Assignment of right to recover amount is not a conveyance and stamp duty of Rs. 5/- is sufficient under Article 5(C) of the Second Schedule of the Rajasthan Stamp (Adaptation) Act, 1952.

1. - Plaintiffs filed a suit for recovery of Rs. 3,75,758.79 with future interest and costs, against defendants No.1 to 5. Basis of the suit was an agreement dated 13.4.1982 whereunder the predecessor in interest of plaintiff No.1 assigned its rights to recover Rs. 3,13,070.54 along with interest at the rate of 16% per annum from defendants No.1 to 4, for which defendant No.5 stood guarnator. Defendants took the plea that the document on a stamp paper of Rs. 5/- was not enough and it was a Conveyance Deed and therefore, ad valorem stamp duty was payable. Objection of the defendants prevailed with the trial court and the trial court vide order dated 6.1.1994 directed the plaintiffs to make good the stamp duty of Rs. 40,794/- and to pay penalty at 10 times thereof. This is revision against that order.

2. The so called agreement dated 13.4.92 is before me as a photo stat copy of it has been provided by the counsel for the defendants. A reading of the document shows that M/s. Birla Cotton, Spinning and Weaving Mills Limited (rights of which have now vested in M/s. Texmaco Limited, plaintiff No.1, by virtue of an order passed by the Company Judge, Delhi High Court) were the manufacturers of cloth and M/s. Textile Trading Co., plaintiff No.2 were the sole selling agents of Birla Cotton, Spinning and Weaving Mills (in short 'Mills'). The cloth manufactured by the Mills was sold to M/s. Ghanshyam Das Sanjay Kumar, a partnership firm, of which defendants No.2 to 4 are partners, through the agency of agents and certain amounts were due from M/s. Ghanshyam Das Sanjay Kumar (debtors) through the agents and how the payment was to be made or recovered, that matter was settled by the agreement. In the agreement it was agreed by the debtors that a sum of Rs. 3,13,070.54 including interest as on the date of the agreement, was due from them to the company. Para 2 provided that the aforesaid amount would be recoverable by agents and the Company assigned all its rights and interest in the said amount in favour of the Agents, to demand, claim, realise and recover from the debtors and the debtors agreed to pay the said amount to the Agents together with interest at the rate of 16% per annum on the aforesaid amount from the date of the agreement, and in consideration of the same, the Company shall not recover the said amount from the debtors which shall now be recoverable by the Agents in their own name from the debtors together with interest.

3. To secure payments, on behalf of the debtors, a bank guarantee was furnished by Smt. Malti Devi, wife of one of the partner of the debtors' firm.

4. Caluse 7 of the agreement provided as under:

"That the stamp duty of this agreement has been paid by the debtors. In case of any penalty regarding deficit stamp duty, it shall be payable by the debtors as and when the same is required and payable."

5. Trial court found that the Mill had assigned its rights in the amount due from the debtors to the Agents and this assignment amounted to conveyance, therefore, ad valorem stamp duty was payable. The trial court was also influenced by Clause 7 of the agreement and concluded that the parties knew that the stamp duty paid was less and that is why this Clause 7 was added in the agreement.

6. After hearing counsel for the parties and on a consideration of the matter, I am of the view that the court below exceeded its jurisdiction in treating the document as a conveyance instead of an agreement. Cloth was manufactured by the Mills and the Agents were the sole selling agents for sale of their cloth and the cloth manufactured by the Mills was sold by the sole selling agents to the debtors. Technically, the amount was due from the debtors to the Company through the agency of the Agents but the Mills and the Agents arrived at an agreement to authorise the Agents alone to recover the amount from the debtors. This agreement between the Mills and the Agents had been made to give an authority to the Agents to recover the am