An instrument containing an unconditional undertaking to pay a certain sum of money, even if it includes a term for payment of interest, is a promissory note payable on demand and liable to stamp duty under Article 49(a) of the Stamp Act.

R.C. Lahoti, J.

1. This revision preferred by the defendants challenges admissibility of the instrument dated 12-2-1988, forming basis of the suit, admitted by the trial Court in evidence as promissory note, treating it to be properly stamped.

2. The instrument reads as under:

^^ge xks;y bUMLVht] eqjSuk ok;nk djrs gSa fd ekax ij HkkbZ vkse izdk'k fey] eqjSuk dks vFkok ftls og fnykosa] :i;k vadu ipiu gtkj flQZ muls izkIr /ku ds cnys nsaxs] bl ij C;kt nj 1-50 izfr'kr ekfld ls izR;sd 180 fnu ckn ns; gksxkA

eqjSuk Qkxqu cnh 9] laor 2044]

psd ua- -------------------

FOR GOYAL INDUSTRIES

fnukad 12&2&1988

Sd/-

Partner.

:i;s 55000@&

GOYAL INDUSTRIES

OLD MILL AREA, DATTPURA

MORENA, M.P.

[on adhesive stamp of 50 paise]"

3. It is submitted by the learned counsel for the petitioners that the document is not a promissory note, and if a promissory note, then being payable otherwise than on demand, is insufficiently stamped. It is further submitted that in the statement of plaintiff Om Prakash Mittal it was admitted that the amount of Rs. 55,000/- was advanced for a period of six months which also suggested that it was a promissory note, payable otherwise than on demand and more than three months after date or site, liable to payment of stamp duty under Article 49(b) read with Article 13(b)(ii) of the Stamp Act and the stamp duty being deficit, the document was liable to be not admitted in evidence.

4. Section 2(22) of the Indian Stamp Act, 1899 defines Promissory Note as under: --

"2. Definitions. -- In this Act, unless there is something repugnant in the subject or context. -

(1) to (21).. .. etc. etc....

(22) "Promissory note" means a promissory note as defined by the Negotiable Instruments Act, 1881; it also includes a note promising the payment of any sum of money out of any particular fund which may or may not be available, or upon any condition or contingency which may or may not be performed or happen;"

5. The main definition is merely referential. Section 4 of the Negotiable Instruments Act, 1881 defines Promissory Note as under : --

"4. "Promissory Note" -- A "Promissory note" is an instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking, signed by the maker to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument."

6. The proper stamp duty payable on a promissory note is to be found mentioned in Article 49 of the Stamp Act which reads as under : --

"49. Promissory note. -- [as defined by Section 2(22)]

(a) when payable on demands --

(i) when the amount or Ten naye paise. or value does not exceed

Rs. 250/-.

(ii) when the amount or value Fifteen Naye Paise. exceeds Rs. 250/- but does

not exceed Rs .1,000/-.

(iii) in any other case Twenty-five paise.

(b) when payable otherwise The same duty as a than on demand.... Bill of Exchange (No. 13) for the same amount payable otherwise than on demand."

7. It is well settled by a catena of decisions that to be a Promissory Note, the instrument must be :

(i) in writing

(ii) containing a promise to pay (the promise must be express, not merely inferential);

(iii) the undertaking to pay must be unconditional;

(iv) promise to pay must be for a certain sum of money and money alone;

(v) the person to whom the promise is made or the payee should be certain;

(vi) must be signed by the maker, the maker or the person signing being a certain person.

Of course, a bank note or a currency note, though having all the insignia of a promissory note, would not be a promissory note within the meaning of this section. If all the ingredients of the section are satisfied and the predominant intention or the purpose of the instrument is to make it a negotiable instrument, it is a promissory note, the form being immaterial.

8. For the purpose of determining liability to stamp duty, the Stamp Act divides promissory note into two categories:

(1) those payable on demand, and

(2) those payable otherwise than on demand, that is, payable on or after an appo