A document creating an indemnity over property to secure the vendee against loss or damage due to defect in title is not a mortgage deed and is only liable to stamp duty as an indemnity bond.

RAMANUJAM J.: This is a case referred by the Board of Revenue under Section 57 of the Indian Stamp Act, 1899. The respondents along with their father Kanthimathinatha Pillai had executed a sale deed dated 18-11-1967 in favour of one Thirumathi Nagammal in respect of the property bearing door No. 6 Munuswami Achari St, Siruvalloor, Madras. Under the said sale deed the house and ground bearing door No. 51 Seshachala Mudali St, Saidapet, Madras had been offered by the vendors and accepted by the vendees as indemnity against any loss, damage or claim in regard to the property conveyed. The vendors subsequently approached the vendee to release her right of indemnity over the said property bearing door No. 51 Seshachala Mudali St, Saidapet, Madras and to accept instead another property bearing door No. 16 Pilliar Koil St, Saidapet, Madras as indemnity. The vender agreed to the said proposal of the vendors and released her rights over the property

given as indemnity under the sale deed, by means of a release deed. Thereupon, the vendors executed an instrument dated 20-4-1968 purporting to be an indemnity bond in favour of the vendee in respect of the substituted property bearing door No. 16 Pilliar Koil St, Saidapet, Madras as agreed. It is a recital in the said indemnity bond that since litigation had cropped up in respect of the property covered by the sale deed, the new property is made available against any loss that might be incurred by the vendee in the said litigation. The above document dated 20-4-1968 was written on a stamp paper of the value of Rs. 22-50. When it was presented for registration, the Sub Registrar felt a doubt as to the quantum of duty payable on the document and referred the matter to the District Registrar, Madras, who held that the document was both a mortgage deed and an indemnity bond attracting levy of stamp duty under Articles 34 and 40 (b) of Schedule I to the Indian Stamp Act, 1899, and chargeable under Section 6 of the Act with the higher of the duties.

2. An appeal was preferred to the Board of Revenue by the respondent against the order of the District Registrar. The Board dismissed the appeal, agreeing with the view expressed by the District Registrar. Subsequently the respondent obtained a direction on 27-2-1970 by way of mandamus from this court directing the Board of Revenue to refer the case to this court under Section 57 of the Indian Stamp Act. In pursuance of the said direction, the following question has been referred for our decision:

"Whether the document dated 20-4-1968, executed in respect of the property bearing door No. 16 Pilliar Koil St, Saidapet, Madras, by R. K. Subramaniam and others is liable to stamp duty both as an indemnity bond and a mortgage deed attracting levy of stamp duty under Articles 34 and 40 (b) of Schedule I of the Indian Stamp Act 1899 and chargeable under Section 6 of the Act with the higher of the duties."

It is the contention of the learned counsel appearing for the Revenue that the document in question can clearly be treated both as a mortgage deed as well as an indemnity bond. There is no dispute before us that the document in question will fall under the definition of 'indemnity bond'. Therefore, the only question for consideration is whether the document falls within the definition of 'mortgage deed' in Section 2 (17) of the Indian Stamp Act, so as to attract the higher of the duties.

3. 'Mortgage deed' as defined in Section 2 (17) is as follows?

" 'Mortgage deed' includes every instrument whereby, for the purpose of securing money advanced or to be advanced by way of loan, or an existing or future debt, or the performance of an engagement, one person transfers, or creates to, or in favour of another a right over or in respect of specified property".

It is clear that the document in question is not one executed for the purpose of securing money advanced or to be advanced by way of loan, or an existing or future debt. The learned Government Pleader sub