SUNDARAM FINANCE PRIVATE Vs. BOARD OF REVENUE

JUDGEMENT

(1.) THIS is a petition under Article 226 of the Constitution praying that a writ of mandamus may issue to the Board of Revenue, the Chief Controlling Revenue authority of the State of Madras, to make a reference under Section 57 of the indian Stamp Act.

(2.) THE petitioners are financiers. They entered into an arrangement with the punjab National Bank for advance of cash credit to a limit of Rs. 15 lakhs. A printed form of agreement was entered into and the agreement bore stamps to the value of only Rs. 1-8-0. As required by the Companies Act, the bank forwarded the agreement to the Registrar of Companies, and the Registrar forwarded it to the Collector of Madras for being validated under the Stamp Act. The Collector, in the exercise of his powers under the Stamp Act, impoundded the document and held that a deficit stamp duty of Rs. 4048-50 was payable. He also imposed a penalty of Rs. 100. The petitioners moved the Collector for revising the order, contending that the document was duly stamped according to law and that it could not fall under Article 5 of the Schedule to the Act. The Collector declined to revise his own order. Thereafter the petitioners moved the Board of Revenue by way of appeal. Finally the Board dismissed the appeal. The Board also purported to examine the question whether the case should be referred to the High Court Under section 57 of the Stamp Act and considered that a reference was unnecessary.

(3.) IT is stated in the affidavit accompanying the petition that the petitioners enter into hire purchase agreement with their customers for the sums advanced by them for purchase of motor cars, lorries etc. , and they take, in addition to the hire-purchase agreements, promissory notes from the customers as a matter of security. These hire-purchase agreements and the promissory notes endorsed in blank by the petitioners were agreed to be deposited with the Punjab National bank in accordance with clause 11 of the agreement. The contention of the petitioners is that in so far as these documents are concerned, which are the only ones so deposited with the bank, they could not be regarded as title deeds or instruments constituting or being evidence of title to property or as a pawn or pledge of moveable property. That being so, it is urged that Article 5 would not apply and that the Board in holding otherwise and further refusing to refer the matter to the High Court for its opinion has not properly understood the scope of the matter in dispute and the view taken by it is erroneous in law. It is in these circumstances that a writ of mandamus is prayed for.