Chamibai and Others Vs Siddhnath and Others (Madhya Pradesh High Court)
Summary: The Madhya Pradesh High Court, Indore Bench, in Chamibai and Others Vs Siddhnath and Others, dismissed a petition filed under Article 227 of the Constitution of India challenging the rejection of an application for temporary injunction under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908. The dispute arose from a suit for specific performance of an agreement to sell immovable property. The principal question was whether the plaintiffs could obtain temporary protection against alienation of the suit property and interference with their possession when the agreement forming the basis of their claim was insufficiently stamped and unregistered. The Court held that the statutory requirement of payment of stamp duty could not be bypassed even at the interlocutory stage and that an insufficiently stamped agreement could not be relied upon to establish rights or possession for obtaining temporary injunction.
The plaintiffs claimed that they had entered into an agreement with defendant Nos. 1 and 6 for purchase of the disputed property for a total consideration of ₹2,35,000. According to their case, they had paid earnest money of ₹2,00,000 and had been placed in possession of the property. They asserted that they had continued in possession but the defendants failed to execute the sale deed despite repeated requests. Consequently, the plaintiffs instituted a suit for specific performance of the contract and simultaneously sought an injunction restraining the defendants from alienating the property or interfering with their possession.
The Trial Court rejected the application for temporary injunction, principally because the agreement relied upon was neither duly stamped nor registered. The appellate court also declined to interfere. The plaintiffs therefore approached the High Court under Article 227, contending that their contractual rights and possession deserved protection pending disposal of the civil suit. The controversy required the High Court to examine the legal consequences of non-payment of proper stamp duty and whether a document suffering from such a defect could be considered for granting interim relief.
The High Court referred to its earlier decision in Kailash Vs Bhagwatilal and Others, 2025 SCC OnLine MP 57, wherein the issue of granting temporary injunction on the basis of an unstamped and unregistered agreement in a suit for specific performance had been examined. The earlier decision had held that payment of stamp duty was a condition precedent even for consideration of an application for injunction. The Court reiterated that an instrument chargeable with stamp duty cannot be admitted in evidence for any purpose, including a collateral purpose, unless the statutory requirements have been satisfied. This principle was considered applicable to claims for interim protection based upon an agreement to sell.
The judgment also reproduced the earlier discussion of Amit Dixit, in which reliance had been placed upon K.B. Jayaram Vs Navineethamma, AIR 2003 Karnataka 241, Narbada Prasad Agrawal Vs Tarun Bhawasar, (2009) 1 MPLJ 176, and Avinash Kumar Chauhan Vs Vijay Krishna Mishra, (2009) 2 SCC 532. These authorities were considered for the principle that an unstamped or insufficiently stamped instrument cannot be admitted in evidence even for collateral purposes until the relevant deficiency is cured. The Court emphasised that a claim for temporary injunction cannot be considered on the basis of such an instrument merely by leaving payment of stamp duty and penalty for a later stage.
The High Court further referred to the decision in Milind Baghade, which had considered whether temporary injunction could be granted on the basis of an unregistered and unstamped agreement to sell. In that case, the Court had declined to grant such relief and had examined the surrounding facts, including the consideration mentioned in the agreement and whether possession had actually been delivered. By relying on these authorities, the High Court reaffirmed the requirement that the agreement forming the foundation of the asserted right must satisfy the applicable stamp duty requirements before it can be relied upon for interim relief.
Applying the principles to the present dispute, the High Court observed that the agreement relied upon by the plaintiffs was executed on stamp paper valued at only ₹50, despite the stated sale consideration of ₹2,35,000. The stamp duty payable was admittedly substantially greater than ₹50. Consequently, the document was insufficiently stamped and was also unregistered. The Court held that no relief, including temporary injunction, could be granted to the plaintiffs on the basis of this document. It further observed that the agreement could not be considered even for the collateral purpose of proving possession. The Court also noted the substantial delay between the alleged agreement and institution of the suit for specific performance.
Accordingly, the Madhya Pradesh High Court found no error in the concurrent orders of the courts below refusing temporary injunction. It affirmed those orders and dismissed Miscellaneous Petition No. 7195 of 2024. The decision illustrates the distinction between asserting contractual rights over immovable property and satisfying the statutory requirements governing the admissibility of the instrument relied upon to establish those rights. It also highlights the significance of proper stamping and the evidentiary consequences of deficiently stamped agreements in proceedings seeking interim relief.
Cases Discussed
1. K.B. Jayaram Vs Navineethamma (Karnataka High Court); AIR 2003 Karnataka 241. Cited in the judicial extract concerning the requirement to pay stamp duty and penalty before an agreement to sell can be considered for granting temporary injunction.
2. Narbada Prasad Agrawal Vs Tarun Bhawasar (Madhya Pradesh High Court); (2009) 1 MPLJ 176. Relied upon in the reproduced precedent for the principle that an insufficiently stamped instrument cannot be admitted in evidence even for a collateral purpose.
3. Avinash Kumar Chauhan Vs Vijay Krishna Mishra (Supreme Court); (2009) 2 SCC 532. Relied upon for the interpretation of Section 35 of the Indian Stamp Act and the inadmissibility of an insufficiently stamped document for any purpose, including collateral purposes.
4. Amit Dixit (Madhya Pradesh High Court). Referred to in the extracted judgment in Kailash concerning the necessity of paying stamp duty before an application for temporary injunction is considered. The complete case identification is not stated in the uploaded judgment.
5. Milind Baghade (Madhya Pradesh High Court). Referred to in the extracted judicial discussion for the principle that an unstamped and unregistered agreement cannot form the basis for granting temporary injunction. The uploaded judgment does not provide its complete citation.
6. Kailash Vs Bhagwatilal and Others (Madhya Pradesh High Court); 2025 SCC OnLine MP 57. Directly relied upon by the High Court for the proposition that payment of stamp duty is a condition precedent to the consideration of temporary injunction based on an agreement to sell.
FULL TEXT OF THE ORDER OF MADHYA PRADESH HIGH COURT
This petition under Article 227 of the Constitution of India has been preferred by the petitioners/plaintiffs being aggrieved by the orders passed by the Courts below whereby their application under Order 39 Rule 1 and 2 of the CPC has been rejected.
2. The plaintiffs have instituted an action against the defendants for specific performance of contract dated 05.08.2003. As per them, they had entered into the said agreement with defendants 1 and 6 for a total consideration of Rs.2,35,000/- upon payment of earnest money of Rs.2 Lakhs followed by delivery of possession. They are in possession since then but the defendants have not executed the sale deed in their favor despite repeated requests.
3. Along with the plaint, the plaintiffs also filed an application under Order 39 Rule 1 and 2 of the CPC praying for issuance of temporary injunction restraining the defendants from alienating the suit property and interfering with their possession over the same. The application was contested by the defendants and has been rejected by the Courts below primarily on the ground that the agreement to sale dated 05.08.2023 is neither registered nor is sufficiently stamped hence on the basis of the same no relief can be granted to the plaintiffs.
4. I have considered the submissions of the learned counsel for the plaintiffs and have persued the record.
5. The issue as regards seeking temporary injunction in a suit for specific performance of contract which is unstamped and unregistered has already been adjudicated upon by this Court in the case of Kailash versus Bhagwatilal and others, 2025 SCC online MP 57 in which it has been held that payment of stamp duty is a condition precedent for considering prayer for injunction also. Unless duty is paid on an instrument, it shall not be admitted in evidence for any purpose including collateral purpose. On the basis of an unregistered and unstamped agreement prayer for temporary injunction cannot be considered. It has been held as under:
“9. In Amit Dixit (supra) this Court held that payment of stamp duty is condition precedent for considering prayer for injunction also. Unless duty is paid on an instrument it shall not be admitted in evidence for any purpose including collateral purpose. The very basis for establishing right i.e. agreement to sell cannot be considered unless it is duly stamped. It was held as under:
“12. This point is no more res integra. AIR 2003 Kar 241 (K.B. Jayaram v. Navineethamma), Justice Tirath S. Thakur (as His Lordship then was), opined that no instrument chargeable with duty shall be admitted in evidence “for any purpose” by any person or even by consent of parties. In para 4 of said judgment, it is held that the court below should first insist upon payment of stamp duty and penalty on the agreement to sale before it. Thereafter, only prayer for injunction could have been considered. The order of court below was disapproved where it has issued injunction subject to payment of stamp duty and penalty. Thus, payment of stamp duty is condition precedent for considering the prayer for injunction also. This Court in (2009) 1 MP LJ 176 (Narbada Prasad Agrawal v. Tarun Bhawasar), opined that unless a duty is paid on an instrument it shall not be admitted in evidence for any purpose including collateral purpose. The Apex Court in (2009) 2 SCC 532 (Avinash Kumar Chauhan v. Vijay Krishna Mishra), opined as under:—
“25. Section 35 of the Act, however, rules out applicability of such provision as it is categorically provided therein that a document of this nature shall not be admitted for any purpose whatsoever. If all purposes for which the document is sought to be brought in evidence are excluded, we fail to see any reason as to how the document would be admissible for collateral purposes.”
13. In the light of aforesaid, it is clear that the very basis for establishing right i.e. agreement to sell cannot be considered, unless it is duly stamped. The courts below have not committed any error in rejecting the injunction application because the document was not stamped. In view of this conclusion, it is not necessary to deal with other points raised by the parties………………..”
10. Further in Milind Baghade (Supra) this Court considered the question whether on the basis of unregistered and unstamped agreement prayer for issuing temporary injunction can be considered and held that the same cannot be done. It was held as under:
“13. In the light of the law laid down by the Hon’ble Apex court and High courts, it is clear that very basis for establishing the right for example agreement to sale cannot be considered unless it is duly stamped. It is also noteworthy that agreement to sale between both the parties for the suit property which is cost of huge amount of Rs. 2,39,00,000/-, the respondent/plaintiff had allegedly paid only Rs. 5,00,000/. Admittedly the possession of suit property was never delivered to respondent and in the entire agreement, there is no recital regarding delivery of possession” .
6. In the present case, the agreement to sale on the basis of which the plaintiffs claim reliance was executed in the year 2023 on a stamp paper of Rs.50/-. The consideration stated therein is two like Rs.2,35,000/-. The stamp duty payable thereupon was admittedly much more than Rs.50/-. The document is hence deficiently stamped. The same is also unregistered. Thus on the basis of this unstamped and unregistered document no relief including relief of temporary injunction can be granted to the plaintiffs nor can the same be considered even for collateral purpose of proving possession. It is also to be noted that though the agreement is of the year 2003 the suit for its specific performance has been filed after a period of 19 years in the year 2024.
7. Thus, in view of the aforesaid discussion, I do not find any error having been committed by the Court below in rejecting plaintiff’s application for issuance of temporary injunction. The impugned orders are hence affirmed, as a result of which the petition is dismissed.
