The stamp duty payable on an instrument is determined by the form and recitals of the instrument itself, and not by the substance of the transaction.

( 1 ) THIS case was referred to the High Court by the Chief controlling Revenue Authority (Board of Revenue, Andhra Pradesh, Hyderabad), for a determination of the question, whether the document in question is a power of attorney, or a mortgage with possession.

( 2 ) THE facts leading to the reference may shortly be stated. P. A. J. Seetharamaraju and two others (hereinafter called "the applicants") presented a document entitled power of Attorney dated 20-8-1962, to the Sub Registrar, Cheepurupalli, for registration. The Sub Registrar referred the document to the District Registrar, Srikakulam, who, by his order dated 4-1-1963, acting under Section 38 (2) of the Indian Stamp Act (Act 2 of 1899) hereinafter referred to as the act), took the view that the document is a mortgage with possession for Rupees 1,50,000 requiring a stamp duty of Rs. 12,000 under Article 35 (a) of the Act. But, as the document bore a stamp only of Rs. 11-50, the District Registrar Directed the sub-Registrar to collect the balance of stamp duty of Rs. 11,988-50, together with the penalty of Rs. 5.

( 3 ) AGAINST that order, a revision was preferred by the applicant to the Board of Revenue, under Section 56 (1) of the Act. The Board of Revenue relying upon four conditions in the document viz. , (1) the firm of Lala Gopikrishna Gokuldas (hereinafter called "the agents") shall work on behalf of the applicants the mines mentioned in Schedules A and B to the plaint in Os. No. 46 of 1961 on the file of the Subordinate Judges Court, Srikakulam; (2) the agents may. In their discretion, appropriate the net sale proceeds towards the decree amount due to them; (3) the applicants agree not to revoke, cancel, or modify the power of attorney in question unless and until the amount due to the agents under the compromise decree is completely discharged; and (4) there should be an accounting and ascertainment of the net sale proceeds worked out during the period, and appropriated to the decree amount, coupled with the fact that the agents were put in possession of the properties (mines and the mining ore) was of the opinion that the properties were held as security in satisfaction of the decree debt, and that that document is, therefore a usufructuary mortgage. It was also of the opinion that as the document in question came within the description of both "power of attorney" as well as "mortgage with possession", in schedule I, it is chargeable with the higher of such stamp duties under Section 6 of the Act.

( 4 ) IN order to appreciate the question in controversy, a few more facts may be stated.

( 5 ) THE agents filed OS. No. 46 of 1961 on the file of the Subordinate Judges court, Srikakulam, against 18 defendants, 1 to 3 of whom were the applicants, for recovery of Rs. 2,71,336-6-3, said to be due to the firm as financing and selling agents under agreements executed in its favour by defendants 1 to 3. It was prayed in the plaint that a decree may be granted for Rs. 2,71,336-6-3, with subsequent interest defendants 1 to 3, and against the charged properties mentioned in Schedules A and B attached to the plaint, in the hands of any of the defendants and for sale of the charged properties for realisation of the amount decreed. A decree was prayed against defendants 1 to 3 and 4 to 10 for an account of the Manganese ore stocks and the assets raised or received by them since 30-6-1956 and against defendants 1, 3, 7 and 8 for account and for other reliefs. This suit was eventually compromised between the parties on 19-8-1962. The petition to compromise was filed in Court on 21-8-1962 and a decree was passed by the Court on 22-8-1962.

( 6 ) THE compromise decree provided, inter alia, that there shall be a decree for Rs. 1,50,000 against defendants 1 to 3 and 8, and that the same shall, without prejudice to the other rights of the agent (decree-holders) under the succeeding clauses of the compromise be a charge on the mines and the mining ores specified in Schedu