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Judgment
Sundaram Chetty, J.—In this second appeal, two questions have been raised and argued before me. The first question is whether the suit
document, Ex. B, which has been admitted in evidence by both the Courts below as a hundi, is to be taken as sufficiently stamped and should be
admitted in evidence and acted upon. The second question is whether this document is supported by consideration, or in other words, whether
there is any legal consideration for it.
As regards the admissibility of this document, it has to be stated that the wording of the document is such as would bring it either under the
category of a promissory note or under a bill of exchange which includes a hundi. The Lower Appellate Court says that this document is warded in
the way in which hundies are usually written. That seems to be the view of the first Court also. There is, however, no doubt that this document
comes also within the definition of a promissory note. At best, it may be said that this is an ambiguous document, as it can be construed either as a
promissory note, or a bill of exchange. In such a case Section 17 of the Negotiable Instruments Act provides that the holder may at his election
treat it as either, and the instrument shall be thenceforward treated accordingly. The holder in the present case has elected to treat it as a hundi and
on that basis filed this suit. If it is to be treated as a hundi, there is no question of insufficiency of stamp, and we must hold that the document has
been duly stamped. If by reason of Section 17 this document should be treated by the Court as a hundi for all purposes, there is no difficulty
whatever. But it is contended by Mr. Section Varadachariar for the appellant that this instrument can be treated as a hundi by reason of Section 17
of the said Act for the purposes of that Act alone and not for the purposes of the Stamp Act. This contention, if approved, would deprive the
holder of the benefit conferred upon him by Section 17. The right of election given to him is a privilege which he must have the full advantage of,
and that benefit should not be taken away by anything contained in the Indian Stamp Act. It would be reasonable to read Section 17 of the
Negotiable Instruments Act as a proviso to Section 6 of the Indian Stamp Act.
Assuming that that section is not to be affected by the provisions of Section 17 of the Negotiable Instruments Act, we have to see how the
position in this case would be. As I have already said, this document is capable of being construed as a promissory note or as a bill of exchange.
That being so, u/s 6 of the Stamp Act, it will be chargeable with the higher duty leviable on a promissory note. A stamp duty of 4 annas would be
payable as a promissory note, but it bears only a one anna stamp which would be sufficient, if it is a hundi payable on demand* If Section 6 of the
Indian Stamp Act is to govern the present case, a difficulty arises in the matter of admitting this document in evidence. Being a promissory note, it
cannot be admitted in evidence even by levying the deficient stamp duty and penalty by reason of Section 35 of the Stamp Act. But reliance is
placed on the wording of Section 36 of the Stamp Act by Mr. Patanjali Sastri for the respondent, and it is contended that once this instrument has
been admitted in evidence by the Court below, such an admission shall not be called in question at any subsequent stage of the suit, on the ground
that the instrument has not been duly stamped. Section 35 states that no instrument chargeable with duty shall be admitted in evidence for any
purpose or shall be acted upon, unless such instrument is duly stamped. The question is, whether the wording of Section 36 is comprehensive
enough to include in the term ""admission"" the necessary consequences of such admission. It is argued for the appellant, that the appellate Court, by
reason of Section 36, is precluded only from questioning the admission of such an instrument by the Lower Court, but is at liberty not to act upon
it, if it should hold that the document was not duly stamped. Reference was made to Sub-section (2) of Section 42 of the Stamp Act, which deals
with the effect of the endorsement on an instrument in respect of which stamp duty and penalty have been levied. Once the instrument is so
endorsed, it shall become admissible in evidence and may be acted upon as if it had been duly stamped from the beginning. That section has no
application to the present case as no duty and penalty have been levied by the Lower Court. What the Lower Court did was to treat it as an
instrument duly stamped and to admit it in evidence and act upon it. The interpretation of Section 36 as contended for by Mr. S. Varadachariar
seems to be a very narrow one. The result of such an interpretation would be to render an instrument admitted in evidence by the Lower Court of
no further use whatever to the party at any later stage of the suit. The expression ""acting upon an instrument"" does not merely indicate the passing
of a decree upon such a document. If the Court admits a document in evidence, such document can be made use of by the Court as a piece of
evidence in order to come to a conclusion upon an issue in the case or it can be considered for the purpose of understanding the evidence itself in
the case. If the admission in evidence by the Lower Court can alone be free from question by the appellate Court u/s 36, the document once
admitted in evidence by the first Court would be practically a dead letter and be of no use whatever to the party who wanted to rely upon it. It is
difficult to infer that such would have been the intention of the Legislature, when it stated that such admission of an instrument in evidence shall not
be called in question at any subsequent stage of the same suit. If such a document happens to be the basis for a suit, the passing of a decree would
be one of the modes of acting upon it. The observations of Richardson, J., in the decision in Rung Lai Kalooram v. Kedar Nath Kesriwal (1921)
27 C.W.N. 513 appear to be germane to the present case. The learned Judge observes that once an instrument is admitted in evidence in any
proceeding u/s 35 of the Stamp Act, it is available in that proceeding for all purposes as if it had been properly stamped at the outset and that
proceeding will go through to a valid termination and cannot afterwards be challenged for want of jurisdiction by reason of non-compliance with
the Stamp Act. If such an interpretation is not adopted, the purpose with which Section 36 of the Stamp Act was enacted would run the risk of
being nullified. The view of Richardson, J., in the said case was also adopted in a later decision of the Calcutta High Court in Joyma Bewa v. Easin
Sarkar ILR (1926) 53 C. 515.
On a comparison of the wording of Section 42(2) with that of Section 36, it is urged by the learned advocate for the appellant that a distinction
between the admission of a document in evidence and the acting upon such a document was recognised by the Legislature. I agree that such a
distinction does exist, but the question now is whether the wording of Section 36 can be reasonably construed in the manner set forth above. I am
clearly of the opinion that once a document has been admitted in evidence by the Lower Court u/s 35, such admission cannot be questioned at any
later stage of the same suit or proceeding on the ground that the instrument has not been duly stamped and the natural consequences of that
admission which have become final must also follow. The appellate Court cannot say that though it has been marked as an exhibit in the case, it
would not look into it and would not make use of it in the appreciation of the evidence or would not allow a decree to be passed on such a
document. Even if Section 6 of the Stamp Act should be held to govern this case, the provisions of Section 36 of the Act preclude this Court from
refusing to act upon this document. In any view, therefore, the contention that the suit document is not duly stamped and therefore cannot be acted
upon by this Court cannot prevail.
As regards the second question, the finding of both the Courts below is that the instrument in question is borne out by legal and valid
consideration. The oral evidence on the plaintiff''s side which has beer, accepted by both the Courts below is to the effect that this hundi came to
be executed by the first defendant in favour of the plaintiff''s father for Rs. 2,000 in pursuance of a partition arrangement entered into between the
1st defendant and his brothers and also their father in accordance with the decisions of certain mediators. As observed by the learned District
Munsif the 1st defendant''s agreement to pay Rs. 2,000 for the marriage expenses of the plaintiff is one of the terms of the arrangement of partition
effected at the instance of mediators, and the plaintiff''s consent to accept the terms of the partition in the manner decided by the arbitrators would
be a sufficient consideration for the agreement on the part of the 1st defendant to pay this sum for the purpose of the plaintiff''s marriage. It is
difficult to believe that the 1st defendant promised to pay this sum purely as a matter of grace. There seems to have been some dispute about the
other brothers not having brought into the hotchpot their separate earnings. The plaintiff''s first witness clearly states that two of the brothers had
kept their earnings separate without throwing them into the joint stock, that the 1st defendant was saying that he had thrown his earnings into the
family stock and that he should not be asked to pay as much as the other two brothers and for that reason it was decided that he should pay only
Rs. 2,000, whereas, each of the other two brothers had to pay Rs. 9,000 to the plaintiff. From this, it is possible to infer that the plaintiff must have
set up some claim to the earnings of his brothers which have not been disclosed or brought into the hotchpot and as a compromise of such
conflicting claims, the panchayatdars, who knew the family affairs very well, decided that the three brothers should compensate the plaintiff in
different sums. It may be that he wanted those sums for the purpose of his marriage. It is difficult to hold upon the evidence that the 1st defendant''s
promise to pay Rs. 2,000 was a promise made without any consideration and purely as a matter of grace. I am not inclined to differ from the
concurrent finding of both the Courts below that the suit hundi is supported by proper consideration.
The second appeal therefore fails and is dismissed with costs.