Suraj Parkash Kapoor vs Om Parkash Kapoor

This order will dispose of issue No: 1 which is reprodeced as below :

Is the suit not maintainable because the document on which the suit is based is not a promissory note but a bond which too is not duly stamped ?

O. P. D.

The document which is the subject matter of this issue reads as follows :

Rs. 40,000/

Dated.

On demand I promise to pay to Sh ; Suraj Parkash Kapoor son of Sh. Jawalla Ditta Kapoor, resident of Puranimandi Jammu the sum of Rs.

40,000 (Rupees forty thousand) for the value received today.

Sd/

(Om Parkash) Partner M/S J. D. Kapoor

& Sons, City Chowk, Jammu Witness :

Sd/ (Harbans Lal Bargotra) 290 New Plots, Jammu

3/1/78

Whereas the plaintiff says that it is a promissory note, the defendant says that it is a bond. In case the document is held to be a promissory note,

then there is no dispute that it would be properly stamped and, therefore, admissible in evidence. Section 2(22) of the Stamp Act which defines

promissory note reads as under :

'(22) ""Promissory note"" means a promissory note as defined by the Negotiable Instruments Act ; it also includes a note promising the payment of

any sum of money out of any particular fund which may or may not be available, or upon any condition or contingency which may or may not be

performed or happen.

Promissory note has been defined by Section 4 of the Negotiable Instruments Act in these words :

A ""promissory note"" is an instrument in writing (not being a banknote or a currencynote (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.

In order, therefore, that a document may fall within the aforesaid definition of a promissory note, it must possess the following characteristics :

i) it must be an instrument in writing other than a banknote or a currencynote;

ii) it must contain an unconditional undertaking to pay a sum of money to another person, or to his order, or to the bearer of the instrument.

iii) the sum of money to be pf id and the feucn to whom it is to be paid must be certain ; and

iv) the undertaking to pay money must be signed by the maker of the instrument.

The document in question does possess all the aforesaid characteristics, for it is a written instrument other than a banknote or a currencynote; it

contains an unconditional undertaking to pay a sum of money to another person, though not to his order or to the bearer of the document ; the sum

of money payable under it and the person to whom it is payable is certain; and the undertaking to pay the money has been signed by its maker. I

find no force in Mr. Chopra's contention that a document, even though it may possess all its charecteristics, cannot still be held to be a promissory

note, once it is shown to have been attested by a witness. Be that as it may, the question still remains whether the document in question is a

promissory note or a bond as defined by Section 2(5) of the Stamp Act, which reads as under:

(5) ""bond"" includes :

(a) any instrument whereby a person obliges himself to pay money to another, on condition that the obligation shall be void 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 grain or other agricultural produce to another.

Clauses (a) and (c) have no application to the document in question, for it is neither an instrument creating a conditional obligation to pay money

to attract the provisions of Clause (a) nor is It an instrument creating an obligation to deliver grain or other agricultural produce to attract the

provisions of Cl. (c). The document does not satisfy the definition of a bond given in Cl. (b), as it satisfies all its requirements which are ;

i) that it must contain an undertaking to pay money, not necessarily certain ;

ii) that the undertaking must be to pay money to a person named in it.

iii) that it must not be payable to order or bearer : and iv) that it must be attested by a witness,

The present document contains an undertaking to pay money to a person named in it. It is not payable to order or bearer either and has also been

attested by a witness, It is, therefore, idle to contend that it does not fall within the definition of a bond contained in Cl. (b), though it is equally idle

to contend that it cannot be said to be a promissory note merely because it has been attested by a witness. True, Cl. (b) makes its attestation by a

witness a condition precedent for bringing a document within the definition of a bond, but Section 4 of the Negotiable Instruments Act also does

not provide that a promissory note must not be attested by awitness, or that it must necessarily be payable to order or bearer. All this not with

standing, applying the maxim generalia specialibus non derogant (general words donot derogate from special words) the present document must be

held to be a bond as defined by Cl. (b), and not a promissory note as defined by Section 2 (22) of the Stamp Act. A document which squarely

falls within the specific definition of a bond contained in Cl. (b) must be held to be taken out of the definition of a promissory note contained in

Section 2 (22), which is obviously more general in character. Viewed thus, an unattested bond may be a promissory note, where an instrument

payable to order or bearer may be a promissory note, inspite of the fact that it is attested by a witness.

Reliance was placed upon Section 13 of the Negotiable Instruments Act, in particular to the explanation appended to it and it was urged that the

present document could still not be held to be a bond, because even though it has not been specifically made payable as it does not contain any

prohibition against making it payable to order or bearer. In order to appreciate this argument, it is necessary to notice Section 13 which reads as

under :

(1) A""negotiable instrument"" means a promissory note, bill of exchange or cheque payable either to order or to bearer.

Explanation (i); A promissory note, bill of exchange or cheque is payable to order which is expressed to be payable to a particular person, and

does not contain words prohibiting transfer or indicating an intention that it shall not be transferable.

This section merely deals wilh the negotiability of apromissory note and makes it payable to order or bearer even in the absence of these words

in it, provided it does not contain any prohibition to that effect. Nevertheless, this section does not alter the basic definition of a promissory note

given in Section 4, muchless can it have the effect of introducing this fiction into a different Act, namely, Section 2 (22) of the Stamp Act. If an

instrument is exfacie a bond as defined by Cl. (b), it does not cease to become not payable to order or bearer by force of Section 13 of the

Negotiable Instruments Act. A similar view has been taken in Jaikumar Shivlal and ors. Vs. Motilal Hirachand Gandhi and another, AIR 1973

Bombay 27, and Santsingh Vs. Madandass. AIR 1976 M.P 144 (F. B.) with which I am in respectful agreement. The authority Prakash Sharma

Versus Krishen Lal, 1980 S. L. J. 4 relied upon by Mr. J. P. Singh is clearly distinguishable on facts, for in that case the distinction between a

bond and a promissory note never arose for consideration.

The document on the strength of which the present suit was brought is bond as defined by Clause (b) of Section 2 (5). Before the suit may be

held to be not maintainable, an opportunity shall have to be given to the plaintiff to pay the necessary duty on the document in terms of Section 35

of the Stamp Act to make it admissble in evidence. The plaintiff is accordingly directed to pay the necessary stamp duty on the document together

with penalty equal to ten timei the duty payable. He shall deposit the necessary stamps within two weeks from today. Jssue No. 1 is disposed of

accordingly.