Kamla Devi and Ors. vs Sianpo

Kotwal, J.

(1) The specific question which falls for determination in this petition is whether a promissory note which bears a stamp of sufficient amount but of

improper description can be certified to be duly stamped under Section 37 of the Stamp Act (hereinafter 'the Act') read with Rule 11 of the Rules

made under the Act ?

(2) The respondent brought a suit against the petitioners on the foot of a promissory note bearing adhesive stamp of forty paise. An objection was

taken by the petitioners that the promissory note was inadmissible in evidence and could not be acted upon as it was not written on a paper with

the requisite stamp impressed on it as required under Rule 4. The respondent, thereafter, made an application that the promissory note may be

returned to her, so that it could be presented to the Collector for obtaining his certificate on it in terms of Sec. 37 read with Rule 11 that ii was duly

stamped, as the pronote bore stamp of sufficient amount though of improper description This application was allowed by the trial court and the

promissory note was returned to the respondent, as a consequence of which, he also obtained the Collector's certificate on is that is was duly

stamped. It is this order which has been challenged by the defendantpetitioners in this revision petition. The petition was initially heard by Chief

Justice Ali as his Lordships then, was who being of the opinion, that it involved a substantial question of law as to whether a promissory note, a bill

of exchange, an acknowledgment or an instrument chargeable with a duty of ten paise which was written on sufficient stamp but of improper

description could be validated u/s 37, directed the petition to be placed before a larger Bench for an authoritative pronouncement. This is how this

petition has come up before this Bench.

(3) Appearing for the petitioners, Mr. Bhardwaj has argued that proviso to Sec. 45 creates a bar against admitting any of the aforesaid documents

in evidence, even on payment of penality and is not duty stamped. Section 37, argued the learned counsel, has to be read subject to this said

proviso, and if a promissory note cannot be admitted in evidence us/35, muchless can it be validated by the Collector us/37 read with Rule 11. To

support his contention, he has placed reliance upon Negala Dinne Erranna Vs. Angadi Madappa and another, AIR 1963 Andhra Pradesh 457 and

Anopp Chand Vs. Nathwat, AIR 1965 Raj. 114. Mr. Gupta's contention on the other hand is that proviso to Section 35 cannot de read as a

proviso to Sec. 37, which otherwise is wide enough in terms to apply to promissory notes as well. He too has relied upon a decision of Madhya

Bharat High Court in (Thakur Ranjit Singh Vs. Behramji, AIR 1957 Madhya Bharat 181.

(4) In order to determine the true ambit and scope of Sec 37, some of other provisions of the Act may have to be noticed first. Sec. 35 provides

that an instrument chargeable with duty cannot be admitted in evidence for any purpose, nor can it be acted upon, registered or authenticated,

unless it is duly stamped. The instruments chargeable with duty are mentioned in Sec. 3 and promissory note is also one of such instruments. Under

Clause (11) of Sec. 2 an instrument can be said to be duly stamped only if it bears an adhesive or impressed stamp of not less than the proper

amount affixed or used in accordance with the law for the time being in force in the State. Section ]0 lays down that duties on instruments shall be

paid and the payment indicated on them by means only of the stamps in accordance with the provisions contained in the Act. in the a b se n c e of

any such provisions in the Act, the same shall be paid in accordance with the rules framed by the Government under the Act in that behalf Article

49 of Schedule 1 of the Act fixes the amount of duly to be paid on a promissory note but there is no provision in the Schedule, or in the Act, as to

the kind of stamp to be used in such a case This omission is, however, supplied, by Rule 4, according to which, a promissory note executed in the

State shall be written on a paper on which the necessary stamp with or without the word 'Hundi' has been engraved or emgrossed. Under Art 49

the suit promissory note ought to have been written on a stamp of not less than twentyfive paise. It bears a stamp of forty paise, i. e. more than

what was required under Art 49, but the stamp is not impressed but only adhesive' Under Rule 4, as already noticed, it was required to be written

on a paper with a stamp of not less than twentyfive paise engraved or embossed on it The suit promissory note cannot, therefore be said to be duly

stamped according to Sec 2(11) read with Rule 4, though it can't also be again said that it bears a stamp of sufficient amount, though of improper

description.

(5) Taken all by its If, Section 37 would apply to the present case, and the Collector would power to certify the suit promissory note to be duly

stamped under its provisions read with Rule 11, the moment the respondent paid the requisite duty on it. It is not permissible to read the proviso to

Section 35 as proviso to Section 37 as. well Proviso to Sec 35 cannot, as such, control the provisions of Section 37 even though ""it is absolute in

its terms"" as held by the High Court of Andhra Pradesh in AIR 1963 AP 457 (Supra), or ""it stands to reason that such a document cannot be

certified to be duly stamped u/s 37,, as observed by the High Court of Rajasthan in AIR 1965 Raj. 114 (supra). In the absence of any thing else

contained in the Act which could limit its operation, Sec. 37 is universal in its application and would apply to all kinds of documents including a

promissory note A proviso must be considered in relation to the principal matter to which it stands as a proviso. To treat it as an independent

enacting clause having no relation to the provision immediately proceeding it is to sin against the fundamental rule of interpretation of statutes. A

court cannot arbitrarily cut down the amplitude of a provision Furthermore, the legislature could have invested the Collector with powers u/s 37 to

validate a document which even a court could not have admitted in evidence on payment of duty and penality under provisoto Section 35 What

powers shall be exercised by whom is essentially for the legislature to decide and its wisdom cannot be questioned on the grounds of

reasonableness or propriety.

(6) Even so, the scheme of the Act clearly indicates that a promissory note, a bill of exchange, an acknowledgment and an instrument chargeable,

with a duty of ten paise cannot be certified to be duly stamped even by taking recourse to Section 37 read with Rule 11. This would be amply

borne out by reading Section 37 alongwith Section 31, 32, 33 and 40. Section 31 enables a person to have the opinion of the Collector as to the

duty with which a particular document, whether already executed, or yet to be executed, is chargeable. On its plain terms, section applies to all

documents including a promissory note, a bill of exchange, an acknowledgment, and an instrument chargeable with a duty often paise. The

Collector shall, as provided by Section 32, make an endorsement on the document that it has been duly stamped, in case it already bears the

requisite stamp, or if not so, the requisite duty, or such sum as with the duty already paid is equal to the duty determined by him has been paid on

it. This power he can exercise subject to the condition that the document has been brought to him within one month from the date of its execution,

when it is executed or first executed within the State, or within a period of three months from the date of its execution, when it has executed or first

executed out of the State. In case it has been brought to him after the expiry of the aforesaid period, and it appears to him that the document is not

duly stamped, he shall impound the same u/s 33, Subsection (1) where of reads as under :

33 (1) Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an

officer of police, before whom any instrument, chargeable in his opinion, with duty, is produced or comes in the performance of his functions, shall

if it appears to him that such instrument is not duly stamped, impound the same.

(7) Obviously, therefore, if a document including a pronote which is not duly stamped if produced before the Collector, or otherwise comes to his

notice in the performance of his functions, within the time specified by Subsection (3) of Sec. 32, he shall certify the same to be duly stamped on

payment of the requisite duty alone. No penality can be charged j under this section. If, however, it is produced before him, or otherwise comes to

his notice after the expiry; of the said time limit, he is obliged to impound it, I and has then to proceed u/s 40 which reads as] under :

(1) When the Collector impounds any instrument under section 33, or received any instrument sent to him under section] 38, subsection (2)

not being an instrument) chargeable with a duty of ten paise only on a bill of exchange or promissory note, of acknowledgment, he shall adopt the

foil] owing procedure :

(a) if he is of opinion that such instrument is duty stamped, or is not chargeable with duty, he shall certify by endorsement thereon that it is duly

stamped, or that it is not so chargeable, as the case may be

(b) If he is of opinion that such instrument is chargeable with duty and is not duty stamped, he shall require the payment to the proper duty or the

amount required to make up the same, together with a penalty of five rupees; or if he thanks fit, an amount not exceeding ten times the amount of

the proper duty or of the deficient portion thereof whether such amount exceeds or falls short of five rupees:

Provided that, when such instrument has been impounded only because it has been written in contravention of Section 13 or section 14, the

Collector may, if he thinks fit, remit the whole panalty prescribed by this section.

(2) Every certificate under clause (a) of subsection (1) shall, for the porpose of this Act, be conclusive evidence of the matters stated therein,

(3) Where an instrument has been sent to the Collector under section 38, subsection (2) the Collector shall, when he has dealt with it as provided

by this section, return it to the impounding officer.

(8) It is thus obvious that before a document which is not duly stamped within the meaning of Sac. 2 (11) is produced before the Collector, he has

to impound it before taking any further action in the matter. There can be no manner of doubt, that a promissory note which is not written on a

paper having the necessary stamp impressed on it, cannot be said to bee duly stamped, even though it bears adhesive stamp of proper amount.

The Collector has, therefore, to impound it under section 33, before proceeding to certify it to be duly stamped, in case it is brought to him after

the expiry of the time limit prescribed by Sub Section (3) of Sec. 32. He can certify a document either impounded by him, or sent to him after

being impounded by any other person u/s 38 (2) to be duly stamped u/s 40 after the requisite duty and penalty has been paid on it.

(9) This power he cannot, however, exercise in respect of a promissory note, a bill of exchange, an acknowledgment, and an instrument

chargeable with a duty of ten paise, as Subsection (1) of Sec. 40 expressly creates an exception in respect of these documents. A similar exception

has been created u/s 41 in respect of documents, unduly stamped by accident It follows that promissory note cannot be certified by the Collector

to be duly stamped u/s 40, if it has not been written on a paper with the necessary stamp impressed on it as provided under Rule 4, even if it bears

adhesive stamp of sufficient amount, as it cannot still be said to be duly stamped within the meaning of Sec 2 (11). Viewed thus, conferring a wider

amplitude on Sec. 37 so as to bring within its ambit a promissory note, a bill of exchange, an acknowledgment, or an instrument chargeable with

duty of ten paise, would clearly bring into conflict with See. 40 inasmuch as, the Collector on the one hand will have power to certify every such

document to be duly stamped u/s 37, whereas on the other hand he shall be barred from doing so u/s 40. An attempt has, therefore, to be made to

harmonize both these provisions so that effect can be given to both of them. They cannot be so interpreted where one becomes destructive of the

other. As held by their Lordship of the Supreme Court in Sh. Venkatarammona Devaru and others Vs. State of Mysore and others, AIR 1958 SC

253 :

The result then is that there are two provision of equal authority, neither of them being subject to the other. The question is how the apparent

conflict between them is to be resolved. The rule of construction is well settled that when there are in an enactment two provisions which cannot be

reconciled with each other, they should be so interpreted that, if possible, effect could be given to both. This is what is known as the rule of

harmonious constructions, Applying this rule, if the contention of the appellants is to be accepted then Art. 25 (2) (b) will become wholly nugatory

in its application to denominational temples, though, stated above, the language of that Articles includes them. On the other hand if the contention of

the respondents is accepted, then full effect can be given to Art 26 (b) in all matters of religion, subject only to this that as regards one aspect of

them, entry into a temple for worship, the rights declared under Art. 25 (2) (b) will prevail. While, in the former case, Article 25 (2) (b) will be put

wholly out of operation, in the latter, effect can be given to both that provision and Art. 26 (b) We must accordingly hold that Art. 25 (b) must be

read subject to Art 25 (2) (b).

(10) The two sections can be harmonized in case Sec 37 is constiued to apply to documents other than promissory notes, bills of exchange,

acknowledgments, and instruments chargeable with duty of ten paise. In this sense Sec. 37 may have to be read as a part of Sec. 43 itself,

impowering the Collector to certify documents to be duly stamped, which not only bear no stamp, or in sufficient stamp, but also sufficient stamp of

improper description. I am, therefore, clearly of the opinion that a document bearing a stamp of sufficient amount but of improper description

cannot be certified to the duly stamped u/s 37 read with Rule 11, if it is either a promissory note, or an instrument chargeable, or an

acknowledgment or an instrument chargeable with a duty of ten paise. To this extent I agree with the view taken by the High Courts of Rajasthan

and Andhra Pradesh in the decisions referred heretofore,, though for reasons different from the ones stated therein. With respect, if I may say so, I

cannot subscribe to the contrary view taken by the High Court of Madhya Bharat in AIR 1957 M. B. 181 (supra), relied upon by Mr. Gupta.

(11) The suit promissory note was produced before the Collector more than a month after its execution. He had, therefore, no jurisdiction to

certify it to be stamped u/s 32. The trial court also committed an error in returning the suit promissory note to the respondent. If it had come to the

conclusion that it was not duly stamped, it ought to have impounded that suit promissory note, and sent it to the Collector u/s 38 (2) instead of

returning it to the respondent himself. The Collector bad no power to certify it to be duly stamped on payment of duty with or without penalty, nor

had he any power to return it to the respondent. The suit promissory note could not be either admitted in evidence or otherwise acted upon. No

finality, as such, can be attached to the certificate of the Collector which is clearly without jurisdiction.

(12) For the foregoing reasons, the revision petition is allowed, and the order of the trial court is set aside, but in the peculiar circumstances of the

case without any order as to costs.