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1981 Supreme(All) 333

IN THE HIGH COURT OF ALLAHABAD
Amitav Banerji, J.
KARTEY SINGH - Appellant
Versus
IFTIKHAR AHMAD - Respondents
Second Appeal 2218 Of 1978
Decided On : 08/18/1981

Advocates Appeared:
G.P.BHARGAWA, R.H.Zaidi

A bond is not a negotiable instrument and consequently the provisions of Section 87 of the Negotiable Instruments Act are not applicable to it.

Headnote:

BOND - DISTINCTION FROM PROMISSORY NOTE - STAMP ACT, 1899, SECTION 35 - NEGOTIABLE INSTRUMENTS ACT, 1881, SECTIONS 4, 13, 87 - INSTRUMENT HELD TO BE A BOND AND NOT A PROMISSORY NOTE - PROVISIONS OF SECTION 87 OF THE NEGOTIABLE INSTRUMENTS ACT NOT APPLICABLE - SUBSEQUENT ALTERATION IN THE INSTRUMENT NOT AFFECTED BY SECTION 87 - INSTRUMENT ADMISSIBLE IN EVIDENCE ON MAKING GOOD THE DEFICIENCY IN STAMP DUTY.

Fact of the Case:

Plaintiff filed a suit for recovery of Rs. 8,000/- on the basis of a promissory note and a receipt dated 25th March, 1972. The trial court dismissed the suit holding that there were material alterations in the promissory note, that the instruments were insufficiently stamped, and that the promissory note was a forged document. On appeal, the court below held that the instrument was a bond and not a promissory note, that the provisions of Section 87 of the Negotiable Instruments Act had no application to the bond, that the amount had been advanced and nothing had been paid by the defendant, and that the promissory note was not a forged document. The appeal of the plaintiff was allowed and the suit was decreed with costs throughout.

Finding of the Court:

The court held that the instrument in question was a bond and not a promissory note, that the provisions of Section 87 of the Negotiable Instruments Act were not applicable to the bond, that the subsequent alteration in the instrument was not affected by Section 87, and that the instrument was admissible in evidence on making good the deficiency in stamp duty.

Issues: 1. Whether the promissory note and receipt were void in view of the provisions contained in Section 87 of the Negotiable Instruments Act? 2. Whether the promissory note and receipt could not be read in evidence because of the provisions contained in Section 35 of the Indian Stamp Act? 3. Whether on the facts and circumstances of the case it was established that the promissory note was a forged document.

Ratio Decidendi: 1. A bond is not a negotiable instrument and consequently the provisions of Section 87 of the Negotiable Instruments Act are not applicable to it. 2. Any alteration made to a document not being a negotiable instrument is not affected by the provisions of Section 87 of the Act. 3. The instrument in question was a bond and not a promissory note, as it contained an undertaking to pay on demand the sum of Rs. 5,000/- along with interest at 2 per cent per mensem to the person from whom the money was borrowed and was attested by two witnesses, but did not contain any writing showing that it was payable to order or bearer. 4. The subsequent alteration in the instrument, namely, the affixation of the refugee relief stamp, was not affected by Section 87 of the Act, as the instrument was a bond and not a promissory note. 5. The instrument was admissible in evidence on making good the deficiency in stamp duty, as it was a bond and not a promissory note.

Final Decision: The appeal was dismissed with costs.


AMITAV BANERJI, J.

( 1 ) THIS is a second appeal by the defendant. Plaintiffs suit for recovery of Rs. 8,000/- on the basis of promissory note and the receipt dated 25th March, 1972 was dismissed by the trial court. The trial court held that there were material alterations in the promissory note, inasmuch as the refugee relief stamp was subsequently affixed and was not properly cancelled. The promissory note and the receipt were insufficiently stamped, and that the pronote was a forged document. It was further held that the plaintiff could not establish by reliable evidence that he had advanced rs. 5,000/- to the defendant on the 25th March, 1972. On appeal, the court below held that the instrument in question was a bond and not a promissory note and that the provisions of Section 87 of the Negotiable Instruments Act had no application to the bond. The court below further held that the amount had been advanced and nothing had been paid by the defendant. It further held that the promissory note was not a forged document. The appeal of the plaintiff was allowed and the suit was decreed with costs throughout.

( 2 ) THE following two substantial questions of law were framed at the time of admission of the appeal :

1. Whether the pronote and receipt were void in view of the provisions contained in Section 87 of the Negotiable Instruments Act ? 2. Whether the pronote and receipt could not be read in evidence because of the provisions contained in Section 35 of the Indian Stamp Act ?

( 3 ) MR. G. P. Bhargava, learned counsel for the appellant, contended that apart from the above two questions a third question also arose in the case viz. whether on the facts and the circumstances of the case it was established that the promissory note was a forged document. Learned counsel urged that in view of the proviso to Section 100 (5) of the Code of Civil procedure, the court could hear the appeal on any other substantial question of law not formulated earlier if it was satisfied that the case involved such a question. The question whether the document was a forged document or not is a question of fact. The trial court held that the document was a forged document. The court below set aside that finding. Both the courts have considered the evidence. It is well settled that this Court in second appeal cannot interfere with a finding of fact howsoever grossly erroneous it may seem to be unless it can be shown that the finding is vitiated by error of law or procedure. Mr. Bhargava referred to a recent decision of their Lordships of the Supreme Court in the case of Madan Lal v. Gopi (AIR 1980 SC 1754) to urge that when the court below ignored the weight of preponderating circumstances and allowed their judgments to be influenced bv inconsequential matters, the High Court would be justified in reappreciating the evidence and in coming to its own independent conclusions. The point in controversy in the above case whether one Mansaram was in a fit state of mind when he executed the deed of adoption. Their Lordships observed that this was substantially a question of fact but the courts below ignored the weight of preponderating circumstances on the record and allowed their judgment to be influenced by inconsequential matters. Mr. Bhargavas contention was that the instrument in question was executed in the year 1972 and it bore revenue stamps of the year 1961 and had been affixed with refugee relife stamp which came into circulation after the alleged date of the execution of the instrument. It was a wholly got up document and in any event had been ante-dated and the court below had not taken into consideration the attending circumstances and its finding on the question of forgery was patently erroneous. I have heard mr. R. H. Zaidi, learned counsel for the respondent also on this point and I think it will be appropriate to consider this point later.

( 4 ) I will now consider the first of the two substantial questions of law framed at the time of admission



























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