Patna High Court
Mst. Radha Devi And Ors. vs Dhanik Lal Isser. on 11 September, 1970
Equivalent citations: AIR1971PAT378, AIR 1971 PATNA 378
JUDGMENT Shambhu Prasad Singh, J.
1. This application under Section 115 of the Code of Civil Procedure is by the defendants and arises out of a suit for recovery of dues on a deed dated 28-6-1962 for a sum of Rs. 8000/-. The deed was found to be insufficiently stamped. A controversy arose between the parties as to whether the stamp on the said deed was leviable under Article 15 or Article 49 (b) of the Schedule to the Indian Stamp Act.
2. The dispute between the parties is not really as to the amount of the deficit stamp duty but as to the nature of the document; whether it is a bond chargeable under Article 15 or a promissory note chargeable under Article 49-Under Article 49. promissory note "when payable on demand" is chargeable under Clause (a)", when payable otherwise than on demand" it is chargeable under Clause (b). Bond is defined in Section 2(5) as follows:
"(5) Bond.-- 'bond' includes --
(a) any instrument whereby a person obliges himself to pay money to another on condition that the obligation shall be void if a specified act is performed, or is not performed, as the case may be:
(b) any instrument attested by a witness and not payable to order or bearer, whereby a person obliges himself to paymoney to another: and
(c) any instrument so attested, whereby a person obliges himself to deliver grain or other agricultural produce to another."
Section 2(22) defines promissory note as follows:--
"(22) Promissory note -- "promissory note" means a promissory note as defined by the Negotiable Instruments Act. 1881 (XXVI of 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."
The question whether the document is admissible or not depends on the question whether it is a bond or a promissory note. Learned counsel for the parties have, therefore, argued the question at some length. The question is also not free from difficulty and the learned Single Judge who heard it in the first instance, therefore, referred it to a Division Bench.
3. The deed is in the form of a letter by the debtors to the creditor and is dated 28-6-1962. After paying necessary compliments it recites the necessity for borrowing the money, the amount which was being taken on loan and the rate of interest payable on it. It then says--
Wada karte hin kejar Karja asal may sun mazkur tarikh 1-1-64 esavi ko apako aday kar dense. Esliye basabut karia chithi indul talab haza likh diva ki wakht par kam aye.
It is not attested by anywitness. The two debtors have affixed their thumb impressions and signatures in the margin with endorsements that they have taken money on the terms mentioned in the letter and written the letter on demand (Chithi Indul Talab).
4. As it will appear from Section 2(22) of the Stamp Act. quoted above, it adopts the definition of the "promissory note" in the Negotiable Instruments Act and also adds something to it. It was not contended before us that the lotter referred to above would be a promissory note because of what is added bythe Stamp Act to the definition of promissory note as given in the Negotiable Instruments Act. One has, therefore, to refer to Section 4 of the Negotiable Instruments Act which defines promissory note as follows:
"4. Promissory note.-- A 'promissory note' is an instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking signed by the maker, to pay a certain sum of money only to, or to the order of a certain person, or to the bearer of the instrument."
In Venku Ramchandrashet v. Sitaram Pandurang. (1905) ILR 29 Bom 82 it was held that a document acceptine receipt of money with a promise to repay it on demand if it was attested by witnesses and not made payable to order or bearer was a bond within the meaning of Section 2 (5) (b) of the Stamp Act and not a promissory note. Learned Counsel for the petitioners submitted that this decision and similar other decisions prior to the amendment of Section 13 of the Negotiable Instruments Act in 1919, were no longer good law. True it is that by the amendment the definition of the term Negotiable Instruments was changed. Before the amendment it was necessary in order to make an instrument negotiable to insert operative words of negotiability, such as order or bearer or any other term expressing an intention on the part of drawer or maker to render it negotiable. The effect of the amendment was to make a promissory note, which was not expressed to be payable to the order or bearer but did not contain words prohibiting transfer or indicating an intention that it would not be transferable, a negotiable instrument. It is, however, important to note that by the amending Act of 1919 the definition of "promissory note" in Section 4 of the Negotiable Instruments Act was not amended and the Stamp Act adopts the definition of that term, i.e. as it is in Section 4 of the Negotiable Instruments Act. In my opinion, therefore, it is not correct to say that the decision in Ramehandrashet's case (1905) ILR 29 Bom 82 or like decisions had become bad law after the year 1919 for the purposes of the Stamp Act after the amendment of Section 13 of the Negotiable Instruments Act in 1919.
5. In Ram Narayan Bhagat v. Ramchandra Singh, AIR 1962 Pat 325 a Bench of this Court repelled argument similar to one advanced before us and followed the decision in Ramchandrashet's case. (1905) ILR 29 Bom 82. It was held that documents having been attested by witness and there being nothing in them to show that the amounts covered by them were payable to order or to the bearer came within the term bond as defined in Section 2(5) (b) of the Act. In view of the Bench decision of this Court which is binding upon us and as I find no reason to take a view different from one taken in that case. I do not propose to discuss this Question in any further detail and reject the contention of learned counsel for the petitioners that decision in Ramchandrashet's case (1905) ILR 29 Bom 82 is no longer good law.
6. Had the document which is the basis of the present suit been attested by a witness, one would have at once held it to be a bond; but as it is not attested, the case before us is not covered by the decision in Ram Narayan Bhagat's case. AIR 1962 Pat 325. The document is not covered by any of the clauses of Section 2(5) of the Stamp Act. It was contended by learned counsel for the opposite party that definition of "bond" in the Stamp Act is merely illustrative and not exhaustive and a document which is not expressly covered by any of the three clauses of the definition may still be a bond if according to terms of it. It binds a person. The expression 'includes' in the definition by itself suggests that the definition is not exhaustive but merely illustrative. But before recording a definite finding as to whether the letter with which we are concerned is a bond or not, I propose to examine the question whether it is covered by any of the two clauses of Article 49 of the Schedule to the Stamp Act. As the payment could not be enforced before 1-1-1964 it was conceded by learned counsel for the petitioners that the document was not a promissory note payable on demand as contemplated by Article 49(a). Really if the document would have been such a promissory note It was sufficiently stamped.
According to learned counsel for the petitioners, the letter was a promissory note payable otherwise than on demand because of the date 1-1-64 mentioned therein before which payment could not be enforced. Had the letter stopped there, one could have easily agreed with the contention of learned counsel for the petitioners that it may be covered by Article 49(b), but it further recites that what was being executed was a note on demand (Chithi Indul Talab). The question, therefore, which arises for consideration before us is whether a document which mentions a date before which the payment cannot be enforced and also mentions the expression "on demand" In the document is covered by Article 49 (b) of the schedule to the Stamp Act.
7. Larse number of decisions were cited before us by counsel for either party. Most of them are not relevant and therefore I do not propose to discuss them. The decision which may be of some help to the petitioners is a Bench decision of Travancore Cochin High Court in Aiyapankutty v. Mathoo Mathai, AIR 1955 Travancore Co 65. From the statements of the lower court about the document which are quoted in the decision it appears that It was a note for Rs- 1500/- payable on demand after one year. Their Lordships held that the words 'payable on demand' occurring in a promissory note means payable at once and as In the case before them the money was not payable within one year, the document was a promissory note not payable on demand covered by Article 49 (b) of the Schedule to the Stamp Act. The controversy before their Lordships was not whether the document was a promissory note chargeable under Article 49 (b) of the Schedule to the Stamp Act or as a bond. The argument advanced before them, which was rejected, was that It was a promissory note payable on demand and covered by Article 49 (a) of the Schedule to the Stamp Act. The trial court had held that it was covered by Article 49(b) of the Schedule to the Stamp Act and stamp duty was to be paid on it as bond was upheld by the High Court.
Learned counsel for the petitioners was not able to cite any other decision in which a document where the payment was to be made on demand after stipulated period was held to be a promissory note. In Chockalingam Chettiar v. Rama Mu Rama Palaniappa Chettiar, ILR 58 Mad 261 = (AIR 1935 Mad 23) a case relied on by petitioners' learned counsel, there was no stipulation in the deed itself postponing the payment for a certain period but as there was a well established usage that under a document of the nature known as Thavanal document, which was under consideration before their Lordships, the amount was not repayable within three months, it was held that it was a promissory note not payable on demand.
8. The decision which had been relied on by the trial court in support of the order impugned before us and helps the opposite party is the case of Muthu Gounder v. Perumayammal. AIR 1961 Mad 347. The document which was under consideration in that case contained a recital "I promise to pay you or your order after a period of two years on demand by you". Ramachandra Iyer J. held that as there was a recital for Payment on demand after stipulated period, making of such a demand was a condition precedent to the payment and thus there being no unconditional promise to pay in the document, it was not a promissory note within the meaning of the expression in Section 2(22) of the Stamp Act. He distinguished the decision in Alamelu Ammal v. Rangai Gounder. AIR 1945 Mad 42 on the ground that there was no stipulation in the document under consideration in that case for a demand after the stipulated period and held that the document was not covered by Article 49 (b) of the Schedule to the Stamp Act.
9. After having given due consideration to the arguments advanced before us by learned counsel for the parties and the ratio for the decisions in Aiyappankutty's case. AIR 1955 Trav-Co 65 and Muthu Gounder's case. AIR 1961 Mad 347 I respectfully agree with the view taken by Ramachandra Iyer, J. in the latter case. In both these decisions it has been held that when there is no stipulation postponing the payment, the expression 'payable on demand' in the document means that the money becomes due forthwith at once on the execution of the document. In such a case the use of the expression "payable on demand" cannot be taken to be a condition: but where the payment cannot be enforced within a stipulated period and it is stated that the debt becomes payable after that period on demand, the use of expression 'on demand' attaches a further condition and such a document is not a' promissory note within the meaning of Section 2(22) of the Stamp Act.
10. As has already been observed, the definition of "bond" in Section 2(5) of the Stamp Act is not exhaustive. By the document under consideration the debtors do bind themselves to pay the amount. Learned counsel for the petitioners was not able to show to us any other Article of the Schedule to the Stamp Act which expressly covers such a document. In the circumstances. I find no reason to differ from the view taken by the court below that the document is a bond and is chargeable under Article 15 of the Schedule to the Stamp Act.
11. For the foregoing reasons the application is dismissed but, in the circumstances of the case, without costs-
B. D. Singh, J.
12. I agree.