Andhra HC (Pre-Telangana)
G. Swaroopa Rani vs Central Bank Of India, Hanamkonda ... on 3 February, 2006
Equivalent citations: 2006(3)ALD116, 2006(3)ALT486, AIR 2006 (NOC) 679 (ANDH PRA)
ORDER P.S. Narayana, J.
1. This Court ordered notice before admission on 10-11-2005. The first respondent, Central Bank of India, Hanamkonda Branch, the plaintiff in the suit, the only contesting respondent had been served. None respondents R.I.
2. G. Swaroopa Rani, the 1st defendant in O.S. No. 27 of 2003, on the file of III-Additional Senior Civil Judge (Fast Track Court), Warangal had raised an objection for the marking of three documents as promissory notes dated 6-8-1996, 3-5-1999 and 30-3-2000. The objections raised were two fold that these documents are not stamped as under provisions of Section 11 of the Indian Stamp Act, 1899 (hereinafter referred to in short as "the Act" for the purpose of convenience). Yet another objection is that they are not properly cancelled under Section 12(3) of the Act. The learned Judge, in the light of the decision of this Court in Gurana Asirinaidu v. Lenka Suryanarayana , came to the conclusion that the objections raised by the revision petitioner-1st defendant in the suit are untenable and came to the conclusion that the documents in question are admissible in evidence. Aggrieved by the same, the present civil revision petition is filed under Article 227 of the Constitution of India.
3. Sri Ghanshyamdas Mandhani, the learned Counsel representing the revision petitioner had taken this Court through Section 11(a) of the Act aforesaid and would maintain that in view of the word "not" used in Section l1(a) of the Act, the prohibition to use adhesive stamps in relation to promissory notes, is an imperative prohibition. The learned Counsel also would maintain that though at least on a couple of occasions the self same question arose for consideration before this Court, the learned Judges who had decided those matters had not taken serious note of the word "not" and came to the conclusion that the language is permissive and ultimately held that such documents are admissible in evidence. The learned Counsel had also incidentally touched the other objection raised in relation to Section 12(3) of the Act. The learned Counsel also would maintain that at any rate when the legislative intent is clear, if there is any undue hardship, it is for the Parliament to amend the law suitably and the Courts cannot legislate. The learned Counsel placed strong reliance on a decision reported in Morvi Merchantile Bank Ltd. v. Union of India .
4. Heard the learned Counsel and perused the impugned order.
5. The learned Judge, in fact had appreciated the contentions of the learned Counsel representing the 1st defendant, the present revision petitioner, recorded reasons and ultimately came to the conclusion that the objections raised are not proper. Section 11 of the Act dealing with use of adhesive stamps reads as hereunder:
The following instruments may be stamped with adhesive stamps, namely:
(a) instruments chargeable with a duty not exceeding ten naya 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.
Section 10 of the Act dealing with Duties how to be paid reads as hereunder:
(1) Except as otherwise expressly provided in this Act, all duties with 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. (2) The rules made under Sub-section (1) may, among other matters, regulate:
(a) in the case of each kind of instrument - the description of stamps which may be used;
(b) in the case of instruments stamped with impressed stamps - the number of stamps which may be used;
(c) in the case of bills of exchange or promissory notes the size of the paper on which they are written.
Section 12 of the Act dealing with the cancellation of adhesive stamps reads as hereunder:
(1)(a) Whoever affixes any adhesive stamp to any instrument chargeable with duty which has been executed by any person shall, when affixing such stamp, cancel the same so that it cannot be used again; and
(b) Whoever executes any instrument on any paper bearing an adhesive stamp shall, at the time of execution, unless such stamp has been already cancelled in manner aforesaid, cancel the same so that it cannot be used again.
(2) Any instrument bearing an adhesive stamp which has not been cancelled so that it cannot be used again, shall, so far as such stamp is concerned, be deemed to be unstamped.
(3) The person required by Sub-section (1) to cancel an adhesive stamp may cancel it by writing on or across the stamp his name or initials or the name or initials of his firm with the true date of his so writing, or in any other effectual manner.
Rules 3, 5, 13 and 17 of the Indian Stamp Rules also may be referred to in this context.
6. In Gurana Asirinaidu v. Lenka Suryanarayana (supra), the learned Judge while dealing with a similar question observed in Paras 11 and 12 as hereunder:
In view of the above position of the Rules as well as the decisions referred to, there is no prohibition as to the execution of a promissory note on an impressed stamp paper. What is required for a valid promissory note is that it should be stamped properly, as provided under the Act and the Rules. Section 10 of the Act refers the mode of duties to be paid. As per this provision except as otherwise expressly provided in the Act, all duties with which any instrument chargeable shall be payable and such payment shall be indicated on such instruments by means of stamps. Further, as already referred to, Section 11 where the word 'may' is used, is indicative of the choice for the executant of the document. A promissory note executed using impressed stamp paper or adhesive stamps are equally valid and admissible in evidence, provided that they are stamped with requisite value.
In view of the above, as the disputed document is admittedly executed on an impressed stamp paper of the value of Rs. 5.00, which is more than the requisite value, it should be treated as a valid document executed with the requisite stamp duty, as provided under the Act and the Rules.
7. In Sree Rama Power Loom Weavers Co-operative Production and Sales Society Ltd. v. Syndicate Bank, Warangal 1987 (1) LS 260, the learned Judge while dealing with the use of adhesive stamps for bills of exchange and objections raised in respect of prohibition use thereof, held that:
there is no prohibition in Section 11 that adhesive stamps shall not be made on any instruments other than those mentioned in Clauses (a) to (e) in Section 11 and Section 11 can be considered as only permissive provision in view of the expressions, may be stamped.
8. In Pachipulusu Krishna Murthy and Ors. v. Munilal 1978 LS 40, the learned Judge of this Court while dealing with Section 11(a) read with Section 48(a) of the Act held that the Stamp Act does not prohibit the use of adhesive stamps for the promissory notes. Similar view was expressed in P. Moorthy v. A.R. Kothandaraman and Somdatta v. Abdul Rashid and also in Gujjala Hanumanthappa and Ors. v. S. Bala Rangaiah .
9. The main contention raised by the learned Counsel for the revision petitioner is that in view of the fact that the language being imperative under Section 11(a) of the Act, the Courts are not expected to legislate and if this Central Legislation is to be suitably amended. It is for the Parliament to do so. Strong reliance was placed on Morvi Merchantile Bank Ltd. v. Union of India, (supra). There cannot be any doubt or controversy relating to this proposition of -law. The object of the Act, being fiscal legislation, also may have to be considered while deciding questions of this nature. Broadly, the object appears to be that the governmental revenue or public exchequer should not suffer. In the back drop of this object, the legislation referred to supra and also in the light of the constant view that had been taken by this Court at least which can be traced from a period of about three decades, the question now is whether a long standing precedent of this nature to be disturbed in the facts and circumstances of the case. Taking into consideration the object of the Act referred to supra, this Court is satisfied that this is not a case to be interfered under Article 227 of the Constitution of India especially in view of the limitations while exercising powers under the said Constitutional provision.
10. Viewed from any angle, the civil revision petition is devoid of merits and accordingly the same shall stand dismissed. No costs.