The stamp duty payable on a rectified instrument is to be determined based on the rectified instrument, and not the original instrument.

JudgmentChagla, C.J.

1. This is a reference made to us under Section 57, Stamp Act, by the Chief Con-trolling Revenue Authority, and the facts giving rise to this reference may be briefly stated. The Maharashtra Sugar Mills borrowed a certain sum of money from the Central Bank of India, Ltd., on the security of various goods and movables belonging to the company, and a document was executed reducing to writing the terms of the transaction between the parties. That document was executed on 22-8-1945. The company sent this document to the Registrar of Companies. The Registrar of Companies took the view that the document was inadequately stamped and therefore forwarded it to the Assistant Superintendent of Stamps. The Assistant Superintendent of Stamps called upon the Sugar Company to pay the proper duty along with penalty. The Sugar Company resisted the demanded filed a suit, being Suit No. 1108 of 1945, in this Court for a rectification of the document. The contention of a Sugar Company was that although in form the document was a mortgage with possession, the intention of the parties was that it should be a deed of hypothecation and the document was drawn up in the form in which it was drawn up by mutual mistake of the parties. This Court passed a decree rectifying the document and giving effect to the real intention of the parties. Notwithstanding this decree the revenue authorities insisted on assessing the stamp payable on the document on the basis of the instrument as it was originally executed, and the question that has now been submitted to us by the Chief Controlling Revenue Authority is mainly concerned with the effect of the decree of rectification on the instrument as originally executed. It is common ground between the parties that the document as originally executed was a mortgage with possession and chargeable to duty under Article 40 (a) of the schedule of the Stamp Act. It is also common ground between the parties that the document as rectified by the-Court is a deed of hypothecation and comes within the exemption given to that document under a notification issued by Government. The only question that we have to consider in this reference is, what is the effect of the decree of rectification on the duty payable on the document of 22-8-1946, and that in terms is the seconds question submitted to us by the Authority.

2. Now, rectification is ordered by a Court on equitable principles, and the equitable doctrine underlying rectification is partly, as the Advocate-General contends, the doctrine of estoppel and partly the doctrine that equity looks to the substance and not to the form. The doctrine of estoppel is that if parties intended that there should be a particular transaction between them and by mutual mistake a document comes into existence which does not give true expression to that intention, equity will not permit the parties to deny what the true intention was. But, as we said before, underlying rectification is also the other and equally important equitable doctrine that equity always prefers to look to substance of things rather than to the form. Even though in form a particular intention maybe evidenced, if in substance the intention was different, equity would pay greater importance to the substance rather than to the form. Now, the contention of the Advocate-General is that under the Stamp Act what is material is the date when the instrument has to be stamped, and if the instrument was of a particular nature at that relevant date, then as far as the stamp authorities are concerned it is entirely immaterial if at a subsequent date a competent Court of law rectifies that document. Reliance was placed on Section 17, Stamp Act. That section provides :

"All instruments chargeable with duty and executed by any person in British India shall be stamped before or at the time of execution."

Therefore this document in question had to be stamped before or at the time of execution, and what the Advocate-General says

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