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2012 DIGILAW 4828 (MAD)

Babu Jeevanatham v. Azhaguvel Mudaliar

2012-11-27

T.MATHIVANAN

body2012
JUDGMENT 1. The memorandum of grounds of civil revision is directed against the Order dated 23.01.2004 and made in O.S.No.126 of 2002, on the file of the learned Principal Subordinate Judge, Villupuram. 2. The respondent herein has filed the suit in O.S.No.126 of 2002 as against the revision petitioner herein for the recovery of a sum of Rs.1,36,000/-with subsequent interest at the rate of 12% per annum. 3. The revision petitioner has contested the suit by filing his written statement. After framing necessary issues, the suit stood posted for trial on 12.01.2004. 4. It is obvious to note here that the above suit has been filed based on a demand promissory note dated 23.12.1998. When the plaintiff was in the box, the demand promissory note dated 23.12.1998 was tendered to be marked as a documentary evidence on behalf of the plaintiff. Whileso, it was vehemently objected to by the learned counsel for the revision petitioner/defendant contending that the demand promissory note dated 23.12.1998 was not properly stamped and therefore it was not admissible in evidence as contemplated under Section 35 of the Indian Stamp Act, 1899. 5. The submissions raised on behalf of both sides were considered by the learned Trial Judge viz., the learned Principal Subordinate Judge, Villupuram and after considering the real issue she has directed the plaintiff to pay necessary stamp duty penalty on or before 05.02.2004 in respect of the demand promissory note dated 23.12.1998 with a finding that the document could not be per se rejected at this stage for being stamped with improper description. 6. Impugning the Order of the learned Principal Subordinate Judge, Villupuram dated 23.01.2004, the defendant in the suit has approached this Court with the present revision petition under Article 227 of the Constitution of India. 7. Heard Mrs. Usha Raman, learned counsel appearing for the revision petitioner and Mrs. S.Hemalatha, learned counsel appearing for the respondent. 8. Mrs. Usha Raman, learned counsel appearing for the revision petitioner has adverted to that instead of affixing revenue stamps, postal stamps have been affixed in the document and therefore it ought to have been construed as one, which is not properly stamped and therefore it could not be received in evidence in terms of Section 35 of the Indian Stamp Act, 1899. 9. On the other hand, Mrs. 9. On the other hand, Mrs. S.Hemalatha, learned counsel appearing for the respondent has contended that the revision petitioner himself had executed the demand promissory note and at the time of execution of the demand promissory note he had brought the postal stamps and affixed on the demand promissory note and taking advantage of the illiteracy of the respondent/plaintiff, now he had schemingly set up a defence that the demand promissory note was not properly stamped and that his contention is liable to be rejected. 10. She has also argued that the revision petitioner had accepted the execution of the promissory note even his written statement and even he had gone one step further and admitted the affixing of postal stamps in the demand promissory note and subsequently when the defect was brought to his notice, another promissory note affixed with revenue stamps for correct description was executed and that he had also admitted that the subsequent demand promissory note was destroyed and once the revision petitioner had admitted the execution of the promissory note, the affixing of postal stamps instead of revenue stamps for proper value has become pale into insignificance and as rightly observed by the learned Principal Subordinate Judge, Villupuram, the document per se could not be rejected. 11. Before we could proceed with the discussion, this Court finds that it may be proper to extract the provisions of Section 35 of the Indian Stamp Act, 1899 (2 of 1899) (hereinafter it may be referred to as the 'Act'). "35. Instruments not duly stamped inadmissible in evidence, etc.-No instrument chargeable with duty 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." 12. Proviso (a) to Section 35 of the Act also assumes importance. Proviso (a) to Section 35 of the Act also assumes importance. It reads as follows: "(a) any such instrument not being an instrument chargeable with a duty not exceeding ten naye paise only, or a bill of exchange or promissory note, shall, subject to all just exceptions, be admitted in evidence on payment of the duty with which the same is chargeable, or, in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion." 13. From the text of Section 35 of the Act, it is crystal clear that the Section itself is very rigid and it says that unless an instrument is duly stamped it shall not be admitted in evidence for any purpose. 14. Proviso (a) to Section 35 of the Act encompasses two compartments: (i) any instrument not being an instrument chargeable with a duty not exceeding ten naye paise only, or a bill of exchange or promissory note, shall be admitted in evidence on payment of the duty with which the same is chargeable, subject to all just exceptions; and (ii) in case of an instrument is insufficiently stamped, it shall be admitted in evidence on payment of amount required to make up such duty, together with a penalty of five rupees. When ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion. 15. It is also very much essential to extract Rule 18 of the Indian Stamp Rules, 1925 (hereinafter it may be referred to as the 'Rules'): "18. Provision for cases in which improper description of stamp is used.-When an instrument bears a stamp of proper amount, but of improper description, the Collector may, on payment of the duty with which the instrument is chargeable, certify by an endorsement that it is duly stamped. Provision for cases in which improper description of stamp is used.-When an instrument bears a stamp of proper amount, but of improper description, the Collector may, on payment of the duty with which the instrument is chargeable, certify by an endorsement that it is duly stamped. Provided: Where the stamp borne on the instrument is a postage stamp and the proper description of stamp is a stamp bearing the words "Indian Revenue" or the words "Revenue B. & O." or the words "Bombay Revenue", the Collector shall so certify if the instrument was executed before, and shall not so certify, if it was executed on or after the 1st April, 1935. 18(A). Added in Tamil Nadu.-Where an instrument is not duly stamped and the deficit stamp duty is paid, a note shall be added on the instrument regarding the payment of deficit stamp duty if a certificate contemplated under section 42 cannot be added (G.O.Ms.419 CT and RE dated, 11.4.1983)". 16. Formerly, there was no need to consider whether a particular instrument was a bill of exchange or a promissory note for the purpose of stamp duty. Both were liable to the same duty whether they were made payable on demand or otherwise. After the amending Act of 1923 (XLIII of 1923) promissory notes payable on demand came to be charged to a duty ranging from one anna to four annas according to the amount secured, while bill of exchange payable on demand came to be chargeable to the fixed duty of one anna. 17. No doubt, Section 35 of the Act creates disability against a party filing a document in evidence, which is not sufficiently stamped and declares that such document will be inadmissible in evidence. However, the Court is empowered to remove the defects by regning the concerned party to make good the deficiency of the stamp duty and to pay the fine which is imposed therein. 18. Mrs. Usha Raman, while advancing her arguments has also made reference to the decision in Yasodammal vs. Janaki Ammal, reported in 1968 (1) MLJ 249 . 19. In this case, the learned single Judge of this Court has observed that no relief could be given on the basis of unstamped document. 18. Mrs. Usha Raman, while advancing her arguments has also made reference to the decision in Yasodammal vs. Janaki Ammal, reported in 1968 (1) MLJ 249 . 19. In this case, the learned single Judge of this Court has observed that no relief could be given on the basis of unstamped document. He has also observed that in the case of an unstamped document it has been held that as the prohibition contained in Section 35 of the Stamp Act is wide and absolute, even though in the pleadings the contesting party may admit the execution of the unstamped document, no relief could be granted on the basis of the admission, as it would amount to acting upon the unstamped document. 20. The learned Single Judge of this Court has also made reference to the decision in Chenbasappa vs. Lakshman Ramachandar, reported in (1894) I.L.R. 18 Bom. 369. In this case, it has been observed that the legislature had enacted "not only that an unstamped promissory note should not be receivable in evidence, but also that it should not be 'acted on', it was held that the Court was precluded from acting on the note by giving a decree on it, even though execution was admitted. 21. On the other hand, Mrs. S.Hemalatha, learned counsel appearing for the respondent has cited the decision of Andhra Pradesh High Court and made in Gurana Asirinaidu vs. Lenka Suryanarayana, reported in 2005 (1) ALD 713 : 2005 (1) ALT 659 . 22. In this case, the plaintiff, who is the revision petitioner had filed the suit in O.S.No.30 of 1998 for recovery of a sum of Rs.9,500/-alleging that the respondent/defendant had borrowed the said amount after executing the promissory note. When the revision petitioner/plaintiff had sought to mark the said pronote, the respondent/defendant had objected on the ground that it was not properly stamped, and therefore, it was not admissible in evidence. Admittedly, the suit document was executed on a non-judicial stamp paper for the value of Rs.5-00. The learned Junior Civil Judge had accepted the objection raised by the defendant and held that the plaintiff was not entitled to mark the disputed document as an exhibit. 23. Being aggrieved by the impugned Order, the plaintiff had preferred the above revision petition before the Andhra Pradesh High Court. The learned Junior Civil Judge had accepted the objection raised by the defendant and held that the plaintiff was not entitled to mark the disputed document as an exhibit. 23. Being aggrieved by the impugned Order, the plaintiff had preferred the above revision petition before the Andhra Pradesh High Court. The learned single Judge, while pronouncing the Judgment has referred to various provisions viz., Sections 2(11), 2(13), 2(22), 10, 11, 35 of the Indian Stamp Act. Besides this, the learned single Judge has also referred to Rules 3, 5, 13, 17, 18 of the Indian Stamp Rules, 1925 and apart from this he has also made reference to Article 49 of the Schedule to the Indian Stamp Act, which provides how a promissory note is to be stamped i.e., value of the stamp. 24. Rule 3 of the Indian Stamp Rules, 1925 deals with description of stamps. Sub-rule 1(i) and (ii) of Rule 3 of the Indian Stamp Rules, 1925 reads as follows: "(1) Except as otherwise provided by the Act or by these rules,— (i) all duties with which any instrument is chargeable shall be paid, and such payment shall be indicated on such instrument, by means of stamps issued by Government for the purposes of the Act, and (ii) a stamp which by any word or words on the face of it is appropriated to any particular kind of instrument, shall not be used for an instrument of any other kind. (2) There shall be two kinds of stamps for indicating the payment of duty with which instruments are chargeable, namely— (a) Impressed stamps, and (b) Adhesive stamps. Tamil Nadu Amendment.-In Rule 3(1) the word "and" occurring at the end of clause (i), omitted and after clause (ii), new clause (iii), "stamps purchased in Tamil Nadu State shall alone be used for instrument chargeable with duty under the Act as in force in that State," added-G.O.Ms.No.1365, Revenue, dated, 30th December, 1957." 25. Ultimately, the learned single Judge has held that there is no prohibition as to the execution of a promissory note on an impressed stamp paper. What is required for a valid promissory note is that it should be stamped properly, as provided under the Act and the Rules. Section 10 of the Act refers the mode of duties to be paid. What is required for a valid promissory note is that it should be stamped properly, as provided under the Act and the Rules. Section 10 of the Act refers the mode of duties to be paid. As per this provision, except as otherwise expressly provided in the Act, all duties with which any instrument chargeable shall be payable and such payment shall be indicated on such instruments by means of stamps. Further, as already referred to the Section 11, where the word 'may' used, is indicative of the choice for the executant of the document. A promissory note executed using impressed stamp paper or adhesive stamps are equally valid and admissible in evidence, provided that they are stamped with requisite value. 26. In the given case on hand, the respondent, who is the plaintiff has stated in his plaint that when he had approached his lawyer to give instruction for filing the suit, he was informed that the stamps affixed on the suit pronote were not revenue stamps, but they were postal stamps. 27. He has also stated that the defendant himself had written the demand promissory note by setting his own handwriting and affixed the postal stamps instead of affixing the revenue stamps. 28. On coming to the written statement filed by the revision petitioner/defendant, he has stated that he had borrowed a sum of Rs.50,000/-from one Velusamy, who is none other than the brother of the respondent/plaintiff and at the time of borrowal, by way of repayment security, his signatures were obtained in blank stamp papers consisting of the denominations of Rs.10/-, Rs.20/- and Rs.50/- respectively on 23.12.1998. 29. He has also stated that when he had availed the loan of Rs.50,000/- from Velusamy, as usual the pronote was executed for double the value i.e., instead of executing the pronote for Rs.50,000/- it was executed for the value of Rs.1,00,000/- as per the request made by Velusamy. 30. He has further stated that in the demand promissory note, which was executed by him, the said Velusamy had mistakenly affixed postal stamps and that he (revision petitioner) had signed on the postal stamps in the presence of two witnesses viz., one Palanisamy and one Periannasamy. 30. He has further stated that in the demand promissory note, which was executed by him, the said Velusamy had mistakenly affixed postal stamps and that he (revision petitioner) had signed on the postal stamps in the presence of two witnesses viz., one Palanisamy and one Periannasamy. When the fact of affixation of postal stamps was brought to the notice of Velusamy, he had requested the revision petitioner/defendant to execute another promissory note and accordingly he had executed another promissory note for the above said value. In that promissory note also the said witnesses Palanisamy and Periannasamy had signed as witnesses. 31. He has also stated in his written statement that since the original promissory note, in which the postal stamps were affixed, was not a valid one, he had not considered it as immaterial and thereafter on 15.05.1999 the principal amount of Rs.50,000/- along with the accrued interest was paid to the revision petitioner in the presence of the witnesses Palanisamy and one Periannasamy. Thereafter, the revenue stamps affixed on the pronote were removed and made the promissory note as invalid as the amount was fully settled. 32. It is also the contention of the revision petitioner that after the debt was fully discharged the pronote, which is affixed with postal stamps, has been misused for the purpose of filing the present suit. 33. It is settled principle of law that the procedural law cannot fail to provide relief when substantive law gives the right. The Principle hidden under this verbal texture is -there cannot be any wrong without a remedy. In M.V.Elisabeth and others. vs. Harwan Investment & Trading Pvt. Ltd., [1993 Supp.(2) SCC 433], the apex court has observed that where substantive law demands justice for the party aggrieved and the statute has not provided the remedy, it is the duty of the court to devise procedure by drawing analogy from other systems of law and practice. 34. In Dhanna Lal vs. Kalawatibai and others, [ (2002)6 SCC 16 ], the Apex Court has also laid down the similar proposition that wrong must not be left un-redeemed and right not left unenforced. 35. From the averments of the plaint as well as the written statement, the fact of affixation of postal stamps on the disputed pronote was known to the defendant. 35. From the averments of the plaint as well as the written statement, the fact of affixation of postal stamps on the disputed pronote was known to the defendant. It is to be established by the defendant by adducing valid and acceptable evidence that he had discharged the amount, which was borrowed and that the postal stamps were mistakenly affixed on the earlier promissory note and subsequently another properly stamped promissory note was executed and since the amount was settled, the said promissory note was made invalid. 36. The learned counsel appearing for the respondent/plaintiff has also taken the assistance of Section 58 of the Indian Evidence Act, 1872 saying that the admitted facts need not be proved and that since the revision petitioner himself had admitted in his written statement that he had executed the demand promissory note and that the said Velusamy had mistakenly affixed the postal stamps on it he was under the obligation to establish his contention. He has also argued that since he himself had admitted the borrowal of Rs.50,000/-, but contended that the promissory note was executed for the value of Rs.1,00,000/-, the marking of disputed pronote would not be required. But, however, as rightly directed by the learned Trial Judge, the respondent/plaintiff was ready to pay the necessary stamp duty penalty and therefore the impugned order need not required any interference. 37. Schedule-I Article 49 of Indian Stamp Act describes the term of 'Promissory Note' as defined by Section 2(22) and also how the pronote is to be stamped. 38. This Court has carefully considered the submissions made on behalf of both sides. 39. This Court has also perused the impugned Order dated 23.01.2004 and made in O.S.No.126 of 2002, on the file of the learned Principal Subordinate Judge, Villupuram. The learned Principal Subordinate Judge, in her Order, has observed that the document cannot be per se rejected at this stage for bearing stamps of improper description. But, the plaintiff can be permitted to pay the stamp duty penalty at this stage and the question of admission of evidence can be considered later. 40. Having regard to the above observations, this Court is of considered view that the Order of the learned Principal Subordinate Judge, Villupuram is perfectly within the ambit of the law and it therefore does not require any modification or interference. 41. 40. Having regard to the above observations, this Court is of considered view that the Order of the learned Principal Subordinate Judge, Villupuram is perfectly within the ambit of the law and it therefore does not require any modification or interference. 41. In the result, this revision petition is dismissed and the fair and decretal Order dated 23.01.2004 and made in O.S.No.126 of 2002, on the file of the learned Principal Subordinate Judge, Villupuram are confirmed. Consequently, connected miscellaneous petition is closed. No costs.