Baljinder Singh vs Mohammad C. Musha

B.K. Ray, J.—Plaintiff-Petitioner filed the suit out of which this revision arises for recovery of some money against the Defendant opposite party. While the suit was pending in the trial Court the Plaintiff filed a document which was marked ''V''. He subsequently filed 2 petitions one for impounding the document and the other for marking it as an exhibit. The Defendant claimed that the document should be impounded as a bond and therefore before it was admitted into evidence the Plaintiff should pay stamp duty and penalty as required for a bond. The trial Court after hearing the parties came to the conclusion that the said document was a bond and therefore called upon the Plaintiff-Petitioner to pay stamp duty and penalty on the said document as required in the case of a bond. As per the order of the trial Court the Plaintiff was asked to pay Rs. 29/ - as stamp duty and Rs. 290/ - as penalty. It is against this order the present Civil Revision has been filed.

The main controversy therefore is as to whether the document referred to above is a bond. The recitals in the bond thus:

I, Sri Musha son of Shiva Mohammad, Main Road, Rourkela-1, House No. 282, borrowed Rs. 2000/ - (Rupees two thousand only) for business purpose from S- Balinder Singh son of S. Soudagar Singh C/o Sardar Hotel, Tarapur Gate, Rourkela-1 on interest basis for a period of one year.

Signature of the Borrower

Sd/ (Musha) Place-Rourkela

Date 13-12-1972

Witness.

Section 2(5) of the Stamp Act defines the bond as follows:

Bond.- ''Bond'' includes

(a) any instrument whereby a person obliges himself to pay money to another on condition that the obligation shall be valid if a specified act is performed, or is not performed, as the case may be;

(b) any instrument attested by a witness and not payable to order or bearer, whereby a person obliges himself to pay money to another; and

(c) any instrument so attested, whereby a person obliges himself to deliver gram or other agricultural produce to another;

Schedule 1 Article 15 of the Stamp Act gives the proper stamp duty payable for different bonds according to amount or value secured under them. The aforesaid definition of a bond does not mean that a document in order to be a bond must fulfil the requirements of all 3 clauses namely (3), (b) and (c) of Section 2(5) of the Stamp Act. An the 3 clauses in the definition of the bond must be disjunctively taken. So if any document comes within the purview of anyone of the 3 clauses it will be a bond even though the requirements of the other clauses are not satisfied Saudamini Dei '' Hazari v. Bishnu Charan Jena 21 (1075) C.L.T. 1277. It follows therefore that the aforesaid definition envisages 3 classes of bonds. This position is not disputed before me. Mrs. A.K. Padhi the learned Counsel for the opposite party urges that the document in question is one which comes under the definition of a bond as given in Section 2(5) Clause (b) of the Stamp Act. According to her the said instrument is attested by a witness and its recitals do not show that anything is payable to order or bearer although under the said document the Defendant obliges himself to pay money to the Plaintiff. Therefore, the document comes under Clause (b) of the definition. On the other hand Mr. S.C. Mohapatra, the learned Counsel for the Petitioner says that the Stamp Act is a fiscal statute and therefore it should not be used to arm a litigant with a weapon of technicality to meet the case of his opponent. The provisions of the enactment are to be construed in the interest of the revenue only. Therefore, while interpreting the provisions of this enactment interpretation favourable to the citizens should be adopted. For this proposition reliance is placed upon a decision reported in Hindustan Steel Ltd. v. Dilip Construction Co. AIR 1969 S.C. 1158. Mrs. Padhi appearing for the opposite party however does not oppose this contention of Mr. Mohapatra though she submits that where an instrument comes within the definition of a bond merely because the party relying upon it has to pay a heavy penalty and stamp duty an attempt should not be made to take out the said document from the category of a bond. There is sufficient force in this contention of Mrs. Padhi. But before deciding whether a particular document belongs to a particular category the first and foremost thing is to examine its contents and the other formalities observed therein. If there is no ambiguity in the recitals and formalities observed in the document bring it under a particular category, the document must be placed in that category and other attending circumstances and intention of parties will not weigh in order to find out to which category the document belongs. Reference may be made in this connection to a decision reported in M/s. Patel Stone Trading Co. Nagpur v. Ram Sing AIR 1975 Born. 19. The relevant passage from the aforesaid decision may be extracted below:

The real test to decide whether a particular document is a bond or not, is to find out, after reading the document as a whole, whether an obligation is created by the document itself or whether it is merely an acknowledgment of a pre-existing liability. If there is merely an acknowledgment of a pre-existing liability which could have been enforced apart from the document itself, then the matter stands on a different footing. But if the document creates an obligation in itself with an express promise for payment of an amount, such a document will have to be termed as a bond within the meaning of Section 2(c)(ii) of the Bombay Stamp Act.

The aforesaid passage clearly shows that to decide whether the particular document is a bond or not, one has to find out and to see whether an obligation has been created by the document itself. Examining this document from this point of view it appears to me that it is merely an acknowledgment of past liability and there is nothing to show in the document that any express or implied obligation has been created thereunder. I The document only recites that one "Musa borrowed Rs. 2000/ - for his business purpose from S. Balinder Singh on interest basis for a period of one year" appearing in the document it is argued by Mrs. Padhi that those words create an obligation on the part of the borrower to pay the sum of Rs. 2000/ - with interest within a period of one year. I do not think from the aforesaid words such a meaning is deducible. Those words only mean that the borrowing of Rs. 2000/ - was on interest basis for a period of one year. By this document 110 obligation has been created. According to me the document only recites a past transaction and does not itself create any liability. Hence in spite of the fact that the other requirements of the definition of a bond as given in Section 2(5)(b) of the Stamp Act namely, that it is attested and not payable to order or bearer, have been satisfied, the document in question cannot be said to be a bond. So far as other clauses of Section 2(5) are concerned as has already been pointed out it is admitted by Mrs. Padhi that they do not apply at all. The same view as noticed earlier in the case reported in M/s. Patel Stone Trading Co. Nagpur v. Ram Singh AIR 1975 Bom. 19, also has been expressed in the decision reported in Jaikumar Shivlal Shah and Ors. v. Motilal Hirachand Gandhi and Anr. AIR 1975 Bom. 27. The relevant sentence in paragraph 9 of that decision is quoted herein below:

.... For the purposes of the Indian Stamp Act 1899, a document as it appears on the face of it, has got to be considered.

A passage from the decision reported in Choudhri Gulabchand Jain Vs. Bhama, , may also be quoted below for reference.

"There can be no difficulty in considering whether a particular instrument is a bond or a bare acknowledgment for the purposes of the Stamp Act, where such instrument contains an express promise to pay. The difficulty can arise only where the promise to pay is implied. It has been held in a number of cases that the definition of ''Bond'' as given in Sub-section (5) of Section 2 of the Act covers only such instruments where by a person expressly obliges himself to pay money and not one from which the law merely implies such an obligation. In Chaganalas v. Emperors AIR 1984 Nag. 261, it was held that the mere signing of the balance in account books does not necessarily make such an instrument a bond even though an obligation to pay is implied. Similarly, in Sobhagmal Keshrimal v. Ramnivas Murlidhar 1961 M.P.L.J. 298, Nowaskar, J. made the following observations in paragraph 2:

There is nothing in the operative part of the document to suggest that the writer had made an express promise to pay the amount although an implied promise to pay can be inferred by reference to the date of maturity mentioned. That would not amount to even an agreement much less a bond.

In Lala Dewan Chand v. Punjab and Kashmir Bank Ltd. AIR 1987 Lah. 220, it has been held that an acknowledgment attested by two witnesses and containing an implied promise to pay interest but containing no express obligation to pay the amount due is not a bond within the meaning of Section 2(5) of the Stamp Act. The essential feature for constituting a document as a bond is that there must be an express obligation to pay. No such obligation can be inferred from a mere acknowledgment of the balance. An implied obligation cannot therefore convert an acknowledgment into a bond. In the decision reported in Hiralal Sircar and Ors. v. Queen Empress ILR 22 Cal. 757 a similar view has been expressed. It has been clearly laid down in this decision that no document can be a bond unless it is one which by itself creates an obligation to pay the money. The relevant passage from the decision reported in Mohamad Sadik v. Amiya Nath Dutt AIR 1917 Pat. 521, in extracted below in this connection:

A bond has been interpreted in the Act to include, among other things, an instrument attested by a witness not payable to order or bearer, whereby a person obliges himself to pay money to another. The document is an instrument whereby a person has obliged himself to pay money to another and it is not payable to order or bearer. In order to determine whether it is attested by a witness or not it is permissible to look only at the document itself. Evidence cannot be referred to. At the foot of the document there occur the letter and words "W by Chintamoni Jena, Mirya Bazaar, Cuttack" with the date. "W by" may mean either written by or witnessed by. Of these two possible alternatives that more favourable to the executants must be preferred, for a question of penalty is involved. We accordingly adopt the alternative ''written by'', The occurrence of the words ''written by'' followed by a name affords no foundation for saying that the instrument has been attested by a witness.

This being the position of law I have no hesitation in my mind while deciding the question as to whether the instrument in question is a bond or not, that the recitals of the document have only to be looked into. Where those recitals do not raise any doubt in the mind of the readers nothing else other than the recitals has to be considered. Even where recitals support 2 views the view which is more favourable to the party relying upon the document must be preferred because a question of penalty is involved. The contention of Mrs. Padhi that in each and every case one has to not only consider the recitals of the documents, but also the attending circumstances and other evidence in order to determine its character does not appeal to me at all and appears to be against the judicial pronouncements referred to earlier of different Courts. May be where the recitals of a document are not very clear we may look to the dominant intention of the parties and other circumstances in order to find out the true nature of the document. Mrs. Padhi in support of her contention has relied upon a decision reported in In the Matter of Hamdard Dawakhana (Wakf) Delhi C., . This decision instead of supporting Mrs. Padhi''s contention supports the view which I have taken. The following passages from the said decision may be noticed.

For the purposes of determining the true character of the instruments before us, all that we have to see is whether under those instruments any of the parties there to has obliged itself to pay money to others. If there is such an obligation, then those instruments are bonds. The possibility of an instrument becoming ineffective on a future date, or the chance of its being avoided by one of the parties thereto, are wholly irrelevant circumstances for the purpose of determining whether that instrument is a ''bond'' or not. For the purpose of determining that fact, we have to take the instrument as it is and see whether any of the parties thereto obliges itself to pay money to another. If so looked at, we have no doubt that the instruments before us are ''bonds''....

It is trite to say that every bond is an agreement. So is the case with a mortgage or sale or exchange. But what we have to see is whether that agreement has acquired the character of a ''bond''. We have already noticed the relevant clauses in the instruments in question. There is no dispute that under those instruments one of the parties thereto had obliged itself to pay moneys to others.

The next decision relied upon by Mrs. Padhi in support of her contention is Rai Sahib Ramdyal Ghansi Ram and Sons and Others Vs. Ramnivas, . In this case the question arose as to whether a document was an acknowledgment as mentioned in schedule I Article 1 of Hyderabad Stamp Act or was a document containing a promise to pay the debt, the controversy between the parties in that case being whether the document would save limitation for a suit for recovery of money.

In this connection their Lordships of Andhra Pradesh High Court have said that in deciding the question that was before them it would be necessary to find the dominant intention of the parties in making the acknowledgment. The following passage from the said decision is extracted below:

Applying this criterion, there can be little doubt in this case that the intention of making the acknowledgment was not so much to furnish evidence of the debt as to give particulars regarding the account calculation of interest etc., which could be used by the Petitioner to save the suit from the bar of limitation. Do hors those acknowledgments, the Petitioner has evidence of the existence of the debt, the main evidence being the promissory notes themselves. As such, independent of these acknowledgments, the Plaintiff could establish his case. That being the real position, the trial Court was not justified in keeping out these documents.

This decision, therefore, in my opinion is no answer to the point raised in the present case for determination. Similarly the decision reported in Jivanlal Chimanlal Mehta Vs. Pramodchandra Chimanlal Mody, , relied upon by Mrs. Padhi is on the question as to whether the particular document is an acknowledgment within Limitation Act or Stamp Act. In such a case therefore their Lordships of Bombay High Court on consideration of the facts and circumstances of the case held that the statement of accounts did not constitute an acknowledgment within the meaning of the Stamp Act but was an acknowledgment

within the meaning of the Limitation Act. This decision therefore can be of no avail to Mrs. Padhi. On the aforesaid analysis my conclusion is that the document in question is not a bond. Reading the document once again I do not find any things therein to show that it contains any promise to pay the debt or any stipulation to pay interest. The document only recites a past transaction and is an acknowledgment of past liability.

I, therefore allow this revision, set aside the impugned order. The document shall be treated as an acknowledgment of debt and dealt with accordingly. In the circumstances of the case, the parties shall bear their own costs.