Jung Bahadur Ahir and Another vs Bansropan Singh and Another

Fazl Ali, C.J.—It appears that the opposite parties had executed a promissory note on 6th July 1937 in favour of the petitioners for a sum of Rs. 200. On 28th June 1940 they executed another promissory note for Rs. 272. In this promissory note reference was made to the principal and interest due under the earlier document and it was recited that as that document was about to be barred it was considered necessary that a second promissory note should be executed. On 26th June 1943 the petitioners brought the present suit in the Small Cause Court to recover a sum of Rs. 369-14-6 alleging that the cause of action arose on the date or the execution of the second promissory note. This suit was dismissed on the ground that the first promissory note was time barred and the second promissory note was insufficiently stamped. The petitioners have now filed an application u/s 25, Provincial Small Cause Courts Act, praying that the judgment of the Court below be set aside and a decree passed in their favour against the opposite parties for the sum claimed in the suit. It was not disputed that the promissory note of 28th June 1940 is insufficiently stamped.

It is, however; contended that though that document was not admissible as a promissory note, yet it was admissible as an acknowledgment of debt. The question, however, is whether the document can be admitted in evidence for that purpose in view of the provisions of Section 35, Stamp Act, which read as follows:

No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped.

It was held in Mulji Lala v. Lingu Makaji 21 Bom. that an acknowledgment of a debt coming under Article 1, Schedule 1, Stamp Act, 1 [I] of 1879, cannot be given in evidence for any purpose including the purpose of saving limitation. This case was followed by the Madras High Court in Nageshwara Eao v. Narayanamurti 21 Bom. 201. That was a case relating to a promissory note of a somewhat similar nature to the document with which I am concerned in this revision, and it was held that an improperly stamped promissory note is inadmissible in evidence to prove an acknowledgment of liability in order to save limitation in respect of promissory notes previously executed. The learned Chief Justice of the Madras High Court who delivered the judgment in that case pointed out that on the wording of Section 35, Stamp Act, an improperly stamped promissory note cannot be admitted in evidence for the purpose of saving limitation or for any other purpose.

A similar view was recently expressed by the Calcutta High Court in Jogendra Chandra Banerji v. Shacheendra Kumar 63 Cal. 813. Mr. Varma, who appears for the petitioner, has relied upon the Full Bench decision of the Allahabad High Court in Kanhaya Lal v. Stowell (81) 3 All. 81; but it was pointed out in the case decided by the Calcutta High Court to which reference has been made that the document in question in the case before the Full Bench was executed while the Stamp Act of 1869 was in force and the terms of the relevant Section in that Act were different from the provisions of Section 85 of the pre-sent Act, the words "for any purpose" being first introduced in the Stamp Act of 1879.

The view which seems to prevail in the Allahabad High Court is clearly, set forth in Mt. Bibbo Vs. Rai Saheb Gokaran Singh in which Sulaiman, C.J. and Bennet, J. held as follows:

The Court should consider whether the document is primarily a promissory note which is insufficiently stamped though incidentally it may amount to a receipt or an acknowledgment of liability. In such a case the stamp must have been affixed to it as a promissory note and not as a mere acknowledgment of liability. Where the instrument as a whole i3 insufficiently stamped it would not be proper to allow it to be split up into two portions and to regard the duty paid on it as having been paid on the portion which it suits the plaintiff to retain although the primary purpose of the document was contained in the other portion.

In the present case the document of 28th June 1940 purports to be a promissory note and must be treated as such. The plaint clearly states that the cause of action for the suit arose on the day on which this document was executed and that shows that the suit was based upon this document. As the document was insufficiently stamped the learned Small Cause Court Judge was right in holding that it could not be admitted in evidence u/s 35, Stamp Act.

The application is accordingly dismissed, but there will be no order for costs.