HINDUSTAN STEEL LTD. versus M/S. DALIP CONSTRUCTION COMPANY

Citation: [1969] 3 S.C.R. 736 · Decided: 18-02-1969 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Dismissed

Cited by 4 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

7 36 
HINDUSTAN STEEL LTD. 
v. 
M/S. DALIP CONSTRUCTION COMPANY 
February 18, 1969 
A 
[J. C. SHAH, V. RAMASWAMI AND A. N. GROVER, JJ.] 
B 
bufion Stamp Act, ss. 35, 36 ~ 
42r-Unstamped document filed in 
.::oUTt-lmpounded-Whether can be acted upon after payment of duty 
and. penalty. 
The dispute between the appellant and the respondents in relation to 
a c:Pntract were referred in accordance with their contract to arbitration. 
The award was filed in the District Court and notice of filing was given 
to the parties. The appellant applied to the Court under ss. 30 and 33 
of the Indian Arbitration Act, 1940 to have the award set aside on the 
around inter alia that it was unstamped. The District Judge ordered the 
doannent to be impounded and directed that an authenticated copy of 
the instrument be sent to the Collector together with a certificate in writ-
ing •tatin.g the receipt of the amount of duty and penalty. Against tha\, 
order the appellant moved the High Court of Madhya Pradesh in exercise 
of ita revision3.i jurisdiction. The High Court rejected the petition. By 
special leave appeal was filed in thill Court. Relying on the difference ia 
tho phraseology between ss. 35 and 36 it was urged that an instrument 
which is not duly stamped may be admitted in evidence on payment of 
duty and penalty, but it cannot be acted upon because s. 35 operates as 
a bar to the admission in evidence of an instrument not duly stamped as 
well u to its being acted upon, and the Legislature has by s. 36 in the 
conditiona set out tbeuin removed the bar only aaainst admission in 
evidttlce of the instrument. 
HELD: The appellant's argument ignored the true import of s. 36. 
By that section an instrument once admitted in evidence shall not be 
oalled in question at any stage of the same suit or proceedings on the 
ground that it bas not been duly stamped. S:ction 36 does not, prohibit 
a challenge against an instrument that it shall not be acted upon becau.e 
it is not duly stamped, but on that account thc*'e is no bar against an in-
strwnent not duly stamped being acted upon after payment of the stamp 
dnty and penalty according to the procedure presc!pbed by the Act. The 
doubt if any is resolved by the terms of s. 42(2) which enact in terms 
unmistakable, that every instrument endorsed by the Collector under s. 
<42(1) shall be admissible in evidence and may be acted upon as if it l>ae 
been duly stamped. [740 C-EJ 
The Stamp Act is a fiscal measure enacted to secure revenue for the 
State on certain classes of instruments : it is not enacted to arm a litigant 
with a weapon of technicality to meet the case of his opponent. 
The 
stringent provisions of the Act are conceived in the interest of the revenue. 
Once that object is secured according to law, the party staking his claim 
on the instrument will not be defeated on the ground of the initial defect 
in the instrument. Viewed in that light the scheme is clear. Section 35 
of the Stamp Act operates as a bar to an unstamped instrument being 
admitted in evidence or being acted upon, s. 40 provides the procedure 
for the instrument being impounded, sub... (I) of s. 42 provides for 
certifying that an instrument is duly stamped, and sub-6. (2) of s. 42 
enacts the consequences resulting from such certification. [740 F-G] 
c 
D 
E 
F 
G 
H 
A 
c 
D 
E 
F 
G 
H 
HINDUSTAN STEEL V, DALIP CONST. CO. (Shah, J.) 
737 
Ob.ervations of Desai, J. in Mst. Bittan Bibi and Anr. v. Kantu Lill 
•n« Anr., l.L.R. [1952) 2 All, 984, disapproved. 
Civn, APPELLATE JURISDICTION : Civil Appeal• 'No, 2425 
ot 1968. 
Appeal by special leave from the judgment and order daled 
August 30, 1968 of the Madhya Pradesh High Court in Civil 
Revision No. 764 of 1967. 
C. K. Daphtary, and /. N. Shroff, for the appellant. 
Rameshwar Nath and Mahinder Narain for the respondent. 
The Judgment of the Court .. was delivered by 
Shah, J. The respondents entered into a contract witJa 
Hindust!lj]l Steel Ltd. for 'raising, stacking, carting natl load-
i-.g into wagons limestone at Nandini Mines". 
Dispute whicJa 
arose between the parties was referred to arbitration, pursaant 
to cl. 61 of the agreemQ!J!. 
The arbitrators differed, and the 
dispute was referred to an umpire who made and published his 
award on April 19, 1967. The umpire filed the award in the 
Caurt of the 
District Judge, 
Rajnandgaon 
in the State of 
Madhya Pradesh and gave notice of the filing of the award to 
tbe parties to the dispute. On J

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