The Hon, The Attorney General V. Mount

1930 Present: Garvin A.C.J., Dalton and Lyall Grant JJ.

THE HON. THE ATTORNEY-GENERAL v. MOUNT.

66-D. C. (Inty.) Colombo, 4,265.

Stamp-Bond given by administrator-Duty leviable-Ordinance No. 22 of 1909, Schedule B, Part I., 15 (i).

A bond given by an administrator for the due administration of an estate is chargeable with duty under item 15 (i) of Part I. of Schedule B of the Stamp Ordinance

CASE referred to a Bench of three Judges on the question whether a bond given by an administrator is chargeable with duly under item 15 (b) or 15 (i) of Schedule B, Pan 1., of the Stamp Ordinance. The learned District Judge held that such a bond was liable to duty under item 15 (i). The Crown appealed from the order.

M. W. H. de Silva, C.C. (with J. E. M. Obeyesekere, C.C ), for the Crown.- The bond given by the administrator was for a sum of Rs. 490,000. The Crown claims that the bond is liable to duty under Schedule B, item 15 (b). Before the amending Ordinance of 1927, Part III. provided for testamentary duties, included bonds. The amending Ordinance re-enacted Part III. omitting" bonds." The question was raised in Commissioner of Stamps v. Banda1 whether it was intended by the omission to exempt bonds altogether. It was held that the bond should be stamped under item 15 (b). In this case the District Court has held that the bond fell under item 15 (i). An administrator's bond is one for a definite sum of money as stated in item 15 (b). It falls under 15 (b) or under Part II., "bail bond, or other bond or recognizance." The bond is given as security for the payment of a certain sum. The certainty applies to the amount and not to the contingency when it is payable (Sweetmeet 1 31 N. L. R. 80.

Automatic Delivery Company v. Commissioners of Inland Revenue1). What is assured by the bond is the payment of the money, if he fails in his duty.

The word "bond" is defined as an instrument to pay a sum of money. In India the definition is enlarged (Donough's Stamp Duty, p. 54).

Where a party to an instrument bound himself, in the event of a breach on his part of any of the conditions of the instrument, to pay the other party a penalty of Rs. 5,000, the instrument was chargeable with the stamp duty leviable on a bond for Rs. 5,000. In reference by Board of Revenue, N. W. P. under Act I. of1879-.

There are two kinds of bond-one conditioned for payment of money, the other for performance of an act.3 In the former case the amount is recoverable, in the latter case the full penalty. {Strickland v. Williams,4 Baban Appuhamy v. Don Davit 5).

Common money bonds which provide for the discharge of the bond in the payment of a smaller sum and interest should be distinguished from bonds which provide' for the performance of an act as the condition on which the bond is discharged. The former are governed by Statute 4 & 5 Anne c. 16 and the latter by Statute 8 & 9 Will. III. c. 2.

In the case of the latter, a breach of the condition makes the full amount of the bond a debt and, though only the damages incurred may be recovered, the full sum provided for in the bond remains as a security for any further damages which may be incurred. The Stamp on the bond should be sufficient to cover the full amount which may be recoverable on a bond. The amount of an administrator's bond is determined by Court after consideration (section 541, C. P. C), and the full amount on the bond may be recovered. It is therefore not a bond providing for a penal sum.
 

Foot notes

1 (1895) 1 K. B. 484. 3 3 Halsbury 164.
2 2 All. 655. 4 (1889) 1 Q. B. 382.
5 24 N. L. R. 444.

Hayley, K. C. (with Garvin), for defendants, respondents.-The object of the bond is to administer the estate, to pay debts under accounts and give the residue to the heirs. Although a sum of money is expressed to be payable, it is for the Court to determine how much is recoverable. It is clearly a penalty that is re

Click Here to Read the rest of this document