Hon’ble Amitava Lala, J.—By way of this petition under Article 226, the petitioners seek the direction to the respondents to realize the stamp duty on their security deposit in terms of the Article 57 of the Schedule 1-B of the Indian Stamp Act.

2. Briefly stated, the petitioner No. 1 is a proprietorship firm and the petitioner No. 2 is its proprietor. The firm carry on business of civil construction in various departments of the State Government, the Local Bodies including the KDA, Kanpur. The petitioners tender/quotation for construction of road, drainage etc was accepted by the respondent No. 2.

3. Consequent upon the Executive Engineer of the Kanpur Development Authority on 25.7.2005 issued a communication wherein the petitioners were informed that their bid for a sum of Rs. 4,10,282. 94p has been accepted and they were asked to submit the stamp paper within ten days for execution of necessary documents/agreements.

4. The petitioners case is that they were required to furnish security either in the shape of National Security Certificate or Fixed Deposit or in the shape of Bank Guarantee and on the aforesaid security amount of 10% the respondents were demanding the stamp duty @ 125/- per thousand. It is noteworthy the security deposit is refundable after completion of the work and the object of the said security is only to ensure that the work may be completed in terms of the contract/agreement.

5. We have heard learned counsel for the petitioner and the learned Standing counsel.

6. The respondents have preferred not to file counter-affidavit and as such by the consent of the parties, we proceed to dispose of the writ petition on the basis of the pleadings of the writ petition.

7. The learned counsel for the petitioners submitted that the stamp duty is payable in terms of Article 57 Schedule 1-B of the Indian Stamp Act and not in terms of the Article 40 (A) of the Schedule 1-B of the Indian Stamp Act as demanded by the respondents.

8. Article 57 Schedule 1-B so far as material for the purposes of present matter is set out below :

Description of Proper stamp duty

instrument

57-Security bond or

mortgage deed,

executed by way of

security for the due

execution of an

office, or to account

for money or other

property received

by virtue thereof,

or executed by a

surety to secure

the due performance

of a contract or the

due discharge a

liability -

(a) When the

amount secured

does not

exceed Rs. 100. Ten rupees

(b) in any other case One hundred

rupees.

9. Learned counsel for the petitioner has relied on the judgments of this Court in the case of Tajveer Singh and others v. State of U.P. and others, 1997 AWC 1029; Mohd.Farman v. State of U.P. and others, 2001 (92) RD 309; M/s Strong Constructions through its partner Shesh Nath Singh v. State of U.P. and others, 2005 (98) RD 662.

10. Learned Standing counsel has urged that the stamp duty was rightly demanded by the respondents under Article 40 of the Schedule 1-B of the Act.

11. We have considered the rival submissions of the parties. The issue whether security Bond falls under Article 57 of the Schedule 1-B of the Stamp Act or under Article 40 has been settled in series of cases of this Court. In the case of M/s Hindustan Sugar Mills Ltd. v. State of U.P. and others, AIR 1972 All 8, this Court has laid down that the security bond is chargeable under Article 57 of the Schedule 1-B of the Act. In the aforesaid case the question arose whether a document as a whole is a security cum indemnity bond falling under Articles 34 and 57 Schedule 1-B of the U.P. Stamp Amendment Act, 1958 and is liable to duty of a fixed stamp of Rs. 18/- or whether the document in question was a bond chargeable with duty under Article 5 Schedule 1-B of the U.P. Stamp (Amendment Act 1958).

12. The Court further held that in view of the definition of contract of indemnity under section 124 of the Contract Act a party only promises to save the other from loss caused to him by the promiser himself. Such