Aribam Keshorjit Sarma v. Konjengbam Amu Singh — 1967 DIGILAW 17 (GAU)

ORDER This is a revision petition filed by the plaintiff in Money Suit No. 13 of 1965 on the file of the Court of the Munsiff, Imphal, under Ss. 115 and 151, Civil P. C. to set aside his order dated 13-4-1966 passed in the suit. 2. The petitioner filed Money Suit No. 13 of 1965 on the file of the lower Court to recover a sum of Rs. 615 with further interest from the date of the plaint till realisation of the amount due on a document, executed in favour of the petitioner on 9-5-1962. The petitioner also prayed for a decree for the sale of the respondents land covered by patta 81/38 Imphal Pana in Taobungkhok Basti by enforcing the charge on the same created by the document. 3. The Munsif passed an order on 3-3-1966 that the document in question is a mortgage bond and not a promissory note, that it was not properly stamped, that it is inadmissible in evidence U/S. 35 of the Indian Stamp Act - Act II of 1899 (as applied to Manipur State) and "that the petitioner should take further steps under the Stamp Act if he wished to get it admitted in evidence." 4. Thereupon, the petitioner filed a petition on 22-3-1966 stating that the document in question is a promissory note for the purpose of the Indian Stamp Act, that even an unregistered mortgaged bond is admissible in evidence to support a claim for a money decree, that the lower Court should have collected the deficit stamp duty and penalty and admit the document in evidence and that, without prejudice to his contentions, the lower Court should impound the document after collecting the deficit stamp duty and penalty and admit the same in evidence of the petitioners claim for money. Then, the lower Court passed the order in question on 13-4-1966 holding that deficit stamp duty of Rs. 3.45 P. (Rs. 3.75 P. minus 30 P. already paid) is payable under Art. 40 (b) of Schedule I of the Indian Stamp Act, that he should further pay Rs. 34.50 P. towards penalty being 10 times the deficit stamp duty and that, after the petitioner deposited the same, the document should be impounded and sent to the District Collector for his endorsement and return. 5. The petitioners counsel challenged the above orders of the lower Court on several grounds. 34.50 P. towards penalty being 10 times the deficit stamp duty and that, after the petitioner deposited the same, the document should be impounded and sent to the District Collector for his endorsement and return. 5. The petitioners counsel challenged the above orders of the lower Court on several grounds. His first contention is that the document in question is a promissory note, that it was validly stamped with. 30 P. revenue labels and that the document is admissible in evidence. The document in question was written in Manipur language. Its English translation (as done by the petitioners counsel) is as follows :- " Sd/- Sri Amu Singh Konjengbam. Lender Shri Aribam Keshorjit Sarma, Uripok Laikhurembi Leikai. I Shri Kongjengbam Amu Singh of Khagempali Huidrom Leikai have borrowed a sum of Rs. 300/- from Mahajan, mortgaging a paddy land U/Patta 81/38 Imphal Pana, Taobungkhok Basti. The amount will be repaid within a period of 3 months with interest at the rate of Rs. 3% per mensem. I undertake all responsibilities in case of any claim from any quarter. Dated 9-5-62." Thus, the document reads that the respondent borrowed a sum of Rs. 300/- from the petitioner mortgaging his land covered by patta 81/38 in Imphal Pana, that he agreed to repay the loan with interest @ 3% per mensem within Appellant period of 3 months and that the respondent undertook to make good his title to the property, if any one raised dispute about it. 6. The question is whether this document is a promissory note within the meaning of Section 4 of the Indian Negotiable Instruments Act or Section 2 (22) of the Indian Stamp Act as contended by the petitioners counsel. Section 4 of the Indian Negotiable Instruments Act runs as follows : 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. Section 4 of the Indian Negotiable Instruments Act runs as follows : 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. 6-A. Section 2 (22) of the Indian Stamp Act runs as follows :- " Promissory note means a promissory note as defined by the Negotiable Instruments Act 1881; 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." The contention of the learned counsel for the petitioner is that a promise to pay the amount covered by the document is implied and that the document in question is, therefore, a promissory note. He relied on Sushil Chander Chaturvedi v. Wali Ullah, (AIR 1941 All 158). It was held that it is a question of fact in each case, whether a particular document is to be regarded as an acknowledgment or promise and that in order to decide this question the primary intention of the parties and the real characteristics of the document must be looked into. But, in the present case the document in question shows that it is lacking in the essential requisites of a promissory note. There is no unconditional promise to pay the amount to the petitioner. It does not appear to be negotiable. On the other hand, it shows that the respondent mortgaged his paddy land covered by patta 81/38 Imphal Pana in favour of the petitioner towards security for the amount. The document further shows that the respondent undertook to make good his title to the property, if any dispute was raised by anyone regarding the property. Further, a reading of the plaint and the prayer portion of it shows that the intention of the parties was to treat the document as a simple mortgage bond. In fact, the petitioner also prayed for a decree for sale of the property by enforcement of the charge on the land covered by the document So, it is clear that the document is not a promissory note. In fact, the petitioner also prayed for a decree for sale of the property by enforcement of the charge on the land covered by the document So, it is clear that the document is not a promissory note. There are a number of decisions relied on by the counsel for the respondent, which go to show when a document can be said to be a promissory note. In Verajlal Muljee v. Secretary of State, AIR 1931 Cal 732 (SB) the promisor under a document stated that, till the debts were paid to the promisee, he "pledged" all his properties to him and that he would dispose of the same only after discharging the debts due to the promisee. It was held that the document should be construed as a whole and that there was no doubt that it amounted to transfer of the properties by way of assurance or mortgage. In Keshavji Thakershi, v. Narshi Ramji, AIR 1954 Sau 52 it was held that the essential feature of a promissory note is an expressed unconditional promise to pay and that it is not enough that the substantial effect of the instrument should be to make the executant liable to pay a sum of money. In that case there was an acknowledgment of a settled account in an account book. It was held that the mere fact that there was a further statement of the amount being payable in certain instalments did not substantially convert the essence of the document to make it a promissory note. The case law on the subject was discussed. In the matter of, Kuppusami Chettiar, AIR 1955 Mad 652 (FB), the document ran as follows :- "Promissory note executed in favour of A residing at P by K. The sum found due to you is Rs. 3000/-. As this sum had to be paid to you, I shall pay the same together with interest at Re. 0-4-0 per month per Rs. 100/- in six equal instalments and discharge the same". It was held that the document was not a promissory note, as there was no unconditional undertaking to pay a certain sum of money and that it was only a bond as defined by Section 2 (5) (b) of the Indian Stamp Act. 0-4-0 per month per Rs. 100/- in six equal instalments and discharge the same". It was held that the document was not a promissory note, as there was no unconditional undertaking to pay a certain sum of money and that it was only a bond as defined by Section 2 (5) (b) of the Indian Stamp Act. In Raghunath Prasad v. Mangi Lal, AIR 1960 Raj 20 the entry of the balance due in an account book was signed by the debtor. There was a statement of the debtor in his own hand-writing that the balance was due after the account was taken. This was followed by a promise by the debtor to pay the amount to the creditor and was again signed by the debtor. It was held that the document was more in the nature of a settlement of account between the parties with a promise to pay the amount due, that it was never intended to be negotiable and that it did not fall within the definition of a promissory note but that it was only an agreement. In Muthu Gounder v. Perumayammal, AIR 1961 Mad 347 the document read as follows :- "I promise to pay you or your order after a period of two years on demand by you the sum of Rs.......". It was held that it was not a promissory note within the meaning of the expression in Section 2 (22) of the Indian Stamp Act. 7. The document in question in the present case is not a promissory note. It contains the characteristics of a simple mortgage bond. They are firstly, the existence of a loan. Secondly, the respondent bound himself personally also to repay the loan. Thirdly, he secured the loan by mortgaging specific immovable property. Fourthly, he did not deliver possession of the property to the petitioner. The fact that the document cannot be registered now is immaterial. So the learned Munsiff is correct in holding that the document in question is a simple mortgage bond. 8. Thirdly, he secured the loan by mortgaging specific immovable property. Fourthly, he did not deliver possession of the property to the petitioner. The fact that the document cannot be registered now is immaterial. So the learned Munsiff is correct in holding that the document in question is a simple mortgage bond. 8. The learned counsel for the respondent argued that the petitioners counsel admitted in his petition dated 22-3-1968 that the document might be impounded, that stamp duty and penalty might be collected so that the document might be admitted in evidence of the money claim only and that, therefore, the present contention of the petitioner that the document is a promissory note is not tenable. The petition shows that the petitioners counsel mentioned therein that he made the above request without prejudice to his contentions. Besides under Section 23 of the Indian Evidence Act his alleged admission (made without prejudice to his contentions) does not bind the petitioner. Also, an incorrect admission on a question of law does not bind the party. 9. Under Section 35 of the Indian Stamp Act the Munsiff was correct in calling upon the petitioner to deposit Rupees 34.50 P. towards the deficit stamp duty and penalty. If they are deposited, the document in question becomes an unregistered but validly stamped simple mortgage bond. Under Section 49 of the Indian Registration Act, though the document cannot be relied upon as affecting the immovable property and as a simple mortgage bond, still it can be relied on as evidence of the money debt. Section 49 of the Indian Registration Act runs as follows :- " 49. Under Section 49 of the Indian Registration Act, though the document cannot be relied upon as affecting the immovable property and as a simple mortgage bond, still it can be relied on as evidence of the money debt. Section 49 of the Indian Registration Act runs as follows :- " 49. No document required by Section 17 or by any provision of the Transfer of Property Act, 1882, to be registered shall - (a) affect any immovable property comprised therein, or (b) confer any power to adopt, or (c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered : Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882, to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877, or as evidence of part performance of a contract for the purposes of Section 53-A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction not required to be effected by registered instrument." That the document can be admitted as evidence of the personal covenant contained therein to repay the debt is clear from a number of rulings cited at pages 348 and 349 of Sanjiva Rows Indian Registration Act, 1960 Edition. Vide also Khantamoni Dassi v. Biswa Nath Pal, AIR 1933 Cal 786 and Om Prakash v. Mukhtar Ahmad, AIR 1940 Lah 486. 10. The learned Counsel for the petitioner argued that the Collector is the final authority who can decide the sufficiency of the stamp duty payable on the document and that, therefore, the lower Court should have sent the document to the District Collector under Section 32 of the Indian Stamp Act. He relied on Government of Uttar Pradesh v. Raja Mohammad Amir Ahmad Khan, AIR 1961 SC 787 and B. K. Narayana Singh v. H. M. Mohum Shumshere Jung Behadur, AIR 1963 Mys 244. In these cases the documents were produced before the Collector for certificate under Sections 31 and 32 of the Indian Stamp Act. But, the present case falls under Section 35 of the Indian Stamp Act, under which the Court can admit an otherwise inadmissible unstamped document by collecting the deficit stamp duty and penalty. In these cases the documents were produced before the Collector for certificate under Sections 31 and 32 of the Indian Stamp Act. But, the present case falls under Section 35 of the Indian Stamp Act, under which the Court can admit an otherwise inadmissible unstamped document by collecting the deficit stamp duty and penalty. The document in question was not filed by the petitioner before the Collector under Section 31 of the Indian Stamp Act. So, the above decisions have no bearing on the facts of this case. 11. The learned Counsel for the petitioner also relied on Thakur Harbux Singh v. Satish Chandra, AIR 1963 All 376 and Mahammad Jamal Saheb v. Munwar Begum, AIR 1964 Andh Pra 188 relating to Section 36 of the Indian Stamp Act, which held that when once an instrument is admitted in evidence, its admissibility cannot be questioned at any subsequent stage in the same matter. These decisions also have no application to the facts of this case, in as much as the document in question was not admitted by the lower Court as evidence. 12. The contention of the petitioners counsel is that the lower Court should have made a reference to this Court under Section 60 of the Indian Stamp Act and relied on Amar Singh v. Asa, AIR 1932 Lah 172 (SB). But, in that case itself it was held that a reference should be made only when the Judge has any doubt and not in every case. The questions involved in this case are not very intricate and the Munsiff was not bound to make a reference to this Court. 13. However, the Munsiff went wrong in directing that the document should be sent to the District Collector after the deficit stamp duty and penalty are collected. The proper procedure to be followed, when the deficit stamp duty and penalty are paid, is laid down by Sections 42 and 38 of the Indian Stamp Act. Under Section 42 of the Indian Stamp Act the Munsiff shall make an endorsement on the document that proper stamp duty and penalty (stating the amount of each) were levied. The name and residence of the persons paying them should also be mentioned. Under Section 42 of the Indian Stamp Act the Munsiff shall make an endorsement on the document that proper stamp duty and penalty (stating the amount of each) were levied. The name and residence of the persons paying them should also be mentioned. Thereafter, he should send a true copy of the document together with a certificate in writing stating the amount of duty and penalty levied in respect thereof and send the amount to the Collector, as required by Section 38 of the Indian Stamp Act. The Munsiff should not send the original document to the Collector. After the stamp duty and penalty are collected, he should proceed with the trial of the suit, after observing the provisions of Sections 42 and 88 of the Indian Stamp Act. 14. In the result, the revision petition is dismissed with the above observations and directions. The parties should bear their respective costs. Petition dismissed.