Tissera V. Tissera

Present: The Hon. Sir Joseph T. Hutchinson, Chief Justice,
and Mr. Justice Wood Renton.

In the Matter of an Appeal under Section 38 of the Stamp Ordinance, No. 3 of 1890.

Debentures-Mortgage bond-" Bond "-Mortgage by corporation in favour of trustees-Stamp duty-Ordinances No. 8 of 1871, No. 22 of 1871. and No. 30 of 1890, s. 38.

Where a corporation issued certain debentures which were stamped as bonds for that amount, and by a trust deed appointed trustees for securing the payment of the money payable in respect of the debentures, and the corporation by a mortgage bond bound itself to the trustees in the penal sum of Rs. 150, 000, and as further security mortgaged to them certain property to secure the repayment of the money payable on the debentures, -

Held, that such bond by the corporation in favour of the trustees was only liable to stamp duty of Rs. 10.

Held, also, that the debentures were '' bonds '' within the meaning of " The Stamp Ordinance, 1890. "

The meaning of the term " bond " considered.

Tissera v. Tissera l referred to and commented on.

THIS was an appeal under section 38 of the Stamp Ordinance, No. 3 of 1890, from the determination of the Commissioner of Stamps as to the stamp duty leviable on a mortgage bond. The facts sufficiently appear in the judgments.

Sampayo. K. C., for the appellant.

Walter Pereira, K. C., S. -G., for the Crown.

Cur. adv. vult.

1(1896) 2 N. L. R. 238.

August 21, 1909. Hutchinson C. J. -

This is an appeal under section 38 of the Stamp Ordinance, No. 3 of 1890, from the determination of the Commissioner of Stamps as to the stamp duty payable on a mortgage.

In January, 1907, the Ceylon Chamber of Commerce (a body incorporated by Ordinance) issued 75 " mortgage debentures " at Rs. 1, 000 each. We have one of them before us. It is headed "Debenture"; the Chamber of Commerce (thereinafter called " Corporation ") thereby acknowledges that it is indebted to the holder in Rs. 1, 000, and binds itself to pay the said sum with interest at the time and place therein specified; and it thereby charges with such payments " its undertakings and all the property comprised in or subject to the trust deed referred to in the within conditions "; and the debenture is to be subject to the conditions endorsed thereon. It is signed by two directors, and bears the seal of the corporation. The conditions endorsed on it declare, amongst other things, that all the debentures are to rank part passu on the property thereby charged, and the charge is to be a floating security; and the holders of the debentures are to be entitled to the benefit of the trust deed bearing the same date (June 29, 1907), whereby Sir William Mitchell and the Hon. Mr. W. H. Figg were appointed trustees for securing the payment of the money payable in respect of the debentures. Each of the debentures bears a stamp of Rs. 2. 50, which is the stamp to which a bond or mortgage to secure Rs. 1, 000 would be liable.

The mortgage bond, in respect of which the present question arises, is dated January 29, 1907. By it, the corporation binds itself to the trustees, Sir. William Mitchell and the Hon. Mr. Figg, in the penal sum of Rs. 150, 000, and as further security mortgages to them certain property to secure the repayment of the money payable on the debentures. The bond was stamped with a Rs. 10 stamp. The notary who attested it requested the Commissioner of Stamps to declare his opinion as to the extent to which it was liable to stamp duty. And the Commissioner in reply declared that it was liable to a stamp duty of Rs. 187. 50. This is an appeal against that declaration.

Under the schedule to the Ordinance a bond or mortgage to secure Rs. 75, 000 is liable to a duty of Rs. 187. 50. But a " bond for further securing the repayment of any sum already secured by a bond or mortgage for which an ad valorem duty had been already paid " is only liable to a duty of Rs. 10, and the appellan

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