Holding

The question of possession transfer under the power of attorney is a factual issue requiring evidentiary determination, and the objection to insufficient stamp duty must be decided before proceeding, leading to the set‑aside of the lower courts' orders.

Summary

In a suit for partition, the plaintiffs filed the suit through power of attorney holders. The appellants sought to impound the powers of attorney under Order XIII Rule 8, contending that they were conveyances within the meaning of Article 23 of the Stamp Act (as amended by the Orissa Act, 2003) and therefore insufficiently stamped. The trial court and High Court dismissed the application, holding that the documents were properly stamped because they were registered. The Supreme Court held that whether possession was transferred at the time of execution of the power of attorney is a factual issue that must be decided on evidence, and that the objection to insufficient stamp duty should be resolved before the suit proceeds. Consequently, the orders of the lower courts were set aside and the matter remitted to the trial court to determine the admissibility of the powers of attorney.

Issues considered

Whether a power of attorney, where possession of immovable property is transferred before, at, or after its execution, constitutes a conveyance under Article 23 of the Stamp Act (Orissa amendment) and is liable to stamp duty.
Whether a document insufficiently stamped can be impounded under Section 35 of the Stamp Act.
Whether the objection to admissibility of such a document for insufficient stamp duty must be decided before the trial proceeds or can be deferred to the final judgment.
Whether the trial court and High Court erred in treating a registered power of attorney as automatically properly stamped.

Legislation cited

Code of Civil Procedure, 1908s. Order XIII Rule 4, s. Order XIII Rule 8
Indian Stamp Act, 1899 (as amended by Orissa Act No.1 of 2003)s. 35, s. 36

Subjects

Stamp dutyPower of attorneyConveyanceImpounding of documentSection 35 Stamp ActOrder XIII Rule 8Evidence admissibilityPossession transferOrissa Stamp Act amendmentCivil procedure

Judgment

644 [2020]
SUPREME COURT 1 S.C.R. 644
REPORTS [2020] 1 S.C.R.

A M/S. Z. ENGINEERS CONSTRUCTION PVT. LTD. & ANR.
v.
BIPIN BIHARI BEHERA & ORS.
(Civil Appeal No. 1627 of 2020)
B FEBRUARY 14, 2020
[S. ABDUL NAZEER AND HEMANT GUPTA, JJ.]
Stamp Act, 1899 (as amended by Orissa Act no.1 of 2003
w.e.f 20.01.2003): s.35; Art.23 – Code of Civil Procedure, 1908 –
Or.XIII r.8 – Impounding of a document (power of attorney) for
C
insufficient stamp duty – Suit for partition filed by plaintiffs-
respondents through power of attorney holders (PW-1) – During
cross-examination of PW-1, appellants filed application under
Or.XIII r.8 to impound the power of attorneys (POAs) on the ground
that such POAs ought to be treated as conveyance within the meaning
D of Art.23 of Stamp Act as amended in Orissa State and in view of
that they were insufficiently stamped and, therefore, in terms of s.35
of Stamp Act, the POAs are liable to be impounded and cannot be
admitted in evidence unless an appropriate stamp duty is paid –
Trial court and High Court dismissed the application observing that
since it is a registered document, therefore, it is properly stamped –
E
Held: The question whether possession was transferred at the time
or after execution of such POA is a question of fact which is required
to be decided by the Court at the time of final decision, after evidence
is led by the parties and not merely on the basis of recitals in POA –
Such process would be fair and reasonable keeping in view the
F provisions of Orissa Act – In the facts of the instant case, the
objection relating to deficiency in stamp duty on POA which the
appellants claimed to be conveyance, would depend upon the finding
regarding delivery of possession in terms of POA – Generally
speaking, such objection is required to be decided before
proceeding further – However, in a case where evidence is required
G
to determine the nature of the document, it is reasonable to defer
the admissibility of a document for insufficient stamp duty at the
time of final decision in the suit – Therefore, order passed by trial
court and High Court set aside – Matter remitted to the trial court
to decide the objection of admissibility of the document on account
H
644
M/S. Z. ENGINEERS CONSTRUCTION PVT. LTD. & ANR.v. 645
BIPIN BIHARI BEHERA & ORS.

of being insufficiently stamped – Indian Stamp Orissa Amendment A
Act, 2003.
Disposing of the appeal and remitting the matter to trial
court, the Court
HELD: The trial court as well as the High Court returned
the findings on the bare reading of the power of attorney and B
observed that since it is a registered document, therefore, it is
properly stamped. But the question as to whether in terms of the
explanation inserted by the Orissa Act, such power of attorney is
liable to be stamped as conveyance, on account of the delivery of
possession at the time of execution of power of attorney or C
thereafter was not examined. The question whether possession
was transferred at the time or after execution of such power of
attorney is a question of fact which is required to be decided by
the Court at the time of final decision being adjudicated, after
evidence is led by the parties and not merely on the basis of
recitals in the power of attorney. Such process would be fair and D
reasonable keeping in view the provisions of Orissa Act.
[Paras 11, 12][650-E-G]
R.V.E. Venkatachala Gounder v. Arulmigu
Viswesaraswami & V.P. Temple & Anr. (2003) 8 SCC
752 : [2003] 4 Suppl. SCR 450 – held inapplicable. E

Ram Rattan (Dead) by LRs. v. Bajrang Lal & Ors. (1978)
3 SCC 236 : [1978] 3 SCR 963; Omprakash v.
Laxminarayan & Ors. (2014) 1 SCC 618 : [2013] 9
SCR 923; Bipin Shantilal Panchal v. State of Gujarat
& Anr. (2001) 3 SCC 1 : [2001] 2 SCR 29 – referred F
to.
Case Law Reference
[1978] 3 SCR 963 referred to Para 7
[2013] 9 SCR 923 referred to Para 8 G
[2003] 4 Suppl. SCR 450 held inapplicable Para 9
[2001] 2 SCR 29 referred to Para 10

H
646 SUPREME COURT REPORTS [2020] 1 S.C.R.

A CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1627
of 2020.
From the Judgment and Order dated 24.01.2019 of the High Court
of Orissa at Cuttack in C.M.P. No. 1534 of 2018.
Shyam Divan, Sr. Adv., Anirudh Sanganeria, Satya Smruti
B Mohanty, Ms. Shruti Agarwal, Advs. for the Appellants.
Vikas Dhawan, S.P. Das, Lakshay, Kaustubh Shukla, Advs. for
the Respondents.
The Judgment of the Court was delivered by
C HEMANT GUPTA, J.
1. Leave granted.
2. The challenge in the present appeal is to an order passed by the
High Court of Orissa on 24th January, 2019 whereby the petition filed by
the appellant under Article 227 of the Constitution of India, dismissing an
D
application filed by the appellant under Order XIII Rule 8 of the Code of
Civil Procedure, 19081 to impound the power of attorneys (Exts. 4 and
5), was dismissed.
3. The plaintiffs-respondents instituted a suit for partition through
their power of attorney holder Kishore Chandra Behera (PW-1). During
E the cross-examination of PW-1, the present appellants filed an application
under Order XIII Rule 8 of the Code to impound the power of attorneys,
Exts. 4 and 5, inter alia, for the reason that such power of attorney is to
be treated as Conveyance within the meaning of Article 23 of the Indian
Stamp Act, 18992 as amended by Orissa Act No. 1 of 2003 w.e.f. 20th
F January, 2003. The amended Schedule IA reads as under:
Schedule IA

23 Conveyance, as defined by Section 2(10) not
being a transfer charged or exempted under
No. 62:
G (a) in respect of movable property. Four per centum of the
amount or value of the
consideration as set forth in
the instrument.

1
for short, ‘Code’
2
for short, ‘Act’
H
M/S. Z. ENGINEERS CONSTRUCTION PVT. LTD. & ANR.v. 647
BIPIN BIHARI BEHERA & ORS. [HEMANT GUPTA, J.]

(b) in respect of immovable property. Eight per centum of the A
amount or va lue of the
consideration for such
conveyance as set forth
therein or the marked value
of the property whichever is
higher.

xxx xxx
B

Explanation – For the purpose of this artic le,
an agreement to sell any immovable property
or a power of attorney shall, in case of transfer
of the possession of such property before or at
the time of or after the execution of such
agreement or power of attorney, be deemed to C
be a conveyance and the stamp duty thereon
shall be chargeable accordingly.

Provided that the stamp duty already pa id on
such agreement or power of attorney shall, at
the time of the execution of a conveyance in
pursuance of such agreement or power of D
attorney, be adjusted towards the total amount
of duty chargeable on the conveyance.

4. Similarly, clause (f) of Article 48 was substituted by the
amending Act, contemplating levy of stamp duty as conveyance when
such power of attorney is given for consideration and authorising the
E
attorney to sell any immovable property.
5. The power of attorney dated 21st February, 2011 was produced
in evidence as Ex.4 on 9th July, 2008 by PW 1- Kishore Chandra Behera.
It was objected to by the present appellants. The other power of attorney
dated 4th October, 2008 was produced as Ex.5 in evidence on 7th August,
2018 which was again objected to by the present appellants. The relevant F
part of the evidence from the statement of PW 1 reads as under:
“15. …This is the original general power of attorney dtd.21.02.2011
marked Ext-4 (with obj.).
16. This is the original general power of attorney bearing No. G
10676 dtd.04.10.2008 marked Ext-5 (with obj.).”
6. It is thereafter an application was filed by the appellants on 3 rd
September, 2018 seeking direction to impound the two power of attorneys
on the ground that they were insufficiently stamped. Therefore, in terms
of Section 35 of the Act, the same were liable to be impounded and can
H
648 SUPREME COURT REPORTS [2020] 1 S.C.R.

A be admitted in evidence only if appropriate stamp duty and penalty is
paid. It is argued that in terms of the Act as amended in the Orissa State,
the power of attorney shall be treated to be conveyance if the possession
is transferred before or at the time or after the execution of a power of
attorney. It is contended though, that the cumulative reading of the power
of attorneys shows that the intention is to give an unequivocal right to
B
the attorney to sell the land. However, the fact that the possession was
transferred to the attorney was admitted when the attorney appeared as
PW-1. Therefore, in terms of explanation to Article 23, the power of
attorney is liable to be impounded and cannot be admitted unless an
appropriate stamp duty is paid.
C 7. In a judgment reported as Ram Rattan (Dead) by LRs. v.
Bajrang Lal & Ors.3, the question regarding admissibility of a document
was examined for the reason that it was not duly stamped and registered.
The learned trial court made an endorsement that the document was
“Objected, allowed subject to objection”. However, the learned trial court
D at the stage of arguments rejected the documents to be admitted for
consideration, by taking recourse to Section 36 of the Act. This Court
found that Section 36 of the Act could come into play only when an
objection regarding insufficient stamp duty was judicially determined.
Since an objection was raised which was not still judicially determined,
the recourse to Section 36 of the Act was found to be not tenable, though
E an objection was raised at the time of evidence.
8. In Omprakash v. Laxminarayan & Ors.4, the plaintiff claimed
that possession was delivered to him on the basis of an agreement to
sell. The defendant denied the delivery of possession. The question
examined was as to whether the admissibility of document produced by
F party would depend upon recitals in the documents or whether documents
are to be considered as conveyance as defined under the Act as amended
by Stamp (Madhya Pradesh Second Amendment) Act, 1990. The
amendment in the Madhya Pradesh Act is similar to that made in Orissa
Act No. 1 of 2003. The High Court accepted the plaintiff’s petition and
G set aside the demand of stamp duty treating the document to be
conveyance as ordered by the trial court.The distinguishing factor is
that, in the aforesaid case, possession was said to be delivered to the
prospective vendee in the agreement to sell itself. This Court held as
under:
3
(1978) 3 SCC 236
H 4
(2014) 1 SCC 618
M/S. Z. ENGINEERS CONSTRUCTION PVT. LTD. & ANR.v. 649
BIPIN BIHARI BEHERA & ORS. [HEMANT GUPTA, J.]

“16. From a plain reading of the aforesaid provision, it is evident A
that an authority to receive evidence shall not admit any instrument
unless it is duly stamped. An instrument not duly stamped shall 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 penalty.
B
As we have observed earlier, the deed of agreement having been
insufficiently stamped, the same was inadmissible in evidence.
The court being an authority to receive a document in evidence to
give effect thereto, the agreement to sell with possession is an
instrument which requires payment of the stamp duty applicable
to a deed of conveyance. Duty as required, has not been paid C
and, hence, the trial court rightly held the same to be inadmissible
in evidence.”
9. Learned counsel for the respondents referred to a judgment of
this Court reported as R.V.E. Venkatachala Gounder v. Arulmigu
Viswesaraswami & V.P. Temple & Anr.5 to contend that admissibility D
of document in evidence can be classified in two classes: (i) an objection
that the document which is sought to be proved is itself inadmissible in
evidence; and (ii) where the objection does not dispute the admissibility
of the document in evidence but is directed towards the mode of proof
alleging the same to be irregular or insufficient. It was held that such
objections are required to be raised when the document has been admitted E
in evidence in terms of provisions of Order XIII Rule 4 of the Code.
However, the said judgment does not deal with the objection regarding
impounding of a document for insufficient stamp duty as required under
the Act. Therefore, such judgment has no applicability to the facts of the
present case. F
10. Learned counsel for the respondents refers to another judgment
reported as Bipin Shantilal Panchal v. State of Gujarat & Anr.6 wherein
the appellant was facing a trial for the offences under the Narcotic
Drugs and Psychotropic Substances (NDPS) Act. During the course of
trial, the trial court had chosen to decide questions of admissibility of G
documents or other items of evidence, as and when objections thereto
were raised. This Court found that it is an archaic practice that whenever
any objection is raised regarding the admissibility of any material in
5
(2003) 8 SCC 752
6
(2001) 3 SCC 1 H
650 SUPREME COURT REPORTS [2020] 1 S.C.R.

A evidence, the Court does not proceed further without passing an order
on such objection. This Court found that any decision on objection is
challenged in appeal or revision which unnecessarily prolongs the trial.
Such practices proved to be hindrance which impede and restrict the
progress of trial proceedings. Such proceedings must be recast and
remodeled to give way to the acceleration of trial proceedings. It is
B
thereafter, the Court held as under:
“14. When so recast, the practice which can be a better substitute
is this: 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
C 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
D 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.)”
E
11. We find that the trial court as well as the High Court returned
the findings on the bare reading of the power of attorney and observed
that since it is a registered document, therefore, it is properly stamped.
But the question as to whether in terms of the explanation inserted by
the Orissa Act, such power of attorney is liable to be stamped as
F conveyance, on account of the delivery of possession at the time of
execution of power of attorney or thereafter has not been examined.
12. We find that the question whether possession was transferred
at the time or after execution of such power of attorney is a question of
fact which is required to be decided by the Court at the time of final
G decision being adjudicated, after evidence is led by the parties and not
merely on the basis of recitals in the power of attorney. Such process
would be fair and reasonable keeping in view the provisions of Orissa
Act.
13. We find that in the facts of the present case, the objection
H related to deficiency in stamp duty on a power of attorney which the
M/S. Z. ENGINEERS CONSTRUCTION PVT. LTD. & ANR.v. 651
BIPIN BIHARI BEHERA & ORS. [HEMANT GUPTA, J.]

appellants claim to be conveyance, depends upon the finding regarding A
delivery of possession in terms of the power of attorney. Generally
speaking, such objection is required to be decided before proceeding
further. However, in a case where evidence is required to determine
the nature of the document, it is reasonable to defer the admissibility of
a document for insufficient stamp duty at the time of final decision in the
B
suit.
14. Therefore, we find that the order passed by the trial court on
14th December, 2018 and the High Court on 24th January, 2019 are liable
to be set aside and are, thus, set aside. The matter is remitted to the trial
court to decide the objection of admissibility of the document on account
of being insufficiently stamped in light of the findings recorded, after C
evidence is led by the parties. The application dated 3rd September, 2018
filed by the appellants shall be decided along with the main suit, when
the question of delivery of possession at the time of the execution of the
power of attorney or thereafter shall be determined.
15. In view of the above, the appeal is disposed of. D

Devika Gujral Appeal disposed of.

E

F

G

H