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1987 DIGILAW 126 (MP)

KANHIYALAL NEMOMAL v. BHAGWANDAS GENDIMAL

1987-03-27

K.M.AGARWAL

body1987
JUDGMENT : ( 1. ) THIS revision by the defendant is directed against an order dated 16-8-1984 of the Court below, whereby the disputed document dated 31-3-1977 has been held to be an agreement. ( 2. ) THE non-applicant has filed a civil suit against the applicant for recovery of a sum of Rs. 37,000/- on the basis of a document alleged to have been executed by the applicant on 31-3-1977. It is pleaded by the non-applicant that in the past he was in pakistan and since 1967, he has been living at Gwalior. While in Pakistan, he used to entrust one Gelomal, resident of a place in Pakistan with his money and while migrating to India, he left in trust with Gelomal a sum of Rs. 31,000/ -. In March 1977, Gelomal came to India. The non-applicant demanded his amount from Gelomal. As the applicant was indebted to Gelomal and Gelomal demanded his money from the applicant, the latter took upon himself the responsibility to pay the amount of the non-applicant and executed the alleged document dated 31-3-1977- in the presence of gelomal and agreed to repay the amount on or before 1-6-1977 with interest at the rate of 6 per cent per annum. In his written statement, the applicant denied the plaint allegations and, inter alia, submitted that the document dated 31-3-1977 was not properly stamped and, therefore, not admissible in evidence. During the course of evidence, the objection was repeated and the Court below proceeded to hear arguments on admissibility of the document and to decide the objection before taking further evidence in the case. The applicant alleged it to be a promissory note, but the non-applicant said it to be an acknowlegement. By its impugned order, the Court below held it to be an agreement. ( 3. ) THE document is on a small and thin piece of paper. It bears no stamp and is written in Sindhi language. Both the parties have filed their Hindi translations of the document, but there is no material difference between the two. The English version of the document may be as follows :- "om "doctor Saheb Bhagwandas, "i shall pay you Seth Gelomals Rs. 31,000-00 in words Thirty-one thousand by 1-6-1977 with interest at the rate of -/8/-in words eight annas. "kanhaiyalal Nemomal Dabra 31-3-1977 ( 4. The English version of the document may be as follows :- "om "doctor Saheb Bhagwandas, "i shall pay you Seth Gelomals Rs. 31,000-00 in words Thirty-one thousand by 1-6-1977 with interest at the rate of -/8/-in words eight annas. "kanhaiyalal Nemomal Dabra 31-3-1977 ( 4. ) THE learned counsel for the applicant submitted that the said document is a promissory note. He cited Sant Singh vs. Madandas, 1976 MPLJ 238 = 1976 JLJ235 (FB); K. A. Lona vs. Dada Haji Ibrahim and Co. , AIR 1981 Ker. 86 ; and Pulluru vajramma vs. More Agaiah, AIR 1979 A. P. 2. ( 5. ) THE learned counsel for the non-applicant contended that the document is an agreement. He placed reliance on paragraph 10 of the decision in Sant Singh (supra), besides relying on clauses (a), (b) and (c) of Section 2 of the Contract Act and in gurdeep vs. Bindra and Co. , 1983 MPWN Note 160; Saraswatibai vs. Haibatrao Ramji, air 1945 Nag. 261; Suraj Prasad Oja vs. Ram Lal Singh, AIR 1947 Pat. 131; and Subbu vs. Arunachalam AIR 1930 Mad 382. ( 6. ) THE essential requirements of a promissory note under Section 4 of the negotiable Instruments Act, 1881 are that it must be in writing; contain an unconditional undertaking to pay a certain sum of money to or to the order of a certain person, or to the bearer of the instrument; and must be signed by the maker. Under section 2 (22) of the Indian Stamp Act, 1899, (for short, the "stamp Act"), a promissory note means "a promissory note, as defined by the Negotiable Instruments Act, 1881" and 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 document in question is in writing and is said to contain the signature of its maker. It also contains an undertaking, but it is not an ordinary undertaking. It is for payment of Gelomals debt. I am, therefore, of the view that the instrument under consideration cannot be said to be a promissory note. The cases relied on by the learned counsel for the applicant give no indication for taking a different view. ( 7. It also contains an undertaking, but it is not an ordinary undertaking. It is for payment of Gelomals debt. I am, therefore, of the view that the instrument under consideration cannot be said to be a promissory note. The cases relied on by the learned counsel for the applicant give no indication for taking a different view. ( 7. ) WITH what relevance the provisions of clauses (a), (b) and (c) of Section 2 of the contract Act or the decisions in Saraswatibai; Suraj Prasad Oja; and Subbu (supra)were referred or cited by the learned counsel for the non-applicant is not easy to follow. The other two cases, Sant Singh and Gurdeep (supra) were just to show that the document in question was not a promissory note or to say that it was an acknowledgement. I have held that the document cannot be said to be a promissory note and the counsel did not challenge the finding of the Court below that it could not be said to be an acknowledgement. It is, therefore, not necessary for me to examine any of the cases cited on behalf of the non-applicant. ( 8. ) THE question still remains, if the document can be said to be a simple agreement, chargeable to stamp duty under Article 57 of Schedule I of the Stamp Act as amended in its application to the State of Madhya Pradesh; and if not an agreement, what it is and subject to what duty ? ( 9. ) IN plaint pleadings, an attempt has been made to set up an agreement of the nature mentioned in illustration (a) to Section 62 of the Contract Act on the basis of the disputed document, but as the document has not been executed by all the parties concerned and as it does not show discharge of Gelomal from his alleged liability towards the non-applicant, or acceptance of the applicant as his debtor by the non-applicant, the document in question cannot be said to be an agreement falling under section 62 of the Contract Act. An agreement without consideration is void under section 25 of the Contract Act and under Section 2 (d ). An agreement without consideration is void under section 25 of the Contract Act and under Section 2 (d ). "when at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise. " Apparently no consideration in terms of Section 2 (d) of the Contract Act passed on the applicant under the document in dispute. Neither the applicants liability towards Gelomal, nor gelomals liability towards the non-applicant stood discharged under the disputed document, which could form consideration for the applicant for executing the document in favour of the non-applicant. Now under Section 127 of the Contract Act, anything done, or any promise made, for the benefit of the principal debtor may be and sufficient consideration to the surety for giving the guarantee. The contract of guarantee, surety, principal debtor and creditor are defined under Section 126, which reads as follows :- "a contract of guarantee is a contract to perform the promise, or discharge the liability, of a third person in case of his default. The person who gives the guarantee is called the surety; the person in respect of whose default the guarantee is given is called the principal debtor, and the person to whom the guarantee is given is called the creditor. A guarantee may be either oral or written. " In the light of the provisions of Sections 126 and 127 of the Contract Act, the disputed document may be said to be a contract of guarantee or a security bond, chargeable to stamp duty under Article 57 of Schedule I of the Stamp Act as amended in its application to the State of Madhya Pradesh. The reason is that by executing the disputed document, the applicant appears to have entered into a contract to discharge the liability of Gelomal, i. e. , a third person towards the non-applicant. I, therefore, hold that the document in question is not a simple agreement. It is a security bond, chargeable to duty under Article 57 of Schedule I of the Stamp Act. The duty chargeable on such document in the State of Madhya Pradesh is Rs. 50/ -. I, therefore, hold that the document in question is not a simple agreement. It is a security bond, chargeable to duty under Article 57 of Schedule I of the Stamp Act. The duty chargeable on such document in the State of Madhya Pradesh is Rs. 50/ -. After payment of this duty together with a penalty of a sum equal to ten-times the duty, as per proviso (a) to Section 35 of the Stamp Act, the document may be admitted in evidence. Accordingly the impugned order of the Court below deserves to be set aside. ( 10. ) IN the result, this revision succeeds and it is hereby allowed. The impugned order of the Court below is set aside and after declaring the disputed document to be a security bond it is directed that it may be admitted in evidence on payment of the duty of Rs. 50/- together with a penalty of a sum equal to ten-times the duty in accordance with proviso (a) to Section 35 of the Stamp Act. In the circumstances of the case, I make no order as to costs of this revision. ( 11. ) IT may be made clear that anything said in this order shall not preclude the court below from considering, if any valid consideration passed on to the applicant under the disputed document; or if the applicants liability under it is exclusive or coextensive with that of the principal debtor. ( 12. ) THE record of the Court below be sent back immediately. Revision allowed.