An agreement to execute a mortgage deed, which is ancillary and contingent on the main object of the instrument, is not a "distinct matter" within the meaning of section 5 of the Indian Stamp Act, and therefore, no additional stamp duty is payable on such an agreement.

( 1 ) THIS revision raised a question of stamp duty and penalty. The document in question was described as a non-possessory mortgage deed for Rs. 2,660, dated 30th July, 1950, in favour of Suryanarayanamurthi. After reciting that the executant had become liable to pay that amount to Suryanarayanamurthi, it was stated that the creditor demanded from the executant an agreement that he should pay the said amount or, in the alternative, that he should give some immoveable property as security for the said amount and that the executant, in compliance with the said demand, executed the said document. The document then prceeds to state:"having agreed to the same, I hereby execute this agreement of non-possessory mortgage. I have received the said amount of Rs. 2,660 as stated above. I hereby undertake to pay you the said sum together with interest thereon at the rate of 61/4 per cent, by 30th October, 1950 and obtain a proper receipt for the same from you. If I fail to pay the said amount in full settlement of your debt by 30th October, 1950, I shall execute and get registered a non-possessory morlgage deed on 30th October, 1950, on a duly stamped paper as per the terms of the deed to be mentioned by you, a non-possessory mortgage of the properties mentioned in para. 3 of the schedule ".

( 2 ) THE Subordinate Judge of Amalapuram held that this document recorded two transactions (i) repayment of certain money with interest and (ii) agreement to mortgage the properties described in the schedule and, therefore, under section 5 of the Indian Stamp Act, the executant should pay Re. 1-8-0 on the first transaction, which was a bond, and Rs. 45 on the second transaction, viz. , the agreement to mortgage the properties. As Re. 1-8-0 only was paid, he directed the deficit to be collected.

( 3 ) LEARNED counsel for the petitioner contends that the main object of the document was only to create a liability to pay a sum of Rs. 2,660 within the prescribed time and the agreement to execute a mortgage deed in default was only ancillary to the main object and, therefore, stamp duty of Re. 1-8-0 paid on the basis it was a bond was correct. Section 5, which prescribes the manner of stamping a multifarious instrument reads :"any instrument comprising or relating to several distinct matters shall be chargeable with the aggregate amount of the duties with which separate instruments, each comprosing or relating to one of such matters, would be chargeable under this Act. "

( 4 ) UNDER this section, if the instrument relates to several distinct matters, the duty is the total of the duties for each matter. This section was the subject of judicial scrutiny and various tests were laid down for ascertaining whether a particular instrument comprised more than one distict matter. A Full Bench of the Madras High Court in Secretary of the Commissioner of Salt

( 5 ) ABKARI and Separate Revenue, Madras (Referring officer), (1920) 38 M. L. J. 506 ; I. L. R. 43 Mad. 365, had to deal with the case of a sale deed in which the vendor mortgaged lands not included in the sale as security for the due performance of his covenants. It was contended that the document should be stamped both as a sale and as a mortgage. But the Full Bench rejected that contention. They held that the main object of the instrument was sale and security for the due performance of covenant was only ancillary to the main object. In that view, they held that the document was rightly stamped as a sale deed. The main test to find out whether a document comprised two distinct matters is to ascertain the leading object of the instrument and to see whether the second matter is only ancillary to the main object or is independent of it. Another test suggested, namely, whether the two matters are capable of being carried out by several instruments is not adequate, for it breaks down in cases where, under a transaction, different properties are sold for specific amounts. I would, therefore, accept the former test,

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