Once Unstamped Document Is Produced, Court Has No Choice But to Send It for Stamp Duty Assessment: Gujarat High Court Slams Trial Court’s Refusal as Illegal

“Delay Cannot Defeat Statutory Duty – Trial Court Must Comply With Stamp Act When Document Is Filed” - In a significant reaffirmation of procedural obligations under the Gujarat Stamp Act, 1958, the Gujarat High Court ruled that a trial court cannot refuse to send an unstamped document for adjudication by the Collector merely on the ground of delay in production. The Court held that once such a document is brought on record, the trial court is statutorily bound to impound it and refer it to the Collector, and any refusal amounts to a gross jurisdictional error.

Justice Maulik J. Shelat set aside the Principal Civil Judge’s order dated 13.09.2022, which had rejected the petitioners’ application solely on the ground that the document was submitted after a nine-year delay.

The High Court clarified:

“No time limit was prescribed in the earlier direction. Once the document was produced, it became the trial court’s legal duty to impound and refer it under Sections 33, 34, and 37 of the Gujarat Stamp Act. Delay is irrelevant when the law commands mandatory action.”

“Trial Court Can’t Ignore Its Own Direction to Send Unstamped Document for Stamp Duty Inquiry – Delay No Excuse for Inaction”

The case arose from Regular Civil Suit No. 5 of 2000 before the Principal Civil Judge, Chotila. The dispute involved unregistered and insufficiently stamped documents (Mark 23/24 and 51/1), which the petitioners sought to rely upon. In an earlier order dated 29.03.2011, the trial court had directed the petitioners to produce the original documents for necessary action under the Stamp Act, and this order was confirmed by the Gujarat High Court on 22.02.2012 in SCA No. 7646/2011.

However, after the petitioners submitted one of the original documents (Mark 205/1) in December 2019, the trial court, in its 2022 order, rejected the application to send it to the Collector, citing delay of nine years.

The High Court found this approach to be legally indefensible and contrary to the mandatory scheme of the Stamp Act.

“Impounding Is Not Discretionary – It Is Mandatory Under Section 33 Once Document Comes Before the Court”

The High Court pointed to Section 33(1) of the Gujarat Stamp Act, which imposes an unambiguous obligation:

“Every person having by law authority to receive evidence shall, if it appears to him that such instrument is not duly stamped, impound the same.”

Once the original document was placed before the court, the judge had no discretion to ignore it or delay action. Justice Shelat emphasized:

“It was the duty of the Trial Court to impound the documents produced in original which are not duly stamped. Thereafter, as per the provisions of the Stamp Act, it is mandatory to refer it to the Collector.”

The Court further explained that Section 34 prohibits admission of unstamped instruments unless duty and penalty are paid, while Section 37 prescribes the manner of forwarding such documents to the Collector.

“Trial Court’s Refusal Is Contrary to Law and Its Own Earlier Direction – High Court Exercises Article 227 Jurisdiction”

Justice Shelat held that the trial court’s action was not only contrary to statute, but also in violation of its own previous order. The Court noted:

“The Trial Court, especially when not acting pursuant to its own order below Exhibit-116, committed gross irregularity while rejecting the application.”

The High Court invoked Article 227 of the Constitution to intervene, stating that the trial court’s reasoning was perverse, erroneous, and unsustainable in law. It ruled that delay in producing the document could not override a statutory requirement:

“The question of delay in submitting the application pales into insignificance... There is no time limit prescribed by the Trial Court in its earlier order. The obligation to impound and refer is independent of delay.”

“Once Document is Referred, Collector Must Hold Inquiry and Return It for Consideration of Exhibit”

In its concluding directions, the High Court ordered:

“The trial court shall send the original document (Mark 205/1) to the Stamp Duty Inspector/Collector for necessary action in accordance with law.”

Upon receipt, the Collector must conduct an inquiry, determine the stamp deficiency and penalty, and after recovery, return the document to the trial court. Only then will the trial court be empowered to consider whether it can be exhibited, in accordance with Section 34 of the Stamp Act.

The Court added: “On receipt of the document duly stamped, an appropriate order be passed by Trial Court in regard to its exhibit, after affording opportunity to all concerned.”

This judgment delivers a clear and authoritative interpretation of the Gujarat Stamp Act, particularly Sections 33, 34, and 37, reaffirming that once an unstamped or insufficiently stamped document is produced in court, the obligation to act under the Stamp Act is automatic and mandatory.

The Gujarat High Court has sent a strong message that procedural obligations under statutory law cannot be ignored under the guise of delay, and that trial courts must adhere to both judicial directions and statutory mandates without exception.

Justice Shelat’s ruling ensures that no party can be prejudiced by procedural neglect and that the adjudicatory process remains compliant with statutory duty and fair trial principles.

Date of Decision: 03.11.2025