RAMA VARAPRASADA RICE MILL Vs. TAKURDAS TOPANDAS

JUDGEMENT

(1.) 1. This Second Appeal is against the decision of the learned Additional District Judge, East Godavari, in A. S. 42 of 1953 on his file which in turn arises out of O. S. No. 25 of 1951 on the file of the Subordinate Judges Court, Rajahmundry. 2. The defendants 1 and 2 in the suit are the appellants in this appeal. The 1st defendant is a registered partnership firm doing business at Tade-pallingudam under the name and style of Sree Rama Varaprasada Rice Mill and Prabhat Oil Works. The second defendant is the Managing partner of the 1st defendant-firm. Defendants 3 to 7 are the other partners of the firm. In this appeal they have been impleadcd as respondents 4 to 7. On 7-9-1947, the second defendant, who is the second appellant in this appeal, executed two hun-dies (Ex. A-1 and A-2) as the Managing partner of the 1st defendant-firm in sums of Rs. 2,000.00 each in favour of one Sajjandas Khialdas, a banker doing money lending business at Rajahmundry for consideration. The hundies were payable on sight after 75 days. It is alleged that a contemporaneous agreement was also executed by the defendants on the same day agreeing to pay overdue interest at 15 per cent per annum. On 4-12-1947, a sum of Rs. 950.00 was paid by the defendants and was duly appropriated towards the first of the two hundies. The payee, Sajjandas Khialdas died on 4-9-1949, bequeathing all his properties, moveable and immove-able, to his wife Leelavathi Bai, in and by his will dated 30-5-1949. The said Leelavathi Bai, in her turn executed a will on 9-10-1949, bequeathing all her properties and outstandings, including the suit debts to her three daughters, who had been implead-ed as defendants 8, 11 and 12, in the suit. Under the will of the said Leelavathi Bai, the plaintiff and defendants 9 and 10 were appointed executors. The suit for the balance due on the two hundies has been filed by the plaintiff as one of the executors, and a decree in favour of the plaintiff and defendants 9 and 10, the two other executors, has been prayed for, in the plaint. 3. The third defendant, one Pasala Satyanara-yana filed a written statement raising several defences. It was alleged that Ex. A-1 and A-2 are not hundies, but promissory notes, that they have not been properly stamped, that there was a material alteration in the suit documents, that the plaintiff has no locus standi as be was not the executor of the will of Sajjendas, that even otherwise since only one of the executors of the will of Leelavathi Bai had instituted the suit it was not maintainable, that the suit documents were executed at Tadepalli-gudem, that the sums due thereon were payable at Secunderabad and by reason thereof, the Court of the Subordinate Judge Rajahmundry had no jurisdiction, that Ex. A-1 and A-2 were not presented for payment at the proper place, that only 6 per cent interest could be allowed, and that in any case, the debt should be scaled down in accordance with the provisions of Act IV of 1938, The written statement filed by the 2nd defendant was adopted by defendants 1, 2, 5 and 8. 4. The learned Subordinate Judge framed the necessary issues and in a well considered judgment found that the suit documents are promissory notes though styled hundies, that they were sufficiently stamped, that they were drawn and payable in British India, that there was no material alteration, that the plaintiff had locus standi to institute the suit, that the wills of Sajjan Das and Leelavathi Bai were true, that letters of administration had been duly obtained for Leelavathi Bais will, that the will of Sajjan Das did not require probate as being mafussil will, and that the suit documents were executed at Rajahmundry so that the Sub-Court, Rajahmundry had territorial jurisdiction to try and determine the suit. Therefore, the learned Subordinate Judge passed a decree in favour of the plaintiff and awarded interest at 6 per cent per annum. 5. In appeal to the District Court, East Goda-vari the only points that seem to have been raised and argued were : (i) whether the suit documents are properly stamped; (ii) whether the Subordinate Judges Court at Rajahmundry had no jurisdiction to entertain the suit and (iii) whether the plaintiff had locus standi to file a suit. The learned Additional District Judge, who heard the appeal found all these points against the appellants and dismissed the appeal. Hence this Second Appeal. 6. Before me the main points raised and argu-ed are (i) the suit documents Ex. A-1 and A-2 are insufficiently stamped and (ii) that the plaintiff has no locus standi to maintain the present suit. I shall deal with these two points in the same order, 7. The two courts below have held that even though Ex. A-1 and A-2 are styled hundies, they are really promissory notes within the meaning of Section 2 (22) of the Indian Stamp Act (Act 2 of 1899) read with Section 4 of the Negotiable Instruments Act 1881 (Act XXVI of 1881). The finding is not seriously assailed by either side and the entire argument has proceeded upon the footing that the suit documents are, and should be, treated as promissory notes. The learned Counsel for the appellants has contended that as they are promissory notes they have to be stamped as such. Under Article 49(b) of the Indian Stamp Act, the proper stamp duty for promissory notes payable otherwise than on demand, is the same duty as on a bill of exchange for the same amount payable otherwise than on demand. Article 13(b) provides for the rate at which the stamp duty has to be paid for the bills of exchange payable otherwise than on demand, but not more than one year after the date of sight. The article provides for the duty ad valorem. It is not in dispute that Exs. A-1 and A-2 fall within the class of instruments whose value is between Rs. 1,600.00, but not exceeding Rs. 2,500.00. That being so, the proper stamp duty that should have been paid on the promissory notes is Rs. 2-4-0 each. But they are stamped with only stamps of annas 6/- each. It is, therefore, clear that they are not prima facie duly and sufficiently stamped. But what is contended for by the learned Counsel for the Respondents and what has found acceptance by the Courts below, and in my opinion, rightly is that under the notification issued by the Central Government under Section 9 of the Stamp Act granting remissions in respect of the stamp duty, the proper stamp duty payable on Exs. A-1 and A-2 is only annas six each and that, therefore, they are sufficiently and properly stamped. It is this finding of the Courts below that has been strenuously assailed before me. Before examining the contentions of the learned Counsel for the appellants, it would be useful to refer to the relevant sections of the Stamp Act and the notification. Section 9 is as follows ; SECTION 9 (1) :