M R SREEDHARAN Vs. G GOPI

JUDGEMENT

(1.) The only question to be considered in this case is whether document dated 24.6.1998 is a bond or an agreement. The court below held it is a bond and impounded the document under S.33 of the Stamp Act and ordered that the plaintiff is at liberty to seek admission of the document after paying deficit stamp duty as provided under proviso (a) to S.34 of the Stamp Act.

(2.) Petitioner herein was the plaintiff in a suit for realisation of money. According to the plaintiff on 24.6.1998 defendant had executed a document undertaking to pay plaintiff on or before 31.1.1999 an amount of Rs. 20,000/- borrowed by him earlier. This was in the form of an agreement which was signed by the plaintiff and defendant and was signed by two witnesses. Same was executed on stamp paper of Rs. 50/-. Though several notices were sent by the plaintiff, there was no response and hence he filed the suit on 11.6.2001. When the plaintiff was examined as P.W.1 he wanted to mark the agreement dated 24.6.1998 which was objected to on the ground that it was insufficiently stamped. Contention raised by the defendant was that it was a bond and therefore required stamp duty and only after payment of the amount and penalty document could be received in evidence under the provisions of the Stamp Act.

(3.) I have perused the document. Essential ingredient which distinguishes a bond and an agreement is that in the case of bond if the implication was a pre existing one it would not partake the character of a bond. Document which evidences acknowledgment of an antecedent obligation or a pre existing liability it would not normally become a bond. Agreement is defined in the Indian Contract Act, 1872 to mean every promise and every set of promises, forming the consideration for each other. Essential features for construing a document as a bond is that it must create an obligation to pay and no such obligation can be inferred from a mere acknowledgment of borrowers. An implied obligation cannot convert acknowledgment into bond. Real test to decide whether it is a bond or agreement is to find out after reading the document as a whole, whether an obligation is created by the document itself or whether it is merely an acknowledgment of a pre existing liability. If there is merely an acknowledgment of a pre existing liability which could have been enforced apart from the document itself, then the matter stands on a different footing. As far as the present case is concerned, the proper character of agreement is distinct from a bond. When the document is read as a whole it would reveal that it acknowledges pre existing liability. In such circumstances, I am of the view court below is not justified in directing the petitioner to pay deficit stamp duty the document being an agreement. Order of the court below is set aside and the document be accepted in evidence. Revision Petition is allowed as above.