Andhra HC (Pre-Telangana)
Allani Lingaiah vs Paidimarri Sathya Babu, Sarpanch And ... on 19 November, 1996
Equivalent citations: 1997(3)ALT805
ORDER S. Dasaratharama Reddy, J.
1. Respondent No. 1/Plaintiff filed suit - O.S. No. 43 of 1992 on the file of the District Munsif, Kodad, Nalgonda district, against the petitioner/defendant for recovery of a sum of Rs. 8,600/- contending that the petitioner borrowed Rs. 7,440/- and Rs. 5000/- from the second respondent under two different pronotes and paid only Rs. 3,300/- and that the respondent No. 1 was holder in due course. During the course of trial, when the first respondent wanted to mark the documents, the petitioner took objection stating that as the documents are not stamped, they are not admissible in evidence. The Court below held that these two documents are promissory notes and directed the first respondent-plaintiff to pay the deficit stamp duty and penalty on them. Aggrieved by this order, the petitioner has come up with this revision.
2. Mr. M. Rajamalla Reddy, the learned Counsel for the petitioner contends that the two documents being pronotes cannot be admitted in evidence, even after paying necessary stamp duty and penalty in view of Section 35 of Stamp Act. In order to determine the controversy, first the nature of the document has to be determined. The documents are almost identical except in one document the amount is stated as Rs. 5000/- to be repaid immediately after Deepavali, while in another document the amount is mentioned as Rs. 7,440/- payable immediately after Ugadi. One document is extracted hereunder:
(Telugu Portion - Omitted) The translated copies of the documents have not been filed by the parties. From the recitals of the documents, it is seen that the petitioner has borrowed a sum and agreed to repay the same without interest immediately after Deepavali or Ugadi as the case may be. Both the documents are attested by one common witness viz., N. Jagannadham. The endorsement on the back of the two deeds dated 27-12-1991 shows the transfer of the deed by the second respondent in favour of the first respondent. Thus the instruments in question are attested by a witness and not payable to order or bearer.
3. As I entertained a doubt - whether the finding of the Court below that the documents are promissory notes is correct, I asked the learned Counsel for the petitioner to address his arguments on this question.
4. The learned Counsel for the petitioner contends that the two documents are promissory notes and in support of his contention, he relied on the following two decisions of this Court:
(i) Bahadurrinisa Begum v. Vasudev Naick, .
(ii) Smt. Pulluru Vajramma v. More Agaiah, (NRC).
5. In the first case, Justice Gopal Rao Ekbote, as he then was, held that if in an instrument there is a promise to pay a certain sum of money to a certain person unconditionally, merely because it does not contain the words "order or bearer" it cannot be said that it is not a promissory note within the meaning of Section 2 (22) of the Stamp Act, 1899, read with Section 4 of the Negotiable Instruments Act, 1881. It was further held that in order to bring an instrument within the meaning of Bond as defined under Section 2 (5) (b) of the Stamp Act, the instrument must have been attested by a witness and must not be made payable to order or bearer and if any one of the two things is absent from an instrument, then Section 2 (5) (b) is not attracted. In that case, the borrower agreed to repay the amount to the lender on demand and the document was neither attested nor was made payable to bearer or order.
6. In the second case, the document did not contain the expression 'or his order'. Only on the ground that the words 'or his order' are not present, the trial Court held that it is not a promissory note. Allowing the revision, the Hon'ble the Chief Justice, A. Samba Siva Rao held that the absence of words 'or order' will not affect the instrument and it will be promissory note within the meaning of Section 4 of the Negotiable Instruments Act.
7. The decision of Division Bench of this Court in State Bank of Hyderabad v. Ranganath Rathi, , is clearly against the petitioner. In that case arising under the Hyderabad Stamp Act, the question arose as to whether the instrument whereunder a person agrees to repay the amount and which is not payable to order or bearer and which is attested by a witness falls within the meaning of bond or promissory note. The facts of that case are similar to the facts of the present case. In that case, as in the present case the borrower promised to repay to the lender a particular sum on demand. It was attested by a witness. The document was affixed with the stamp as required for the promissory note. The question was whether the instrument is a bond and is not admissible in evidence as it is insufficiently stamped. Section 2 (4) (b) of Hyderabad Stamp Act which is analogous to Section 2 (5) (b) of the Indian Stamp Act defines bond as including any instrument attested and not payable to order or bearer, whereby a person agreed to pay money to another. Section 2 (18) of the Hyderabad Stamp Act, which is analogous to Section 2 (22) of the Indian Stamp Act, adopts by reference the definition of Promissory note in Section 3 of the Hyderabad Negotiable Instruments Act, which in turn is analogous to Section 4 of the Negotiable Instruments, Act. It defines promissory note as an instrument in writing containing unconditional undertaking, signed by 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. On these facts, the Division Bench following the decision of earlier Division Bench in Ramakistaiah v. Yellappa, held that the document falls within the definition of Section 2 (4) (b) of the Hyderabad Stamp Act, similar to Section 2 (5) (b) of the Indian Stamp Act, as it was attested by a witness and not payable to order or bearer. The decision in Bhadurinnisa Begum's case (supra) noticed this decision and distinguished it on the ground that in that case the document was not attested. The decision in Smt. Pulluru Vajramma's case (2 supra) has not noticed the decision of the Division Bench. Further from the report it is not clear - whether the instrument was attested by a witness. The discussion centered round on the words 'or his order'. Thus this decision also is not of any assistance to the Counsel for the petitioner. In view of the Division Bench decision in State Bank of Hyderabad' case (supra), I hold that the instruments in question are bonds and not promissory notes and the finding of the Court below that they are promissory notes is not correct. Hence, they are admissible in evidence on payment of deficit stamp duty and penalty, as required under proviso to Section 35 of the Indian Stamp Act. If the first respondent pays the deficit stamp duty and penalty as required under proviso to Section of 35 of the Indian Stamp Act, the document may be admitted in evidence.
8. The C.R.P. is accordingly disposed of. No costs.