‘Unstamped Document Can Still Be Evidence Once Duty Paid’: Supreme Court Clarifies

The bench further stated that in an appeal preferred against the judgment of a court refusing to admit a document in evidence, the appellate court may allow such evidence if it ought to have been admitted. Should the appellate court consider that the production of a document or the examination of a witness is necessary to pronounce the judgment, such court may allow the document or evidence to be produced. Court noted that if the first appellate court allows the additional evidence to be produced, assigning reasons, it may be admitted by the court.

Court made the observations in a matter concerning an eviction suit and the admissibility of a lease deed. The bench allowed the appeal filed by the landlord, setting aside the high court's judgment and restoring the decision of the first appellate court.

The suit for eviction, filed by the landlord-appellant against the tenants (respondents), had initially been dismissed by the trial court. The suit property was situated in Cuddapah District to the extent of 80 square yards out of 1.24 cents.

On September 15, 1999, the suit property was leased out to the father of the respondent (defendant No.1) for a monthly rent of Rs 1,300 under an agreement. The defendant Nos. 1 to 3 started and ran a hotel business from the premises. They stopped payment of the rent from May 2000, which led to the landlord filing the suit for eviction due to non-payment of rent and arrears thereof.

The respondents denied the landlord-tenant relationship and submitted that a decree of eviction ought not to be directed. In their written statement, the respondents admitted the execution of a sale deed for a consideration of Rs 18,400 instead of Rs 60,000 as alleged by the landlord. They asserted that since the sale deed was executed in repayment of a loan, they had yet paid Rs 1,65,110 in total. The trial court admitted the registered sale deed into evidence but refused to admit the lease deed. Finally, the suit was dismissed in 2006, among other reasons, on the observation that the landlord-tenant relationship had not been established and that the notice under Section 106 of the Transfer of Property Act was not served.

In the appeal, the appellant sought to bring the lease deed on record by way of additional document. The first appellate court, after impounding the document and on payment of deficit stamp duty, admitted the said document. Relying upon the oral testimony of the defendant, the first appellate court concluded that, in the absence of denial of ownership and given the execution of the lease deed, the trial court's finding of not having a landlord-tenant relationship was incorrect. Consequently, the first appellate court decreed the suit, directing the eviction of the tenant.

The respondents then filed a second appeal which was allowed by the high court. The high court held that once the trial court did not admit the lease deed, the first appellate court was not correct to admit the said document and record the finding proving the landlord-tenant relationship without the trial court’s order being challenged. This resulted in the high court setting aside the judgment of the first appellate court.

After hearing the counsel for both parties, the Supreme Court noted that the suit property was admittedly sold by defendant No.1 (Respondent No.1) to the plaintiff (appellant) by a registered sale deed on September 16, 1998, upon receiving the consideration of Rs 18,400. After the purchase, the plaintiff constructed a zinc sheet shed, and about one year after the sale, the lease deed of September 15, 1999, was executed, inducting the respondent as a tenant.

To appreciate the issue of taking additional evidence on record at the appellate stage, court referred to the provision of Order XLI Rule 27 of the CPC. Court opined that in the present case, after payment of deficit stamp duty, the first appellate court admitted the document on record, and the application for additional evidence was allowed based on the subsequent event.

The bench held, "In our view, the argument as advanced by respondents cannot be countenanced and the First Appellate Court was justified in accepting the lease deed in additional evidence and to admit the same".

Court further noted that the registered sale deed executed by the respondent in favour of the appellant was not disputed by them and clearly indicated that at the time of execution of the sale deed, possession was handed over by the respondent to the appellant. The bench said, "In the written statement, it has not been explained how the defendants have re-entered in the premises after handing over of possession at the time of sale deed. In fact after construction of the zinc sheet shed by defendants, the reentry in the premises was in furtherance to the lease deed. Therefore, the lease deed was a relevant document and the First Appellate Court has rightly admitted the same by way of additional evidence after impounding".

Court stated that in the facts of the case, the respondent was inducted as a tenant with effect from September 15, 1999, approximately one year after the purchase. The respondent continued to pay rent up to April 2000; however, from May 2000, the payment of rent was stopped. As such, the lease document demonstrated that the capacity of the respondent was as a tenant in the suit premises.

Thus, the bench held, "The findings recorded by the Trial Court as well as the High Court denying the landlord-tenant relationship cannot be sustained, though the findings of the First Appellate Court was based on evidence. In our view, the First Appellate Court was justified to admit the document and relying upon the same to recognize the landlord-tenant relationship and grant decree of eviction due to non-payment of rent and the arrears while decreeing the suit."

Court decreed the suit in toto with costs throughout. It also ordered that the amount of rent, if any, deposited by the respondent and lying with the court would be permitted to be withdrawn by the appellant.

Case Title: Maddirala Venkateswarlu Vs Gonuguntla Ramesh Naidu Died By His Lrs

Bench: Justices J K Maheshwari and Vijay Bishnoi