Stamping of Documents

Filed in Court

Proceedings

Ruwan Fernando

District Judge, Mawanella

Introduction

Stamp duty payable on instruments and documents was regulated by Ordinance No:22 of 1909. The said ordinance, as amended from time to time, was in force till the end of 1982. On 1st of January 1983, the Stamp Duty Act No: 43, of 1982 came into operation replacing the said Ordinance.

Documents filed in court attract stamp duty to the value of the appropriate class except those that are exempt by the Stamp Duty Act. Section 2 of the said Act(1)* states inter alia that there shall be charged a stamp duty at the prescribed rate, on every document presented or filed in civil proceedings instituted in the Supreme Court, the Court of Appeal, the District Court or in the Admiralty proceedings instituted in the High court. Different rates are prescribed in respect of different classes or categories of instruments, and documents.

Documents In Relation To Legal Proceedings

The word Document in section 71 of the Stamp Duty Act .No:43 of 1982, has been amended by stamp duty (Amendment) Act No: 71 of 1988(2)

Document in relation to legal proceedings in any court means an appointment of Attorney, plaint, answer, replication, or other pleading, petition, application, affidavit, appointment, summons, Judgement, decree, order of any description award, writ warrant inventory account mandate, bond, recognizance, citation, application other than motion, interrogatories, answer to interrogatories, notice of appeal bill of costs commission injunction or notice.

In Volanka Limited v. Attorney General(3) the District Judge made order that stamp duty to the value of the appropriate class should be tendered in respect of Judgement and decree made by the court. In appeal, Court of Appeal held

a) section 2(b) and section 14 of the Stamp Duty Act speak of documents filed or presented in or to court. Judgement and decree in a particular civil proceeding.

pronounced, delivered or drawn up by the court in such a proceeding do not attract stamp duty.

Thus the court ruled that no stamp duty to the value of the appropriate class is leviable on Judgement and decree which the court is enjoyed to make in the performance of its functions.

Under section 2(b) of the stamp duty Act every document presented or filed in civil proceedings instituted in the Supreme Court, or the Court of Appeal or a District Court or in admiralty proceedings instituted in the High Court shall be charged with stamp duty at the prescribed rate. But only the first 10 documents are liable to be stamped.

Exemptions to Stamp Duty on Documents in Court Proceedings

1. * Affidavit or affirmation made on the request of any public officer or in compliance with any requirement imposed by any written law.

2. The following documents filed in legal proceedings.

(a) all documents filed in Magistrate’s Court and primary courts and all documents filed for the purpose of criminal proceedings in any other court.

(b) documents filed in any court by public officers suing or being sued or intervening, virtue office, in any proceedings in such court.

Thus when a public officer is a party in a civil action, all documents that are filed on his behalf are exempt from stamp duty under section 5(14) (b) of the Stamp Duty Act.

(c) documents filed in any court by a person duly admitted to sue, defend or intervene as a party in any proceedings instituted in such court.

(d) all documents filed in any court by a person applying to be declared as insolvent by such court.

(e) all documents filed in any court for the purpose of an application for an order in the nature of a writ of habeas corpus.

(f) motions filed in any court.

(g) warrants issued by any court, whether on application or on its own motion

(h) document filed in co-operative societies cases*(5)document filed in a court of law in pursuance of the provisions of section 59 of the Co-operative Societies Law No: 5 of 1972.

(i) Document in legal Aid cases (6)

AH documents by or on behalf of any person who is certified by the administrator of the Legal Aid scheme approved under the Legal Aid Law No:27 of 1978, or any officer duly authorised by him in that behalf as suing defending or intervening with legal aid provided under the said law.

(j) Plaintiffs in motor Accident cases.(7)

All documents filed in any court by or on behalf of any person claiming damages arising from death or damage caused by a motor vehicle.

(k) Documents filed in partition cases.(8)

All pleadings processes and, all documents filed or produced in a partition action, shall be exempt from stamp duty.

The Supreme Court has decided in an unreported case.*(9) that the papers filed by way revision to the Supreme Court in partition cases are free of stamp duty, as in appeals from partition cases.

STAMP DUTY ON AFFIDAVITS.

Affidavit is a document in relation to legal proceedings in any court. Therefore an affidavit presented or filed in court proceedings is chargeable with stamp duty. But there is an exception to this:

under section 5(1) of the Stamp Duty Act. An Affidavit or affirmation made on the request of any public officer or in compliance with any requirement imposed by any written law is exempt from stamp duty.

In Sarath Perera Nanayakkara v. University of Peradeniya*(10) it was held that section 5(1) of the Stamp Duty Act exempts two categories of affidavits.

1) affidavits made on the request of a public officer.

2) affidavits made in compliance with any requirement imposed by any written law.

The criteria upon which the exception is granted is the purpose of making the particular affidavit in category (1) the purpose of making the affidavit is to meet the request of a public officer in category (11) the purpose is to meet the

requirement imposed by written law. Since the exemption is granted on the basis of these specified purposes the exemption should apply not only to the stage at which the affidavit is made. But also to the stage when it is used for the stated purposes thus an affidavit made at the request of a public officer will be exempt from stamp duty at the stage it is presented to that public officer. Similarly an affidavit made in compliance with any requirement imposed by any written law will be exempt from stamp duty at the stage it is presented or filed in compliance with such written law. Thus an affidavit filed in support of an application for leave to appeal is exempt from stamp duty at the time it was made and it was filed in the proceedings.

Stamping of Pleadings

Section 39 of the Civil Procedure Code states every action of regular procedure shall be instituted by presenting duty stamped written plaint

The second proviso to section 46(2) empowers court to reject a plaint when the plaint is insufficiently stamped and the plaintiff on being required by the court to supply the requisite stamps within a time to be fixed by the court fails is do so.

Similar provisions are found in the Civil Procedure Code in respect of stamping of the answer. Section 73 states if the defendant does not admit the plaintiffs claim, he shall himself or his registered attorney shall on his behalf deliver to the court a duly stamped written answer: Under section 75. every such answer shall be duly stamped. Under section 77. If any answer is substantially defective in any particulars herein before defined or is argumentative or prolix or contains matters irrelevant to the action the court may reject the answer or return it for amendment.

Under section 79 a replication filed shall be subject to the rules prescribed by section 75 relative to the form and substance of the answer. Therefore, a replication has to be stamped and the provisions relating to the rejection and returning of the answer will be applicable to a replication. Now I shall discuss the case law dealing with pleadings unstamped or insufficiently stamped and subsequent tender of stamp duty in pleadings. In Sandanam v. Jamaldeen*(11) H. N, G Fernando C. J at p 147 held it is useful now to consider the case of plaint which is unstamped or insufficiently stamped. Section 36 of the Civil Procedure Code (section 2(h) requires the court to reject a plaint if it is written on paper insufficiently stamped and the plaintiff on being required by the court to supply the requisite stamps within a time to be fixed by the court fails to do so. This means that the court is bound to afford to the plaintiff an opportunity to supply the deficiency in stamping. In Jayawickrema v. Amaratunga* (12) Pereira J held when a plaint or answer is not rejected by a District Judge under. Section 46 or section 77 of the Civil Procedure Code the presumption is that the Judge has adjudicated in favour of the party who had tendered the pleading on the question as to the sufficiency of the stamp thereon. When a plaint or answer is accepted as the result of the inadvertent omission

on the part of the court to consider the question of the sufficiency of stamp duty. It may be that before any step in the regular course of procedure is taken by the opposite party. The court may return the pleading to be properly stamped, but generally speaking, where an insufficiently stamped pleading is accepted after consideration of the sufficiency of stamp duty or inadvertently, the remedy, if any exists, is by means of such action as the Attorney General as representing the crown, to which all stamp duties are a debt, may be deemed to be entitled to take NO Objection can be taken by a defendant in his answer on the ground of the insufficiency of the stamp on a plaint. In Wijeratne and Another v. Weeratunga *(13) the question that arose in this case was whether the failure to stamp the proxy was fatal. The proxy filed by the defendant along with the statement of objections had not been stamped. The plaintiff filed objections to the acceptance of the papers of the defendant. It was held that the Civil Procedure Code makes it clear that neither in regular actions (section 39) nor in answer filed under section 75, is there any requirement that the documents should be stamped at the time of presentation. There is no explicit or implied provision for denial of the acceptance of the document presented to court contained in these aforesaid sections. Section 46 (2) shows that the court is bound to afford to the plaintiffs an opportunity to supply the deficiency in stamping. Thus it is clear that insufficiency of stamping is not a fatal defect.

In Yousoob Mohomed and Another v. Indian Overseas Bank*(14) Edussuriya J held section 39 of the Civil Procedure Code sets out that every action shall be instituted by presenting a duly stamped plaint. However there is no provision which directs the rejection of a plaint which is not duly stamped or a dismissal of an action on that basis. Where a plaint is insufficiently stamped due to any annexures which have been filed as part and parcel of the plaint not being duly stamped the court cannot reject to entertain the plaint or dismiss the action. But must necessarily call for the deficiency in stamps.

In De Silva v. Hassanally *(15) where a plaint insufficiently stamped is accepted by the court and the plaintiff on an objection raised by the defendant supplied the deficiency of stamp duty. Held that the irregularity was cured and that the action should not be dismissed.

In Sita Rajasingham v. Maureen Seneviratne and another. *(16)

Where a petition filed by a defendant under section 86 of the Civil Procedure Code bore no stamps. D. J rejected the petition proper stamp duty was late tendered, but after the lapse of 14 day period Dheeraratne J held inter alia.

1. As far as se 86 is concerned there is no expressed or implied requirement that the petition should be stamped at the time of its presentation.

2. Section 2(b) of the stamp duty Act does not require that a document should be stamped at the time of its

presentation

3. The proper course should have been for the court to call for the deficiency of stamps to be supplied by the party who tendered that document.

STAMPING OF THE NOTICE OF APPEAL

The Notice of Appeal-Section 755(1) of the Civil Procedure Code states every notice of appeal… shall be duly stamped provided that where the appeal is lodged by the Attorney-General no such stamps shall be necessary.

According to section 755(3) of the Civil Procedure Code petition of appeal shall be exempt from stamp duty.

In Brook Bond (Ceylon) Ltd v. Gunasekera*(17) it was held that it is the notice of appeal that has to be duly stamped and not the petition of appeal. The petition of appeal is exempt from stamp duty.

Is non- stamping or insufficiency of stamping of the notice of appeal at the time of its presentation fatal?

This question has been discussed in a number of cases. I will now deal with the full bench decision in the case of Salgado v. Peiris – (18) I must mention here that this case was decided when the old Civil Procedure Code was in operation which required a proper stamp to be produced at the time of presentation of a written petition of appeal. But under the present Civil Procedure Code it is the notice of appeal that has to be stamped and not the petition of appeal.

Salgado v. Peiris was a decision on non -stamping of a petition of appeal to the Supreme Court in terms of section 755 (before the amendment No. 20 of 1977) at the time of its presentation. This section by implication required a proper stamp to be produced at the time of presentation of a written petition of appeal. It was held in this case that a petition of appeal must bear stamp duty.

This is an undoubted authority for the proposition as the law stood before the Civil Procedure Code amendment of 1977 that a petition of appeal to the Supreme Court should be rejected if it is not sufficiently stamped on the day of its presentation and the court has no power to allow it to be stamped after the time of appealing has expired.

Under section 755(1) of the present Civil Procedure Code, a notice of appeal shall be stamped. But this section does not expressly or impliedly provide for the rejection of a notice of appeal stamped if it is not sufficiently on the day of its presentation. If the notice of appeal is found to be insufficiently stamped, the proper course should be for the court to call for the deficiency of stamp’, to be supplied by the party tendered the document.

Can a District Judge reject the notice of appeal if the deficiency of stamps is supplied although the appealable period had lapsed?

Under section 754(4) of the Civil Proce lure Code a notice of appeal shall be presented to the District court within a

period of 14 days from the date when the decree or order appealed against was pronounced.

This question was discussed in British Ceylon Corporation Ltd v. The United Shipping Board.*ii9) In this case Gravin SPJ stated it is well settled by the Judgment of this court that when it is found that a petition of appeal is not stamped or not duly presented according is law and must be dismissed. Such a petition may not be stamped after the expiry of the appealable time.

The failure to stamp the notice of appeal under section 755(1) of the Civil Procedure Code and section 33 of the Stamp Duty Act was considered in the case of Kithsiri v. Weerasena.*(20) In this case the Plaintiff presented the notice of appeal to the District Court within the period of 14 days set out in section 754(4) but failed to duly stamp the notice of appeal as required by section 755(1). The deficiency of stamps was supplied by the plaintiff shortly after the expiry of the 14 days contemplated by section 754(4). G.P.S. De. Silva C.J. held that he provisions in section. 755(1) of the Civil Procedure Code which requires the notice of appeal to be duly stamped is imperative. However the Court of Appeal has jurisdiction to grant relief to the appellant in terms of section 759(2) of the Code in respect of the mistake or omission in supplying the required stamp fee.

Therefore, when the notice of appeal is not stamped or insufficiently stamped at the time it was presented, the District court must call for the deficiency in stamps to be supplied before the expiry of the 14 days contemplated by section 754(4) of the Civil Procedure Code. The District Court cannot call for the deficiency in stamp to be supplied after the expiry of the 14 days contemplated by section 754(4). However, if the notice of appeal has been filed in the District court within the period of 14 days set out in section 754(4), but the deficiency in stamp was supplied after the expiry of the 14 days contemplated by section 754(4), the District Court cannot reject the notice of appeal, the District Court as set out in section 755(4), should forward the case record to the Court of Appeal with its observations. The Court of Appeal has jurisdiction to grant relief to the appellant in terms of section 759(2) in respect of the mistake or omission in supplying the required stamp fee.

Conclusion

The insufficiency of stamping is not a fatal defect. There is no requirement under the Civil Procedure Code that stamps should be supplied at the time of its presentation or that a document field without stamps is valueless and therefore should be rejected or that such document which is unstamped should be rejected. A right of a party to maintain a proceeding cannot be denied to that party on the ground of insufficiency of stamping of a document, unless the law expressly or impliedly provided for such denial.

In conclusion, the observation of the Privy Council in Karunapejjalage Bilinda v. Wellawa Attadassi Thero(21) is of significance.

“It would be an unfortunate and probably unintended result of the stamp ordinance, if a litigant should be debarred from an appeal on a ground which is from a practical point of view capable of easy remedy without injustice to anyone”

FOOTNOTES

1. Stamp Duty Act No. 43 of 1982 2. Stamp Duty Act (Amendment) Act No 71 of 1988-sec. 19 3. 1984 1. Sri. L. R. 210 4. Stamp Duty Act No. 43 of 1982 -sec. 5 5. Stamp Duty (Amendment) Act. No. 6 of 1996 -sec 2 6. Stamp Duty (Amendment) Act. No. 71 of 1988 -sec 4 7. Stamp Duty (Amendment) Act. No. 71 of 1988 -sec. 4 8. Partition Act. Sec. 74(1) 9. S. C. Application No. 219/1976-Reported in B. A. S. L. Newsletter- May-Jan-1978 Decided on 21.03.1978 10. C. A. Application No LA/149/90 D. C. Kandy Case No. 16798/MR decided on 15.03.1991 11. 71 N.L.R. 145 12. 17 N. L. R. 174 13. 1999 1. Sri. L. R. (part 12)332 14. 1999. 3. Sri. L. R. 278 15. 37 N.L.R.436 16. 1995.2 Sri. L. R. (part 3) 69 17. 1990. 1. Sri. L. R. 71 18. 12 N. L. R. 319 19. 36N.L. R. 257 20. 1997 1 Sri, L. R. 70 21. 47 N. L. R. 79