Rajinder Sachar, J.
(1) (DECEMBER 22, 1972)-When is a Hundi payable on demand or otherwise than on demand is the question that calls turn determination
(2) This revision petition is directed against the order of the trial court, dated 16th April, 1970 holding that the Hundi in question being a bill of exchange payable on demand was not liable to any stamp duty.
(3) The plaintiff filed a suit for the recovery of Rs 1,555.00 on the basis of a Hundi under Order 37 Rule 2 C.P C. Objection having been taken by the defendant that the Hundi was insufficient in stamp, the following preliminary issue was framed :- Whether the document in question is insufficient in stamp If so its effect. The trial court found that the document in question did not require any stamp duty. It is this order which is being challenged in the civil revision. The document in question reads as follow :-
'RS.1500.00 Dated 4th November, 1968. Due Date 4th April. 1969. Hundred and eighty days after this date I Suraj Ram Khurana 40/1 Shaktinagar Delhi-7 promise to pay to Shri Hari Rattan and Smt. Prem Vati (either or survivor) R/o H. No 1/339 Hari Chand Building Sadar Bazar, Delhi Cantt. a sum of Rs. 1500.00 (Rupees one thousand and 5 hundred only) for the value received in cash. Seen and accepted Suraj Ram Khurana, Surajram 4th November, 1968. 4th November. 1968.
Section 35 of the Indian Stamp Act, 1899 (hereinafter called the Act) makes instruments not duly stamped inadmissible in evidence. The argument of the counsel for the petitioner is that the instrument in question is a Hundi payable otherwise than on demand and, thereforee, it should have borne stamp as provided in Article 13(b) of Schedule I of the Act. The document in question is written on a paper of Rs. 1.00 . It is not disputed that if this document is taken to be payable otherwise than on demand then it is insufficiently stamped. The contention of the counsel for the plaintiff/defendant, however, is that it is a hundi payable on demand and for such a document there is no provision in the Act and, thereforee, the question of it being inadmissible in evidence because of insufficiency of stamp does not arise. Section 2(2) of the Act defines a bill of exchange to mean a bill of exchange as defined by the Negotiable Instruments Act, 1881, and includes also a hundi and any other document entitling or purporting to entitle any person, whether named therein or not, to payment by any other person of, or to draw upon any other person for, any sum of money. Section 2(3) of the Act defines Bill of exchange payable on demand to include an order for the payment of any sum of money by a bill of exchange or promissory note or for the delivery of any bill of exchange or promissory note in satisfaction of any sum oF money, or for the payment of any sum of money out of any particular fund which may or may not be available, or upon any Condition or contingency which may or may not be performed or happen. Section 2(22) defines promissory note to mean a promissory note as defined by the Negotiable Instruments Act, 1881. Counsel for the petitioner defendant sought to urge that the document in question was not a hundi but a promissory note and even if it was to be treated as being payable on demand it has to bear a stamp as provided under Article 49(a) of Schedule I of the Act and as this document did not bear the stamp prescribed it was not admissible. This argument has no force as the document in question is admittedly written on a paper which is described as hundi. The language of the document also shows that it was being written as a hundi and not as a promissory note. I must, thereforee, proceed on the basis that the document in question is a hundi and not a promissory note. The document slates that 180 days after the date mentioned in the hundi which is 4th November, 1968, executant promises to pay the amount of Rs. 1500.00 . The question, thereforee, arises whether when a hundi incorporates a promissory to pay 180 days after the date of its execution, it can be called a hundi payable on demand. Section 19 of the Negotiable Instruments Act, 1881, provides that a promissory note or bill of exchange in which no time for payment is specified and a cheque, are payable on demand.
(4) 'THE words 'payable on demand' occurring in a promissory note mean payable 'at once', 'forthwith' or 'immediately' and a promissory note payable on a specified date or after a specified period or within a certain time can hence be considered only as a promissory note payable otherwise than on demand. A promissory note payable on demand is payable without any demand and the true import of the words 'on demand' is that the debt is due and payable immediately', vide Aiyappankutty v. Mathoo Mathai. In that case the promissory note was payable after one year and it was held that it was liable to stamp duty under Article 49(b) of Schedule I of the Act as being a promissory note payable otherwise than on demand. A similar view was also taken in Alamelu Ammal v. P. Rangai Gounder, where the promissory note agreeing to pay within two years. was held to be not payable on demand, as the words 'payable within two years' were introduced to give the debtor time within which to pay the debt and that within that time that promisecould not enforce the debt.
(5) The case of Alamelu Ammal was approved by the Division Bench in Thenappa Chettiar v. Addiyappa Chettiar, where it was held that a promissory note promising to pay after two years was by necessary implication not a document payable on demand as a period of two years was specified and it cannot be said to be payable on demand.
(6) The finding of the trial court that the Hundi in question is payable is based on a decision of a single judge in a case Tikum Chand v. Laxmichand. In that case the learned judge held that a Hundi payable after a particular date specified therein is not one payable otherwise than on demand it is payable on demand after the due date and is exempt from payment of stamp duty The learned judge relied on Partab Chand Ratan Chand v. Gilbert in order to come to this conclusion. A reference to Partab Chand Ratan Chand's case, however, shows that this case dealt with the proposition whether the post dated cheque was a bill of exchange or not. The lower court had there come to the conclusion that a post dated cheque was not a valid negotiable instrument within the meaning of Section 6 of the Negotiable Instruments Act. This conclusion was not accepted by the single judge of Allahabad High Court who held that a cheque is a bill of exchange nonetheless and as a bill of exchange it is negotiable. In my view this case is clearly distinguishable. Section 6 of the Negotiable Instruments Act defines a cheque to mean that a cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise on demand. Now a post dated cheque becomes immediately payable on demand on the date which it bears. In point of law it makes no difference whether it is ante-dated or post dated it is still payable on presentation after the execution of date. It maybe that a cheque is delivered to a party on a particular date say 1st January but if it bears a particular date say 15th January, it is still payable on demand immediately on the date it bears. There is no question of a cheque being payable on a date subsequent to the date of its execution as by the very nature of its definition a cheque cannot be expressed to be payable otherwise than on demand. Merely by delivering a cheque earlier to the date of its execution does not mean that cheque is not payable on demand. But these considerations do not apply to the case of a Hundi which though executed on a particular date containing a promise to pay only 180 days after the date of execution of the Hundi. In order that a Hundi should be treated to be payable on demand it is implicit that it should be payable immediately, that is on the date of its execution. If a promisecannot enforce payment before a certain period it is hard to imagine how the hundi can still be called one payable on demand. Article 13 (b) of Schedule I of the Act deals with stamp to be affixed on bills of exchange which are payable otherwise than on demand depending on the amount and the period being within one year. Sub-clause (ii) of Article 13 (b) covers cases where it is payable more than 6 months but not more than 9 months after date or sight. Sub-clause (c) of Article 13 provides those cases where bill of exchange is payable at more than one year after date or sight. Mr. Bhatia learned counsel for the respondent sought to urge that clause (b) of Article 13 is only applicable if there were two periods i.e. where before which the bill of exchange is rot payable and the outer limit within which it is payable. According to the learned counsel it in the present Hundi it was stated that it was payable more than three months but not more than 6 months after date or sight, it would be covered by sub clause (ii) of Clause (b) of Article 13 of Schedule I of the Act, but as the document in question only states that it is payable 180 days after the date of execution, it is taken out of the purview of any of the sub-clauses of clause (b) of Article 13 and becomes one payable on demand. In my view there is no force in this contention. This argument, if accepted would make the whole clause (b) of Article 13 totally redundant and otiose. I can see no logic why if a document in the first instance contains a period of 180 days after its execution when alone it is payable that it should be treated as payable on demand, while a document which mentions that it is payable more than three months hut not more than six months after date or sight it would be covered by Sub-clause (ii) of clause (b) of Article 13 of the Act. This argument also cannot be accepted if a reference is made to clause (c) of Article 13 which specifically provides that if a bill of exchange is payable at more than one year after date or sight a particular stamp has to be paid. According to Mr Bhatia had the present document mentioned instead 180 days, a period of over 365 days, he would not have contended that it was payable on demand and would have conceded that it would in that case be covered by clause (c) of Article 13 as according to him this sub clause (e) covers a case of bill of exchange whether payable on demand or otherwise than on demand. I am afraid, I cannot accept this interpretation, which is not supposed by the scheme of the Article. The only difference between clause (b) and Clause (e) of Article 13 is with reference to the period, i.e. clause (b) dealing with period of less than one year and clause (e) dealing with period of more than one year. But both clause (b) and clause (e) deal with cases of bill of exchange payable otherwise than on demand Once a document is accepted as payable on demand either clause (b) nor clause (e) is applicable. I cannot for the reason mentioned above agree, with respect, with the view expressed in Tikam Chand's case. It may be mentioned that there is no discussion in the case nor are the authorities mentioned by me noticed therein. In my view the case of Pratab Chand Rattan Chand, was dealing with a different matter and reliance on that case was placed wrongly (if I may say with respect) in Tikam Chand's case.
(7) For the reasons mentioned above, in my view the trial court has acted illegally in holding that the document in question did not require any stamp duty. I would, thereforee, set aside the order of the trial court and hold that the document in question is payable otherwise than on demand and is hence insufficiently stamped, I would, thereforee, find the preliminary issued in favor of the petitioner-defendant.
(8) The result is that the petition is allowed, but with no order as to costs. The parties through their counsel are directed to appear before the trial court.