ALAGAPPA CHETTI Vs. ALALNNARAYANAN CHETTIAR

JUDGEMENT

(1.) In this second appeal, two questions have been raised and argued before ma. The first question is whether the suit document, Ex. B, which has been admitted in evidence by both the Courts below as a hundi, is to be taken as sufficiently stamped and should be admitted in evidence and acted upon. The second question is whether this document is supported by consideration, or in other words, whether there is any legal consideration for it.

(2.) As regards the admissibility of this document, it has to be stated that the wording of the document is such as would bring it, either under the category of a promissory note or under a bill of exchange which includes a hundi. The lower appellate Court says that this document is worded in the way in which hundis are usually written. That seems to be the view of the first Court also. There is however nodoubt that this document comes also within the definition of a promissory note. At best, it may be said that this is an ambiguous document, as it can be construed either as a promissory note or a bill of exchange. In such a case Section 17, Negotiable Instruments Act, provides that the holder may at his election treat it as either, and the instrument shall be thenceforward treated accordingly. The holder in the present case has elected to treat it as a hundi and on that basis filed this suit. If it is to be treated as a hundi, there is no question of insufficiency of stamp, and we must hold that the document has been duly stamped. If by reason of Section 17, this document should be treated by the Court as a hundi for all purposes, there is no difficulty whatever. But it is contended by Mr. 3. Varadachariar for the appellant that this instrument can be treated as a hundi by reason of Section 17 of the said Act or the purposes of that Act alone and not for the purposes of the Stamp Act. This contention, if approved, would deprive the holder of the benefit conferred upon him by Section 17. The right of election given to him is a privilege which he must have the full advantage of, and that benefit should not be taken away by anything contained in the Stamp Act. It would be reasonable to read Section 17, Negotiable Instruments Act, as a proviso to Section 6, Stamp Act.

(3.) Assuming that that section is not to be affected by the provisions of Section 17, Negotiable Instruments Act, we have to see how the position in this case would be. As I have already said, this document is capable of being construed as a promissory note or as a bill of exchange. That being so, Under Section 6, Stamp Act, it will be chargeable with the higher duty leviable on a promissory note. A stamp duty of 4 annas would be payable as a promissiory note, but it bears only a one anna stamp which would be sufficient, if it is a hundi payable on demand. If Section 6, Stamp Act, is to govern the present case, a difficulty arises in the matter of admitting this document in evidence. Being a promissory note, it cannot be admitted in evidence even by levying the deficient stamp duty and penalty by reason of Section 35, Stamp Act. But reliance is placed on the wording of Section 36, Stamp Act, by Mr. Patanjali Sastri for the respondent and it is contended that once this instrument has been admitted in evidence by the Court below, such an admission shall not be called in question at any subsequent stage of the suit, on the ground that the instrument has not been duly stamped. Section 35 states that no instrument chargeable with duty shall be admitted in evidence for any purpose or shall be acted upon, unless such instrument is duly stamped. The question is, whether the wording of Section 36 is comprehensive enough to include in the term "admission" the necessary consequences of such admission. It is argued for the appellant, that the appellate Court, by reason of Section 36 is precluded only from questioning the admission of such an instrument by the lower Court, but is at liberty not to act upon it, if it should hold that the document was not duly stamped. Reference was made to Sub-section (2), Section 42, Stamp Act, which deals with the effect of the endorsement on an instrument in respect of which stamp duty and penalty have been levied.