- (1.) THE sole question for determination in this revision is whether the document dated January 28, 1980 on the basis of which the respondents filed Civil Suit No. 43/83 in the Court of Civil Judge, Udaipur was not sufficiently stamped and could not form the basis of the suit.
(2.) THE document in question has been alleged to have been executed by the petitioner as proprietor of the firm M/s. Govind Sahai and Saujay Kumar. It appears that the past accounts had been gone into and an amount of Rs. 5220/- was found due in favour of the plaintiff-respondents. THE petitioner agreed to pay this amount alongwith interest at 1% per month after January, 1982 on demand. THE Civil Judge, Jaipur City decided this question under issue No. 4 framed by him. He referred to the decision in Hanuman Vs. Fattu (1) of this Court and held that the document should not be held to be a promissory note and that it was an agreement which required stamp of R. s. 2/-Since the document was insufficiently stamped, he directed that the plaintiff should pay an amount of Rs. 22/- as penalty. On behalf of the defendant-petitioner, it has been stated in the memo of revision that the decision in Hanuman Vs. Fattu (supra) was incorrectly interpreted by the Civil Judge as in that case a document similar in nature was held to be a promissory note but being payable otherwise on demand and it was held in that case that the document was liable to stamp duty under Article 13 (b) (i) of the Stamp Act. It is further stated that where promissory note is payable otherwise than on demand, it was liable to stamp duty as a bill of exchange under Article 13 of the First Schedule of the Stamp Act. The document in Hanuman's case read as under :- "i Hanuman son of Heeralal declare that I had borrowed Rs. 300/- from Fattu in cash. I shall pay this amount to you on demand or on the demand of the person whom you order payment at the place of business together with interest at Rs. 1. 50/- per month on Mah Sudi 1- Samvet 2016". On a consideration of the document, his Lordship Jagat Narain J. held that it was clearly stated in the document by the executent that he shall pay the amount to the original payer on demand or shall pay to the enforsee on the demand of the later. In both cases the words "on demand" have the same technical meaning, viz. , payable immediately or forthwith. Further it was stated that payment will be made at the place of business. That obviously meant the place of business of the original payer or the endorsee. It could not be said, therefore, that it was necessary to make an express demand before the promissory note was payable after the period fixed for repayment therein. It was thus held that the document was a promissory note payable 3 1/2 months after the date of execution i. e, payable otherwise than on demand. The present document in the suit filed by the respondents is not similar in nature as was the document in Hanuman's case. Although the document in the present case is on a printed form of promissory note but it is mentioned that the amount of Rs. 5220/- would be paid alongwith interest of Rs. 1/-per month after January, 1982 on demand. Words "after January 1982 on demand" are important. These words are on the lines which were in the case of Muthu Gounder vs. Perumayammal (2), In Muthu Gounder's case (supra) the nature of the promissory note was as under- I promise to pay you or your order after a period of two years on demand by you the principal together with interest. " The same is the nature of the promissory note in this case. It was held by the Madras High Court in Muthu Gounder's case (supra) that under Sec. 2 (22) of the Stamp Act a promissory note is one that would come within the definition contained in Sec. 4 of the Negotiable Instruments Act and would include a note promissing payment of any sum of money out of any particular fund which may or may not be available or upon any condition or contingency which may or may not be performed or happened. A promissory note may be payable on demand or at a fixed determinable point of time. But in every case there should be an unconditional undertaking to pay certain sum of money to or to the order of a certain person or bearer. It was held that the documents in Muthu Gounder's case were not on their terms ones which stipulate payment on demand simplicities. Nor were they ones which were payable at the end of a fixed period, They were a combination of both, that is, payment is to be made after two years on a demand being made. The expression "on demand" in a promissory note has a technical meaning viz. payment immediately or forthwith. In such a case, no actual demand is necessary to make the money due under the promissory note payable. Similarly if the amount of the promissory note is also payable at the end of a fixed period, it will still be a promissory note as the date of payment is certain and thereafter the liability would be unconditional. No further demand would be necessary for any amount due. But it was held that in the case before the Madras High Court the unconditional promise to pay, which would otherwise exist if the promissor had merely agreed to pay on demand, is qualified and made into a conditional one by making it payable after a period of two years; or conversely the unconditional promise which would exist even if the money is made conditional by the stipulation or a demand thereafter. In relation to such a document, it could not be said that the words "on demand" had the technical meaning of being payable immediately as they were conditional upon not being payable for a period of two years. The making of a demand in such a case would be a condition precedent to the payment. Such a document was held not to be a promissory note within the meaning of the expression in Sub-sec. (2) of Sec. 22 of the Stamp Act. In Hanuman's case (supra) the document was held to be a promissory note. In Muthu Gounder's case the document was not held to be a promissory note and it was held that it could be received in evidence on being validated after payment of the proper stamp duty.
(3.) AS already stated, the document in the present suit is exactly on the lines as was in Muthu Gounder's case and not in Hanuman's case, the document in question is not a promissory note. It has already been stated above that the expression "on demand" in a promissory note has a technical meaning viz. , payable immediately or forthwith. In the present case, an unconditional promise to pay has been made into a conditional one by making the amount payable after January, 1982 and, therefore, it cannot be said that the words 'on demand' contained in the document has a technical meaning of being payable immediately, as it is conditional upon not being payable upto January, 1982. Further the demand contemplated has to be made after January, 1982. The making of a demand is, therefore, a condition precedent to the payment and, therefore, there is no conditional promise to pay, in the document. The Civil Judge was, therefore, right in holding that the document was not a promissory note and was an agreement and further that it was admissible in evidence on payment of the penalty amount. This revision has no merit and it is hereby dismissed. .;