Chandra Reddy, C.J.
1. The point posed by this revision petition is whether certain documents constitute acknowledgments within the purview of Section 19 of the Indian Limitation Act or acknowledgments attracted by Article 1 of Schedule 1 of the Hyderabad Stamp Act (IV of 1331-F.) as amended by Regulation XIV of 1359-F.
2. The facts leading up to this litigation may be shortly stated. The respondent executed two promissory notes on 23-1-1949 and 10-2-1949 for Rs. 2,000/. and Rs. 3,000/- respectively in favour of the petitioner-firm. Subsequently, he signed in the account books of the petitioner under certain entries containing the account between the parties on four occasions viz., on 4-11-1951, 30-10-1952, 27-10-1954 and 3-10-1956. A suit was laid by the petitioner for recovery of a sum of Rs. 8,596-70 nP. in the Court of the First Additional Judge, City Civil Court. The four acknowledgments referred to above were relied upon by the petitioner-plaintiff as saving limitation.
3. One of the answers of the respondent-defendant to the suit was that it was barred by limitation as It was brought more than ten years after the execution of the two promissory notes.
4. To get over this difficulty, the plaintiff called in aid the acknowledgments referred to above.
5. The trial Court accepted the defence of the defendant-respondent that these acknowledgments, which were insufficiently stamped -- bearing a stamp of one anna on each were of no avail to the plaintiff to save limitation. The learned Judge thought that they were meant to supply evidence of the debt within the mischief of Article 1, Schedule 1 of the Hyderabad Stamp Act and, therefore, they could not be admitted in evidence for the reason that they were insufficiently stamped. In that view, he excluded these documents from evidence. It Is this opinion of the trial Court that is impugned before us in this revision.
6. It is urged by the learned counsel for the petitioner that the acknowledgments in question did not answer the description of documents within the contemplation of Article 1, Schedule 1, of the Hyderabad Stamp Act in which case alone Section 33 of that Act would be attracted and that the learned Judge was in error in thinking that Article 1, Schedule 1, was a bar to the admissibility of these documents.
7. On the other hand, it is strenuously contended for the respondent that the paramount intention of the parties was that these acknowledgments should serve as evidence of debt and, consequently, it was hit at by Section 33 read with Article 1, Schedule 1 of the Hyderabad Stamp Act.
8. Since the question to be answered by us primarily turns upon the language of Article 1, Schedule 1, it is convenient first to extract that Article here.
Description of Instrument. Proper Stamp-duty.
1. Acknowledgment of a debt exceeding twenty rupees in amount or value, written or signed by or on behalf of, a debtor in order to supply evidence of such debt in any book (other than a banker's pass book) or on a separate piece of paper, when such book or paper is left in the creditor's possession:
Provided that such acknowledgment does not contain any promise to pay the debt or any stipulation to pay interest or to deliver any goods or other property.... One and half annas.
9. Indisputably the documents in question relate to indebtedness of more than Rs. 20/- since the debts acknowledged to be due amount to more than Rs. 5,000/-. It is also not disputed that the first three of the documents did not bear sufficient stamps in that it was only a one-anna revenue stamp that was affixed on each of them. The effect of Insufficiently stamping a document is stated in Section33 of the Hyderabad Stamp Act, which says:
'(1) No person having by law or consent of parties authority to receive evidence, shall admit in evidence an Instrument on which duty is payable and no such person or Government servant shall act upon, register or authenticate it unless it is duly stamped:
Provided that -
(a) Any such instrument, not being an instrument on which a duty of (one and a half annas or one anna) is payable or a bill of exchange or promissory note shall, subject to all just exceptions, be admissible in evidence when the duty payable thereon is paid, or if the duty is insufficiently paid, when it is made up and an amount of rupees five is paid by way of a penalty or when ten times the amount of the duty payable or deficiency thereof exceeds five rupees, a sum equal to ten times the duty payable or the amount of deficiency is paid. (b) xx xx xx xx xx xx xx(c) xx xx xx xx xx xx xx(d) xx xx xx xx xx xx xx(e) xx xx xx xx xx xx xx....'
10. The Proviso does not render any material assistance to the petitioner if the documents should fall under Article 1 for the reason that the acknowledgments in question are instruments on which a duty of one and a half annas is payable.
11. The sole question, therefore, for consideration is whether these instruments fall within the ambit of Article 1, in other words, whether they were written or signed in order to supply evidence of such debt. It is only in the contingency of a document or instrument being intended to furnish evidence of the debt that it requires to be stamped but not otherwise. Could it then be posited that in this case the dominant intention of the parties was to afford evidence of the debt; This intention has to be gathered from the terms of the instrument as also from the surrounding circumstances.
12. In this case, the debt was evidenced by the promissory notes. The suit is also based on the promissory notes. It must be borne in mind that in the plaint also these acknowledgments were relied upon to save the suit from the bar of limitation and not as constituting evidence of the debt. If the purpose of the acknowledgment was not to create evidence of the debt but It was for some other purpose, such as to save limitation, it falls outside Article 1 and serves as an acknowledgment as contemplated by Section 19 of the Limitation Act.
13. In this connection, We may cite the judgment of the Allahabad High Court in Bishambar Nath v. Nand Kishore, ILR 15 All 56, a leading case on the subject. There, a suit was brought in 1889 for recovery of money alleged to have been advanced in 1884. The claim of the appellant would have been barred by the statute of limitation, unless it was shown that it was aided by any special section. For that purpose, the plaintiff relied on a letter written by the defendants as serving as an acknowledgment of their liability to pay the money within the meaning of Section 19 of the Limitation Act. The Court below thought that it was precluded from treating that letter as evidence for the reason that the document was not stamped as required by Article 1, Schedule 1 of the Indian Stamp Act, 1879, which is in pari materia with Article 1, Schedule 1 to the Hyderabad Stamp Act, which we are called upon to interpret. The Bench of the Allahabad High Court did not uphold this view. The learned Judges considered that the said letter did not purport to supply evidence of the debt, since it was not written with that intention but it was one written some time before the period of limitation expired and evidence as* to the existence and amount of the original debt at the time was at hand and readily available and as such the document was not one which required to be stamped and hence it could not be kept out of record. It was laid down by the learned Judges that whether a document of that kind amounted to an acknowledgment within the terms of Article 1, Schedule 1 of the Stamp Act was a fact which depended in each case upon the intention of the writer. They observed that one of the factors to be taken into account was whether at the time when this letter was written there was evidence aliunde to prove the debt.
14. This principle was accepted in Suryanarayana v. Narendra Thatraz, ILR 19 Mad 255. In the same strain of thought is Nagappa Chetty v. V.A.A.R. Firm, 49 Mad LJ 306 : (AIR 1925 Mad 1215). Krishnan J., who dealt with this aspect of the matter, proceeded on the assumption that if there was other evidence which would establish the debt, the document in question did not really require a stamp at all, for, it could not be regarded as an acknowledgment within the words of Article 1.
15. This question was also considered by another Bench of the Madras High Court in Surjimull Murlidhar v. Ananta Lal, AIR 1924 Mad 352. In this case, the acknowledgment relied on by the plaintiff as coming within the scope of Section 19 of the Limitation Act and which, according to the defendants, was governed by Article 1, Schedule 1 of the Stamp Act, showed credit entries, the balance dire at the last account, interest thereon uptodate, debit entries of the amount paid-off, and a balancing item. Further, there were the words
'balance payable, upto Kartik Sudh 1st of Samvat 1974'-
The amount was also mentioned with the signature of the defendant underneath. On the terms of the acknowledgment and taking into account the circumstances under which it came into existence, the learned Judges opined that the document was not an acknowledgment within the mischief of Article 1.
16. Said the learned Judges in the course of their judgment:
' The question is whether it is givenwith the dominant intent to supply evidences of thedebt; and it has been held that (where the document contains other entries from which it is right to deduce thatthe intention as to arrive at a statement of account or toput on record payments on either side, the intention tobe inferred from the sending of the document, althoughit contains a balancing item at the end, is not to supplyevidence to the creditor'.
In another part of the judgment, it was remarked
'(the instrument) was given with the intention that it was to be a statement of account as between the parties containing entries of payments by the defendants as well as a statement of debts due from him, and also a statement of the calculation of interest, and the date of interests which the defendant admitted that he was under a liability to pay'.
The situation in this case is quite similar and the principle enunciated therein applies to this case with lull vigour.
17. Sri Bankathlal, learned counsel for the respondent, draws our attention to some of the rulings of the Bombay High Court as substantiating the proposition that wherever a document indicated that some money was due after stating the account, it was governed by Article 1, the chief of them being Mulji Lala v. Lingu Makaji, ILR 21 3orn 201 (FB). In this case, the words amounted to giving the figure and the statement was that accounts having been considered the balance due was so much. There was no independent evidence as to the existence of the Debt. In that position the Full Bench of the Bombay High Court fled that the instrument was an acknowledgment within the meaning of Article 1 of the Stamp Act. The learned Judges paid great regard to the form of entry as given in the document. They thought that the acknowledgment fulfilled the conditions of Article 1, Schedule 1, and it not having been stamped was not admissible in evidence. We may point out here that this Full Bench decision was referred to by a Division Bench of the Madras High Court in AIR 1924 Mad 352, The Madras High Court distinguished the Bombay case on the ground that there the words amounted to giving the figure and the statement was that account having been fatten the balance due was so much and, therefore, it was an acknowledgment of debt to the other party, for use in evidence. It cannot be postulated that the Full Bench of the Bombay High Court laid down as a broad proposition of law that whenever a statement of account was set out and the balance struck and the signature of the defendant was obtained, it satisfied the terms of Article 1, Schedule 1 of the Stamp Act and, therefore, it could not be admitted in evidence unless it was sufficiently Stamped.
18. That this is not so is also apparent from the judgment of the same High Court in J.C. Mehta v.
P.C. Mody, : AIR1959Bom289 . Chagla C. J., who spoke for the Court propounded the lest for the consideration of the question as to whether the document was intended to supply evidence of a debt or was only to serve as an acknowledgment for the purpose of Section 19 of the Limitation Act in the following observations;
'Now, the question as to whether the document falls within Article 1, Schedule 1 of the Stamp Act depends, as the Article itself says, on the decision whether the document was given in order to supply evidence of a debt, and numerous authorities, which it is not necessary to review, have clearly laid down that that must b- the paramount intention of the person giving the document and the question that the Court has to ask looking at the document and looking at the surrounding circumstances is whether the document is given in order to supply a statement of account or whether the document is given in order to supply evidence of a debt'.
It is needless to labour this point any further. Suffice it to say that it is the dominant intention of the parties that has to determine the nature of the instrument, in the consideration of the question whether the document requires to be stamped under Article 1, Schedule 1 of the Stamp Act or whether it can be used only as an acknowledgment for the purpose of Section 19 of the Limitation Act, the surrounding circumstances also could be looked into.
19. Applying this criterion, there can be little doubt in this case that the intention of making the acknowledgment was not so much to furnish evidence of the debt as to give particulars regarding the account, calculation of interest etc., which could be used by the petitioner to save the suit from the bar of limitation. De hors these acknowledgments, the petitioner has evidence of the existence of the debt, the main evidence being the promissory notes themselves. As such, independent of these acknowledgments, the plaintiff could establish his casa. That being the real position, the trial court was not justified in keeping out these documents, it follows that the order under revision could not be sustained and has to be set aside.
20. In the result, the revision is accepted and the matter is sent back to the trial court for decision on other issues. There will be no order as to costs.