PRAHLAD PRASAD Vs. BHAGWAN DAS

JUDGEMENT

(1.) The plaintiff-appellant here had advanced certain moneys to the defendant, In accordance with the common practice he sent to the defendant, on the 29th September 1922, a statement of account, which is Ex. 2 in the case, in which he showed that Rs. 2,366-2-6 were due to him from the defendant. This is the last account which was sent in to the defendant. On that account the defendant endorsed an acknowledgment that Rs. 2,366-2-6 remained due from him to the plaintiff and added the words "interest at annas 12 per cent. per mensem." A reference to this memorandum signed by the defendant is made in para. 3 of the plaint, and in para. 5 of the plaint the plaintiff further states that the correctness of the statement of account is supported by his account books. The trial Court decreed the plaintiff's suit. The lower appellate Court held that this document (Ex. 2) was merely an acknowledgment of the amount due from the defendant and that it came within Art. 1, Stamp Act, and that as such it required a one-anna stamp, and not having been stamped was inadmissible in evidence.

(2.) Neither party has been able to put before us very clearly the circumstances in which the trial Court apparently admitted the document into evidence, but it bears an endorsement by the trial Court. Admitted in evidence against the defendant and it was undoubtedly considered by the trial Court. In view, however, of the opinion at which we have arrived on the point, which we shall next discuss, it is unnecessary for us to consider the effect of Section 36, Stamp Act, and whether the lower Court was right in excluding it from the record if it had been once accepted in evidence.

(3.) The first question argued before us for the appellant is that this document was more than a mere acknowledgment such as is described in para. 1, Art. 1, Sch. 1, Stamp Act, and that it came in fact within the proviso to that article. It was contended that the memorandum signed by the defendant did contain a promise to pay the debt and, at any rate, a stipulation to pay interest. We think that there can be no doubt on the terms of the document that the contention that the document contained a stipulation to pay interest must be accepted. That the document contained a stipulation as to the rate of interest is beyond question on the face of it. That stipulation must have had reference either to the rate of the past interest or to the rate of future interest to be paid or to both. It is difficult to see what could have been the meaning of particularly mentioning the rate of interest if it only referred to past interest. That interest had already been calculated and formed part of the total which both parties agreed was due from the defendant. There can be no possible reason then for referring to it unless it related to the interest which the defendant was agreeing to pay in the future on the balance which he was acknowledging to be due. We have already stated that we are unable to see any reason for mentioning the rate of interest if it referred to the past. But it did not even refer both to the past rate of interest and the future, for it is stated to us on behalf of the appellant that the interest payable prior to the 29 September, 1922, was 11 anna3 and the new interest to be payable according to the memorandum was to be 12 annas. It is, therefore, apparent that the rate of interest quoted referred to the future and cannot be held to be anything but a stipulation to pay interest in the future. This is sufficient to take it out of Art. 1, Sch. 1, Stamp Act, and it would come within the terms of Art. 5 (c), Sch. 1, that is to say, it was an agreement not otherwise provided for and the stamp duty payable on it was 8 annas. That being so, the lower Court should not have held the document inadmissible in evidence but should have acted under Section 61, Stamp Act.