1. The appeal is brought by the defendant against an appellate decree of District Judge, Sher Singh, dated 16-11-1949 reversing the decree of the trial Court and thus decreeing the plaintiff's suit for recovery of Rs. 1,700/- on the basis of a promissory note dated 7-7-1943 executed at Phagwara in the erstwhile Kapurthala State.
2. The suit was brought on 23-6-1949 and it is alleged that it is within limitation because of the payment of Rs. 20/- under the signatures of the defendant on 23-6-1946. The finding of the learned District Judge is that the document is a promissory note but that there was no presentment although he does not seem to have reversed the finding of the trial Court that Rs. 20/-were paid and are a good acknowledgment under Section 20, Limitation Act.
3. The question to be decided in this case is whether the promissory note is properly stamped. It was executed by the defendant, as I have said before, in Phagwara in what was Kapurthala State. At the time it was executed lour one anna British Indian stamps were affixed and cancelled and Mr. Bahri submits that in this case it was necessary that before presentment could be made another four anna stamps should have been affixed and as they were not affixed the promissory note was not properly stamped within the meaning of Section 35, Indian Stamp Act. Section 3 Indian Stamp Act mentions the instruments which are chargeable with duty and Section 3(b) rung as under;
'3. Subject to the provisions of this Act and the exemptions contained in Schedule 1, the following instruments shall be chargeable with duty of the amount indicated in that Schedule as the proper duty there for respectively, that is to say
(a) * * * *
(b) every bill of exchange (payable otherwise than on demand) or promissory note drawn or made out of India except Part B States on or after that day and accepted or paid, or presented for acceptance or payment, or endorsed, transferred or otherwise negotiated, in India except part B states; * *.'
4. Reliance is placed on a Judgment of Mockett J in -- 'Sivasubramania Thevan v. Kalankarayan Konar', AIR' 1941 Mad 868 (A). There a promissory note was executed in Colombo in favour of one Arunachala Thevar and it was stamped with one anna adhesive stamp, the correct stamp for a note in British India, and was duly cancelled. It was then brought into British India and was assigned in favour of the plaintiff, and it was held that the first holder whether he was a promisee or not was bound to affix a proper stamp and cancel the note before he presented it for acceptance in British India and that the Act commences to operate on promissory notes from the moment they are endorsed, transferred or otherwise negotiated or presented for payment and it is at a moment of time before those processes began in British India that the affixing of the stamp and cancellation must be done. In other words, the learned Judge was of the opinion that a promissory note even though it already bore a proper British Indian Stamp required to be re-stamped if it was negotiated in British India. Reliance was placed in this case on -- 'Griffin v. Weather by', (1869) 3 QB 753 (B). In that case an action was brought for recovery of money on the basis of a foreign bill of exchange drawn in the Isle of Man payable in Shrewsbury, England, and although it did not require a stamp because it was a foreign bill, when presented for payment, endorsed, transferred or otherwise negotiated in United Kingdom it would require a stamp, but as it had not been dealt with in any of these ways it was admissible in evidence without a stamp.
I with great respect am unable to see how this supports the opinion of Mockett J. because the words used there do not seem to be any different from those used in Section 19 of the Indian Act which provides :
'19. The first holder in India except Part B States of any bill of exchange (payable otherwise than on demand) or promissory note drawn or made out of India except Part. B States shall, before he presents the same for acceptance or payment, or endorses, transfers or otherwise negotiates the same in India except Part B States, affix thereto the proper stamp and cancel the same : Provided that
(a) if, at the time any such bill of exchange ......or note comes into the hands of any
holder thereof in India except Part B States, the proper adhesive stamp is affixed thereto and cancelled in manner prescribed by Section 12 and such holder has no reason to believe that such stamp was affixed or cancelled otherwise than by the person and at the time required by this Act, such stamp shall, so far as relates to such holder, be deemed to have been duly affixed and cancelled;
(b) * * *'
5. The facts in the present case are these that the promissory note was executed outside British India. It was brought into British India by the promisee himself and Rs. 20/- out of the money due on this promissory note were paid as an acknowledgment under Section 20, Indian Limitation Act. In a case such as this, in my opinion, no fresh stamps are required. In -- 'Mahomed Rowthan v. Mahomed Husin Rowthan', 22 Mad 337 (C) a promissory note was executed in Mecca and a suit was brought in one of the towns in Madras Presidency on the basis of this pronote and it was held that there was no provision of law which required a promissory note executed out of British India to be stamped before it was sued on or used in Court, where the holder of the note had not done any of the acts referred to in Sections 5 and 58 of the Act which correspond to the present sections of the Act which I have mentioned above Seshagiri Aiyar J. in -- 'Kunhi Koya Haji v. P. V. Assan Baya Haji', AIR 1919 Mad 104 (D) held that if a promissory note executed outside British India is valid according to the law of the place where it was executed, it can ordinarily be sued upon in India and is admissible in a British Indian Court without affixing any Indian stamp on it, and if any stamp is necessary, it is sufficient if at the time of the decree, an Indian stamp is affixed to it.
Reliance was there placed on -- 'Simulu Ebra-him Rowthan v. Abdul Rahim Mahomed', 8 Mad LJ 182 (E) & on '22 Mad 337 (C) which I have already mentioned above. In a Bombay case-- 'Dhondiram Chatrabhuj v. Sadasukh Savatram', AIR 1918 Bom 211 (F) a promissory note was executed in Hyderabad State. It was stamped with a British Indian Stamp and a suit was brought on the promissory note in a Court in British India, and it was contended that as the promissory note was not stamped with the stamp required by the laws of the Hyderabad State, no suit would He upon it in British India, and relying on English Judgment -- 'James v. Catherwood', (1823) 3 Daw and Ry KB 190 (G) it was held that ever since the time of Lord Hardwicke it was settled that in a British Court no notice can be taken of the revenue laws of a foreign State.
'It would be productive of prodigious inconvenience, if, in every case in which an instrument was executed in a foreign country, we were to receive in evidence what the law of that country was, in order to ascertain whether the instrument was valid or was not valid.'
In a Sind case -- 'Ramsing v. Parumal', AIR 1916 Sind 6G (H) it was held that a promissory note not executed in British India is not compulsorily 'stanipable' under the Stamp Act but is chargeable only when presented, paid or negotiated in British India, and that view was approved of in a later case -- 'Gangaram Shewaram v. Mallik Nur Ahmed, AIR 1935 Sind 48 (I).
6. A perusal of these authorities shows that where a promissory note is executed outside British India it is not inadmissible in evidence in a Court in British India if a suit is brought to enforce the liability created by the promissory note. The requirement of a stamp under Section 19, Indian Stamp Act seems to arise when a first holder in British India does any one of the following things:
Presentation for acceptance or for payment or endorses, transfers or otherwise negotiates it in British India.
In the present case I must hold that none of these things were done therefore even under the strictest view which the appellant would like me to take the promissory note did not require any fresh stamping. But I would be quite prepared to go further and hold that if a British Indian stamp is already on the promissory note it will not require a fresh stamp, because if that is done the Crown or the State as the case may be will be charging double duty.
The object of the Stamp Act is to collect revenues for the State and it has never been held that Courts will enforce payment of double duties on instruments which fall under the Indian Stamp Act. Even under Private International Law a bill issued out of the United Kingdom if it conforms as regards requisites in form to the law of the United Kingdom, it may, for the purpose of enforcing payment thereof, be treated as valid as between all persons who negotiate, hold, or become parties to it in the United Kingdom: see Dicey's Conflict of Laws, Edn. 6, p. 684. The validity of such a bill as regards requisites in form,of the supervening contracts, such as acceptance,or indorsment, or acceptance supra protest, isdetermined by the law of the place where suchcontract was made. Looking at it from any pointof view therefore in my opinion the suit has beenrightly decreed but because the case was not freefrom difficulty although I would dismiss the appeal the parties must be left to bear their owncosts throughout.