P. Kodandaramayya, J.
1. The Commissioner of Survey Settlements and Land Revenue Records, Andhra Pradesh, Hyderabad , as the Chief Controlling Revenue Authority made this reference under Sec. 57 of the Indian Stamp Act 2 of 1899 (hereinafter called the Act). The reference is in the following terms.
Whether the document Ex. B. 4 should be levied under Article 48 of Schedule 1-A of the Indian Stamp Act, 1899. The facts, leading to the reference are briefly as follows :-
2. One Potta Appalaraju, owner of lorry A. P. S. 2486 approached this court and obtained a direction in a writ petition that the District Panchayat Officer should release his lorry seized by the said officer on condition that the lorry owner should execute a personal bond for a particular sum and a third party also should execute a bond giving immovable property as security for a like sum. In pursuance of the said order, one Manda Suryakanthamma executed the security bond in question agreeing that 'in case the lorry owner Sri Potta Appalaraju fails to produce the lorry A. P. S. 2486 before the said District Forest Officer, Flying Squad Division, Vizianagaram, whenever occasion arises and whenever the said D. F. O., directs him to do so and the said amount of Rs. 40,000/- shall have a charge over the schedule mentioned property described in para-III hereunder in which property, I hereby declare I have full legal and marketable title and which properties are in my khas possession and which properties are not burdened with any maintenance and title charges'. A schedule is appended giving particulars of the property, with stated boundaries. The same was signed by the executant attested by two witnesses. The question arose on the objection by the executant whether this document should be stamped under the Stamp Act and whether Art. 48 of the Schedule 1-A of the Act is attracted to the facts of this case and the reference was made accordingly.
3. Mr. C. Trivikramarao, who assisted the court as amicus curiae contended that the instrument is an indemnity bond liable for duty under Art. 30 of Schedule 1-A which suffers the same duty as the security bond under Art. 40 and submitted alternatively that the reference may be accepted. On the other hand, the learned G. P. Sri N. Subbareddy stated that the instrument in question is governed by Art. 85 of Schedule 1-A as it is a mortgage and liable to higher rate of duty.
4. Sec. 3 of the Act is the charging section. The levy of duty is on the instrument but not on the transaction. The court should look into the form of instrument as well as substance of the transaction in order to arrive at the conclusion by which article of the schedule the instrument is governed. There are four articles which have a bearing on the question before us viz., Arts. 15, 34, 40 and 57 of Schedule 1 (Central Act) which correspond to Arts. 13, 30, 35 and 48 respectively in Schedule 1-A of the State Act. The operative portions of those Articles in Schedule 1-A are as follows :-
'Art. 13. Bond (as defined by S. 2(5)) not being a debenture and not being otherwise provides for by this Act, or by the Andhra Court-fees and Suits Valuation ACt, 1956;
Art. 30 Indemnity Bond.
Art. 35. Mortgage deed not being an Agreement relating to Deposit of title deeds, Pawn or Pledge (No. 7) Bottomry Bond (No. 14), Mortgage of a crop (No. 36) respondentia Bond (No. 47) or Security Bond (No. 48).
Art. 48. Security Bond or mortgage Deed, executed by way of security for the due execution of an office, or to account for money or other property received by virtue thereof, or executed by a surety to secure the due performance of a contract'.
The corresponding provisions in the Act defining the bond and mortgage deed in Secs. 2 (5) and 2 (17) read as follows :-
'2 (5) '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;
2 (17) 'Mortgage deed includes every instrument whereby, for the purpose of securing money advances, or to be advanced by way of 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 is also necessary to notice the definition of instrument given in Sec. 2(14).
'2 (14). 'Instrument' includes every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded'.
A comparison of these articles shows that Art. 15 (13 of the State Act) is of residuary character intended for bonds which cannot be governed by any other articles of the Stamp Act and by the Court fees Act and as ruled by the Calcutta High Court in Reference under O. 46 R. 1 C. P. C., (1) AIR 1925 Cal 906 (FB) 'a bond which finds its proper place in one or the other Articles is not exempt from duty under the Stamp Act, and, at the same time as being given in pursuance of the Court's order, it is liable under Article 6 of Schedule II of the Court-fees Act'. This view was accepted by the Madras High Court also in Pitchamma v. Pedamuneyya, AIR 1935 Mad 380 (FB).
5. The definition of 'mortgage' given in Sec. 2(17) of the Act is more extensive than one defined in Sec. 58 of the Transfer of Property Act 4 of 1882 as it governs moveable property and the performance of engagement is not limited to engagements giving rise to pecuniary liability, and it also includes a charge. Further it is noticed that the definition of mortgage in both the Acts consists of two parts, one the purposes of the transaction and another the creating interest in the property. Both the requirements must be satisfied, for attracting the definition. Transferring the property or creating charge over the property for the purpose other than the purpose enumerated in the definition clause would not make the transaction a mortgage. Applying the said test, we are of the opinion that the instrument in question is not executed either for purpose of securing the money advanced or a loan or any existing or future debt or for performance of an engagement. This is the view taken in Board of Revenue v. R. K. Subramaniam, : AIR1977Mad44 where a vendor executed the indemnity bond it was ruled the instrument cannot be construed as a mortgage though a charge was created in respect of some property as the vendor has not engaged himself to perform any particular act or service. Once the instrument is not for securing any money advanced or to be advanced or a loan or any existing future debt the only other purpose that can be served by the deed to constitute a mortgage deed is the performance of an engagement. The terms of the deed in question, which we have already noticed, never undertakes the performance of an engagement or service but only guarantees the payment of money and hence we cannot construe this deed as a mortgage though the other limit of the definition of creating a charge over a specified property is satisfied.
6. However, in order to attract Art. 48 the fact that the instrument fulfills the definition of mortgage is not fatal. Art 48 contemplates the execution of security bond or a mortgage bond. The only requirement is such security bond or mortgage bond must be executed by way of security for the enumerated purposes mentioned in the Article. They are (1) Security for the due execution of the office, (2) To account for money or other property received by virtue of such office. (3) Execution of a deed by way of surety to secure due performance of a contract. Hence the only controversy in the present case is whether this mortgage deed can be described as one executed by surety to secure due performance of the contract. The divergence of judicial opinion on this question has arisen from different constructions placed on the language in Art. 57 (48 of the State Act) especially the words 'to secure the due performance of a contract'. It is ruled that there can be no contract between the court and a party to the proceeding before the court. Further the courts have also taken the view that, if the principal obliger such as the decree-holder or the judgment-debtor, himself executed the deed the liability cannot be treated as one arisen out of execution by a surety to secure the due performance of the contract. The U. P. Stamp 'to secure the due performance of a contract' in Art. 57 (Central Act). The result of this amendment is that a deed executed by a surety by way of security to secure the due discharge of a liability would now fall under Art. 57 (vide Hunter v. Emperor, AIR 1940 Oudh 371).
7. In this connection, the learned Government Pleader relied on Abubacker Labbai v. Chinnathambi, AIR 1938 Mad 262 (FB) in support of his contention that the instrument in question is a mortgage. In the said case, one Abubacker applied to the court under Provincial Insolvency Act to be adjudged as insolvent and under Sec. 21(1) of the Act he was required to give a bond with two sureties for his due appearance in the insolvency proceedings. The bond was accordingly executed by two sureties in favour of the Sharistadar of the Court. There the court ruled that an agreement amounting to a contract must be entered into by the parties with the object of creating contractual relationship between themselves and this was impossible when the court was concerned. It is immediately noticed that the obligation undertaken by the sureties in that case is undoubtedly for the purpose of performing the engagement undertaken by them. They must see that the insolvent appears in court whenever required. Such undertaking coupled with transfer of interest in the property or a right in respect of property constitute a mortgage. It is also pertinent to notice that the bond in that case was executed in favour of the Sheristadar of the court and hence the said decision has no applicattion. The instrument in question before us was executed in favour of District Forest Officer no doubt occasioned in pursuance of the order of the court and hence we see to analogy of the present case with the decided cases that there cannot be a contract in favour of a court as the court is not a judicial person and incapable of contracting as held in Raghubir Singh v. Jai Indra Bahadur Singh, ILR 42 All 158 : (AIR 1919 PC 55). We have already noticed that Art. 15 excludes from its purview bonds executed in pursuance of an order made by a court or Magistrate under any sections of the Criminal Procedure Code of 1898 or the Civil Procedure Code of 1908. (Vide Art. 6 of Schedule II of the Court-fees Act of 1970). So it is ruled that bonds given under the orders of the court coming under the purview of Art. 15 are totally exempt from stamp duty as the payment of court fee is enough in such cases. However instruments coming under other Articles of the Stamp act should suffer both the court fee and the stamp duty (vide) Amrithammal v. Maddalakaran, ILR 43 Mad 363 : (AIR 1920 Mad 939) (FB) Pitchamma v. Pedamuneyya, (AIR 1935 Mad 380) (FB) and Reference under O. 46, R. 1. C. P. C., (1). Thus it is seen that the enforcement of the instruments executed in pursuance of the orders of the court is not enforcing a contractual obligation but by the powers vested in the court. The emphasis of the learned Government Pleader that there cannot be contractual obligation with the court and the present bond is executed in pursuance of the orders of the court would not advance his case any further to take away the case from the purview of Art. 48. The present instrument is executed in favour of the officer who is purely discharging an executive function as an officer of the State and same is not hit by the principle that there cannot be contract with the court. Further, the services of the executant were secured by the writ petitioner to comply with the order of the court. Besides executing a personal bond, as directed by the orders of High Court the owner of the lorry should secure a third party who should execute a bond to comply with the terms of the order directing release of the vehicle. A clear contract of guarantee, within the meaning of S. 126 of the Contract Act, is established in this case as the executant of the instrument is the surety and the owner of the vehicle is the principal debtor and the person to whom the guarantee is given is the creditor and hence it attracts Art. 48 of Sch. 1-A as the instrument is executed by the surety to secure the due performance of the contract.
8. We cannot also construe this instrument as a deed of indemnity though the duty payable for the deed of indemnity is same as in the case of surety bond under Art. 48. There can be no contract of guarantee, unless there is a principal debtor. A promise to be primarily and independently liable is not a guarantee but can only be an indemnity. This is because Sec. 124 of the Contract Act says that 'A contract by which one party promises to save the other from loss caused to him by the conduce of the promisor himself, or by the conduct of any other person is called a 'contract of indemnity'. In the present case, the liability was undertaken in the event of default on the part of the original power of the lorry. The undertaking is only 'In case the lorry owner fails to produce the lorry before the District Forest Officer'. It was not a primary liability of indemnify the loss and hence we cannot agree that it is a contract of indemnify. In the present case, the instrument is not executed in favour of a court. It is also not executed by the principal obliger. It satisfies all the requirements of Sec. 126 of the contract Act. Hence we hold that the instrument in question is one governed by Art. 48 and we accordingly answer the reference in the affirmative. We make no order as to costs. Advocate's fee Rs. 500/-. A sum of Rs. 500 shall be paid to Sri C. Trivikramarao, Advocate as fee.
9. Reference answered in affirmative.