STATE OF KERALA Vs. MCDOWELL AND COMPANY LIMITED

JUDGEMENT

(1.) THE short but important question of law that arises for consideration in this appeal directed against the judgment and order of the Kerala High Court is whether the bond executed under Section 7, of the Kerala Abkari Act for deferred payment of duty on export by the manufacturers of Indian made Foreign Liquor in Form VI was a bond within meaning of Article 13 of the Kerala Stamp Act 1939 (hereinafter referred to as `the Act') or an agreement as defined in Article 5 of the Schedule of the Act.

(2.) THE manufacture, sale and supply of Indian made Foreign Liquor in the State of Kerala is governed by the Kerala Abkari Act. Under it a distiller is permitted to export liquor manufactured by it outside the State after obtaining permission from the excise authorities. Since such liquor is consumed in another State the Government in exercise of is power under Section 17, of the Act issued notification levying confessional duty of Rs. 0.50 per proof litre. But if the quantity exported did not reach the destination or there was wastage etc. then the liability to pay normal duty arose. To ensure such payment the distiller is required to execute a bond under Clause (b) of sub-section (i) of Section 7, of the Abkari Act which reads as under:

(3.) BONDS can be categorised in different ways. They may be classified on, 'the basis of purpose for which the bonds are issued' or on, 'nature, form or terms and hence may involve difference in rights and obligation' (American Jurisprudence 2nd Ed. Vol. 64). In England, bond is an obligation in writing and under seal to pay money. It may be a simple or conditional bond. The former requires payment on a date named in the bond whereas in latter if the obligor does some particular act or abstains from so doing, the obligation shall be void or remains in force. It is a word normally used in the statutes to indicate security or obligation to pay money to public bodies. But what it is, what is its meaning, how it should be construed or understood depends on the language of the statute, the context in which it has been used and the purpose it seeks to achieve. 'There is nothing inherent in the word 'bond' which makes them in every case either synonymous or different in meaning. To determine their meaning the Courts must look to the context in which such words are used in the relevant statute or other provision of law, to the intent and purpose of such provisions and to the circumstances in which such words are used' (American Jurisprudence 2nd Ed. Vol. 64).