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Bachan Singh Vs. Ram Avadh - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1949All431
AppellantBachan Singh
RespondentRam Avadh
Excerpt:
- .....court of the munsif, shahganj, jaunpur, exercising the powers of a judge, small cause court, were promissory notes or agreements. the first instrument is dated 29th march 1939. it was executed by ram avadh singh and is to the effect:i had borrowed a sum of rs. 42...bearing interest at the rate of annas four percent, from bechan singh...on 29th march 1939, and have, therefore, executed this pronote on this 29th day of march 1939, so that it may serve as evidence and be of use when needed.the second instrument is dated 30th december 1940. it was executed by raja ram singh and. it recites:i of my own free will and accord approached mahajan ranbir singh...and borrowed from him the sum of rs. 100...bearing interest at the rate of annas eight per cent, per mensem for the purpose of purchasing.....
Judgment:

Bhargava, J.

1. This is a reference by the Chief Inspector of Stamps, United Provinces, under Section 61, Stamp Act. The question raised in this reference is whether the two instruments filed in Suits Nos. 11 of 1944 and 31 of 1944 in the Court of the Munsif, Shahganj, Jaunpur, exercising the powers of a Judge, Small Cause Court, were promissory notes or agreements. The first instrument is dated 29th March 1939. It was executed by Ram Avadh Singh and is to the effect:

I had borrowed a sum of Rs. 42...bearing Interest at the rate of annas four percent, from Bechan Singh...on 29th March 1939, and have, therefore, executed this pronote on this 29th day of March 1939, so that it may serve as evidence and be of use when needed.

The second instrument is dated 30th December 1940. It was executed by Raja Ram Singh and. it recites:

I of my own free will and accord approached Mahajan Ranbir Singh...and borrowed from him the sum of Rs. 100...bearing interest at the rate of annas eight per cent, per mensem for the purpose of purchasing bullock. I have, therefore, executed these few presents by way of a promissory note so that it may serve as evidence and be of use when needed.

Each instrument bears a one-anna revenue stamp.

2. The Inspector of Stamps and Registration, who examined the records of the cases in which these instruments were filed, was of opinion that the instruments ware not promissory notes as they did not contain any undertaking to pay the money and each of them only contained an acknowledgment of debt coupled with an agreement to pay interest at the stipulated rate. He, therefore, treated them as unstamped and reported that the persons concerned should be asked to pay the stamp duty and penalty provided by law. The Court concerned did not accept the report and held that, in view of the fact that the documents were described as 'pronotes,' they must be treated as promissory notes.

3. In this reference, the Chief Inspector of stamps has again pointed out that the instruments are not promissory notes but they are acknowledgments of debt coupled with agreement to pay interest.

4. The term 'promissory note' has been defined in Section 4, Negotiable Instruments Act, as follows:

A 'promissory note' is an instrument in writing (not being a bank-note or a currency note) containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument.

5. It is true that the instruments are styled as 'pro-notes,' but that is merely the description of the instruments; and, in order to find out whether the instruments are promissory notes or not, we must examine their terms. The terms of 'the instruments have been set out above and we do not find therein any conditional or unconditional undertaking by the maker to pay the amounts mentioned therein.

6. In our opinion, there must be an express undertaking to pay the amount mentioned in the instrument before it can be held to be a promissory note, as defined in Section 1, Negotiable Instruments Act. A mere implied undertaking by the use of the word 'debt' or 'proyote' is not sufficient. This is also made clear by illus. (c) appended to Section 4 of the Act, it reads : ''(C) Mr. B, x. O.U. Rs. 1000.' This does not amount to a promissory note within the meaning of the term as used in Section 1 of the Act.

7. In Ratan Singh v. Pirbhu Dayal : AIR1931All302 the instrument under consideration was in more or less similar terms and, in the absence of any unconditional undertaking to pay the amount mentioned therein, it was held that the instrument could not be considered as a promissory note,

8. We, therefore, accept the reference and hold that the instruments in question are not promissory notes, but they are agreements. Accordingly, we declare that a stamp duty of twelve annas and a penalty of Rs. 7-8-0 is payable in respect of each of the instruments by Ram Avadh Singh in one case and Raja Ram Singh in the other case.


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