BACHAN SINGH Vs. RAM AVADH

JUDGEMENT

(1.) This is a reference by the Chief Inspector of Stamps, United Provinces, under Section 61, Stamp Act. The question raised in this reference is whether the two instruments filed in Suits Nos. 11 of 1944 and 31 of 1944 in the Court of the Munsif, Shahganj, Jaunpur, exercising the powers of a Judge, Small Cause Court, were promissory notes or agreements. The first instrument is dated 29 March 1939. It was executed by Ram Avadh Singh and is to the effect: I had borrowed a sum of Rs. 42...bearing Interest at the rate of annas four percent, from Bechan Singh...on 29 March 1939, and have, therefore, executed this pronote on this 29 day of March 1939, so that it may serve as evidence and be of use when needed. The second instrument is dated 30 December 1940. It was executed by Raja Ram Singh and. it recites: I of my own free will and accord approached Mahajan Ranbir Singh...and borrowed from him the sum of Rs. 100...bearing interest at the rate of annas eight per cent, per mensem for the purpose of purchasing bullock. I have, therefore, executed these few presents by way of a promissory note so that it may serve as evidence and be of use when needed. Each instrument bears a one-anna revenue stamp.

(2.) The Inspector of Stamps and Registration, who examined the records of the cases in which these instruments were filed, was of opinion that the instruments ware not promissory notes as they did not contain any undertaking to pay the money and each of them only contained an acknowledgment of debt coupled with an agreement to pay interest at the stipulated rate. He, therefore, treated them as unstamped and reported that the persons concerned should be asked to pay the stamp duty and penalty provided by law. The Court concerned did not accept the report and held that, in view of the fact that the documents were described as "pronotes," they must be treated as promissory notes.

(3.) In this reference, the Chief Inspector of stamps has again pointed out that the instruments are not promissory notes but they are acknowledgments of debt coupled with agreement to pay interest.