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Judgment
The transactions comprised in the document which, is the subject of this reference consist of a transfer of mortgage by S.D. Karaka to the Ahmedabad Fine Spinning and Weaving Co. and an agreement inter alia that the Company shall lend money at the request of S.D. Karaka for making improvements, additions and repairs to the building and machinery of the Hitvardhak Cotton Mills up to an unascertained though ascertain-able amount and also such money as may be required for working the said Mills.
It has been argued on behalf of the Revenue Authorities that the agreement to lend money for repairs and improvements is a bond within the moaning of the Indian Stamp Act 1899, Section 2 (5) (b).
By that clause it is provided that '' bond '' shall include any instrument attested by a witness and not payable to order or bearer whereby a person obliges himself to pay money to another.
In our opinion an agreement to lend money does not create an obligation to pay money within the moaning of this clause. An agreement Co lend money to a partnership is not capable of specific performance see Sichel v. Mosenthal (1862) 30 Beav. 371; and it creates no debt though the breach of it may give rise to a claim for damages : see South African Territories v. Wallington (1898) A.C. 309.
We hold that the document is only liable to duty as a transfer of mortgage and as an agreement, i.e. to Rs. 5-8-0 in all.