The issue regarding the nature of a document sought to be marked in evidence by the petitioner, who is the plaintiff in O.S.No.23 of 2008 on the file of the learned Senior Civil Judge, Nandikotkur, falls for consideration in this Civil Revision Petition.

For convenience, the parties are referred to as they are arrayed in the suit.

The true translation of the document in question is as under:

“On 7-5-2005 I have borrowed Rs.5,00,000/- from B.Jaya Raghava Naidu, s/o.Tirupalu. I will repay in six months”.

On the foot of this document, the plaintiff filed the above mentioned suit for recovery of the alleged debt from the defendant. In the plaint, the document is described as a ‘receipt’.

In his written statement the defendant maintained that the said document is a rank forgery as he never executed “the suit receipt in favour of the plaintiff”. The defendant further pleaded that the plaintiff created the suit receipt by forging his signature; and that to the suit notice he has sent a suitable reply.

A perusal of the reply notice sent by the defendant shows that the defendant maintained the same stand, describing the alleged receipt as a rank forgery and denying his borrowing the amount from the plaintiff. It is further stated in the said reply notice that the defendant filed a suit against the plaintiff for recovery of certain amount in the Court of the Senior Civil Judge, Kurnool, and that as a counter-blast the plaintiff has forged his signature and got the suit notice issued.

When the plaintiff sought to mark the above said document in evidence, the defendant raised an objection by taking the stand that the document is a promissory note and not a receipt. This objection was upheld by the Court below by holding that as the defendant has undertaken to pay the sum of money allegedly borrowed by him, the same cannot be treated as a receipt within the definition of Section 2(23) of the Indian Stamp Act, 1899 (for short “the Act”). The Court further held that as the document in question was executed prior to coming into force of the amendment to Section 35 of the Act by the Finance Act 2006, it cannot be impounded and the same is not admissible in evidence.

At the hearing, the learned counsel for both the parties have referred to and relied upon several judgments of various High Courts in support of their respective stands.

Section 2(22) of the Act defined “Promissory Note” as under:

"S.2 (22) 'Promissory Note' means a promissory note as defined by the Negotiable Instruments Act, 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".

As the definition of promissory note in the Negotiable Instruments Act, 1881 (for short “the 1881 Act”) is adopted by incorporation, the relevant provisions of the said Act need to be referred to. Section 4 of the 1881 Act defined “Promissory Note” as “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".

Section 13(1) defined the “negotiable instrument” and it is relevant to reproduce this provision along with all the explanations thereto hereunder:

"13. (1) A "negotiable instrument" means a promissory note bill of exchange or cheque payable either to order or to bearer.

Explanation (i) A promissory note, bill of exchange or cheque is payable to order which is expressed to be so payable or which is expressed to be payable to particular person, and docs not contain words prohibiting transfer or indicating an intention that it shall not be transferable.

Explanation (ii) A promissory note, bill of exchange or cheque is payable to bearer which is expressed to be so payable or on which the only or last endorsement is an endorsement in blank.

Ex