The Chief Controlling Revenue Authority, Madras vs The Madras Industrial Investment Corporation and Another

M. Anantanarayanan, Offg. C.J.

(1) The matter referred to us is under S. 57 of the Indian Stamp Act, 1899, and the question for decision has been phrased as follows:--

Whether the instrument in question is liable to be stamped even if it were not to be attested and whether instruments in general are to be stamped

on execution notwithstanding that other conditions which validate the transfer of right which the instrument purports to make are not present?

Whether the instrument in question is chargeable as a mortgage deed, under Art. 40(b) of Schedule I of the Indian Stamp Act?

(2) As we shall presently make it clear, the facts establish beyond the shadow of any doubt or controversy that there is no executed document of

any kind in the present case. There is only a draft of a proposed document, which may or may not come is not existence at all. The content of the

reference to us is that on the assumption or supposition that this document might be executed as a deed of mortgage without attestation, the issue

should be determined whether the Full Bench decision of this court in Crompton Engineering Co., (Madras) Ltd. Vs. Chief Controlling Revenue

Authority, Madras, , which held that such a document was not a mortgage deed and was not therefore liable to be stamped as a mortgage deed, is

correct or incorrect. The facts, which are not in dispute, may be briefly set forth, for our present purpose, as follows:

(3) The matter has arisen on account of certain correspondence between the Madras Industrial Investment Corporation, who may be termed the

party initiating the reference or enquiry, and the Refinance Corporation of Industry Ltd., Bombay. As will be clear from the statement of the case

referred for opinion the Secretary of the Madras Industrial Investment Corporation sought the opinion of the Collector of Madras u/s 31, with

regard to the unsigned draft of the instrument proposed to be executed. It is further clear that, not merely has such an instrument not been executed

so far, but that the explicit understanding was that it was not to be attested by any witness. The point for consideration was said to be whether such

an unattested document, evidencing a mortgage will be liable to stamp duty, as such, or whether, as contended by the Madras Industrial

Investment Corporation, whatever its operational effect might be, it will not be liable for stamp duty as a mortgage, on the authority of the Full

Bench decision.

(4) On this point, is necessary, to refer to two sections of the Stamp Act, and to certain decisions appertaining thereto, for, it appears to us that

there is much to be said for the argument that we are being asked to decide a matter which is not an actual case, but a pure hypothesis.

Undoubtedly, and we agree with the learned Government Pleader on that aspect, S. 31 of the Act, clothes a party like the Madras Industrial

Investment Corporation with a power to obtain the opinion of the Collector as to the proper stamp duty to believed even without any instrument

actually executed or attested; it is open to a party to seek such an opinion upon a mere draft of an instrument, that might never come into existence

in the future. Once such an opinion is sought, the Collector has to exercise his powers under S. 56 of the Act, and, if he feels a doubt, he makes a

reference to the Chief Controlling Revenue authority, which has the power of review. Under S. 57 the Board of Revenue has the undoubted

statutory power to make a reference of the kind that has come up before us.

(5) Even so, we shall refer to certain decisions in support of the view that such a reference must be based upon an actual case; it cannot be a mere

abstract question, referred for determination upon a hypothesis, which may never fructify into actuality.

(6) The relevant decisions on this aspect are to be found in Stamp Reference by the Board of Revenue, ILR 37 All 125: AIR 1915 All 33, and

two other decisions in which that decision has been noted. In the Full Bench decision of the Allahabad High Court, the Full Bench held that Section

57 empowers the High Court to decide questions relating to instruments already in existence, and which have been made the subject of action by

the Collector acting under the relevant section of the Stamp Act. They do not empower the court to give an opinion upon a deed, which may or

may not come into existence thereafter.

(7) Another relevant decision is that of Macleod C. J. and two other Judges of the Bombay High Court in Usuf Dadabhai Vs. Chand Mahomed, .

This also emphasises the principle that the Chief Revenue authority cannot refer an abstract question, when there is no pending case before it. u/s

57, it can only refer a pending or actual case which requires to be disposed of by the authority on receipt of the High Court''s judgment. In other

words, it is not permissible to the Chief Revenue authority under the guise of its powers u/s 57, to obtain the determination by this court of a

hypothetical question relating to documents which might never come into existence, even though such documents might have been contemplated by

the concerned party.

(8) Marine Insurance Policies Vs. Board of Revenue, , the same situation was considered with reference to previous cases cited by us. Rankin

C.J. pointed out that the Revenue authority could not obtain the opinion of the High Court on a question of an abstract or general character, not

arising out of a particular case and actual instrument. It appears to us that these three decisions do furnish two guiding principles or criteria which

could be applied to any given case. The first is that a purely abstract proposition of law or a hypothesis in law, however likely it may be that a case

corresponding to that hypothesis may later arise in practice, cannot be referred to this court, for resolution of a conflict of cases or for decisions u/s

The second is that it is essential that there should be in existence an actual case, which has to be decided in the light of the opinion furnished by

the court, with regard to an actual document, and not merely to some contemplated document.

(9) The learned Government Pleader stresses that these cases do not exclude the main line of his argument that S. 31 itself empowers a party to

obtain the opinion of the Collector, even on a mere draft or a contemplated document. When the legislature has so provided, and the Collector

can, when he feels a doubt, make a reference to the Board of Revenue, u/s 56, it would follow, according to the learned Government Pleader, that

the Board of Revenue can refer to this court even an instance where there is no actual document, but only a draft which may never eventuate into a

document, in other words, even a hypothesis can be the subject of reference, provided that it arose out of an approach to the Collector under S.

31.

(10) We do not think that it is necessary to finally decide this point, but we do feel that it is essential that there should be a ""case"" within the

meaning of the expression in the decisions cited by us. Commonsense would dictate the conclusion that a ""case"" of that kind cannot merely refer to

a solicitation of the opinion of the Collector by a party; it naturally presupposes an actual document of some kind, whether attested or unattested,

and an actual problem of the stamp duty to be levied on an existing document. On this ground alone, we feel that the reference to us will not bear

any further resolution by proceeding into the question whether the Full Bench decision in Crompton Engineering Co., (Madras) Ltd. Vs. Chief

Controlling Revenue Authority, Madras, was correctly decided or otherwise.

(11) Even apart from this, upon the broad doctrine of stare decisis is, we do not see why we should proceed to dispose of the matter, as we have

been invited to do by the Government Pleader, by making a reference to a Fuller Bench, concerning the validity of the decision in Crompton

Engineering Co., (Madras) Ltd. Vs. Chief Controlling Revenue Authority, Madras, . No doubt, the doctrine of stare decisis is generally shown

expressed in a different form, viz, that where a particular principle of law has been formulated and applied in a particular manner, in a series of

decisions over a period of years, even a court doubting the correctness of the view held for many years, in the light of which many rights might have

been decided will not lightly have the propriety of such a view re-examined. As stated in Roscoe Pound''s ""Jurisprudence"" Volume III page 562,

the doctrine has been expressed as

a feature of the common law technique of decision. That technique is one of finding the grounds of decision in reported judicial experience, making

for stability by requiring adherence to decisions of the same question in the past, and allowing growth and change by freedom of choice......... when

new questions arise or old ones take on new forms"".

These dicta do imply that there must be an actual question before court, before the principle of stare decisis is lightly set aside. In the present case,

we desire to record that we are not proceeding into merits of the contention urged by the learned Government Pleader why, in his view, the

decision of the Full Bench in Crompton Engineering Co., (Madras) Ltd. Vs. Chief Controlling Revenue Authority, Madras, requires

reconsideration, at the hands of a Fuller Bench. We think it is sufficient to state the facts, and to lay it down that, in the absence of an actual case or

a document actually in existence, and, in the mere context of a hypothetical case and a document which may never eventuate, we do not think that

the principle of stare decisis should be departed from, or that we should be departed from, or that reference to the Fuller Bench for

reconsideration. Consequently, we answer the reference by stating that Crompton Engineering Co., (Madras) Ltd. Vs. Chief Controlling Revenue

Authority, Madras, holds the field, as far as the present circumstances of reference are concerned, and that, such an instrument is not chargeable as

a mortgage as laid down in the decision.

(12) No order as to costs.