impounding of instruments

 (1) Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an Officer of Police, before whom any instrument, chargeable in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same.

(2) For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him, in order to ascertain whether it is stamped with a stamp of the value and description required by the law in force in the State when such instrument was executed or first executed:

      Provided that —

(a) nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding underChapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898;

(Chapter xii of the Code of 1898, relates to Disputes as to Immovable Property and Chapter xxxvi…relates to Maintenance of Wives and Children)

Section 34: Instrument not duly stamped inadmissible in evidence,etc.-

No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped:

Provided that —

(a) any such instrument not being an instrument chargeable with a duty of twenty paise or less than twenty paise shall, subject to all just exceptions, be admitted in evidence on payment of the duty with which the same is chargeable, or, in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of ten rupees or, when ten times the amount of the proper duty or deficient portion thereof exceeds ten rupees, of a sum equal to twenty times such duty or portion;

Section 35: Admission of instrument where not to be questioned.-

Where an instrument has been admitted in evidence such admission shall not, except as provided in Section 59, be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped.

 Judgments Holding that Mere Production of the Instrument in Contra Distinction to ‘Tender the Document in Evidence’ is not Sufficient to Impound the Same

Thara Thomas v. Narayanan Nair(1989 (1) KLT SN 6 (C.No.10) : 1989 (1) KLJ 16) Radhakrishna Menon J:

In this case the court below had impounded a document produced along with the plaint construing it as a bond and finding it to be insufficiently stamped. The Plaintiff/Revision Petitioner had not yet taken any steps to tender the same in evidence. The High Court set aside the impugned order, observing as quoted hereunder:

“The words in the Section that require special mention are “is produced or comes in the performance of his functions.” The insufficiently stamped document in order to be impounded under S.33 therefore must be one which had been produced or had come in the performance of the functions of the persons or authorities mentioned in the
sub-section. The phrase “in the performance of his functions” in the context is meaningful. The document, in order to find that it has been produced or has come in the performance of the functions of the authority concerned, must be one, the party concerned had taken steps to tender in evidence. A mere production of the document cannot therefore be said to be a production within the meaning of that phrase, because the party who has produced the document, has every right to take the same back before steps to tender it formally in evidence are taken.” The Court further stated:

“The cumulative effect of these Sections (33 & 34) is that the question as to whether or not an instrument chargeable with duty, has however, been insufficiently stamped, in so far as court proceedings or proceedings akin thereto are concerned, comes up for consideration, only when the party concerned takes steps to tender the said document in evidence. The court has then and only then the power to consider whether the document has been duly stamped.”

For arriving at the above conclusion the Court also relied on the Lahore High Court Judgments in Ujjal Singh Sunder Singh v. Ahmed Yer Khan (AIR 1936 Lahore 985) and Harjimal & Sons v. H.S. Palta & Sons (AIR 1947 Lahore 319). Uthuppan Abraham v. State of Kerala (1997 (2) KLT 475):

In this case the defendant/petitioner, produced before the Munsiff’s Court a document styled as an assignment deed, which was insufficiently stamped. The document was neither tendered in evidence nor relied on. Nevertheless the Munsiff’s Court impounded the document and passed an order directing payment of deficient stamp duty along with the prescribed penalty and the Collector was directed to realise the above amount. The High Court set aside the order observing as below:

“Only the document which is either relied on by the parties for proving the case or admitted in evidence by marking as Exhibit is liable to be impounded by the Court. Merely because a document was filed in Court (and when the same was not either proved in evidence or acted upon by any of the parties) the Munsiff cannot order impounding the document or imposing any penalty for insufficiency of the stamp duty. The principle seems to be that a party to the litigation cannot escape the liability of payment of the stamp duty under the law whenever he wants to rely on the document in order to prove his case.”

In coming to the above conclusion the court relied on the following observation of Justice Chandrasekhara Menon in Chanda Pillai v. Munsiff, Tiruvalla & Ors. (1975 KLT 753):

“As long as an instrument is not admitted in evidence, the Munsiff though he may have impounded the same has no jurisdiction to levy any penalty or charge any duty on the same. The question whether the Munsiff should not under sub-s. (2) of S.37 by which every person impounding an instrument has to send it in original to the Collector, depends upon the answer to the question whether the case is one which can come within the description of every other case mentioned therein. Every other case means every case other than the cases mentioned in sub-s.(1) of S.37. Among cases mentioned therein is the case of a person impounding an instrument under S.33 who has by law authority to receive evidence and admits such instrument in evidence upon payment of penalty as provided by the proviso to S.34. It is only when the case is different from the one mentioned therein that an occasion will arise for a Civil Court to act under sub-s.(2). Ordinarily, the duty or power of assessing the amount of stamp duty or collecting stamp duty and penalties is invested by the Act in the Collector. The proviso to S.34 invests courts with the special jurisdiction of adjudicating upon stamp duty and imposing penalty in certain cases and those are cases where a party to litigation before the court tenders a document in evidence. In the instant case, as the documents have not been admitted in evidence no question of imposition of stamp duty by the Munsiff arises. He could have acted only under S.37(2) by which he is to send the documents to the Collector who then can proceed to stamp the instruments concerned and collect the required duty and penalty if any from the person or persons who are liable to pay the same.”

It is submitted that in “Uthuppan Abraham” the Court went wrong in observing that “the document……..admitted in evidence by marking as Exhibit is liable to be impounded by the Court”. A conjoint reading of Sections 33, 34 and 35 makes it abundantly clear that the stage of impounding comes prior to the marking of the document as exhibit/admitting the document in evidence. Once the document is admitted in evidence, Section 35 comes into operation and the order admitting the document in evidence cannot be reviewed and the document cannot be impounded thereafter. The issue has been dealt with, in detail, by a 4 Judges Bench of the Supreme Court in Javer Chand & Ors. v. Pukraj Surana (AIR 1961 SC 1655) and the court categorically held with respect to the issue of sufficiency of stamp duty, that: “Once a document has been admitted in evidence, as aforesaid, it is not open either to the Trial Court itself or to a Court of appeal or revision to go behind that order. Such an order is not one of those judicial orders which are liable to be reviewed or revised by the same Court or a Court of superior jurisdiction”.

In Chanda Pillai v. Munsiff, Tiruvalla & Ors. (supra), the court was dealing with the procedure to be followed once the instrument is impounded. Interpreting the clauses in Section 37 the court rightly held that, when the impounded document is not admitted in evidence on payment of stamp duty and penalty as provided in the proviso to Section 34, the court cannot issue a direction for imposition and realization of stamp duty and penalty. The said power belongs to the realm of the Collector u/S.39 of the Stamp Act. As per S.37(2) the Court merely has to send the original instrument to the Collector.

Joseph Vilangadan v. Agma Techno Products Ltd.(2012 (2) KLT 128) -
S.S.Satheesachandran, J.

In this case the Defendant/Petitioner produced a copy of the lease deed containing an Arbitration clause and objected the jurisdiction of the court to entertain the suit, invoking Section8 of the Arbitration and Conciliation Act, 1996. Later as per the direction of the court original lease deed was produced. The Munsiff’s Court after examining the original lease agreement taking note that it had not been sufficiently stamped, found that a stamp duty and penalty of `5,43,000/- is due for validating that document, and directed to pay such sum within the time fixed. Since such payment was not made, the document was ordered to be impounded and sent over to the District Collector for realisation of the deficit stamp duty and penalty. The High Court set aside the said order interpreting Section 34 of the Stamp Act, holding that, the Court has to look into the question whether the instrument is properly stamped or not, only at the stage when it is tendered in evidence.

The Court relied on the Supreme Court Judgment in Bharat Sewa Sansthan v.
U. P. Electronic Corporation Ltd.,AIR 2007 SC 2961 : (2007) 7 SCC 737 and observed:

 “In the context, it is also to be pointed out that for the purpose of an enquiry under S.8(1) of the Act, the original agreement containing the arbitration clause as such need not be produced, nor be insisted upon. A copy of the agreement, if it is not disputed by both sides, can be looked into and appropriate decision can be taken in an enquiry under S.8(1) of the Act. The Apex Court in Bharat Sewa Sansthan v. U. P. Electronic Corpn. Ltd., considering the aforesaid question in paragraph 21 of that case, has held that photo copy of the lease agreement could be taken on record under S.8(1) of the Act for ascertaining the existence of an arbitration clause. Scope of enquiry canvassed for in such a case is very much limited as to the only question to be gone into is whether there is an arbitration clause in the agreement, governing the parties. Looking into the original or photo copy of the agreement having regard to the plaint allegations, a decision under S.8 of the Act has to be taken in such case, and in doing so, the Court is not admitting the document in evidence or not even acting on it, as contemplated under S.34 of the Kerala Stamp Act.”

Curative Provision in the Proviso to Section 34 of the Stamp Act is not Applicable to Copies of the Instrument

In the context of the discussions herein, incidentally, we may look into the application of the curative provision in S. 34 of the Kerala Stamp Act to copies of the Instrument tendered in evidence. It is well settled that the Proviso to Section 34 enabling the court to validate and receive in evidence an insufficiently stamped instrument on payment of the deficient stamp duty along with the prescribed penalty, has no application when only a copy of the document is produced or other secondary evidence is offered. The curative provision applies only when the original instrument is tendered in evidence. In this regard after a thorough analysis of S.33(1), S.35 and S.36 of the Central Stamp Act and S.63 of the Indian Evidence Act and the case laws in this regard, the Supreme Court in Jupudi Kesava Rao v. Pulavarthi Venkata Subbarao & Ors. ((AIR 1971 SC 1070): (1971) 1 SCC 545) enunciated the law on the point in the following words:

“The first limb of S.35 (corresponding to S. 34 of the Kerala Stamp Act) clearly shuts out from evidence any instrument chargeable with duty unless it is duly stamped. The second limb of it which relates to acting upon the instrument will obviously shut out any secondary evidence of such instrument, for allowing such evidence to be let in when the original admittedly chargeable with duty was not stamped or insufficiently stamped, would tantamount to the document being acted upon by the person having by law or authority to receive evidence. Proviso (a) is only applicable when the original instrument is actually before the Court of law and the deficiency in stamp with penalty is paid by the party seeking to rely upon the document. Clearly secondary evidence either by way of oral evidence of the contents of the unstamped document or the copy of it covered by S.63 of the Indian Evidence Act would not fulfill the requirements of the proviso which enjoins upon the authority to receive nothing in evidence except the instrument itself. S.35 is not concerned with any copy of an instrument and a party can only be allowed to rely on a document which is an instrument for the purpose of S.35. ‘Instrument’ is defined in S.2(14) as including every document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded. There is no scope for inclusion of a copy of a document as an instrument for the purpose of the Stamp Act.”

See also, Hariom Agrawal v. Prakash Chand Malviya (2007 (4) KLT SN 67 (C.No. 75)SC =AIR 2008 SC 166 : (2007) 8 SCC 514).

To put it simply the law does not provide for validation of insufficiency of stamp of lost instruments by payment of penalty and thereby shuts out secondary evidence altogether in such cases. It is submitted that the law in this regard appears to be harsh, technical and unjust and needs a relook by the lawmakers. The curative provision should be extended to copies also, when copies are otherwise admissible as secondary evidence.

Judgments Holding that Mere Production of the Insufficiently Stamped Instrument will Entitle the Court to Impound the Same.

Asokan v. Dy.Collector :1995 (2) KLT 292. M. M.Pareed Pillay, C. J. & P. Shan

In this case, a bond executed by the petitioner (before the High Court) was produced before the Sub Court by the plaintiff in a suit in which the petitioner was not a party. The Court impounded the Instrument and sent the same to the Collector for realisation of stamp duty and p`enalty. The Petitioner assailed the order inter alia on the ground that he did not produce the document. The Division Bench dismissed the petition holding as under:

 “If an instrument is not duly stamped the executant cannot be heard to contend that it was not produced by him before any authority and so he is not liable under the Act when it is produced by a third party before the Court. Whenever the infraction of the Act is detected primary liability of the executant of the instrument cannot be shelved for the reason that he never produced it before the Court. Court’s power to impound an instrument cannot be denied on the ground that the parties to the instrument are not before the Court. From a reading of S.33(1) it can be discerned that whenever an insufficiently stamped instrument comes to the notice of the Court it can impound the same....He cannot be absolved of the liability under the Act merely on the ground that he was not the person who produced the document before the Court. His liability is not extinguished for the reason that he did not have occasion to present it before any authority.”

Mohanan v. M.A.C.T. Moovatupuzha(2005 (4) KLT 273)

In this case the Motor Accidents Claims Tribunal impounded an agreement of sale of a vehicle holding it to be insufficiently stamped and liable to be stamped as a conveyance under Article 21 of the Stamp Act. The Petitioner contended that the document was only produced along with the list of documents and therefore ought not to have been impounded. In support of the said proposition the Petitioner relied on the above referred Thara Thomas andUthuppan Abraham. The Court rejected the contention and held as under:

“I am afraid, the legal position is not correctly applied in the above two cases. The whole purpose of the provisions under Chap.4 as already referred to above is to check the evasion of stamp duty. The petitioner produced certain documents before the Tribunal. True the same was not marked and not tendered in evidence. But the document forms part of the documents produced in court. On such production, the Tribunal (court) notices the insufficiency of stamp. The Act has conferred power on the authority to examine the documents produced before it or brought to its notice in the performance of its official duties and see whether those documents are properly stamped. No restriction whatsoever is discernible under S.33 that only those documents which are proved in evidence or relied on by the parties alone can be impounded.”

The Court heavily relied on and quoted from the above referred Division Bench judgment in Asokan v. Dy.Collector and ultimately held that “the decisions in Thara Thomas’s case (supra) and Uthuppan Abraham’s case (supra)are no more good law in view of the Bench decision of this Court in Asokan’s case (supra).”

Exposition of the Correct Law on the Point by the Supreme Court;

Government of Uttar Pradesh & Ors. v. Raja Mohammed Amir Ahmad Khan
AIR 1961 SC 787 (J. L.Kapur, M. Hidayatullah & J. C. Shah, JJ.)

In this case an executed instrument was presented under S.31 of the Stamp Act, before the Collector for his opinion as to the duty chargeable. Certificate U/S. 32 was not sought for. The Collector determined the amount of duty payable and impounded the document, finding it to be insufficiently stamped. The High Court of Allahabad set aside the order by a reasoned judgment, the State preferred appeal before the Supreme Court, the above 3 Judges Bench dismissed the appeal endorsing the reasons enumerated by the High Court and holding as under:

“..if he does not want to proceed any further than seeking the determination of the duty payable then no consequence will follow and an executed document is in the same position as an instrument which is unexecuted and unstamped and after the determination of the duty the Collector becomes functus officio and the provisions of S.33 have no application.”

In the process the Court observed:

“The decision of this appeal depends upon the interpretation to be put upon the words “before whom any instrument chargeable.....is produced or comes in the performance of his functions”. Dealing with these words the High Court held:

“With all respect, therefore, we agree that the learned Judges deciding Chuni Lal Burman v. Board of Revenue, U. P. (AIR 1951 All.851), took a correct view of the words “is produced or comes in the performance of his functions” used in S.33 of the Act to mean “the production of the instrument concerned in evidence or for the purpose of placing reliance upon it by one party or the other”.

“The High Court was also of the opinion that the object of paying the whole stamp duty was to get the instrument admitted into evidence or its being acted upon or registered or authenticated as provided in Ss. 32(3), 35, 38(1) and 48(1) of the Stamp Act.”

After addressing the various counter arguments raised by the Counsel for the appellant State, the Supreme Court further confirmed the proposition and held as under:

“The instrument in dispute was not produced as a piece of evidence nor for its being acted upon, e.g., registration, nor for endorsement as under S.32 of the Stamp Act but was merely brought before the Collector for seeking his advise as to what the proper duty would be. The words “every person...before whom any instrument... is produced or comes in the performance of his functions” refer firstly to production before judicial or other officers performing judicial functions as evidence of any fact to be proved and secondly refer to other officers who have to perform any function in regard to those instruments when they come before them, e.g., registration”.

The Provisions in the Indian Stamp Act, 1899, referred by the Supreme Court are in pari materiawith the provisions of the Kerala Stamp Act. Hence the views of the Supreme Court are as such applicable in the interpretation of the corresponding provisions of the Kerala Stamp Act. Though, the case related to the production of an executed instrument for the opinion of the Collector as to its proper stamp duty u/S.30, the issue called for a comprehensive interpretation of the phrase “is produced or comes in the performance of his functions” in S.33. In doing so the Supreme Court has in no uncertain terms held that the production contemplated when it is before an officer performing judicial functions is production “as evidence of any fact to be proved” and in other cases for being acted upon. The said view is a binding precedent under Article 141 of the Constitution of India.

Later in, District Registrar and Collector v. Canara Bank (2005 (1) KLT SN 38 (C.No.43) SC = (2005) 1 SCC 496 = AIR 2005 SC 186) (R.C. Lahoti, C.J. I. & AshokBhan, J.) the Supreme Court upheld the Judgment of the Andhra Pradesh High Court which struck down the State Amendment which extended the power of inspection under S.73 of the Indian Stamp Act to instruments in the possession of Private Persons also, as ultra vires the provisions of the Indian Stamp Act as also of Art.14 of the Constitution. The High Court inter alia upheld the right to privacy of the citizen and recognized that “The grievance of private persons is that the documents in their possession are sought to be inspected, impounded and levied with duty though they were not tendered in evidence nor produced before any public office.” The Supreme Court in the process of upholding the Judgment of the High Court endorsed its “stamp” of approval on some High Court Judgments holding the view that mere production of an instrument will not entitle impounding the same. The Court observed:

“Powerto impound a document and to recover duty with or without penalty thereon has to be construed strictly and would be sustained only when falling within the four corners and letter of the law. This has been the consistent view of the courts. Illustratively, three decisions may be referred. In Jai Devi v. Gokal Chand (1906 (7) Punj.LR 428 (F.B.)) a document not duly stamped was produced in the court by the plaintiff along with the plaint but the suit came to be dismissed for non prosecution. It was held by the Full Bench that the document annexed with the plaint cannot be said to have been produced in the court in evidence and the court had no jurisdiction to call for the same and impound it. In Munshi Ram v. Harnam Singh (AIR 1934 Lah.637(1)) the suit was compromised on the date of first hearing and decree was passed based on the compromise. The original entry in a bahi was not put in evidence and, therefore, the Special Bench held it was not liable to be impounded. In L.Puran Chand v. Emperor (AIR 1942 Lah.257) the power to impound was sought to be exercised after the decision in the suit and when the document alleged to be not duly stamped had already been directed to be returned as not proved though it was not physically returned. The Special Bench held that the document was not available for being impounded.”

It is submitted that if the Court is permitted to impound the insufficiently stamped instrument on mere production or whenever it comes to its notice and to send the same to the Collector, the curative provision in the proviso to S.34 will become inoperative. That can never be the legislative intent in the scheme of the Act.

Dispute Regarding Stamp Duty is to be Decided Before Proceeding Further.

Incidentally, the question as to whether the Court can relegate decision on objection as to stamp duty to a later stage may be considered here. In Bipin Shantilal Panchal v. State of Gujarat & Anr. (2001 (1) KLT SN 86 (C.No.106) SC =AIR 2001 SC 1158 = (2001) 3 SCC 1), a 3 Judges Bench of the Supreme Court, being deeply disturbed by the heavy consumption of valuable time by the trial courts in deciding on the objections as to the admissibility of evidence, which are raised amidst the trial, laid down that in order to avoid unnecessary delay and to speed up trials the trial courts could relegate such decisions to the stage of the final judgment. But the Supreme Court rightly excluded the application of the above proposition in the cases of objections as to stamp duty. The Court said:

“Whenever an objection is raised during evidence taking stage regarding the admissibility of any material or item of oral evidence the Trial Court can make a note of such objection and mark the objected document tentatively as an exhibit in the case (or record the objected part of the oral evidence) subject to such objections to be decided at the last stage in the final judgment. If the court finds at the final stage that the objection so raised is sustainable the Judge or Magistrate can keep such evidence excluded from consideration. In our view there is no illegality in adopting such a course. (However, we make it clear that if the objection relates to deficiency of stamp duty of a document the court has to decide the objection before proceeding further. For all other objections the procedure suggested above can be followed.)”

In, Sereefa & Ors. v. Moideen(2012 (2) KLT 115 (S. S.Satheesachandran, J. ), the High Court of Kerala considered the consequence of infraction of the above norm relating to insufficiently stamped instruments. In this suit for money, there was dispute as to whether the suit document was an agreement or a bond. The Munsiff’s Court marked the instrument subject to objection. Later judgment was passed decreeing the suit but subject to a direction that decree shall not be drafted till deficient stamp fee and penalty are paid on the document, which was found to be a bond and not an agreement. In this regard after extensively referring to ‘Bipin Shantilal Panchal v. State of Gujarat and Another’(supra), and observing that the action of the Munsiff was not one without jurisdiction but was an improper exercise of Jurisdiction, the High Court held:

“It is only an improper exercise of jurisdiction not in accordance with the procedure applicable under the Stamp Act with respect to the admissibility of a document insufficiently stamped. Even an insufficiently stamped instrument if admitted by the Court can be acted upon and relief be granted by passing any order or decree. So much so, there was an improper exercise of jurisdiction by the Court in relation to the determination of the sufficiency of the stamp and directions issued how the decree has to be drafted after passing of the judgment, cannot be canvassed by one or the other party to contend that such order or decree is unsustainable.”

Outcome of the above Discussion.

1.   The proposition in Thara Thomas v. Narayanan Nair (1989 (1) KLT SN 6 (C.No.10) =1989 (1) KLJ 16), that, the insufficiently stamped instrument can be impounded by the Court only when it is tendered in evidence is correct and is in line/consonance with the verdict of the three-Judges’-Bench of the Supreme Court in Government of Uttar Pradesh & Ors. v. Raja Mohammed Amir Ahmad Khan (AIR 1961 SC 787 ).

2.   The observation inAsokan v. Dy.Collector (1995 (2) KLT 292),that “whenever an insufficiently stamped instrument comes to the notice of the Court, it can impound the same”, runs counter to the law as laid down by the Supreme Court in“Raja Mohammed Amir Ahmad Khan” and hence is“per incuriam.”

3.   Mohanan v. M.A.C.T. Moovatupuzha (2005 (4) KLT 273), holding “Thara Thomas” as ‘not good law’, relying on ‘Asokan’ is rendered “per incuriam” of the above “Raja Mohammed Amir Ahmad Khan.”

4.   Sections 33 or 34 does not make any distinction as to instruments produced/ tendered in evidence by their executants or by any other persons. Insufficiently stamped instruments can be impounded u/S.33 or validated on payment of duty and the prescribed penalty and admitted in evidence under the proviso to S.34(provided it is otherwise admissible), whether it is produced by the executants or by any other person. On that aspect the decision in “Asokan” holds good. (In this context refer also S.43 of the Kerala Stamp Act).

5.   Curative Provision in the Proviso to Section 34 of the Kerala Stamp Act which enables the Court to admit in evidence insufficiently stamped Instruments on payment of duty and prescribed penalty is applicable only when the original instrument is produced and it does not apply to copies of the Instrument or to other secondary evidence. (See, Hariom Agrawal v. Prakash Chand Malviya, (2007 (4) KLT SN 67 (C.No.75) SC =AIR 2008 SC 166: (2007) 8 SCC 514.)

6.   There is no prohibition under S.49 of the Registration Act, to receive an unregistered document of which the Registration is compulsory under S. 17 of the Registration Act, in evidence for collateral purpose. But the document so tendered should be duly stamped or should comply with the requirements of S.35 of the Stamp Act (corresponding to S. 34 of the Kerala Stamp Act), as a document cannot be received in evidence even for collateral purpose unless it is duly stamped or duty and penalty are paid under S.35 of the Stamp Act.(See, Avinash Kumar Chauhan v. Vijaya Krishna Mishra (2009 (1) KLT Suppl. 218 (SC) =(2009) 2 SCC 532 : AIR 2009 SC 1489(S.B. Sinha & Cyriac Joseph, JJ.) & Manohar Kammath v. Rammohan Kammath (1991 (2) KLT 714 (D.B.))

7.   The objection as to stamp duty has to be decided at the time of tendering the instrument in evidence and before proceeding further. (See, Bipin Shantilal Panchal v. State of Gujarat & Anr. (2001 (1) KLT SN 86 (C.No.106) SC =AIR
2001 SC 1158 = (2001) 3 SCC 1).

8.   Tail piece:- It is often reiterated by the Supreme Court that the Stamp Act is not enacted to arm a litigant with a weapon of technicality to defeat the fair case of his opponent. But recently the State in its eagerness to procure more revenue has increased the prescribed penalty in the curative provision in the proviso to S.34 from ‘ten times such duty’ to ‘twenty times such duty’ by an amendment brought in by the Kerala Finance Act, 2013. The said amendment appears to be irrational and has made the curative provision otiose and practically out of reach of a bona fide litigant in most of the instances of insufficiency of stamp duty. The cure has become worse than the disease.

A Short Historical Background for Passing of Indian Succession (Amendment) Act 26 of 2002 under which the Necessity of Taking of Probate or Letters of Administration with copy of Will Annexed, for Christians in the Whole of India was taken away or Obliterated,
Under Section 213 of Indian Succession Act, 1925

(By N. Subramaniam, Advocate, High Court of Kerala, Ernakulam)

1. Section 213 of Indian Succession Act as it stood prior to amendment read as follows:-

213. Right as executor or legatee when established.-- (1) No right as executor or legatee can be established in any court of justice, unless a Court of competent jurisdiction in India has granted probate of the Will under which the right is claimed, or has granted letters of administration with the will or with a copy of an authenticated copy of the will annexed.

This section shall not apply in the case of Wills made by Indian Christians and shall only apply.

i) In the case of Wills made by any Hindu, Buddhist, Sikh or Jaina where such Wills are of the classes specified in clauses (a) and (b) of Section 57, and

ii) in the case of wills made by any Parsi dying, after the commencement of the Indian Succession (Amendment) Act, 1962 (16 of 1962), where such Wills are made within the local limits of the (ordinary original civil jurisdiction) the High Courts at Calcutta, Madras and Bombay and where such wills are made outside those limits, inso far as they relate to immovable property situated within those limits].

2. So Christians were not exempted from the applicability of Section 213.
AIR 1982 A.P. 410 at 413 (Tynala Musalayya v. J. Moharaj)

3. While so the amendment to Indian Succession Act was enacted by Kerala State by Indian Succession (Kerala Amendment) Act 1 of 1997 which came into effect from 14.3.1997.

4. Based on this Kerala Amendment, the Kerala High Court in the decision reported in AIR 1998 Ker.160 = 1998 (1) KLJ 460 (Kalari Thressiamma v. Kathidukkanamikal Joseph) held that Christians of Kerala do not require to get their wills probated.

5. But the Amended Act 1 of 1997 (Kerala did not exempt from Section 213(1) to wills executed by Christians of Kerala involving property outside Kerala. So in such Cases they had to take Probate or Letters of Administration for establishing their rights.

6. Thereafter a Christian by name Clarence Pais filed a suit with regard to a flat in Delhi. He was living in Kerala. His aunt had made him as a legatee under her will of 1986 with regard to her flat in Delhi. His aunt died in 1991. He approached the Housing Society to hand over the flat to him which he got by the will of his aunt. Housing society insisted, (obviously to avoid unnecessary disputes and complications) that Clarence Pais should obtain an order from a competent Court. He took appropriate action in the court to get an order. But he was not able to get any relief from court, on the ground that he was bound by the restrictions in Section 213.

7. Thereupon he challenged the constitutional validity of S. 213 in Supreme Court, on the ground of discrimination among Christians (as in Kerala and outside Kerala). But the Supreme Court did not give him the relief on historical reasons. The case is reported in 2001 (1) KLT 860 (SC) = AIR 2001 SC 1151 at 1152 = (2001) 4 SCC 325 (Clarence Pais v. Union of India).

8. However, Christian community made an uproar against this and the Government of India conceded the demand made by the Christian community and enacted Indian Succession (Amendment) Act 26 of 2002 which came into effect from 27.5.2002; by which Section 213(b)(2) was made exemplary to Christians also as in the case of Mohammedans, by inserting the words ‘or Christians’. This is the historical background how the Christians in India get immunity for taking probate or L.O.A.

9. But the proviso of S.213 still continues to apply in the case of wills made by Buddhists, Sikhs or Jaina, if such wills are of classes mentioned in Section 57. Section 57 reads as follows:

57. Application of certain provisions of Part to a class of Wills made by Hindus, etc. -The provisions of this Part which are set out in Schedule III shall, subject to the restrictions and modifications specified therein, apply -

a) to all Wills and Codicils made by any Hindu, Buddhist, Sikh or Jaina on or after the first day of September, 1870, within the territories which at the said date were subject to the Lieutenant - Governor of Bengal or within the local limits of the ordinary original civil jurisdiction of the High Courts of Judicature at Madras and Bombay ; and

b) to all such Wills and Codicils made outside those territories and limits so far as relates to immovable property situate within those territories or limits; and

c) to all Wills and Codicils made by any Hindu, Buddhist, Sikh or Jaina on or after the first day of January, 1927, to which those provisions are not applied by clauses (a) and (b):

Provided that marriage shall not revoke any such Will or Codicil.

10. Though the Law Commission presided by His Lordship Dr.AR.Lakshmanan, in its 209th report in 2008 had recommended the deletion of Section 213 itself, the Ministry of Law and Justice has not still thought it so far.

The KumkiTradition

(By P. Deepak, Advocate, High Court of Kerala)

A Full Court Reference that heralds the assumption of office of the newly appointed judges evokes diverse reactions among the lawyer fraternity. For those of the ex officio category it means sitting through an unavoidable two hours of repetitive eulogies maintaining the most solemn expression. For the ambitious few it means inching imperceptibly forward to be seen within the zone of the collegiums’ collective vision. To the many, however, it betokens a late beginning to the day with sufficient time to tide over the spirituous effects of an unrepentant late night on the tiles.

But what really interests everyone is the ‘sitting arrangements’ that follow. Who gets to sit with whom and for how long? In this regard our High Court follows the Kumki tradition consistently whereby the trained and tested seniors take within their fold the untamed and inexperienced new recruits with a view to season them for the long haul ahead. It is a common refrain among the lawyers that this period of apprenticeship either makes or breaks a newly appointed judge and moulds his approach to his job irretrievably. It determines, for instance, whether 11.00 a.m. passes off for 10.15 a.m. or whether the proceedings in the court hall are a monologue or a dialogue.

These early days of internship are also a source of wholesome merriment for the lawyers. Coming as they do from two diverse streams the initial responses of the newly appointed judges are also equally varied. A sense of awe and stupefaction is invariably reflected on the faces of the promotees who find it unable to shake off the servility ingrained over the years by a deeply entrenched feudal order. The fact that their former ‘masters’ have overnight become their ‘brothers’ is something that they simply cannot fathom. On the other hand a judge appointed directly from the bar presents a starkly contrasting picture of having to the manor born. He gives you the impression of a man in a hurry to make up for lost time; galloping on his Rocinante to recompense the unfortunate judicial system which had been deprived of his knightly services on account of some regrettable affair, like the Executive-Judiciary stand-off.

In due course of time a few of the new fledglings do find their feet and they are then packed off to the remote corners of the judicial edifice to dispense justice in the manner trained. Here again an unwritten code comes into play. The ripe and experienced promotees seldom get to venture into the constitutional areas of jurisprudence and are consigned to deal with more of the mundane stuff that they had handled during their stint in the lower echelons of the judicial hierarchy. The high prerogative writs fall to the exclusive lot of the judges directly appointed from the bar. The rationale behind this unwritten code has always escaped me. The deftness with which the writ jurisdiction was handled by a promotee gentleman judge (now retired) who till recently graced Court No: 5 A is still fresh in the memory of the lawyers. At the same time the procedural and technical wrangles that certain bar-judges bring to the constitutionally unfettered frontiers of the writ court defy all imagination. Sometimes, it also so chances that the old and cagey seniors divine that a junior left to find his feet after undergoing the usual period of internship has grown too big for his boots warranting urgent corrective therapy. The inevitable corollary is that the young man is hauled up and made to sit in Division again and the Kumkis get to work on him stifling his ardor for all time.

Coming back to the kumkis; ordinarily, the new recruits continue to sit in Division, playing a dumb second fiddle to the big brother, until such time as a new batch of recruits is enlisted to take their place. This brings into sharp focus the efficacy of an intra-court appeal provided under Section 5 of the Kerala High Court Act, 1958. Far from being a Divisional Court of Correction correcting the orders passed by it in the exercise of the same jurisdiction; the Division Bench, with the all powerful big brother in the saddle, assumes the role of a Court of Error, correcting as it were the order of a subordinate court, with the little brother mutely assenting to the exercise, a veritable anghuhta chhap. In other words, the truth of the biblical proverb ‘Therefore two are better than one, for they may well enjoy the profit of their labour’doesn’t ring with any conviction here.

Is it any wonder then that ‘dissent’ is quite a rare commodity in the High Court of Kerala? For every singular and spirited instance of dissent by a junior judge leading to the constitution of a larger bench (The resolution of the issue relating to the power of the sessions judge to impose a higher variety of life sentence being a glorious such instance) there are innumerable instances of hasty reconstitution of benches to ease out an irksome junior. In such a scenario is it any wonder that the pious hope of Justice Charles E Hughes doesn’t find much resonance here as there is none to ‘appeal to the brooding spirit of the law, to the intelligence of a future day’. On the contrary, the little brother chooses to remains mute biding for the day when he would don the role of the big brother and possibly ‘correct the error into which he believes the court to have been betrayed’.

Consider the facts. Thirty eight judges in all and ten Division Benches, comprising, invariably, the top ten judges (seniority-wise) huddled together with an equal number making up the lower ten. Why does this have to be so? As far as I gather there is no statute, rule or binding precedent compelling the Honorable Chief, as master of the roster, to persist in this practice. Should the efficacy of an intra-court appeal be compromised to assuage the egos of otherwise well meaning judicial personages in their climb up the seniority ladder? Why cannot the top twenty sit in Division thereby fostering a reasonably democratic meeting of minds, a judicial feast of reason and flow of soul?

Flip-side: There was the case of a ‘foreign’ Chief who always sat with the second in command. It did not take long for the lawyers to fathom the reason. In almost two years of his stay at the helm the venerable Chief never authored a single judgment and left the unpleasant job to his deputy.

Order XXI Rule 64 C.P.C. If by Sale of a Portion or one among other Items of Property the Decree Debt would be Wiped off,
Court should not order Sale of Whole Property
Decisions known to all but Consolidated for Easy Reference

(By N.Subramaniam, Advocate, High Court of Kerala, Ernakulam)

1. There is a duty cast upon the Court under Order XXI Rule 64 to sell only such property or a portion thereof as necessary to satisfy the decree. It is a mandate of court which cannot be ignored.

AIR 1990 SC 119 (Ambati Naria Sayya v. M.Subba Rao).

1996 (1) KLT 319 (Parvathy Antharjajam v. Indian Bank).

(1994) 1 SCC 131 at 150 (para.17) (Deshbandhu Gupta v. N.L. Anand and Rajinder Singh).

2. Only such of property as is necessary to satisfy debt need be sold even under SARFAESI Act. This is particularly so, since there is nothing inconsistent in that regard in SARFAESI Act under which sale is proposed to be conducted by Bank.

2013 (2) KLT 944 = 2013 (3) KLJ 43 = ILR 2013 (2) Ker.961 (Anilkumar v. Catholic Syrian Bank Ltd.)

2015 (2) KLT SN 77 (C.No. 87) = 2014 (4) KLJ 30 = ILR 2015 (2) Ker.182 (Augusty v. Catholic Syrian Bank Ltd.).

1990 (1) KLT SN 28 (C.No.28) SC (Narasayya v. Subba Rao).

1990 (2) KLT 956 = 1990 (2) KLJ 889 (Appukuttan v. Janardhanan).

1995 (1) KLJ 495 = ILR 1995 (2) Ker.406 (Karambil Ice and Cold Storage Co. v. S.B.T.)

3. That portion of property ‘necessary to satisfy the decree’ indicates that portion of property which would be sufficient to satisfy the decree is only to be sold. This is not just a discretion but an obligation on the part of the court - sale without examining this aspect is illegal.

2006 (1) KLT 926 (SC) = AIR 2006 SC 1456 (Balakrishnan v. Malaiyandi Konar).

4. Under Order XXI Rule 64 it is mandatory for the court to examine whether whole of the attached property of judgment debtor or a portion alone is to be sold to satisfy decree.

 2009 (2) KLT 30 (George v. Shirley Varkey).

5. Where the amount specified in sale proclamation, for the recovery of which the sale is ordered is realized by sale of certain items, the sale of other items should be stopped. If they are sold, the sale would be vitiated and set aside even if no objection made by judgment debtor.

AIR 1977 SC 1789 (Takkaseela v. Padmavathamma).

6. It is not necessary to sell the entire attached portion if decree can be satisfied by sale of portion of it and not vice versa. It cannot be the intention of the legislature that no sale can be made if valuation of property is not sufficient to satisfy the decree.

AIR 2005 All. 270 (Habib Sheikh v. State of U.P.).

7. Under Order XXI Rule 64 a duty is cast on the court. Thus where the court did not apply its mind, the court sale was one without jurisdiction. If it was one without jurisdiction and nullity, application can be made only under S.47 and not under
Order XXI Rule 90.

(1998) 122 Mad.LW 550 (Subramaniyan v. Sadaya Padayachi).

8. The rise in property rates after confirmation of sale is not reason enough to set aside an otherwise valid sale.

2007 AIHC 1714 (ICICI Ltd. v. HICO Products Ltd.).

9. The court cannot, after the sale has been confirmed, go into the question of legality of sale for violation of Rule 64.

2006 (1) KLT 926 (SC) = AIR 2006 SC 1458 (Balakrishnan v. Malaiyandi Konar).