Once a Document Is Admitted in Evidence, Its Stamp Defect Cannot Be Reopened: Madras High Court

“Equitable Mortgage of 2009 Cannot Be Defeated by 2012 Amendment”, In a significant ruling clarifying the legal position on equitable mortgages in Tamil Nadu, the Madras High Court  held that a Memorandum of Deposit of Title Deeds executed in 2009 did not require compulsory registration.

The Division Bench comprising Justice N. Sathish Kumar and Justice R. Sakthivel allowed the appeal under Section 96 of the Code of Civil Procedure and set aside the Trial Court’s refusal to grant a preliminary mortgage decree. The Court held that the amendment mandating registration of memorandum of deposit of title deeds came into force only on 01.12.2012 and cannot operate retrospectively.

The judgment also reinforces the bar under Section 36 of the Indian Stamp Act, 1899, observing that once a document is admitted in evidence without objection, its admissibility cannot be questioned at a later stage of the same proceedings.

The plaintiff had filed O.S. No. 10 of 2013 seeking recovery of Rs. 68,33,000/- with interest and enforcement of an equitable mortgage allegedly created by deposit of title deeds.

According to the plaintiff, the first defendant borrowed Rs. 25 lakhs on 16.09.2009 and executed a promissory note. On the following day, 17.09.2009, he deposited the original title deeds at Kancheepuram with an intention to create an equitable mortgage. On 18.09.2009, he executed a confirmation letter acknowledging the deposit. Subsequently, on 17.10.2009, he borrowed an additional Rs. 15 lakhs and executed another promissory note.

It was further alleged that after creating the mortgage, the first defendant executed a settlement deed dated 09.03.2010 in favour of his brother, the second defendant, with an intention to defeat the plaintiff’s rights.

The Trial Court, after trial, held that the borrowal and execution of promissory notes and confirmation letter were proved. However, it declined to grant a preliminary mortgage decree on the ground that the confirmation letter (Ex.A2) was unregistered and therefore could not create a valid mortgage. Only a personal money decree was granted.

Aggrieved by denial of mortgage relief, the plaintiff preferred the present appeal.

Proof of Execution and Consideration: Findings Not Challenged

The Division Bench noted that the Trial Court had clearly found that Exs.A1 and A3 promissory notes and Ex.A2 confirmation letter were executed by the defendant.

The Court observed:

“Execution of the document has been clearly established on record.”

The evidence of PW1 and the attesting witness PW2 remained unshaken. The Trial Court had also taken note of the handwriting expert’s opinion regarding the defendant’s signature. Additionally, Ex.A9 bank statement established withdrawal of Rs.48 lakhs, thereby proving the source of funds.

Significantly, the defendants had not filed any cross appeal or cross objection challenging these findings. The Bench therefore remarked:

“Without there being any cross appeal/cross objection, now the defendant namely the respondents cannot take different stand in the argument.”

The High Court concluded that execution of the documents and borrowal of Rs.40 lakhs stood clearly proved, and the statutory presumption attached to the promissory notes was not rebutted.

“Stamp Objection Cannot Be Raised After Admission” – Section 36 Applied

Before the High Court, the respondents attempted to argue that Ex.A2 was not duly stamped and hence inadmissible.

The Bench rejected this submission by invoking Section 36 of the Indian Stamp Act, which states:

“Where an instrument has been admitted in evidence, such admission shall not… be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped.”

The Court emphasized that no objection was raised at the time of marking the document before the Trial Court. Having allowed it to be admitted, the respondents could not challenge its admissibility at the appellate stage.

“Compulsory Registration Came Only From 01.12.2012” – Trial Court’s Error Corrected

The central question was whether Ex.A2 required compulsory registration.

The Trial Court had refused mortgage relief on the ground that the memorandum of deposit of title deeds was unregistered.

The High Court clarified the legal position by noting that compulsory registration of Memorandum of Deposit of Title Deeds in Tamil Nadu was introduced only by Tamil Nadu Act 29 of 2012, with effect from 01.12.2012.

The Bench categorically held:

“Registration of the agreement relating to the Memorandum of deposit of title deeds was made compulsory only with effect from 01.12.2012… prior to that there was no compulsory registration.”

Since the deposit and confirmation were made in September 2009, the amendment had no application. The Trial Court’s refusal to grant a preliminary mortgage decree was therefore legally unsustainable.

Effect of Subsequent Settlement Deed

The first defendant had executed a settlement deed in favour of the second defendant after the borrowal.

In view of the proved equitable mortgage created by deposit of title deeds in 2009, the High Court held that the plaintiff’s mortgage rights would prevail. In the event of default, the plaintiff would be entitled to proceed against the mortgaged property notwithstanding the subsequent settlement.

Allowing the appeal, the Division Bench set aside the Trial Court’s judgment insofar as it declined the preliminary mortgage decree.

The suit was decreed with costs. The first defendant was directed to pay Rs. 68,33,000/- with interest at 12% per annum on Rs.40,00,000/- from the date of plaint till decree and thereafter at 6% per annum till realization. Two months’ time was granted for payment.

The Court further held that in default of payment, the plaintiff would be entitled to seek a final decree and proceed against the mortgaged property.

Date of Decision: 11.02.2026