Trial Court Cannot Demand Stamp Duty on Unregistered Partition Deed Before Stage of Evidence: Andhra Pradesh High Court Sets Aside Order

“Mere Filing of Document at Injunction Stage Doesn’t Trigger Section 35 of Stamp Act; Marking as Exhibit Before Trial Is Impermissible” – In a significant ruling on the procedural use of documents at the interlocutory stage, the High Court of Andhra Pradesh held that a trial court cannot compel payment of stamp duty and penalty under Section 35 of the Indian Stamp Act, 1899, merely because an unregistered instrument is filed during an interim injunction application.

Justice Subhendu Samanta quashed the order of a trial court in I.A. No. 477 of 2017 in O.S. No. 186 of 2017, where the court had directed the plaintiffs to pay stamp duty and penalty for marking an unregistered partition deed (Ex.P1) at the interlocutory stage. The High Court termed such direction “illegal and improper”, clarifying that impounding of instruments under Section 35 can only arise during trial when documents are sought to be admitted in evidence.

Premature Demand of Stamp Duty on Partition Deed Quashed

Andhra Pradesh High Court allowed a civil revision petition filed under Article 227 of the Constitution and set aside an order that required the plaintiffs to pay stamp duty and penalty for an unregistered partition deed filed during an injunction application.

Justice Samanta held that:

“At the stage of interlocutory application, marking documents as exhibits and demanding stamp duty under Section 35 of the Stamp Act is premature and unsustainable in law.”

The Court directed the trial court to decide the interim injunction application on prima facie satisfaction based on materials placed without treating documents as formal exhibits.

Unregistered Partition Deed Filed in IA Marked as Exhibit P1

The petitioners, plaintiffs in a suit for permanent injunction, had filed I.A. No. 477 of 2017 seeking temporary relief. In support of their claim, they relied upon an unregistered partition deed, which the trial court marked as Ex.P1, along with other documents marked as Exs.P2–P6. The respondents (defendants) also filed documents, which were similarly marked as Exs.R1–R12.

On 23 March 2022, the trial court held that Ex.P1, being an unregistered instrument, was inadmissible without payment of proper stamp duty and penalty under Section 35 of the Indian Stamp Act, 1899, and directed the plaintiffs to make such payment.

Challenging this direction, the plaintiffs approached the High Court under Civil Revision Jurisdiction.

Whether Stamp Duty Can Be Demanded at the IA Stage?

The central question before the High Court was whether a trial court can invoke Section 35 of the Indian Stamp Act and compel payment of stamp duty and penalty on an unregistered partition deed merely because the document was filed during hearing of an interlocutory application, and whether such document could be formally marked as an exhibit at that stage.

Justice Samanta held that Section 35 of the Stamp Act prohibits admission of unstamped instruments in evidence, but its application is limited to the stage where the document is formally admitted in evidence, not when merely looked into for prima facie evaluation in interlocutory matters.

“The statutory guidelines under Section 35(a) make it clear that when a party intends to admit an instrument, not duly stamped, as documentary evidence, he is required to pay stamp duty with penalty. But such stage of evidence has not been reached yet in this suit.” [Para 5]

Thus, the Court concluded:

“It is not proper for the trial court to not only mark the documents as exhibits but also to direct the petitioner to pay stamp duty and penalty at this premature stage.” [Para 6]

The High Court also emphasized that documents filed at the stage of interim injunction are only for prima facie satisfaction, and cannot be exhibited until evidence is formally led at trial.

“Exhibiting of documents is permissible only during trial when evidence is tendered; it cannot be done during interlocutory proceedings.” [Para 7]

Trial Court’s Order Held Illegal – High Court Sets It Aside

Terming the impugned direction to pay stamp duty as “illegal and improper”, the High Court quashed the trial court’s order, restoring procedural sanctity in the marking and use of documents during civil trial stages.

“The learned court below committed an error directing the petitioner to pay requisite stamp duty and penalty... Such stage has not yet been reached. Thus, the order is set aside.” [Paras 6–7]

The High Court clarified that the trial court is at liberty to consider impounding or demanding duty at the appropriate stage of evidence under Section 33 or Section 35 of the Stamp Act, but not earlier.

Trial Court Directed to Expedite Hearing and Suit Disposal

Acknowledging the long pendency of the suit since 2017, Justice Samanta issued clear directions:

• Interlocutory application (I.A. No. 477 of 2017) to be disposed of within three weeks from the receipt of the High Court’s order;
• Main suit to be disposed of within one year, preferably, without avoidable adjournments;
• Parties to remain vigilant and cooperative in the interest of justice.

Important Clarification on Use of Documents During Interlocutory Stage

This judgment reaffirms an important procedural safeguard: courts cannot compel payment of stamp duty or treat unregistered documents as exhibits at a premature stage. The ruling provides much-needed clarity for litigants and trial courts on the appropriate stage for invoking Sections 33 and 35 of the Indian Stamp Act, ensuring that interim relief applications are decided on prima facie materials alone, not entangled in evidentiary formalities.

Date of Decision: 13 November 2025