1. In this case six persons have been convicted under Section 61 of the Indian Stamp Act, I of 1879, under the following circumstances: These six persons were members of a punchayet, who decided a matter relating to a small piece of land, acting as arbitrators or umpires between two of their fellow-villagers. This decision, or arbitration, was reduced into writing, but the writing was not stamped. One of the persons at whose instance it was made having subsequently resorted to the Civil Court, this written award was filed in the suit. This paper may possibly have been an award within the meaning of Article 10, Schedule i of the Stamp Act, and as it had not been stamped, the Munsif, before whom it was filed, proceeded to impound it; and subsequently, in accordance with the provisions of Section 35 of the Stamp Act, he forwarded the paper to the Collector. The Collector upon this made an order that the writer of the document be sent to the Deputy Magistrate for trial under the Criminal Code. The Deputy Magistrate upon this summoned the six persons who had acted as arbitrators, and imposed upon them a fine of Rs. 25 each, making a total of Rs. 150.
2. It appears to us, that this conviction is illegal, and must be set aside. When the Munsif forwarded the award to the Collector under the provisions of Section 35 of the Stamp Act, the course which the Collector ought to have pursued was that laid down by Section 37 of the Act, the language of which section is imperative: 'He shall adopt the following procedure.' If the Collector was of opinion that the instrument was chargeable with duty and was not duly stamped, his course was to require the payment of the proper duty, or the amount required to make up the same together with a penalty (see Clause (b) of Section 37). If this duty and penalty had been paid, then, according to the provisions of Section 40, such payment would not have been a bar to the prosecution of any person who appeared to have committed an offence against the stamp law in respect to the instrument under the proviso to Section 40; a criminal prosecution could not have been instituted unless it appeared to the Collector that the offence was committed with an intention of evading payment of the proper duty. It appears to us to be clear from the provisions referred to, that it was the intention of the Legislature in the first place to compel the payment of the stamp-duty together with a penalty. By the payment of the stamp-duty, the revenue would be protected from loss; and the exaction of a small money penalty would be a sufficient punishment in the large majority of cases in which the omission to stamp at all, or stamp duly, arises from negligence, inadvertence, or ignorance of the provisions of the stamp law. The severer proceeding of a criminal prosecution is intended for those cases only in which there is an intention to evade the stamp law; and before a criminal prosecution can be instituted, it is incumbent upon the Collector to form an opinion whether it appears to him that such intention existed. Now, in the present case the Collector did not adopt the procedure provided by the Act. He did not call upon the parties concerned to pay the stamp-duty together with the penalty prescribed by Clause (b), Section 37. Had he done so, there is no reason to suppose that it would not have been paid. The penalty required by the Munsif was apparently higher than it should have been under the Stamp Act; and it may well have been that the Collector would have required a smaller sum, and that this smaller sum would have been paid by the parties concerned. Thus, if the duty, as assessed by the Collector, together with the penalty, had been paid, a criminal prosecution could not have been instituted, unless it appeared to the Collector that there had been an intention of evading the proper duty. It is quite possible that the Collector might have been satisfied that no such intention existed, and that the exaction of the stamp-duty and the stamp penalty may have appeared to him a sufficient vindication of the interests of the public revenue. We may observe that, as the arbitrators did not claim any benefit under the award, and could receive no advantage from the non-payment of the stamp-duty, it is not easy to see how they could have had an intention of evading the stamp law. The Stamp Act is a fiscal enactment, and must be strictly construed: and before any person can be punished for an offence relating to the stamp revenue, the procedure prescribed by the Act must be strictly followed. 'If,' said Lord Mansfield in Hartley v. Hooker 2 Cowper 523 'a new offence is created by statute, and a special jurisdiction out of the course of the common law is prescribed, it must be followed. If not strictly pursued, all is a nullity and coram non judice.' We are, therefore, of opinion that, as the course of procedure prescribed by the Act was not followed in this case, the prosecution before the Deputy Magistrate was unwarranted, and the conviction is bad in law. We reverse the conviction and direct that the fines, if paid, be refunded.
3. I am of the same opinion.