L H SUGAR FACTORY Vs. MOTI

JUDGEMENT

(1.) This is a reference under Section 60, Stamp Act, (Act II of 1899) by the Small Cause Court Judge of Pilibhit and the questions formulated by the learned Judge in the reference are as follows: (1) Whether the instrument dated 16 May 1936 is a bond as defined under Section 2(5), Stamp Act, chargeable with the duty provided for under Art. 15, Schedule 1 of that Act or is it an agreement for or relating to the sale of goods or merchandise exclusively covered by exemption (a) of Art. 5, Schedule 1? (2) If it is a bond whether the duty chargeable is that provided for under Art. 15, Schedule 1, Stamp Act, or that provided for under Schedule 5, U.P. Agriculturists Relief Act, even though the instrument is not registered, it being admitted that the executant is an agriculturist within the meaning of the term under Section 2(1), U.P. Agriculturists Relief Act?

(2.) The learned Judgefelt doubt as to the amount of duty chargeable in respect of the instrument dated 16 May 1936 and, accordingly, he, in conformity with the provisions of Section 60(1), Stamp Act, drew up a statement of the case and made the present reference. In the course of the reference he expressed the opinion that the instrument in question is a bond as defined under Section 2(5), Stamp Act, and is chargeable with the duty provided for under Art. 15, Schedule 1 of the Act. He was further of the opinion that, as the instrument was not registered, Schedule 5, U.P. Agriculturists Relief Act, was inapplicable. The reference was originally heard in part by a Bench of three Judges and, as there was difference of opinion among the Judges constituting the Bench, the case was ultimately referred to, and heard by, the present Bench consisting of five Judges.

(3.) While it is admitted on all hands that the instrument dated 10 May 1936 is so framed as to come within the description of more than one of the instruments specified in Schedule 1, Stamp Act, the question as to what articles of that Schedule are applicable to the instrument has been the subject of long debate and acute controversy. Further there is difference of opinion among the Judges constituting the present Bench about the true interpretation of Section 40, U.P. Agriculturists Relief Act, and, lastly, there is unfortunately disagreement even about the interpretation of the instrument itself. The instrument is drawn up in Urdu language and an official translation of the same has been supplied to us. It runs as follows: I, Moti...resident of...district Pilibhit ido declare as under : I, the exeoutant, by hypothecating for the year 1344F. the sugarcane fields of eight Kham bighas, bounded and specified as below and situate in Mauza Beri Khera, Pargana Pilibhit, district Pilibhit, which I had cultivated and produced, have taken, by promising to sell the said sugarcanes, (upar moaheda farokhtgi nai shalcar mazlcur), a sum of Rs. 35 in cash, as a peshgi (advance-money) on an interest payable at the rate of 2. pies per rupee per mensem from L.H. Sugar Factories Ltd., Pilibhit, through the Mufaslis Gane Office; and that for such sums as I will take in future I shall abide by the following terms: (1) That, in accordance with the quota, assigned by the creditor, I, the executant, shall supply, from the time of the start up to the finish of the work in the karkhana, the whole and the part of the sugarcanes - at least to the extent of the estimate for September 1934, in English weight and according to the legal rate - of the hypothecated sugarcane field...at such weighing machine of the karkhana in Pilibhit as will be assigned by the creditor aforesaid. (2) That if, any day, the delivery of sugarcanes be not taken at the karkhana, on account of its not working or any other reason, I shall not get the sugarcanes peeled out that day, nor shall I take them to the weighing machine, but it is conditioned that I, the executant, shall be informed of it a day before. (3) That all such sugarcanes, specified above, as will be supplied by me, the executant shall be of pure and fine stuff (4) That I, the executant, shall continue to take, from the said creditor, the duplicated sarkhats to certify delivery of such sugareanes as I will supply, and I shall be entitled to receive from him the price thereof according to the prescribed rate.... (5) That, whenever a necessity will dictate I, the executant, shall in addition to the zar-i-peshgi aforesaid, continue to take under receipts, further sums from the said oreditor, the aggregate amount whereof will come to Rs. 100 and all the sugarcanes shall stand hypothecated for the entire mutaleba, aforesaid and the price of the sugarcanes supplied will be allowed a set-off against the mutaleba re-zar-i-peshgi, and receipts, aforesaid, and the interests thereon, which under this contract, is payable by me up to the time of supply of the sugarcanes; that if, after the mutaleba aforesaid, has been set-off, a surplus amount, payable to me by the said creditor on aocount of price of sugarcanes, be found to have accumulated, I, the executant, shall, on demand, take it interest- free; and that I shall pay up the mutaleba, if any, found due by me to the said creditor when the accounts will be squared after the end of the work, in the karkhana, and in case of default I shall pay an interest thereon at the rate of 2 pies per rupee. (6) That the quantity of the hypothecated sugarcanes, which I have sold will be at least at par with the above-mentioned estimate in English maunds and should the sugarcanes supplied be less than the contracted quantity, referred to above, I shall, for this breach of the contract, pay a compensation at the rate of one anna per maund for the unsupplied portion of the contracted quantity of the sugarcanes which in fact will be far less than the damages of the creditor. (7) That the hypothecated sugarcanes, referred to above, do not in any way stand transferred on my behalf to any other place.... (8) That I, the executant, shall, after (enforcement of) this contract, no longer have any proprietary right of any kind in the hypothecated sugarcanes, referred to above; that I shall however be responsible for getting the sugaroanes cut down, and the steins, prescribed by the creditor, weighed and delivered so that the price thereof may be fixed in my presence, and if I fail to do so, the said creditor shall take delivery of the hypothecated sugarcanes, sold to him, after getting them cut down and weighed by his servants.... (9) That I have obtained a copy of this contract from the creditor, aforesaid, and that I have heard and understood the contents thereof. Boundaries of the hypothecated sugarcane field: Written on 16 May 1936, at Pilibhit.