Supreme Court Rejects Property Sale Claim Due to Insufficient Stamp Duty

The case of Bidyut Sarkar & Anr. v. Kanchilal Pal (Dead) Through LRs. & Anr. involves a property dispute and the enforcement of a sale agreement. The Supreme Court was asked to determine whether an agreement to sell property, which was insufficiently stamped, could be admitted as evidence. The Court ruled against the plaintiff, affirming that an instrument lacking proper stamp duty is inadmissible in court, thereby restoring the trial court’s dismissal of the suit.

The dispute arose over a property transaction in Kolkata, where the plaintiff claimed to have entered into an agreement to purchase land but later found that it had been sold to another party. The plaintiff sought specific performance of the contract, but the courts debated the admissibility of the sale agreement, which was executed on insufficiently stamped paper.

Arguments Presented

Appellants’ Arguments

The appellants contended that:

• The agreement to sell dated 29.03.1999 was not properly stamped and, therefore, inadmissible under the Indian Stamp Act.
• The plaintiff did not take any concrete steps to rectify the stamp duty deficiency despite knowing the legal requirements.
• The trial court correctly dismissed the suit based on inadmissibility, and the High Court erred in overruling that decision.

Respondents’ Arguments

The respondents argued that:

• The agreement was a valid contract, and the deficiency in stamp duty should not affect its enforceability.
• The plaintiff was willing to pay the required stamp duty and penalty, making the document admissible.
• The High Court rightly allowed the claim by focusing on the intention of the parties rather than technical deficiencies.

Supreme Court’s Observations

The Supreme Court examined the Indian Stamp Act and relevant case laws, concluding:

• Under Section 35 of the Stamp Act, an insufficiently stamped document is inadmissible unless the deficiency is corrected before admission.
• The plaintiff failed to ensure the necessary stamp duty was paid, despite ample opportunity to do so.
• The High Court erred by admitting the document without confirming compliance with the Stamp Act.

Final Judgment

The Supreme Court ruled that:

• The agreement to sell was inadmissible due to insufficient stamp duty.
• The High Court’s decision to enforce the agreement was overturned.
• The trial court’s ruling dismissing the suit was reinstated.
• The appellants were directed to return Rs.5,00,000 to the plaintiff as compensation for the failed transaction.

This ruling reaffirms the principle that property agreements must comply with stamp duty requirements to be legally enforceable. The judgment serves as a cautionary precedent for property transactions, emphasizing strict adherence to legal formalities.

Read also: https://judgmentlibrary.com/land-ownership-and-public-purpose-supreme-court-verdict-on-nachimuthu-nagar-dispute/

Petitioner Name: Bidyut Sarkar & Anr..
Respondent Name: Kanchilal Pal (Dead) Through LRs. & Anr..
Judgment By: Justice Vikram Nath, Justice Prasanna B. Varale.
Place Of Incident: Kolkata.
Judgment Date: 27-08-2024.

Don’t miss out on the full details! Download the complete judgment in PDF format below and gain valuable insights instantly!

Download Judgment: bidyut-sarkar-&-anr.-vs-kanchilal-pal-(dead)-supreme-court-of-india-judgment-dated-27-08-2024.pdf