Photocopy of an instrument cannot be impounded or validated for secondary evidence under the Stamp Act.

The petitioners (plaintiffs) entered into an Agreement to Sell dated 10.01.2015 with the respondent (defendant) for land in Kodagu for a consideration of Rs. 1.05 Crores, paying an advance of Rs. 25 Lakhs.

Due to title issues, the parties executed a Cancellation Agreement on 19.01.2016, stipulating a refund of the advance within three months.

Upon failure to refund, the petitioners filed a suit for recovery (O.S.No.19/2019).

During cross-examination, a photocopy of the Agreement to Sell was confronted to the defendant's witness and marked as Ex.P8.

Subsequently, the Trial Court allowed an application under Section 34 of the Karnataka Stamp Act (KS Act), ordering the impounding of the photocopy and imposing a penalty.

The petitioners challenged this order via a Writ Petition.

Whether a photocopy of an instrument can be impounded and validated under Sections 34 to 36 of the Karnataka Stamp Act, 1957.

Whether the objection regarding the admissibility of a document on the grounds of insufficient stamping can be raised at a belated stage after the document has been admitted in evidence.

The Court applied Section 34 of the Karnataka Stamp Act, 1957, which mandates that an "instrument" chargeable with duty is inadmissible in evidence unless duly stamped.

It interpreted the definition of "Instrument" under Section 2(1)(j) of the KS Act.

The Court primarily relied on the Supreme Court precedent in Jupudi Kesava Rao v. Pulavarthi Venkata Subbarao, which established that "instrument" refers only to the original document and excludes copies or secondary evidence from the purview of impounding provisions.

It further followed Hariom Agarwal v. Prakash Chand Malviya, which reiterated that a photocopy cannot be validated by impounding or admitted as secondary evidence under the Stamp Act.

The High Court observed that the Trial Court had relied on a Co-ordinate Bench decision (Smt. Shanthi Vijaydev) which ran contrary to settled Supreme Court mandates.

The Court reasoned that Section 34 of the KS Act (pari materia to Section 35 of the Indian Stamp Act) serves as a bar only to the "instrument" itself.

Citing Jupudi Kesava Rao, the Court held that the legislature did not intend to include copies within the definition of "instrument" for the purpose of paying deficiency and penalty.

Since the document in question was admittedly a photocopy, it did not satisfy the statutory definition of an instrument that can be impounded.

Consequently, the Trial Court's order directing the impounding of a photocopy and the affixing of a penalty was legally unsustainable.

The Court held that a photocopy of an instrument cannot be impounded or validated under the Karnataka Stamp Act, as the provisions for curing stamp duty deficiencies apply exclusively to original instruments.

All pending applications were closed.