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2014 DIGILAW 723 (AP)

Avaula Surendra Babu v. Movva Bhikshavathi

2014-06-13

L.NARASIMHA REDDY

body2014
Judgment : The petitioner filed O.S.No.197 of 2009 in the Court of XI Additional District Judge (Fast Track Court), Guntur at Tenali, against the respondents for recovery of amount on the strength of an agreement dated 10-04-2007. The respondents entered appearance and filed a written-statement. Later on, they filed I.A.No.152 of 2011, under Section 151 of C.P.C., with a prayer to collect stamp duty and penalty on the document. According to them, though the document is styled as ‘agreement’, it is a ‘bond’, as defined under Section 2(5) of the Indian Stamp Act (for short ‘the Act’), and the document cannot be received in evidence, unless stamp duty and penalty is collected. The application was opposed by the petitioner. He pleaded that though the respondents committed themselves to repay the amount covered by the agreement, no conditions, rendering the obligation as void are provided. According to him, the document answers the description of ‘agreement’, and it does not fall within the definition of ‘bond’. Through its order dated 23-03-2011, the trial Court allowed the I.A. Hence this revision. Heard Sri T. Sharath, learned counsel for the petitioner. The basis for the suit claim is a document dated 10-04-2007, said to have been executed by the respondents. Even while denying the execution thereof, the respondents took the plea that the document answers the description of a ‘bond’, and insisted that stamp duty and penalty must be collected thereon. The trial Court took the view that the document falls into clause (b) of Section 2(5) of the Act, and accordingly treated it as a bond. Directions were issued to get the document impounded by sending it to the Collector/District Registrar. The distinction between an ‘agreement’, on the one hand, and a ‘bond’, on the other hand, is fairly thin. Both of them fall into a broad category, since they incorporate the commitment of the parties to each other. A bond, however, has typical characteristics of its own. The distinction between an ‘agreement’, on the one hand, and a ‘bond’, on the other hand, is fairly thin. Both of them fall into a broad category, since they incorporate the commitment of the parties to each other. A bond, however, has typical characteristics of its own. Section 2(5) of the Act defines a ‘bond’, as under: “Bond” :-- “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) Any instrument so attested, whereby a person obliges himself to deliver grain or other agricultural produce to another”. The petitioner filed a copy of the agreement, in the revision. A perusal of the same discloses that it does not fall in clause (a) of Section 2(5) of the Act, since it did not incorporate a condition to the effect that the obligation thereunder shall be void, if a specific act is performed or is not performed. To attract clause (b), two conditions are necessary: The first is that the instrument must be attested by a witness, the second is that it should not incorporate a condition, providing for payment of the amount to order or bearer. Though the word ‘attested’ is used in Section 2(5) (b) of the Act, it does not appear to be the one, defined under Section 3 of the Transfer of Property Act (for short the ‘T.P. Act’). The reason is that attestation, as and where it is required, must be, by at least two witnesses, and in the form mentioned in Section 3 of the T.P. Act. Section 2(5)(b) of the Act refers to only one witness. The word appears to have been used, signifying the signature by a witness, and not beyond that. In the instant case, the document is signed by two witnesses. Though the plaintiff made an attempt to plead that the witnesses did not sign the document, when it was executed, it is difficult to accept the same, particularly, at this stage. The word appears to have been used, signifying the signature by a witness, and not beyond that. In the instant case, the document is signed by two witnesses. Though the plaintiff made an attempt to plead that the witnesses did not sign the document, when it was executed, it is difficult to accept the same, particularly, at this stage. Further, except that the party to the agreement promised to repay the amount, he did not agree to pay the amount covered by the document, to any bearer or order. The inescapable conclusion is therefore that, the document is a ‘bond’ and is liable to be stamped. The trial Court has taken the correct view of the matter, and there are no merits in the revision. It is accordingly dismissed. There shall be no order as to costs.