John Beaumont, Kt., C.J.
1. This is a reference from the Sessions Judge of Sholapur asking us to set aside the conviction of the accused by the Sub-Divisional Magistrate, Pandharpur Sub-division, under Section 68(c) of the Indian Stamp Act. The1 case is said to be a test case on which there is no direct authority in Bombay. It appears that the accused is a money-lender, and he keeps a book, vyajwahi, in which entries are made as to loans, and the two entries which are the foundation of the present prosecution are, first, an entry in the form, ' Received Rs. 1,500 in cash to-day,' which is signed by one Salgarkar, the borrower; and, secondly, an entry in respect of a sum of Rs. 2,000, stated to be in two hundis for Rs. 1,500, and Rs. 500 in cash, which is again signed by the same borrower. So that the entries are the ordinary entries in the borrower's khata with the creditor acknowledging the payments.
2. A question has been raised whether the entries are receipts or acknowledgments under the Indian Stamp Act. I am inclined to think that the first entry is a receipt, since it purports to be a receipt for a present advance, but that the second entry is more in the nature of an acknowledgment, at any rate in respect of part of the debt which appears to have been secured on two hundis, and not to have been advanced at the moment, and for the purposes of my judgment I will assume that I have to deal both with a receipt and an acknowledgment. However, for the purposes of Section 68, Clause (c), under which the present accused was convicted, it appears to me to make no difference whether the document we are dealing with is a receipt or an acknowledgment. That section, so far as material, provides that ' Any person who, with intent to defraud the Government of duty, practises or is concerned in any act, contrivance or device not specially provided for by this Act or any other law for the time being in force' shall be punishable with fine. The learned Judge considered that the intention of the parties was to defraud Government of duty, but that merely taking a document which requires to be stamped, without seeing that it is stamped, does not amount to practising or being concerned in any act, contrivance or device within the meaning of Section 68, Clause (c), and in so holding he relied on the case of Queen-Empress v. Sdmasundararn Chetti I.L.R. (1899) Mad. 155. No doubt the execution of a document requiring a stamp, without seeing that it is stamped, can hardly be said to be a contrivance or a device, but I think, myself, that it is rather difficult to say that it is not an act. If it is not an act, I do not know in what category of events it is to be included. But, to my mind, the Government in this case have failed to prove any intent to defraud the Government of duty. The learned Sessions Judge thinks that because the effect of taking these receipts or acknowledgments without a stamp is to deprive Government of duty, therefore he must infer that the accused intended the natural consequences of his act, and intended to defraud Government. But where an Act of Parliament makes an offence dependent on proof of intention, the Court must have proof of facts sufficient to justify it in, coming to the conclusion that the intention existed. No doubt one has usually to infer intention from conduct, and one matter that has to be taken into account is the probable effect of the conduct. But that is never conclusive. Here we know nothing whatever about the circumstances in which these entries were signed, and I am not prepared to infer a fraudulent intention merely because the result of the action of the parties would be to deprive Government of duty. I should doubt very much whether the parties really considered the effect on Government of omitting to put a one anna stamp on these documents. The argument that the Court must always infer that the parties had an intention to do a particular act if that act is the necessary consequence of the action of the parties, was dealt with by Lord Esher in a striking passage of his judgment in Ex parte Mercer : In re Wise (1886) 17 Q.B.D. 290. He was there dealing with the question whether a conveyance was made with intent to defraud creditors within the meaning of the Statute, 13 Eliz. c. 5, and he says this (p. 298):-
The argument was first put in this way-it is necessary to prove that the bank-rupt, at the date of the voluntary settlement, intended to defeat and delay a creditor or his creditors generally; the necessary consequence of what he did was to defeat and delay his creditors; and, therefore, as a proposition of law, the) tribunal which had to consider whether he did intend to defeat and delay his creditors was bound to find that he did. In support of that proposition dicta of great and eminent Judges were cited. I will venture to say as strongly as I can that to my mind that proposition is monstrous.
I agree with that view of Lord Esher. I think we must have something more than we have got here, namely, the mere fact that parties executed a document without a stamp upon it, to induce us to hold that they had an intention to defraud Government. Therefore, the reference must be allowed, and the conviction set aside. Fine, if paid, to be refunded
3. I agree.