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1970 Supreme(Pat) 138
PATNA HIGH COURT
Shambhu Prasad Singh and B.D.Singh JJ.
Radha Devi
Versus
Dhanik Lal Isser.
Civil Revision No. 860 of 1969 ;
Decided On : SEPTEMBER 11, 1970
A document which mentions a date before which the payment cannot be enforced and also mentions the expression "on demand" In the document is not covered by Article 49 (b) of the schedule to the Stamp Act.
Headnote:
STAMP ACT - BOND OR PROMISSORY NOTE - ARTICLE 15 OR ARTICLE 49(B) - DOCUMENT MENTIONING DATE BEFORE WHICH PAYMENT CANNOT BE ENFORCED AND ALSO MENTIONING EXPRESSION "ON DEMAND" IS NOT COVERED BY ARTICLE 49(B) OF THE SCHEDULE TO THE STAMP ACT.
Fact of the Case:
A dispute arose between the parties as to whether the stamp on a deed dated 28.06.1962 for a sum of Rs. 8000.00 was leviable under Article 15 or Article 49 (b) of the Schedule to the Indian Stamp Act. The deed was found to be insufficiently stamped.
Finding of the Court:
The court held that the document was a bond and was chargeable under Article 15 of the Schedule to the Stamp Act. The court found that the document was not covered by any of the clauses of Section 2(5) of the Stamp Act and that it was not a promissory note within the meaning of Sec.2(22) of the Stamp Act.
Issues: Whether the document was a bond or a promissory note.
Ratio Decidendi: The court held that a document which mentions a date before which the payment cannot be enforced and also mentions the expression "on demand" In the document is not covered by Article 49 (b) of the schedule to the Stamp Act. The court found that the document was not a promissory note within the meaning of Sec.2(22) of the Stamp Act because there was a stipulation postponing the payment for a certain period and making of such a demand was a condition precedent to the payment.
Final Decision: The application was dismissed but, in the circumstances of the case, without costs.
Shambhu Prasad Singh, J.
1. This application under Sec.115 of the Code of Civil Procedure is by the defendants and arises out of a suit for recovery of dues on a deed dated 28.06.1962 for a sum of Rs. 8000.00. The deed was found to be insufficiently stamped. A controversy arose between the parties as to whether the stamp on the said deed was leviable under Article 15 or Article 49 (b) of the Schedule to the Indian Stamp Act.
2. The dispute between the parties is not really as to the amount of the deficit stamp duty but as to the nature of the document; whether it is a bond chargeable under Article 15 or a promissory note chargeable under Article 49-Under Article 49. promissory note "when payable on demand" is chargeable under Clause (a)", when payable otherwise than on demand" it is chargeable under Clause (b). Bond is defined in Sec.2(5) as follows:
"(5) Bond.-- bond includes -- (a) any instrument whereby a person obliges himself to pay money to another on condition that the obligation shall be void if a specified act is performed, or is not performed, as the case may be:
(b) any instrument attested by a witness and not payable to order or bearer, whereby a person obliges himself to paymoney to another: and
(c) any instrument so attested, whereby a person obliges himself to deliver grain or other agricultural produce to another."
Sec.2(22) defines promissory note as follows:--
"(22) Promissory note -- "promissory note" means a promissory note as defined by the Negotiable Instruments Act. 1881 (XXVI of 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."
The question whether the document is admissible or not depends on the question whether it is a bond or a promissory note. Learned counsel for the parties have, therefore, argued the question at some length. The question is also not free from difficulty and the learned Single Judge who heard it in the first instance, therefore, referred it to a Division Bench.
3. The deed is in the form of a letter by the debtors to the creditor and is dated 28-6-1962. After paying necessary compliments it recites the necessity for borrowing the money, the amount which was being taken on loan and the rate of interest payable on it. It then says--
Wada karte hin kejar Karja asal may sun mazkur tarikh 1-1-64 esavi ko apako aday kar dense. Esliye basabut karia chithi indul talab haza likh diva ki wakht par kam aye.
It is not attested by anywitness. The two debtors have affixed their thumb impressions and signatures in the margin with endorsements that they have taken money on the terms mentioned in the letter and written the letter on demand (Chithi Indul Talab).
4. As it will appear from Sec.2(22) of the Stamp Act. quoted above, it adopts the definition of the "promissory note" in the Negotiable Instruments Act and also adds something to it. It was not contended before us that the lotter referred to above would be a promissory note because of what is added bythe Stamp Act to the definition of promissory note as given in the Negotiable Instruments Act. One has, therefore, to refer to Sec. 4 of the Negotiable Instruments Act which defines promissory note as follows:
"4. Promissory note.-- A promissory note is 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."
In Venku Ramchandrashet V/s. Sitaram Pandurang. (1905) ILR 29 Bom 82 it was held that a document acceptine receipt of money with a promise to repay it on demand if it was attested by witnesses and not made payable to order or bearer was a bond within the meaning of Sec.2 (5) (b) of the Stamp Act and not a promissory note. Learned Counsel for the petitioners submitted that this decision
