Karnataka High Court
Gujjala Hanumanthappa And Ors. vs S. Bala Rangaiah on 30 January, 1987
Equivalent citations: AIR1987KANT285, ILR1987KAR1201, AIR 1987 KARNATAKA 285, ILR 1987 KANT 1201
ORDER
1. This is a defendants' revision against the judgment and decree dated 27th July, 1985 passed by the Civil Judge, Hospet, in R. A. 16/82 affirming the judgment and decree dated 19th Oct. 1982 passed by the Munsiff, Hospet, in O. S. 3/82, decreeing the suit.
2. The plaintiff filed the suit alleging that the defendants on receiving Rs. 2000/- from him on 15-11-79 and agreeing to pay interest at 18% per annum, executed the suit pronote and also agreed to supply flowers raised by them to the plaintiff who is a wholesale dealer in flowers. It was agreed that the plaintiff should deduct the amount advanced by him for the supply of flowers to him. As the defendants failed to supply the flowers no amount could be adjusted. The defendants, notwithstanding many requests, did not return the money. Hence, the suit.
3. The defendants resisted the suit.
4. The trial court decreed the suit.
5. The defendants' appeal to the lower appellate court proved abortive. Hence, the revision.
6. The trial court, appreciating the oral evidence of the plaintiff-Bala Rangaiah and witnesses Ramappa-P.W. 2, Alla Bakash-P.W. 3, Kalappa P.W. 4 and the documents Exs. P1 to P5 and rejecting the oral evidence of Hanumanthappa, defendant No. 1 and Duggamma, defendant No. 2, concluded that the defendants had received the consideration and had failed to supply the flowers and that the defendants had executed the suit pronote. Hence, it decreed the suit.
7. The lower appellate court also affirmed the said conclusions recorded by the trial court.
8. These are pure questions of facts and do not involve any question of law. Looking to the said evidence it is not even possible to take any separate view in the matter. Therefore the conclusions of the trial court and the conclusions arrived at by the lower appellate court that the defendants on receiving consideration of Rs. 2000/- have executed the suit pronote, are unassailable and they do not require any interference.
9. Learned counsel Savanur contended that the document had been written only on an impressed stamp and that adhesive stamps had not been used and that, therefore, it was a document not duly stamped and, therefore, not admissible in evidence.
10. Learned counsel Savanur referred me to S. 2(22) of the Stamps Act which defines a pronote. It reads:
" 'promissory note' means a promissory note as defined by the Negotiable Instruments Act, 1881;
It also includes a note promising the payment of any sum of money out of any particular fund which may or may not be available, or upon any condition or contingency which may or may not be performed or happen;"
That the document in question amounts to promissory note within the meaning of Negotiable Instruments Act and the Stamp Act cannot be disputed and is not disputed at all.
11. Section 35 of the Stamp Act reads, '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: Provided that-(a) any such instrument not being an instrument chargeable with a duty not exceeding ten naye paise only, or a bill of exchange or promissory note, shall, subject to all just exceptions, be admitted in evidence on payment of the duty with which the same is chargeable, or, in the case of an instrument, insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion.' Therefore S. 35 of the Stamp Act makes it clear that if a pronote is not executed on a duly stamped paper then it cannot be admitted in evidence at all, though the party might be willing to pay the duty and penalty.
12. Then Sri Savanur referred me to Art. 49 of the Stamp Act which reads, '(a) when payable on demand- (i) when the amount or value does not exceed Rs. 250/-; Ten naya paise, (ii) when the amount or value exceeds Rs. 250 but does not exceed Rs. 1000; Fifteen naye paise, and (iii) in any other case; Twenty-five naye paise.' Art. 49 only prescribes the duty to be paid. S. 10 of the Stamp Act reads, '(1) Except as otherwise expressly provided in this Act, all duties wit which any instruments are chargeable shall be paid, and such payment shall be indicated on such instruments, by means of stamps- (a) according to the provisions herein contained; or (b) when no such provision is applicable thereto-as the State Government may by rule direct. 'Section 10 also deals with the description of the stamps to be used. S. 11 of the Stamp Act reads as:
"11. The following instruments may be stamped with adhesive stamps, namely: -
(a) instruments chargeable with a duty not exceeding ten naye paise, except parts of bills of exchange payable otherwise than on demand and drawn in sets;
(b) bills of exchange, and promissory notes drawn or made out of India;
(c) entry as an advocate, vakil or attorney on the roll of a High Court:
(d) notarial acts; and
(e) transfers by endorsement of shares in any incorporated company or other body corporate."
Therefore S. 11 only enables the execution of some documents with adhesive stamps. Perhaps this section was incorporated with a view to see that when stamps of smaller denominations could be used, it may not be necessary to use an impressed stamp. But, there is nothing in S. 11 to restrain the party from using impressed stamps though adhesive stamps might be used. Section 12 only speaks as to how adhesive stamps should be cancelled by parties. Section 13 speaks as to how the impressed stamps should be written. Section 14 speaks that only one instrument shall be written on one stamped paper and that no second instrument chargeable with duty shall be written on the same. Section 15 reads that every instrument written. in contravention of Ss. 13 and 14 shall be deemed to be unstamped. Section 15 can be read with advantage. It does not say that any instrument written in contravention of S. 11 shall be deemed to be unstamped. Section 11 says that adhesive stamps may be used on the pronote. Therefore, it is a clear indication to show that promissory notes, though written on an impressed paper, will have to be taken in law as duly stamped. Sri Savanur then drew my attention to R. 5 of Stamp Rules which reads, 'a promissory note or bill of exchange, shall, except as provided by S. 11 or by Rr.13 and 18, be written on paper on which a stamp of the proper value, with or without the word "hundi" has been engraved or embossed.' There is nothing in R. 5 to indicate that promissory note should be executed only by using adhesive stamp. Then he referred me to R. 13 of Stamp Rules which reads, "Use of adhesive stamps on certain instruments - The following instruments may be stamped with adhesive stamps, namely: -(f) Instruments chargeable with stamp duty under Arts. 19, 36, 37, 49(a)(ii) and (iii) and 52 of Schedule I" Even R. 13 only enables a party to use adhesive stamps. But, it does not prohibit the use of impressed stamps. Therefore, this rule also would not come to his rescue at all.
13. Sri Savanur then referred me to Mohanlal Kanailal v. Keshrimull Chordiya, AIR 1914 Mad 358. It was a case of a pronote written on one impressed paper to which another impressed paper containing no writing was annexed. Therefore, the Madras High Court held that as the other annexed paper had not been cancelled, as required by the Stamp Act, the pronote was not duly stamped. There is nothing in the said Madras ruling to, indicate that the pronote written on an impressed paper cannot be considered to be duly stamped. Therefore, even this ruling would not be of any help to him. Sri. Savanur then referred me to Chhabildas Mangaldass, v. Luhar Kohan Arja, . It was a case where the pronote was not executed either on an impressed paper or by using the adhesive stamp. Therefore, the Gujarat Court said that such document was inadmissible in evidence. The facts in the said case are altogether different from the facts involved in this case.
14. Learned counsel Kantharaj who argued the matter in a very able manner brought to my notice P. Moorthy v. A. R. Kothandaraman, . It was also a case where a pronote was found written on an impressed stamp paper of the value of Rs. 1-50/-. The Madras High Court after referring to the various provisions of the Stamp Act, Stamp Rules and the Tamil Nadu Rules held that a promissory note could be stamped with adhesive stamps or could be engrossed on an impressed stamp paper of proper value. The Madras High Court held that the word 'may' did not mean that adhesive stamps alone should be used. The Madras High Court referred to a decision reported in Kalwan Singh v. Bhanwarlal, ILR (1965) 15 Raj 231 which reads as, 'the rule is merely a permissive one, permitting the use of an adhesive stamp on promissory notes payable on demand when the amount or value exceeds Rs. 250/-. The rule does not lay down that such promissory note shall be stamped with adhesive stamp of the requisite value. The result is that promissory note exceeding Rs. 250/- in value can be written on a paper having an impressed stamp or it can be stamped with adhesive stamps of the requisite value.'
15. In this case the pronote has been written on an impressed stamp paper of requisite value. Therefore, both the courts below were justified in holding that the pronote had been duly stamped.
16. Then learned counsel Sri. Savanur argued that the plaintiff was a professional moneylender within the meaning of Karnataka Money Lenders Act. According to him, as the plaintiff did not comply with the provisions of S. 20 and other provision of the Money Lenders Act, the suit was bad at law. The evidence on record shows that the plaintiff is also a flower vendor and the defendants are persons growing flowers and selling them to the flower vendors. Thus, it cannot be considered to be a loan within the meaning of Money Lenders Act. It would amount to lending between two traders. The amount is advanced for the supply of flowers. It would amount to an advancement of money for supply of the articles to a regular trader. Therefore, it would be transaction between two traders themselves. Therefore, it does not come within the meaning of a loan under the Money Lenders Act. Therefore, the said argument advanced by learned counsel Sri. Savanur is rejected.
17. In the result, there is no merit in the revision and it is dismissed. All the parties are directed to bear their own costs throughout.
18. Revision dismissed.