The central legal point established in the judgment is the interpretation of the definitions of 'bill-of-exchange' and 'promissory note' under the Stamp Act and the Negotiable Instruments Act, and the exemption of demand drafts from stamp duty.

JUDGMENT

Rankin, C.J. - This is a Reference made to us under the provisions of Section 57, Stamp Act. It would appear that certain, instruments were presented on behalf of the holder for adjudication as to whether it was necessary that they should be stamped u/s 19, Stamp Act. The documents of which three in number are before us may be sufficiently exemplified by choosing one of the three. The one which I shall choose is a document in the form in which bills of exchange are accustomed to be couched. It is headed "Imperial Bank of India." It is addressed from Calcutta. It is signed as drawer by the Secretary and Treasurer and the Accountant of the Imperial Bank of India. It is addressed to the Imperial Bank of India, Lahore, as the addressee or drawee and it is made payable to a third party, the Commercial Syndicate Ltd. or order. It will be observed, upon a strict reading of the instrument, that there are two parties and only two parties-the Imperial Bank of India on the one hand and the payee, the Commercial Syndicate Ltd., on the other. The question is whether these instruments are required to be stamped by virtue of the terms of the Stamp Act as amended recently by the Finance Act, 1927, and I shall discuss first whether this instrument is a bill-of-exchange within the meaning of the phrase as it is used in the Stamp Act. If it is a bill-of-exchange, then as by its express terms it is payable on demand, it is prima facie freed from stamp duty by the amendment introduced by the Finance Act (5 of 1927).

2. When we come to consider the question whether it is a bill-of-exchange, we have to refer to Clause 2, Section 2, Stamp Act. By that clause "bill-of-exchange" is defined as meaning

a bill-of-exchange as defined by the Negotiable Instruments Act, 1881 and includes also a hundi, and any other document entitling or purporting to entitle any person, whether named therein or not, to payment by any other parson of, or to draw upon any other person for, any sum of money.

3. Now, the first question is whether this document is a bill-of-exchange as defined by the Negotiable Instruments Act, 1881, and, on that question, we have to look to Section 5 of the Act. We find that a bill-of-exchange is defined there as an instrument in writing containing an unconditional order, signed by the maker directing a certain person to pay a certain sum of money only to or to the order of a certain person or to the bearer of the instrument.

4. This definition may be contrasted with the definition contained in Section 3 of the English Bills of Exchange Act, 1882 (45 and 46 Vic. 61) whereunder an instrument co be a bill-of-exchange must be an unconditional order in writing, addressed by the person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to, or to the order of, a specified person or to bearer. It is to be observed that, whereas in the English Act express provision is made by Sub-section 2, Section 5, for the case where in a bill the drawer and the drawee are the same person, namely, that the holder may treat the instrument either as a bill-of-exchange or as a promissory note; the Indian statute, which has not expressly required that the instrument in order to be a bill-of-exchange must needs be addressed by one person to another, nevertheless contains a provision in Section 17 that where an instrument may be construed either as a promissory note or a bill-of-exchange the holder may at his election treat it as either, and the instrument shall thenceforward be treated accordingly. So far as the first part of the wording of Sub-section 2, Section 2, Stamp Act of 1899 is concerned, the question whether the document before us is a bill-of-exchange as defined by the Negotiable Instruments Act, 1881 raises certain-considerations. It is, in my judgment, a case which is governed by Section 17, Negotiable Instruments Act, in the sense that