SCC Online Web Edition, © 2024 EBC Publishing Pvt. Ltd.
Page 1 Tuesday, December 17, 2024
Printed For: Khushi Dhingra, National Law Institute University
SCC Online Web Edition: https://www.scconline.com
© 2024 Law Weekly , Chennai.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
2012 SCC OnLine Mad 4718 : (2013) 1 LW 606
In the High Court of Judicature at Madras
BEFORE T. MATHIVANAN, J.
Babu Jeevanantham … Petitioner;
Versus
Azhaguvel Mudaliar … Respondent.
Prayer: Petition is filed under Article 227 of the Constitution of India against the
Order dated 23.01.2004 and made in O.S. No. 126 of 2002 on the file of the
learned Principal Subordinate Judge, Villupuram.
C.R.P.(NPD) No. 1576 of 2004
Decided on November 27, 2012
Stamp Act (1899), Section 35/Promissory Note, insufficiently stamped, admissibility of, in
evidence,
(Indian) Stamp Rules (1925), Rules 18, 3.
Promissory note tendered to be marked as a documentary evidence on behalf of the
plaintiff — It was contended that the demand promissory note was not properly stamped
and therefore it was not admissible in evidence.
Para 4
Court is empowered to remove the defects by reigning the concerned party to make good
the deficiency of the stamp duty and to pay the fine which is imposed.
Para 17
Fact of affixation of postal stamps on the disputed pronote was known to the defendant —
It is to be established by the defendant by adducing evidence that he had discharged the
amount, and that the postal stamps were affixed by mistake.
Para 35
Plaintiff can be permitted to pay the stamp duty penalty at this stage and the question of
admission of evidence can be considered later.
Para 39
Held :
Section 35 of the Act creates disability against a party filing a document in evidence, which is not
sufficiently stamped and declares that such document will be inadmissible in evidence. However, the
Court is empowered to remove the defects by regning the concerned party to make good the
deficiency of the stamp duty and to pay the fine which is imposed therein.
Para 17
From the averments of the plaint as well as the written statement, the fact of affixation of postal
stamps on the disputed pronote was known to the defendant. It is to be established by the
defendant by adducing valid and acceptable evidence that he had discharged the amount, which was
borrowed and that the postal stamps were mistakenly affixed on the earlier promissory note and
subsequently another properly stamped promissory note was executed and since the amount was
settled, the said promissory note was made invalid.
Para 35
The learned Principal Subordinate Judge, in her Order, has observed that the document cannot be per
se rejected at this stage for bearing stamps of improper description. But, the plaintiff can be
permitted to pay the stamp duty penalty at this stage and the question of admission of evidence can
be considered later.
Para 39
Yasodammal v. Janaki Ammal, 1968 (1) MLJ 249;
Chenbasappa v. Lakshman Ramachandar, (1894) I.L.R. 18 Bom. 369;
SCC Online Web Edition, © 2024 EBC Publishing Pvt. Ltd.
Page 2 Tuesday, December 17, 2024
Printed For: Khushi Dhingra, National Law Institute University
SCC Online Web Edition: https://www.scconline.com
© 2024 Law Weekly , Chennai.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Gurana Asirinaidu v. Lenka Suryanarayana, 2005 (1) ALD 713 : 2005 (1) ALT 659;
M.V. Elisabeth v. Harwan Investment & Trading Pvt. Ltd. [1993 Supp (2) SCC 433];
and
Dhanna Lal v. Kalawatibai [(2002) 6 SCC 16]; — Referred to.
CRP dismissed.
For Petitioner: Mrs. Usha Raman
For Respondent: Mrs. S. Hemalatha
Page: 607
ORDER
1. The memorandum of grounds of civil revision is directed against the Order dated
23.01.2004 and made in O.S. No. 126 of 2002, on the file of the learned Principal
Subordinate Judge, Villupuram.
2. The respondent herein has filed the suit in O.S. No. 126 of 2002 as against the
revision petitioner herein for the recovery of a sum of Rs. 1,36,000/- with subsequent
interest at the rate of 12% per annum.
3. The revision petitioner has contested the suit by filing his written statement.
After framing necessary issues, the suit stood posted for trial on 12.01.2004.
4. It is obvious to note here that the above suit has been filed based on a demand
promissory note dated 23.12.1998. When the plaintiff was in the box, the demand
promissory note dated 23.12.1998 was tendered to be marked as a documentary
evidence on behalf of the plaintiff. Whileso, it was vehemently objected to by the
learned counsel for the revision petitioner/defendant contending that the demand
promissory note dated 23.12.1998 was not properly stamped and therefore it was not
admissible in evidence as contemplated under Section 35 of the Indian Stamp Act,
1899.
5. The submissions raised on behalf of both sides were considered by the learned
Trial Judge viz., the learned Principal Subordinate Judge, Villupuram and after
considering the real issue she has directed the plaintiff to pay necessary stamp duty
penalty on or before 05.02.2004 in respect of the demand promissory note dated
23.12.1998 with a finding that the document could not be per se rejected at this stage
for being stamped with improper description.
6. Impugning the Order of the learned Principal Subordinate Judge, Villupuram
dated 23.01.2004, the defendant in the suit has approached this Court with the
present revision petition under Article 227 of the Constitution of India.
7. Heard Mrs. Usha Raman, learned counsel appearing for the revision petitioner
and Mrs. S. Hemalatha, learned counsel appearing for the respondent.
8. Mrs. Usha Raman, learned counsel appearing for the revision petitioner has
adverted to that instead of affixing revenue stamps, postal stamps have been affixed
in the document and therefore it ought to have been construed as one, which is not
properly stamped and therefore it could not be received in evidence in terms of
Section 35 of the Indian Stamp Act, 1899.
9. On the other hand, Mrs. S. Hemalatha, learned counsel appearing for the
respondent has contended that the revision petitioner himself had executed the
demand promissory note and at the time of execution of the demand promissory note
he had brought the postal stamps and affixed on the demand promissory note and
SCC Online Web Edition, © 2024 EBC Publishing Pvt. Ltd.
Page 3 Tuesday, December 17, 2024
Printed For: Khushi Dhingra, National Law Institute University
SCC Online Web Edition: https://www.scconline.com
© 2024 Law Weekly , Chennai.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
taking advantage of the illiteracy of the respondent/plaintiff, now he had schemingly
set up a defence that the demand promissory note was not properly stamped and that
his contention is liable to be rejected.
10. She has also argued that the revision petitioner had accepted the execution of
the promissory note even his written statement and even he had gone one step further
and admitted the affixing of postal stamps in the demand promissory note and
subsequently when the defect was brought to his notice, another promissory note
affixed with revenue stamps for correct description was executed and that he had also
admitted that the subsequent demand promissory note was destroyed and once the
revision petitioner had admitted the execution of the
Page: 608
promissory note, the affixing of postal stamps instead of revenue stamps for proper
value has become pale into insignificance and as rightly observed by the learned
Principal Subordinate Judge, Villupuram, the document per se could not be rejected.
11. Before we could proceed with the discussion, this Court finds that it may be
proper to extract the provisions of Section 35 of the Indian Stamp Act, 1899 (2 of
1899) (hereinafter it may be referred to as the ‘Act’).
“35. Instruments not duly stamped inadmissible in evidence, etc.- No instrument
chargeable with duty shall be admitted in evidence for any purpose by any person
having by law or consent of parties authority to receive evidence, or shall be acted
upon, registered or authenticated by any such person or by any public officer,
unless such instrument is duly stamped.”
12. Proviso (a) to Section 35 of the Act also assumes importance. It reads as
follows:
“(a) any such instrument not being an instrument chargeable with a duty not
exceeding ten naye paise only, or a bill of exchange or promissory note, shall,
subject to all just exceptions, be admitted in evidence on payment of the duty with
which the same is chargeable, or, in the case of an instrument insufficiently
stamped, of the amount required to make up such duty, together with a penalty of
five rupees, or, when ten times the amount of the proper duty or deficient portion
thereof exceeds five rupees, of a sum equal to ten times such duty or portion.”
13. From the text of Section 35 of the Act, it is crystal clear that the Section itself is
very rigid and it says that unless an instrument is duly stamped it shall not be
admitted in evidence for any purpose.
14. Proviso (a) to Section 35 of the Act encompasses two compartments:
(i) any instrument not being an instrument chargeable with a duty not exceeding
ten naye paise only, or a bill of exchange or promissory note, shall be admitted
in evidence on payment of the duty with which the same is chargeable, subject
to all just exceptions; and
(ii) in case of an instrument is insufficiently stamped, it shall be admitted in
evidence on payment of amount required to make up such duty, together with a
penalty of five rupees. When ten times the amount of the proper duty or
deficient portion thereof exceeds five rupees, of a sum equal to ten times such
duty or portion.
15. It is also very much essential to extract Rule 18 of the Indian Stamp Rules,
1925 (hereinafter it may be referred to as the ‘Rules’):
“18. Provision for cases in which improper description of stamp is used.- When an
instrument bears a stamp of proper amount, but of improper description, the
SCC Online Web Edition, © 2024 EBC Publishing Pvt. Ltd.
Page 4 Tuesday, December 17, 2024
Printed For: Khushi Dhingra, National Law Institute University
SCC Online Web Edition: https://www.scconline.com
© 2024 Law Weekly , Chennai.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Collector may, on payment of the duty with which the instrument is chargeable,
certify by an endorsement that it is duly stamped.
Provided:
Where the stamp borne on the instrument is a postage stamp and the proper
description of stamp is a stamp bearing the words “Indian Revenue” or the words
“Revenue B. & O.” or the words “Bombay Revenue”, the Collector shall so certify
if the instrument was executed before, and shall not so certify, if it was executed
on or after the 1st April, 1935.
18(A). Added in Tamil Nadu.- Where an instrument is not duly stamped and the
deficit stamp duty is paid, a note shall be added on the instrument regarding the
payment of deficit stamp duty if a certificate contemplated under section 42 cannot
be added (G.O. Ms. 419 CT and RE dated, 11.4.1983)”.
16. Formerly, there was no need to consider whether a particular instrument was a
bill of exchange or a promissory note for the
Page: 609
purpose of stamp duty. Both were liable to the same duty whether they were made
payable on demand or otherwise. After the amending Act of 1923 (XLIII of 1923)
promissory notes payable on demand came to be charged to a duty ranging from one
anna to four annas according to the amount secured, while bill of exchange payable on
demand came to be chargeable to the fixed duty of one anna.
17. Nodoubt, Section 35 of the Act creates disability against a party filing a
document in evidence, which is not sufficiently stamped and declares that such
document will be inadmissible in evidence. However, the Court is empowered to
remove the defects by regning the concerned party to make good the deficiency of the
stamp duty and to pay the fine which is imposed therein.
18. Mrs. Usha Raman, while advancing her arguments has also made reference to
the decision in Yasodammal v. Janaki Ammal, reported in 1968 (1) MLJ 249.
19. In this case, the learned single Judge of this Court has observed that no relief
could be given on the basis of unstamped document. He has also observed that in the
case of an unstamped document it has been held that as the prohibition contained in
Section 35 of the Stamp Act is wide and absolute, even though in the pleadings the
contesting party may admit the execution of the unstamped document, no relief could
be granted on the basis of the admission, as it would amount to acting upon the
unstamped document.
20. The learned Single Judge of this Court has also made reference to the decision
in Chenbasappa v. Lakshman Ramachandar, reported in (1894) I.L.R. 18 Bom. 369. In
this case, it has been observed that the legislature had enacted “not only that an
unstamped promissory note should not be receivable in evidence, but also that it
should not be ‘acted on’, it was held that the Court was precluded from acting on the
note by giving a decree on it, even though execution was admitted.
21. On the other hand, Mrs. S. Hemalatha, learned counsel appearing for the
respondent has cited the decision of Andhra Pradesh High Court and made in Gurana
Asirinaidu v. Lenka Suryanarayana, reported in 2005 (1) ALD 713 : 2005 (1) ALT 659.
22. In this case, the plaintiff, who is the revision petitioner had filed the suit in O.S.
No. 30 of 1998 for recovery of a sum of Rs. 9,500/- alleging that the
respondent/defendant had borrowed the said amount after executing the promissory
note. When the revision petitioner/plaintiff had sought to mark the said pronote, the
respondent/defendant had objected on the ground that it was not properly stamped,
SCC Online Web Edition, © 2024 EBC Publishing Pvt. Ltd.
Page 5 Tuesday, December 17, 2024
Printed For: Khushi Dhingra, National Law Institute University
SCC Online Web Edition: https://www.scconline.com
© 2024 Law Weekly , Chennai.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
and therefore, it was not admissible in evidence. Admittedly, the suit document was
executed on a non-judicial stamp paper for the value of Rs. 5-00. The learned Junior
Civil Judge had accepted the objection raised by the defendant and held that the
plaintiff was not entitled to mark the disputed document as an exhibit.
23. Being aggrieved by the impugned Order, the plaintiff had preferred the above
revision petition before the Andhra Pradesh High Court. The learned single Judge,
while pronouncing the Judgment has referred to various provisions viz., Sections 2
(11), 2(13), 2(22), 10, 11, 35 of the Indian Stamp Act. Besides this, the learned
single Judge has also referred to Rules 3, 5, 13, 17, 18 of the Indian Stamp Rules,
1925 and apart from this he has also made reference to Article 49 of the Schedule to
the Indian Stamp Act, which provides how a
Page: 610
promissory note is to be stamped i.e., value of the stamp.
24. Rule 3 of the Indian Stamp Rules, 1925 deals with description of stamps. Sub-
rule 1(i) and (ii) of Rule 3 of the Indian Stamp Rules, 1925 reads as follows:
“(1) Except as otherwise provided by the Act or by these rules,—
(i) all duties with which any instrument is chargeable shall be paid, and such
payment shall be indicated on such instrument, by means of stamps issued by
Government for the purposes of the Act, and
(ii) a stamp which by any word or words on the face of it is appropriated to any
particular kind of instrument, shall not be used for an instrument of any other
kind.
(2) There shall be two kinds of stamps for indicating the payment of duty with
which instruments are chargeable, namely—
(a) Impressed stamps, and
(b) Adhesive stamps.
Tamil Nadu Amendment.-In Rule 3(1) the word “and” occurring at the end of clause
(i), omitted and after clause (ii), new clause (iii), “stamps purchased in Tamil Nadu
State shall alone be used for instrument chargeable with duty under the Act as in
force in that State,” added-G.O. Ms. No. 1365, Revenue, dated, 30th December,
1957.”
25. Ultimately, the learned single Judge has held that there is no prohibition as to
the execution of a promissory note on an impressed stamp paper. What is required for
a valid promissory note is that it should be stamped properly, as provided under the
Act and the Rules. Section 10 of the Act refers the mode of duties to be paid. As per
this provision, except as otherwise expressly provided in the Act, all duties with which
any instrument chargeable shall be payable and such payment shall be indicated on
such instruments by means of stamps. Further, as already referred to the Section 11,
where the word ‘may’ used, is indicative of the choice for the executant of the
document. A promissory note executed using impressed stamp paper or adhesive
stamps are equally valid and admissible in evidence, provided that they are stamped
with requisite value.
26. In the given case on hand, the respondent, who is the plaintiff has stated in his
plaint that when he had approached his lawyer to give instruction for filing the suit, he
was informed that the stamps affixed on the suit pronote were not revenue stamps,
but they were postal stamps.
27. He has also stated that the defendant himself had written the demand
SCC Online Web Edition, © 2024 EBC Publishing Pvt. Ltd.
Page 6 Tuesday, December 17, 2024
Printed For: Khushi Dhingra, National Law Institute University
SCC Online Web Edition: https://www.scconline.com
© 2024 Law Weekly , Chennai.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
promissory note by setting his own handwriting and affixed the postal stamps instead
of affixing the revenue stamps.
28. On coming to the written statement filed by the revision petitioner/defendant,
he has stated that he had borrowed a sum of Rs. 50,000/- from one Velusamy, who is
none other than the brother of the respondent/plaintiff and at the time of borrowal, by
way of repayment security, his signatures were obtained in blank stamp papers
consisting of the denominations of Rs. 10/-, Rs. 20/- and Rs. 50/- respectively on
23.12.1998.
29. He has also stated that when he had availed the loan of Rs. 50,000/- from
Velusamy, as usual the pronote was executed for double the value i.e., instead of
executing the pronote for Rs. 50,000/- it was executed for the value of Rs. 1,00,000/-
as per the request made by Velusamy.
30. He has further stated that in the demand promissory note, which was executed
by him, the said Velusamy had mistakenly affixed postal stamps and that he (revision
petitioner) had signed on the postal stamps in the presence of two witnesses viz., one
Palanisamy and one Periannasamy. When the fact of affixation of postal stamps was
brought to the notice of Velusamy, he had requested the revision petitioner/defendant
Page: 611
to execute another promissory note and accordingly he had executed another
promissory note for the above said value. In that promissory note also the said
witnesses Palanisamy and Periannasamy had signed as witnesses.
31. He has also stated in his written statement that since the original promissory
note, in which the postal stamps were affixed, was not a valid one, he had not
considered it as immaterial and thereafter on 15.05.1999 the principal amount of Rs.
50,000/- along with the accrued interest was paid to the revision petitioner in the
presence of the witnesses Palanisamy and one Periannasamy. Thereafter, the revenue
stamps affixed on the pronote were removed and made the promissory note as invalid
as the amount was fully settled.
32. It is also the contention of the revision petitioner that after the debt was fully
discharged the pronote, which is affixed with postal stamps, has been misused for the
purpose of filing the present suit.
33. It is settled principle of law that the procedural law cannot fail to provide relief
when substantive law gives the right. The Principle hidden under this verbal texture is
- there cannot be any wrong without a remedy. In M.V. Elisabeth v. Harwan
Investment & Trading Pvt. Ltd. [1993 Supp (2) SCC 433], the apex court has observed
that where substantive law demands justice for the party aggrieved and the statute
has not provided the remedy, it is the duty of the court to devise procedure by
drawing analogy from other systems of law and practice.
34. In Dhanna Lal v. Kalawatibai [(2002) 6 SCC 16], the Apex Court has also laid
down the similar proposition that wrong must not be left un-redeemed and right not
left unenforced.
35. From the averments of the plaint as well as the written statement, the fact of
affixation of postal stamps on the disputed pronote was known to the defendant. It is
to be established by the defendant by adducing valid and acceptable evidence that he
had discharged the amount, which was borrowed and that the postal stamps were
mistakenly affixed on the earlier promissory note and subsequently another properly
stamped promissory note was executed and since the amount was settled, the said
promissory note was made invalid.
SCC Online Web Edition, © 2024 EBC Publishing Pvt. Ltd.
Page 7 Tuesday, December 17, 2024
Printed For: Khushi Dhingra, National Law Institute University
SCC Online Web Edition: https://www.scconline.com
© 2024 Law Weekly , Chennai.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
36. The learned counsel appearing for the respondent/plaintiff has also taken the
assistance of Section 58 of the Indian Evidence Act, 1872 saying that the admitted
facts need not be proved and that since the revision petitioner himself had admitted in
his written statement that he had executed the demand promissory note and that the
said Velusamy had mistakenly affixed the postal stamps on it he was under the
obligation to establish his contention. He has also argued that since he himself had
admitted the borrowal of Rs. 50,000/-, but contended that the promissory note was
executed for the value of Rs. 1,00,000/-, the marking of disputed pronote would not
be required. But, however, as rightly directed by the learned Trial Judge, the
respondent/plaintiff was ready to pay the necessary stamp duty penalty and therefore
the impugned order need not required any interference.
37. Schedule-I Article 49 of Indian Stamp Act describes the term of ‘Promissory
Note’ as defined by Section 2(22) and also how the pronote is to be stamped.
38. This Court has carefully considered the submissions made on behalf of both
sides.
39. This Court has also perused the impugned Order dated 23.01.2004 and made in
O.S. No. 126 of 2002, on the file of
Page: 612
the learned Principal Subordinate Judge, Villupuram. The learned Principal Subordinate
Judge, in her Order, has observed that the document cannot be per se rejected at this
stage for bearing stamps of improper description. But, the plaintiff can be permitted to
pay the stamp duty penalty at this stage and the question of admission of evidence
can be considered later.
40. Having regard to the above observations, this Court is of considered view that
the Order of the learned Principal Subordinate Judge, Villupuram is perfectly within the
ambit of the law and it therefore does not require any modification or interference.
41. In the result, this revision petition is dismissed and the fair and decretal Order
dated 23.01.2004 and made in O.S. No. 126 of 2002, on the file of the learned
Principal Subordinate Judge, Villupuram are confirmed. Consequently, connected
miscellaneous petition is closed. No costs.
VCJ/VCS
———
Disclaimer: While every effort is made to avoid any mistake or omission, this casenote/ headnote/ judgment/ act/ rule/ regulation/ circular/
notification is being circulated on the condition and understanding that the publisher would not be liable in any manner by reason of any mistake
or omission or for any action taken or omitted to be taken or advice rendered or accepted on the basis of this casenote/ headnote/ judgment/ act/
rule/ regulation/ circular/ notification. All disputes will be subject exclusively to jurisdiction of courts, tribunals and forums at Lucknow only. The
authenticity of this text must be verified from the original source.
