Unstamped Agreement Cannot Be Basis For Granting Temporary Injunction | Bombay High Court Says Mere Admission Of Execution Does Not Cure Inadmissibility Under Stamp Act
Isabella Mariam
The Bombay High Court at Aurangabad, Single Bench of Justice S. G. Chapalgaonkar, on July 29, 2025, partly allowed a writ petition challenging concurrent orders of injunction issued by the lower courts. The Court held that the unregistered and insufficiently stamped agreement in question was inadmissible in evidence even for collateral purposes and thus could not be relied upon to grant interim relief concerning possession. While modifying the trial court and appellate court orders, the High Court directed that the petitioner shall be restrained only from alienating the suit property, and the portion of the injunction order protecting the respondent's alleged possession was quashed and set aside.
The petitioner, the original defendant, was the owner of the suit land. According to the petitioner's contention, the agreement entered into on 26.06.2020, referred to as "tabe-isar-pavti," was merely for the development of the land and did not constitute a formal agreement to sell. Under the terms stated in the document, the respondent/plaintiff was permitted to develop the land into plots and sell them, and in return, the defendant would receive the consideration amount in instalments.
An initial amount of Rs. 2,00,000/- was paid as earnest money, followed by further instalments on 08.07.2020 and 11.11.2020. Eventually, a total of Rs. 22,00,000/- was paid by the respondent to the petitioner. The petitioner agreed to execute "bharna-pavtis" periodically and assist in document execution for prospective purchasers. The final sale deed for the balance land was to be executed by 25.06.2022, contingent on the full payment of the consideration.
The plaintiff contended that he had fulfilled his obligation to pay the agreed consideration and had requested the defendant to clear the encumbrances, which the defendant failed to do. The petitioner, in response, contended that the plaintiff did not meet the timelines and obligations under the agreement, particularly in relation to the development and sale of plots.
Despite admitting the receipt of Rs. 22,00,000/-, the petitioner maintained that the nature of the agreement was not one of outright sale but a development arrangement. He further stated that possession of the land was never delivered to the plaintiff.
The trial court, however, passed an order of temporary injunction restraining the petitioner from alienating the suit property or disturbing the possession of the respondent/plaintiff. This order was subsequently upheld by the District Judge in appeal.
The petitioner challenged the orders on the grounds that the document dated 26.06.2020 was neither registered nor sufficiently stamped, being merely notarised on a bond paper worth Rs. 100/-. The primary argument was that the document, being inadmissible in evidence due to statutory requirements under the Indian Stamp Act, could not form the basis for granting interim relief, particularly regarding possession.
In support of his argument, the petitioner relied on the judgment of the Hon’ble Supreme Court in Avinash Kumar Chauhan v. Vijay Krishna Mishra, 2009 AIR SCW 979, wherein it was held that an instrument lacking the requisite stamp duty cannot be considered even for collateral purposes.
The respondent countered by submitting that objections regarding stamping and registration could be dealt with at the time of evidence, citing the Supreme Court judgment in Ameer Minhaj v. Dierdre Elizabeth (Wright) Issar, 2019 (3) Mh.L.J 550, which allows for impounding of such documents at a later stage.
Additionally, the respondent referred to Merces Builders Private Limited v. Shaikh Mohammad Hanif Bepari & Others, 2017 (5) AllMR 401, to argue that questions of admissibility can be postponed until the stage of evidence.
The High Court carefully considered both positions and examined the factual matrix, including the existence and nature of the agreement, the payment of part consideration, and the question of delivery of possession. It was noted that while the execution of the document and payment of money were admitted, the defendant firmly denied that possession had been handed over.
The High Court observed that the lower courts had placed reliance on the contents of the document to infer that possession had been delivered and accordingly issued injunction orders.
Justice S. G. Chapalgaonkar recorded, "It can be observed that agreement to sell is neither registered nor sufficiently stamped. It is executed on Rs. 100/- bond paper and notarized. It stipulates delivery of possession of suit property in favour of plaintiff."
The Court stated the statutory prohibition under Section 35 of the Indian Stamp Act, stating, "No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped."
Referring to Avinash Kumar Chauhan, the Court further stated, "There is total and absolute bar as to admission of unstamped instrument, unless there is compliance with requirements of provisos to Section 35."
"If unstamped instrument is admitted even for collateral purpose, it would amount to receiving such document in evidence for a purpose which is prohibited under Section 35 of Stamp Act," the Court noted, clarifying that the bar is applicable irrespective of whether the purpose is primary or collateral.
The Court also referred to the Karnataka High Court decision in Smt. Dyavamma Alias Sanna Mukkamma v. Smt. Balamma and Others, ILR 2010 KAR 3280, noting that an unstamped instrument cannot be acted upon or even considered for interim relief until it is impounded and the required duty and penalty are paid.
Citing Yellapu Uma Maheswari & Another v. Buddha Jagadheeswararao & Others, (2015) 16 SCC 787, the Court reiterated that payment of stamp duty and penalty is a precondition to relying on such documents, even for collateral purposes.
"Looking to the scheme under the provisions of Stamp Act and law espouses in aforesaid judgments, it is apparent that so-called document of agreement to sell could not have been considered for any purpose for accepting plaintiff's case," the Court recorded.
Nevertheless, the Court acknowledged the admitted fact that the document was executed and Rs. 22,00,000/- was received. However, it noted, "If contents of agreement to sell are ignored for want of its admissibility, there is nothing on record to depict that plaintiff has received possession of suit property and even exact nature of transaction cannot be ascertained at this stage."
The Court held that the lower courts erroneously assumed possession based on the inadmissible document, stating, "The Courts have erroneously observed that prima facie value of document could be adjusted at the time of granting interim injunction; however, such observations are not in tune with legal position."
The High Court, in conclusion, issued the following directives: "The impugned judgment and order dated 21.09.2022 passed by learned Joint Civil Judge Senior Division, Beed below Exhibit-5 in Special Suit no.93 of 2022 which is confirmed by learned District Judge, Beed vide order dated 10.05.2023 in Misc. Civil Appeal No.91 of 2022 is hereby modified."
It further stated, "Respondent (defendant) or anybody on his behalf is hereby temporarily restrained from alienating suit property by any mode of transaction."
However, the Court declared, "Order of temporary injunction passed against defendant to not to disturb possession of plaintiff over suit property is hereby quashed and set aside."
"Rule made absolute in aforesaid terms," the Court concluded.
Advocates Representing the Parties:
For the Petitioners: Mr. J. M. Murkute, Advocate
For the Respondents: Mr. E. S. Potdar, Advocate
Case Title: Salim Baig v. Sayyad Nawid
Neutral Citation: 2025: BHC-AUG:19926
Case Number: Writ Petition No.13409 of 2023
Bench: Justice S. G. Chapalgaonkar
