Shiv Raj and Another vs Ram Swaroop

Mohini Kapoor, J.—In ''Bahi'' of the plaintiff respondent, there is an entry in the following words:

[kkrk A lk- Jh f''kojktth ekyi.kh nsoth Nko.kh okyk o lk Jh nqXkkZyky th lqjD;k pkSnoh okyk dk fefr dkrh lwn 2035 dks A

40]000@& jksdM+h nhuk :i;k gtkj th.k dks O;kt izfr 1@& jksdM+ ekfld ls tkssM+dj tc Hkh vki ysuk tek djk nsxs A j- f''kojktth g- nqxkZyky

This is signed by the defendants appellant. But does not bear any stamp. An objection was raised before the learned District Judge, Tonk, where the suit on the basis of this Khata was pending, that the document which is a pronote, being unstamped, is not admissible in evidence.

Learned District Judge considered the intention of the parties and after referring to certain decisions held that the intention of the parties was to execute a Khata in the Bahi of the plaintiff and it was not a pronote, so, as to say that it is inadmissible in evidence on account of being unstamped. This decision has been challenged in this appeal by the defendant appellant. The promissory Note has been defined u/s 4 of the Negotiable Instruments Act, 1881 is as under:

(a) A "promissory note" is an instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument;

Illustrations

A signs instruments in the following terms:

(a) "I promise to pay B or order Rs. 500";

(b) ''''I acknowledge myself to be indebted to B in Rs. 1,000/-, to be paid on demand, for value received";

(c) "Mr. B,I O U Rs. 1,000/-"

(d) "I promise to pay Rs. 500/- and all other sums which shall be due to him";

(e) "I promise to pay B Rs. 500/-, first deducting thereout any money which he may owe me;

(f) "I promise to pay B Rs. 500/- seven days after my marriage with C;

(g) "I promise to pay B Rs. 500/- on D''s death, provided D leaves me enough to pay that sum";

(h) "I promise to pay B Rs. 500/- and to deliver to him my black horse on 1st January next.

The instruments respectively marked (a) and (b) are promissory rotes. The instruments respectively marked (c), (d), (e), (f), (g), and (h). are not promissory notes. Learned counsel for the appellant has contended that the document in question contains all the necessary requisites for making it a promissory note as it is an unconditional undertaking to pay a certain sum of money and it has been signed by the maker. As far as the person to whom it is payable, it is slated that the document has been executed in the Bahi of the plaintiff respondent and as such the parson to whom the amount is payable, is a certain person, therefore, it should be taken to be a pronote which being unstamped is inadmissible in evidence. It is contended that when the document is in the bahi of a particular person, then it is payable to the person to whom the Bahi belongs and it cannot be said that the document is not in favour of a certain person.

Reliance has been placed on Jagjivandas Bhikhabhai Vs. Gumanbhai Narattamdas, , wherein it was held that an instrument cannot be said to be a promissory note, merely on account of behalf of the parties that what they executed is a promissory note but it is to satisfy the conditions of the definition of promissory note u/s 4 of the Negotiable Instruments Act. In this case a Khata was executed in a Bahi. The name of the payee was not expressely mentioned in the body of the khata but there was a clause to the effect that "we promise to pay whenever you demand." The name of the payee was specified with certainty on the head of khata. As it was addressed to the plaintiff by making reference to the head of the khata, therefore, it was held that khata was an unconditional undertaking to pay a certain sum to a specified payee and when it was signed by the defendant it became a pronote.

Relying on this decision, learned counsel for the appellant has contended that the document in the present case contains a promise to pay a specified sum and the payee cannot be said to be uncertain because it is the person in whose bahi this entry is made is the payee. The plaintiff has claimed to be the creditor on the basis that the document has been recorded in his bahi. In Sahu Brijraj Sharan v. Sahu Ragunandan Sahra RLW 1957 33, the nature of the document arose for decision. In this case also it was not mentioned after the promise to pay as to who was the person to whom the amount was payable but when the name of person to whom the amount was payable was mentioned on top of the document itself, it was held to be a pro-note and being unstamped was held inadmissible in evidence. Reference was made to Illustration (b) of Section 4 of the Negotiable Instruments Act. Emphasis was laid on the fact that the words, "to me" were not used after the words "to be paid" but still this was an illustration of a promissory note. It was held that it was not necessary that the payee should be specifically named after the words "I shall pay" or similar words but on reading the document as a whole, there should be no doubt as to the parson who is the payee.

On the other hand, the plaintiff respondent has placed reliance on Raghunath Prasad Vs. Mangi Lal, but this case refers to a document in which the rate of interest was not specified and it was held that the sum payable was not certain.

Another case relied upon by the plaintiff respondent is Chiranji Lal and Others Vs. Ramnath and Others, The document in this case was recorded by the debtor in the account book of the creditor, and was based on previous accounts at a certain rate of interest. Considering the intention of the parties, it was held that it was an agreement and not a promissory note, though containing the terms to pay and being insufficiently stamped, it would be used in evidence on payment of penalty. The intention in this case was inferred from the evidence that the parties had money-dealings for a long time and balance was struck from the previous accounts and it was after striking the balance that the document, was written in the account book of the creditor. The primary intention of the parties was held to be to strike a balance of the previous account and the rate of interest was recorded only to save any dispute about the rate. It was also stamped according to the sum chargeable on an acknowledgement at that time.

In the present case, according to the pleadings in this plaint, the allegation is that a sum of Rs. 40,000/- was advanced in cash, by the plaintiff to the defendent and this transaction was recorded in the bahi of the plaintiff and the instrument is termed as a khata. The fact that it is a cash transaction further strengthens the contention of the defendants appellant that the document in question is a pro-note, which satisfies all the conditions necessary for making a document a promissory note. When it is a case of cash transaction and not settlement of previous accounts, then it cannot be an acknowledgement. If an instrument satisfies all the ingredients necessary for making it a pro-note then it will be a pro note. No matter what name the parties give to it. It will not become a khata merely because the plaintiff chooses to give this name. Ordinarily the concept is that a document executed in a bahi is a khata but these Khatas mainly strike a balance of the amount due and do not contain a promise to pay, contain the existence of which charges the complexion of the document.

In the present case, all the necessary requisites of a pro-note are present in the document. There is an instrument in writing, containing an unconditional undertaking signed by the maker, to pay a certain sum of money and the person to whom it is payable, is also certain as the amount is to be paid to the person in whose account book this amount has been entered. In such circumstances, the document in question is a pro-note and when the pro note is unstamped, it is inadmissible in evidence u/s 35 of the Indian Stamp Act.

In the result, this revision is accepted and the decision of the learned District Judge, Tonk, dated 10th September, 1982 is set-aside.