P. Jaganmohan Reddy, C.J.
1. In view of an apparent conflict between a Full Bench of the Madras High Court in Crompton Engineering Co., (Madras) Ltd. v. Chief Controlling Revenue Authority Madras, : AIR1953Mad764 and a Full Bench of this Court in Midde Varaprasada Rao v. Collector of Krishna, : AIR1959AP650 (FB) on the interpretation of Section 2(17) of the Indian Stamp Act as to what would constitute a mortgage within the meaning of that section, this case has been directed to be referred by a Division Bench of this Court consisting of one of us namely Basi Reddy, J. and Gopal Rao Ekbote, J., to a Full Bench of five Judges or more for resolving the conflict.
2. The facts in so far as they are relevant for the determination of the question are that the plaintiff had filed a money suit against the defendants for the price of articles supplied to Gande Chinniah, the predecessor-in-interest of the 1st and 2nd defendants for their family needs, which debt he acknowledged by a receipt dated 1-4-1963. This receipt was filed with the plaint, the translation whereof in English is as follows:
'Agreement executed by Gande Chinniah, son of Linganna, resident of Balkonda, Taluk Armoor, in favour of Hazori Gatifiaram, son of Anthaji, to the effect that from 16-6-1952 to 9-9-1962, principal amount Rs. 1397-7-0. This whole amount in respect of 'Khalli'. For this, I have given the key of my free will. Upon this, there can be no objection by me or by heirs. You can put another lock instead of the present one. After paying whole of the above amount. I shall take my key and letter back.'
This document was attested by three witnesses. Evidently on the objections taken by the respondents an issue was raised as to whether this document constituted a mortgage within the meaning of Section 2 (17) of the Stamp Act. The Court-fee Examiner of the High Court in the course of his examination of the documents filed in Court considered that the sale-receipt was a mortgage under Section 2(17) of the Act. The District Munsif, Armoor, heard the arguments of the learned advocates appearing on behalf of the parties and held that taking into consideration certain circumstances namely that the key of the house was delivered showing that there was delivery of possession that the predecessor-in-interest of the defendants had no objection of any kind and that the key would be handed over only on the repayment of the loan the document was a mortgage-deed as contemplated by Section 2(17) of the Stamp Act and was chargeable with stamp duty under Art. 35 of the Act. The plaintiff was directed to pay Rs. 495 as penalty and stamp duty.
3. The question in this revision petition is whether the suit document is a mortgage within the meaning of Section 2(17) of the Stamp Act. In order to determine this question it is necessary to examine the relevant provisions of the Stamp Act. It is not denied by Mr. Jeevan Reddy, the learned Advocate for the petitioner, that under the document by whatever name it may be called, possession of specific immovable property was given which possession is to be retained by the plaintiff till the amount of debt due from the executant is discharged. There is little doubt that this document affects the transfer of an interest in immovable property of the value of Rs. 100 or upwards for the purpose of securing a debt and is, therefore, a mortgage within the meaning of Section 58 of the Transfer of Property Act. and it would only be valid by executing a registered instrument signed by the mortgagor and attested by at least two witnesses as required under Section 59 of the Transfer of Property Act. While this is so. the question is whether this document is a mortgage-deed within the meaning of Section 2(17) of the Stamp Act which defines it as including 'every instrument whereby, for the purpose of securing money advanced, or to be advanced, by way or loan, or an existing or future debt, or the performance of an engagement, one person transfers, or creates, to, or in favour of, another, a right over or in respect of specified property.'
It may however, be noticed that while Section 58 and Section 59 of the Transfer of Property Act define what is a mortgage and how such a mortgage can be effected. Section 2(17) of the Stamp Act defines a mortgage-deed as such, which implies that while under the Transfer of Property Act the requirements of a valid mortgage are set out the Stamp Act is only concerned with defining what a mortgage-deed is, which ex facie need not necessarily have the effect of creating a valid mortgage. We shall deal with this aspect of the matter in greater detail after we have referred to the two decisions cited in the order of reference. In : AIR1953Mad764 a Full Bench of the Madras High Court was dealing with an unattested and unregistered document dated 22-3-1948, one of the clauses of which was construed as creating a mortgage over the borrower's floating assets, comprising specified immovable property, lands, buildings and premises bearing door No. 27. Tirrovottiyur High Road, Madras. In construing whether this document was a mortgage-deed, it was held by the Full Bench that the transfer provided in Section 2(17) of the Stamp Act is a transfer valid in law, and as there can be no transfer unless the requirements of Section 59 of the Transfer of Property Act are satisfied where the specified immoveable property is worth Rs. 100 or upwards, the document purporting to be a mortgage-deed of such property is not liable to stamp duty where it is neither attested nor registered. Rajagopalan, J., speaking for the Court said that to ensure the validity of the instrument as a mortgage, attestation is made as much a part of the execution as the signature of the mortgagor. The contention of the Government Pleader in that case was that on 29-5-1948, when the document was impounded under Section 33 of the Stamp Act, the time for effective registration of that document had not expired The Bench pointed out that the document was neither attested nor registered and the impounding authority could not have enforced registration, and that in any case, it could not cure the failure to attest, which by itself was enough to invalidate the document as an instrument of mortgage.
4. Then again it was contended by the Government Pleader in that case that it was an 'instrument' that the document dated 22-3-1948 was impounded under Section 33 of the Stamp Act, but this contention was also repelled by the Bench holding that the document certainly purported to transfer the right in the immoveable property, among other things, though in law it could not and did not transfer that right, and that even Section 33 refers to an instrument chargeable with duty, stamp duty payable under the provisions of the Stamp Act. It was further held that the document dated 22-3-48 might be an instrument but it was not an instrument chargeable with duty, as a mortgage deed as defined by Section 2(17) of the Stamp Act, Rajagopalan, J., concluded by saving that 'the very difference between the definition of an Instrument in Section 2(14) and a mortgage deed in Section 2(17) should show that the 'transfer' provided for in Section 2(17) is a transfer valid in law. To make a document liable to stamp duty as a mortgage deed, it is not enough if the document purports to effect a transfer. It must 'transfer'.
5. In 1959-2 Andh WR 102 = (AIR 1951 Andh Pra 650) the Court was answering a reference under Section 57 of the Stamp Act for a decision on the question of law namely 'whether the document dated 28-2-50 was an usufructuary mortgage chargeable to duty under Art. 33 (a) of Schedule I-A of the Stamp Act or 'a mere agreement chargeable to duty under Art. 4 (c) of Schedule I-A of the Indian Stamp Act'. The document was engrossed on a stamp paper of Rs 1-8-0 and presented for registration before the Sub-Registrar, Mas-ulipatnam. The Sub-registrar felt a doubt as to the sufficiency of the stamp duty and referred the matter to the Revenue Divisional Officer, Masulipatnam. The Revenue Divisional Officer construed the document as a mere agreement and held that the stamp duty paid was sufficient. Not being satisfied with this opinion, the Sub-Registrar referred the matter to the Collector of Krishna District who interpreted the document as a usufructuary mortgage and impounded, it holding that a stamp duty of Rs. 4, 800 was payable. A revision, by one of the parties to the Board of Revenue proved unsuccessful, and it was on the application of the revision petitioner that the reference was made. After considering the purport of the document, the Full Bench held that all the essential elements that constitute a mortgage were present in that case and that if really a document operates to create rights of the nature contemplated by Section 2(17) of the Stamp Act in favour of persons who advance money, clearly the document is a mortgage, and in the case before them it was an usufructuary mortgage.
6. The question as postulated before the Full Bench of the Madras High Court does not appear to have been argued or considered before this Full Bench, as such we must necessarily examine the provisions of the Stamp Act to consider whether what the Act requires is a valid mortgage-deed as contemplated under Section 59 of the Transfer of Property Act. We have pointed out earlier that under the Stamp Act what is sought to be defined by Section 2(17) is a mortgage-deed while under the- Transfer of Property Act, the requirements of a valid mortgage and its creation are provided for. The Full Bench of the Madras High Court held that transfer as constituting one of the elements of the definition of a mortgage-deed in the Stamp Act should be a valid transfer in law and since the absence of attestation or registration makes a mortgage invalid in Law, a document, purporting to transfer is not a mortgage-deed. With this view, with great respect, we disagree. In our opinion, there is no warrant for the importation of the requirements either of the Transfer of Property Act or the Registration Act to construe documents or instruments under the Stamp Act, as the latter Act itself specifically defines the terms used therein.
7. We now propose to notice the relevant definition of the terms used in the Stamp Act which are necessary for the purpose of determining the question before us.
8. Under Section 2(6) of the Stamp Act 'Chargeable' means, 'as applied to an instrument executed or first executed after the commencement of this Act, chargeable under this Act, and, as applied to any other instrument, chargeable under the law in force in India when such instrument was executed or where several persons executed the instrument at different times, first executed. 'It may be noticed that according to this definition, what is chargeable is what is liable to duty at the time of execution. Under Section 2(12) 'Executed'' and 'execution' used with reference to instruments, means 'signed' and 'signature' A reading of these two definitions of 'Chargeable' and 'Executed' under Sections 2(6) and 2(12) of the Stamp Act would make it dear that an instrument is chargeable with duty as soon as it is signed by the executant. Under the Stamp Act of 1879, there is no definition of the terms 'executed' or 'execution,' and it was held in Bhawanji Hlarbhum v. Devji Punja. ILR 19 Bom 635 that a hundi was duly stamped if the stamp was affixed and cancelled at the time of delivery, but under the present Act liability to stamp the instrument would he at the time of signing it, so that it is clear that once the instrument is signed or executed, no other formality required to give legal validity to the instrument under the general law such as delivery or attestation by witnesses is necessary to make the instrument liable to stamp duty under the Stamp Act.
9. The word 'Instrument' under Section 2(14) of the Stamp Act is defined to include 'every document by which any right or liability is, or purports to be, created, transferred, limited, extended, existinguished or recorded'. Under this definition, what is made liable to duty is the document which satisfies the requirements of Section 2(14). The test is whether the document creates or purports to create a right, and every such instrument as defined under Section 2(17) would be liable to stamp duty at the time of execution i.e., at the time when it is signed, because the crucial time as to when a document is liable to stamp duty is undoubtedly the date of execution i.e., the date on which it is signed and nothing else. To hold that en instrument must be a valid instrument under law before it is liable to stamp duty would be to ignore the requirements of the definition or to make them otiose. That this is not so is further demonstrated by some of the other provisions of the Stamp Act. Under Section 13 of the Stamp Act, every instrument written on a stamped paper shall be written in such manner that the stamp may appear on the face of the instrument and cannot be used for or applied to any other instrument and under Section 14, no second instrument chargeable with duty shall be written upon a piece of stamped paper upon which an instrument chargeable with duty has already been written. Section 15 of the Stamp Act says that every instrument written in contravention of Section 13 or Section 14 shall be deemed to be unstamped
10. The time at which an instrument executed in India should be stamped is specifically provided for under Section 17 which states that 'all instruments chargeable with duty and executed by any person in India shall be stamped before or at the time of execution' In view of this requirement, a document not signed is clearly not liable to stamp duty. It is interesting to note that in Burma, formal documents written on palm leaves are by custom treated as completed documents and admitted in evidence though not signed But under Section 2(12) being unsigned, such documents will not be liable to stamp duty as they are not 'executed. Thus it has been held by a Full Bench of the Burma Chief Court in In re. Chet Po, 22 Ind Gas 75-(AIR 1914 Low Bur 219) (FBI that an instrument chargeable with stamp duty on being executed is not liable to duty until it is signed, although this fact does not neeessarily imnly that the unsigned document it incomplete for the purpose for which it was drawn up. Again in Maung Po Din v Maung Po Nvein. 66 Tnd Cas 360= (AIR 1921 Upp Bur 3) it was observed that unsigned Burmese instruments made since the Indian Stamp Act of 1899 came into force cannot be treated as executed for the purpose of the Stamp Law. In Shams Din v. Collector, Amritsar, ILR 17 Lah 223-(AIR 1936 Lah 449) (SB) a special Bench of the Lahore High Court consisting of Addison, Coldstream and Abdul Rashid, JJ., explained that before Section 2(12) of the Stamp Act was enacted, there was no such provision in the Stamp Act and the intention of the new clause was to make it clear at what time a document became executed so as to be chargeable with stamp duty under Section 3 of the Stamp Act. At page 228 (of ILR Lah) = (at p. 451 of AIR), Coldstream, J., delivering the judgment of the Bench said:
'Signature alone will not, in all cases, complete the execution of a document for the purpose of giving it legal validity, for Instance, a will may not be legally executed until it is duly attested by witnesses, a Hundi is not executed until it is delivered (see, (1895) ILR 19 Bom 635), but for the purpose of the Stamp Act the clause makes all documents which are chargeable with duty when executed, chargeable as soon as they are signed by the executant'
It may, however, be noticed that the definition in Section 2(12) does not give an indication as to when the document is complete. Take for instance a contract which is complete when the last party signs it, though in some cases it may be a valid agreement with only one signature. But for the requirement of the Stamp Act, the document must be stamped before or at the time of execution viz., at the time when it is signed. end not necessarily when the agreement is completed or the document is validly executed. Under the aforesaid provision of Section 17 the question has also arisen as to whether the stamping and execution are part of the same transaction making it permissible to stamp the instrument immediately after the execution or whether it should be stamped before the execution. The Madras High Court in Surij Mull v. Hudson, (1901) ILR 24 Mad 259 held that it is sufficient if stamping and execution are part of the same transaction so that it is permissible to stamp It immediately after the execuion. But the Bombay High Court in Rohini v A. I. Fernandes, AIR 1956 Bom 421. distinguished the Madras decision on facts and differing from the ratio in that case has held that a promissory note stamped after execution was not duly stamped under Section 17 of the Stamp Act. What is meant by the expression 'at the time of execution' in Section 17 has been considered by their Lordships of the Privy Council under Section 19 of the Zanzibar Stamp decree, which is in pari materia with Section 17 of the Act, in Takim and Co. v. Velji (Fazal Kassam), 1955 AC 617. After citing and considering the decision in In re, Tinnel Mining Co. (Pool's case). (1887) 35 Ch D 579, their Lordships of the Privy Council observe at page 626:
'The provision as to the meaning of execution is 'unless the context otherwise requires'. The word 'at' in the phrase 'at or before' in the proviso to Section 19 cannot mean simultaneously with signing, and must therefore, cover a reasonable time after signing.'
Their Lordships however considered it undesirable to decide this question on a document which does not raise it, but observed that should a similar point arise in the future, the arguments referred to, particularly, as to the scope of the preposition 'at' in its context in Section 19, will require careful consideration. In our view also, it is unnecessary to consider, and we are not called upon to decide, whether the Madrai view is correct or the Bombay view is correct. Whichever view is taken, it is clear, that the document must be stamped, without reference to any other formality or requirement of law to make the instrument valid, at or before the execution of the document. It is because of the requirement that a document should be stamped before or at the time of execution that the Legislature by Section 18, specifically provided for stamping of documents in certain cases after having been executed, viz., documents executed outside India.
11. The provisions of Chapter IV also lend support to this view. The relevant provisions of Section 33 and 35 may now be read. Section 33 and 35 of the Stamp Act run as follows:--
'(1) Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an officer of police, before whom any instrument, chargeable, in his opinion, with duty is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same.
(2) For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him, in order to ascertain whether it is stamped with a stamp of the value and description required by the law in force in India when such instrument was executed or first executed: Provided that.....'
'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: The above provisions clearly show that an instrument which is not duly stamped can be impounded by the person specified in Section 33(1) of the Act, which would include the Registrar before whom the document it produced for registration on an insufficiently stamped paper as he is the person in charge of a public office who comes across the instrument in performance of his functions. If the document required registration for legal validity before it could be considered whether is stamped or not, no question of the Registrar impounding it before registration could ever ' arise; but nonetheless Section 33 authorises him to do so. That this is so is made clear by the provisions of Section 35 which provides that unless an instrument is duly stamped, it cannot be registered or received in evidence or authenticated etc., by any person who had, by law or consent of parties, authority to receive evidence, or by any public officer Even where such a document has been admitted by a Court, Section 61 empowers the Court to which appeals lie from, or references are made by the Court which admitted that instrument, on its own motion or on the application of the Collector, to take such order into consideration, and thereafter if so required, record a declaration that the document should not have been admitted in evidence without payment of duty or penalty under Section 35, and to determine the amount of duty with which such instrument is chargeable. It may also require any person in whose possession or power such instrument then is, to produce the same, and may impound the same when produced
12. Sections 62 - 69 provide for various penalties for transgressing the provisions of the Act, one of which is penalty for executing instruments not duly stamped. The definitions and the terms of every section of the Stamp Act indicate clearly that an instrument need not be valid in law or meet the requirements of law as a valid document before it is chargeable to stamp duty under the Act. It is chargeable to stamp duty before or at the time of its being signed or executed. It is not necessary that it must be attested, or registered when such registration is an essential requirement for validity of the document. In our opinion, there is not the slightest indication in any of the provisions of the Stamp Act to lend support to the contention that a document must be validly executed either under the provisions of the Transfer of Property Act or under the Registration Act or, for that matter, under any other provision of law, before it is chargeable to stamp duty. As rightly pointed out by the learned Government Pleader. Mr. Sambasiva Rao, the admissibility of a document or instrument is dealt with both under Section 35 of the Stamp Act as well as under Section 49 of the Registration Act. While the Stamp Act prohibits instruments chargeable with duty from being admitted in evidence unless such instruments are duly stamped, the Registration Act prohibits receipt of unregistered documents which are required by Section 17 of that Act or any of the provisions of the Transfer of Property Act to be registered. The admissibility of a document or instrument has been dealt with both in the Stamp Act as well as the Registration Act to achieve their respective purposes. II cannot, therefore, be said that the determination of the question as to what is a completed document or at what point of time a document should be stamped has to be considered with reference to any Act other than the Stamp Act.
13. In the view we have taken, we must, with great respect, dissent from the views of the eminent Judges of the Full Bench of the Madras High Court in Crompton Engineering Co's case, : AIR1953Mad764 (FB) before whom the several aspects to which we have referred, were not argued, nor were they otherwise considered, -- and hold that for the purpose's of the Stamp Act, the crucial time for determining whether an instrument chargeable with duty is duly stamped or not, is before or at the time of execution, and that apart from its execution, no other formalities under any other law need be satisfied.
14. The instrument in question is a deed of mortgage, inasmuch as it satisfied the definition of Section 2(17) of the Stamp Act, as it not only transfers rights, but also creates a right 'over or in respect of specified property', which, it may be noticed, need not necessarily be immovable property as required under Section 58 of the Transfer of Property Act; as such, is chargeable with stamp duty. The revision petition is accordingly dismissed. The costs of the Government Pleader fixed at Rs. 100