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R.B. Suraj Bhan Vs. Dewan Singh - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtDelhi High Court
Decided On
Case NumberRegular First Appeal No. 14D of 1964
Judge
Reported inILR1974Delhi581
ActsStamp Act, 1899 - Sections 12 and 36; Code of Civil Procedure (CPC), 1908 - Order 13, Rule 4
AppellantR.B. Suraj Bhan
RespondentDewan Singh
Advocates: R.M. Lal and; Prem Shanker, Advs
Cases ReferredDhirajlal Mohanlal Kathewadi v. Ranchhod Balaram Nayak
Excerpt:
.....of law, this document must be treated as unstamped.;(ii) stamp act (1899) - section 36-unstamped document marked as exhibit by trial court-execution of document also not denied - admissibility into evidence - duty of court-civil procedure code 0rder 13 rule 4.;where, as in the instant case, the document (pronote) was unstamped but its execution was not denied by the appellant and the trial court marked the document as exhibit; held, that the marking of the document as exhibit cannot be regarded as the document having been admitted into evidence within the meaning of section 36 of the stamp act. the mere marking of documents cannot be regarded as dispensing with proof of documents in accordance with law. furthermore, it is the duty of the court recording evidence to see that it..........on the pleadings of the parties the trial court settled the following. issues:- 1. whether the suit pronote is without consideration as alleged in the additional pleas? 1a.whether the pronote in question is not properly cancelled? if so, with what effect? ib.what is the effect of the pronote having been admitted in evidence 2.what amount, if any, is due to the plaintiff on account of (a) principal and (b) on account of interest, if any ? 3.relief. (5) the trial court decided all the issues against the defendant and, as already noticed earlier, decreed the suit for the recovery of rs. 50,000.00 as principal and rs. 3000.00 as interest with costs. hence this appeal. (6) the respondent though served, did not file representation. accordingly, an actual date notice was also sent to him.....
Judgment:

Prakash Narain, J.

(1) This first appeal is directed against the judgment and decree dated September 30, 1963 of the Commercial Sub Judge 1st Class, Delhi, whereby the suit of the respondent/plaintiff for recovery of Rs. 53,000.00with costs was decreed against the appellant/defendant.

(2) The suit was filed by the respondent under Order 37 of the Code of Civil Procedure on the basis of a promissory note (Exhibit P. 2) for a sum of Rs. 50,000.00 carrying interest at 6 per cent per annum payable to the respondent on demand, executed by the appellant on May 25, 1961. The amount of Rs. 50,000.00 is said to have been paid to the appellant by the respondent by means of a cheque for Rs. 50,000.00 (Exhibit P.I/I). In token of receipt of the said amount the appellant is stated to have executed a receipt (Exhibit P. 3). The appellant applied fct and was granted leave to appear and defend the suit conditional on famishing security. This has been done. The pleas taken up by the appellant in defense of the suit originally were that he had not received any payment of Rs. 50,000.00 and so, the promissory note in question was without consideration; that actually this promissory note was executed to secure additional interest to be paid by the appellant to the respondent in connection with, an agreement to sell entered into between the parties in respect of certain properties owned by the appellant which had been attached and sold in a court auction after dismissal of the appellant's objections under order 21 rule 90 Civil Procedure Code from which order an appeal was then pending in the High Court. The agreement to sell, broadly speaking, was that in case the High Court set aside the auction sale the respondent would purchase two properties of the appellant for a sum of Rs. 3,90,000.00. Another agreement between the parties to the effect that the appellant would be entitled to repurchase the properties sold to the respondent within two years and in that contingency would have to pay to the respondent interest at the rate of Rs. 1.12 per month on the amount of Rs. 3,90,000.00 was also pleaded. In this agreement of resale interest payable was to be mentioned as 10 annas per cent per month and so, for the balance interest of 8 annas per cent per month this promissory note was obtained as security. Later on the written statement was amended and a plea was taken that the promissory note which was the basis of the suit was not admissible in evidence nor could it be admitted into evidence as there was no proper cancellation of the four revenue stamps affixed on the said promissory note. The amended written statement was filed after the parties had led evidence. This amendment was allowed.

(3) The respondent in his replication denied that the promissory note had any connection with the agreement to sell pleaded by the appellant and reiterated his case about the said promissory note being for consideration.

(4) On the pleadings of the parties the trial court settled the following. issues:-

1. Whether the suit pronote is without consideration as alleged in the additional pleas?

1A.Whether the pronote in question is not properly cancelled? If so, with what effect?

IB.What is the effect of the pronote having been admitted in evidence

2.What amount, if any, is due to the plaintiff on account of (a) principal and (b) on account of interest, if any ?

3.Relief.

(5) The trial court decided all the issues against the defendant and, as already noticed earlier, decreed the suit for the recovery of Rs. 50,000.00 as principal and Rs. 3000.00 as interest with costs. Hence this appeal.

(6) The respondent though served, did not file representation. Accordingly, an actual date notice was also sent to him under the rules of this court. He has, however, not put in appearance.

(7) The first point that was urged on behalf of the appellant is that the stamps on the promissory not?. Exhibit P.2, have not been cancelled as required by the provisions of the Stamp Act and so, the document must be treated as unstamped. If that be so, then the document could not be taken into evidence and the suit was liable to be dismissed being a suit on an inadmissible document. This very objection had been raised in the trial court also and forms the subject matter of Issues is and IBT.

(8) The trial court agreed with the proposition of law cailvassed before it that all the four stamps affixed to the promissory note had to be cancelled but came to the conclusion that the cancellation was proper and fulfillled the requirements of Section 12 of the Stamp Act. Before we proceed to comment upon this fintling, it would be advantageous to notice the law on the subject. The relevant provision of the Stamp Act in this behalf is Section 12 which is in the following terms:-

'12.(l)(a) Whoever affixes any adhesive stamp to any instrument chargeable with duty which has been executed by any person shall, when affixing such stamp, cancel the same so that it cannot be used again; and

(B)whoever executes any instrument on any paper bearing an adhesive stamp shall, at the time of execution, unless such stamp has been already cancelled in manner aforesaid. cancel the same so that it cannot be used again.

(2)Any instrument bearing an adhesive stamp which has not been cancelled so that it cannot be used again, shall, so far Uk such stamp is concerned, be deemed to be un- stamped.

(3)The person required by sub-section (1) to cancel an adhesive stamp may cancel it by writing on or across the stamp his name or initials or the name or initials of his firm with the true date of his so writing, or in any other effectual manner.'

(9) A reading of the section would show that there is no particular manner provided for cancellation of the stamps. What is important is that the cancellation should be in such a manner so that the stamps cannot be used again.

(10) In Sohan Lal Nihal Chand v. Raghu Nath Singh and others, A.I.R. 1934 Lah 606, the court was concerned with the question of cancellation of, a pronote for Rs. 20,000.00. This pronote had four one anna adhesive- stamps affixed to it. It was admitted that one of them had not been cancelled in any way and could be removed and used again. It was held that one of the stamps being uncancelled, the document should be considered as insufficiently stamped and so, no decree could be passed on the basis of such a pronote which was inadmissible in evidence. We may mention that it was further observed by the bench in this case that no decree could be passed in a suit on the basis of such a pronote even if the defendant admitted his liability.

(11) In Khazan Shah v. Atta Ullah, Air 1933 Lah 148 also the same rule was laid down as in the case of Sohan Lal Nihal Chand.

(12) In Hafiz Allah Baksh v. Dost Mohammad, Air 1935 Lah 716 the bench considered the question of a line drawn across the same being regarded as sufficient cancellation within the meaning of Section 12 of the Stamp Act. It was held that where it is possible to use such a stamp a second time, it could not be held that the cancellation was proper. The same view as was expressed in the case of Hafiz Allah Baksh by the bench of the Lahore High Court has recently bean reiterated by the Bombay High Court in Dhirajlal Mohanlal Kathewadi v. Ranchhod Balaram Nayak, 1973 B L R 189.

(13) The ratio of the judgments, thereforee, is that the stamp in question should be examined to see whether it can be lifted from the document on which it is affixed and used again. Indeed, the requirement of the statute is that the cancellation should be in a manner that the stamp cannot be used again.

(14) We have examined the original document in this suit. It bears four revenue stamps of 10 Naya Paise each. The first three stamps have at them the signatures of the appellant but the fourth stamp has a faint line in ink running almost half way across the stamp with a hook coming downward in some what deeper impression in ink. The trial court had held that this line ending in a hook was sufficient cancellation with the requirements laid down by Section 12 of the Stamp Act. We do not agree. The requirement of law is to see whether the stamp can be used again if lifted from the document. There is sufficient space both at the top, bottom and the right half side of the fourth stamp for affixation of signatures or adoption of any other mode of cancellation. This stamp is not affixed either overlapping the third stamp nor are the perforation of the third and the fourth stamps undetached. In our view, thereforee, the fourth stamp cannot be regarded as having been cancelled in a manner which would prevent it from being reused.

(15) Even the first three stamps, in our view, may not be regarded as properly cancelled because the three stamps which have the signatures of the appellant can be lifted and affixed on another document giving complete signatures. In order that the stamps can be called effectually cancelled the signatures should commence on the paper on which the stamp is affixed, go across the stamps and finish on the paper on the other side. If signatures are not affixed to cancel the stamp, some other effectual manner of cancellation be adopted running right across the stamps, the cancellation commencing on the paper on which the stamp is affixed and ending also on the paper on the other side. We, thereforee, hold that the stamps on the pronote not being cancelled in accordance with the requirements of law, this document must be treated as unstamped.

(16) The document had been marked Exhibit P. 2 and even its execution was not denied by the appellant. The question that, however, arises is that even in such circumstances could the document be regarded as having been admitted into evidence and so, its admiasibility being put beyond question as contemplated by Section 36 of the Stamp Act. As already noticed the execution of the document was not in dispute. In such circumstances the marking of the document as Exhibit P. 2 cannot be regarded as the document having been admitted into evidence within the meaning of Section 36 of the Stamp Act. The mere marking of documents cannot be regarded as dispensing with proof of documents in. accordance with law. Furthermore, it is the duty of the court recording evidence to see that it docs not admit into evidence a document which is not properly stamped.

(17) As was held by the Supreme Court in Sait Tarajee Khimchand and others v. Yalamarti Satyam and others, : AIR1971SC1865 (5), the mere marking of an exhibit does not dispense with the proof of documents. Looking at the evidence on record we do not find anyone deposing on behalf of the respondent that the promissory note, Exhibit P. 2, was signed by the appellant. In any case as the document is not properly stamped, it could not be allowed to be put to a witness in evidence as the provisions of sub-section (2) of Section 12 are clearly attracted. This being the situation the suit on the basis of this promissory note could not be decreed.

(18) The view that we have taken makes it unnecessary for us to dilate on the other issues in the case.

(19) Accordingly, we accept the appeal, set aside the judgment and decree of the trial court and dismiss the respondent's suit with costs of the trial court. As the respondent was not represented in this court there will be no order as to costs in appeal.


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