Alhabeeb Mohd Hussain vs Kareem Khan

Bilgrami, J.—This revision petition is directed against the judgment and decree of the Chief Judge of the Small Cause Court, dated 14-9-54 dismissing the suit of the Plaintiff for recovery of Rs. 588-14-4 on a promissory note of Rs. 1000/- dated-17-8-53 executed in Mecca. It is alleged that after returning to Hyderabad, the Defendant paid. Rs. 500/- I.G. This is a suit to recover the remaining sum of Rs. 500/- I.G., the H.S. equivalent of which is the suit sum, as the Halli Sicca was current at the time when the suit was filed.

The trial court dismissed the suit because the promissory note was unstamped. I think that a promissory note that has been executed in a foreign country is not chargeable with duty u/s 17, Hyderabad Stamp Act. As the wording of the section makes it clear, it is only when the first holder of such note wants to present the same for acceptance or payment or endorses, transfers, or otherwise negotiates that payment, a duty in necessary. For filing a suit on the basis of such a promissory note, no duty is chargeable under this section.

There are some very clear authorities on this point. There is no other provision in the same Act which makes it necessary for a promissory note executed outside the State chargeable with a stamp duty for claiming the amount under it. See in this regard ''Kishenlal v. Marappa'' 27 Deccan LR 588 (A). See also Kottakota Venkatarami Reddi Vs. Sri Maharaja Seetharama Bhupal Rao (dead) and Others, . In this case, a promissory note was executed in the Nizam''s dominion and no stamp was fixed on it.

It was held, that this instrument can be produced in the court at Madras, since no duty was chargeable under any provision of the Stamp Act for a promissory note executed in a foreign territory. Similarly, the same High Court in an earlier decision in ''Mohamed Rowthen v. Mohamed Husin Rowthan 22 Mad 337 (C), has held that a promissory note which has been executed outside the British India insufficiently or improperly stamped, is not inadmissible u/s 34, Stamp Act, as there is no provision of Law which requires the promissory note executed out of British India to be stamped before it is sued on or used in the Court of law.

The Sind High Court in ''Gangaram, v. Nur Ahmed AIR 1935 Sind 48 (D), has held that a foreign note is not excluded by Section 35 from being admitted in evidence in a suit filed by the promisee against the maker of the note for recovery of the amount due on the note. All that Section 19 (which corresponds to Section 17, Hyderabad Stamp Act) requires is that such a note should be stamped before it is presented for acceptance or payment or endorsed, transferred or otherwise negotiated in British India.

The Madras High Court has again in Sivasubramania Thevan Vs. Kalankarayan Konar, , held that a suit can be brought on a (promissory note made outside British India, as between the promisor and the promisee, even though unstamped. It is not necessary in my view to cite any more rulings on the point, as it seems to be well established that what Section 17 of the Hyderabad Act, which corresponds to Section 19, Indian Stamp Act purports to lay down is that a duty is chargeable only when it is sought to negotiate transfer, endorse, or present for acceptance or payment as the words used expressly indicate it. This does not cover a case where a suit is brought by the promisee against the promisor.

For the reasons I have given above, I think the trial court was wrong in holding that the promissory note is inadmissible in evidence. The case is, therefore, remanded to the court below for trial and decision on merits according to law. Costs will abide the final result.