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2011 DIGILAW 912 (RAJ)

Hari Om Enterprises v. Court of Addl. District Judge (FT) No. 4

2011-05-04

MAHESH BHAGWATI

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Hon'ble BHAGWATI, J.—By way of the instant writ petition, the petitioner has implored to quash and set aside the order dated 17.8.2010, whereby the learned Additional District Judge (Fast Track) No.4, Ajmer, allowed the application of the respondent No.2-defendant filed under Order 13 Rule 6 of CPC and Section 35 of Stamp Act and directed the petitioner-plaintiff to pay 5% stamp duty on amount of Rs. 2 lakhs together with ten times penalty of the amount of stamps. 2. Adumbrated in brief, the facts of the case are that the petitioner-plaintiff filed a suit under Order 37 Rule 2 of CPC stating that the petitioner and respondent No.2 were known to each other and both of them were entailed in a business transaction. It is averred that the respondent No.2-defendant borrowed Rs. 2 lakhs from the petitioner on 8.4.2004 and rendered a promissory note in favour of the petitioner, which termed that whenever the petitioner-plaintiff asked for return of the said amount, he would repay the same. It is alleged that on 24.2.2006, the petitioner-plaintiff asked the respondent No.2 to return the said amount of promissory note, but the respondent No.2 refused to do so, hence, he filed the aforesaid suit before the competent Court. 3. During the trial of the suit, the respondent No.2-defendant filed one application under Order 13 Rule 6 of CPC and Section 35 of the Stamp Act stating that the petitioner-plaintiff had exhibited the promissory note as Exhibit/1 in his affidavit and the cross-examination of the witness was to commence but the said promissory note could not be taken in evidence, as it was not a 'promissory note' within the definition of Negotiable Instrument Act and conversely, it was a 'bond' under Section 2(5) of Stamp Act, which was insufficiently stamped, hence, the document could be admissible in evidence only after realizing 5% stamp duty of the total value of promissory note. Learned trial Court having considered the submissions, allowed the application of the respondent No.2-defendant on 17.8.2010, which has been impugned in this writ petition. 4. Heard learned counsel for the parties and carefully perused the relevant material on record. 5. Learned counsel for the petitioner canvassed that the order of the learned trial Court was not sustainable on account of the same being arbitrary, illegal and contrary to the provisions of law. 4. Heard learned counsel for the parties and carefully perused the relevant material on record. 5. Learned counsel for the petitioner canvassed that the order of the learned trial Court was not sustainable on account of the same being arbitrary, illegal and contrary to the provisions of law. Learned counsel further canvassed that the document was a promissory note, which was executed by the respondent No.2 - defendant without any condition, which was essential ingredient of he definition of 'Promissory Note', but the learned trial Court did not take note of this fact. Learned trial Court erred in treating the instrument as a 'Bond', whereas the instrument is, in fact, a promissory note. Learned trial Court not only ordered the petitioner to pay 5% stamp on the value of promissory note but arbitrarily directed the petitioner to pay ten times penalty thereon also. The order of imposing ten times penalty is also highly wrong and arbitrary, which is liable to be quashed. 6. E converso, learned counsel for the respondent No.2 defended the impugned order and stated the same to be just and proper, which required no intervention. 7. Having reflected over the submissions made at the bar and carefully scanned the material on record including the impugned order, it is noticed that the learned trial Court having critically analyzed and discussed the facts Ad longum, observed that 'the so-called promissory note was a 'promissory note' but it was a 'bond' within the definition of 'Bond' under Section 2(5) of the Stamps Act. 8. "Promissory note" has been defined in Section 4 of the Negotiable Instruments Act as under : "4. 'Promissory note'- 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." 9. 'Promissory note'- 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." 9. "Bond" has been defined in Section 2(5) of the Indian Stamp Act, 1899, which reads thus:- "(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) and instrument so attested, whereby a person obliges himself to deliver grain or other agricultural produce to another." The essential ingredients of promissory note are- (1) an unconditional undertaking to pay; (2) the sum should be a sum of money and should be certain; (3) the payment should be to the order of a person who is certain, or to the bearer of the instrument; and (4) the maker should sign it." The essentials of a bond are : (1) there must be an undertaking to pay; (2) the sum should be a sum of money but not necessarily certain; (3) the payment will be to another person named in the instrument; (4) the maker should sign it; (5) the instrument should be attested by a witness; and (6) it must not be payable to order or bearer. 10. Learned trial Court having relied upon the judgment of Madhya Pradesh High Court rendered in the case of Bhagatram Gandhi vs. Mohan Gupta 1 (2001) BC 287, found that it was mentioned nowhere in the document Exhibit/1 that the payment of amount shall be to the order of a person, hence, it did not fall in the category of "Promissory note". Conversely, the instrument was fulfilling all the requirements and terms of "Bond" and the instrument was duly attested by a witness, hence, it was fulfilling all the essentials of a 'Bond' and the learned trial Court rightly treating the same to be 'Bond' unerringly directed the petitioner-plaintiff to pay 5% stamp duty. 11. Conversely, the instrument was fulfilling all the requirements and terms of "Bond" and the instrument was duly attested by a witness, hence, it was fulfilling all the essentials of a 'Bond' and the learned trial Court rightly treating the same to be 'Bond' unerringly directed the petitioner-plaintiff to pay 5% stamp duty. 11. Learned counsel also canvassed that the learned trial Court arbitrarily imposed ten times penalty on the amount of stamp duty, which was highly wrong and arbitrary. This argument of the learned counsel is not found to be tenable at all. Section 39 of the Rajasthan Stamp Act, envisages that no instrument chargeable with duty under this Act shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped. Provided that any such instrument shall be subject to all just exceptions, be admitted in evidence on payment of a penalty of Rs. 100/-, or, ten times the amount of deficient portion thereof, whichever is higher. Since the said 'promissory note' (instrument) was found deficient of proper stamp, learned trial Court rightly directed the petitioner to pay 5% stamp duty on the value of the so called promissory note and ten times penalty on the amount of stamp duty. It is wrong to say that the imposition of ten times penalty on the amount of 5% stamp duty is arbitrary or contrary to the provisions of law. The impugned order of the learned trial Court is found to be perfectly just and proper and does not suffer from any infirmity. 12. It has been consistently held by the Hon'ble Apex Court in the plethora of judgments that the jurisdiction under Article 227 must be sparingly exercised and may be exercised to correct errors of jurisdiction and the like, but not to upset pure findings of facts, which falls in the domain of Appellate Court only. The High Court under Art. 226 or 227 of the Constitution is required to invoke extra-ordinary jurisdiction only when the impugned order is found to be perverse, or not based on material or it results in manifesting injustice. In the instant case, the impugned order is just and warrants no intervention. 13. The High Court under Art. 226 or 227 of the Constitution is required to invoke extra-ordinary jurisdiction only when the impugned order is found to be perverse, or not based on material or it results in manifesting injustice. In the instant case, the impugned order is just and warrants no intervention. 13. For the reasons stated above, the writ petition being bereft of any merit deserves to be dismissed and the same stands dismissed, accordingly.