ORDER
S. Ananda Reddy, J.
1. This revision petition is directed against the order of the learned District Judge, Guntur dated 13st March, 2001 in O.S. No. 30 of 1998 in determining the disputed document as an acknowledgment of debt and therefore the same is not liable to any stamp duty and accordingly overruled the objections of the plaintiff.
2. The Petitioner/Plaintiff filed the suit for recovery of certain amount based on vouchers said to have been executed by the defendant, not only in the name of the plaintiff but also in the name of some other persons. in the said suit, the defendant’s case is that in respect of various vouchers. cheques were issued for repayment and in the process of encashment of the blanks cheques issued, the amount drawn by the plaintiff in the present suit and the other connected suits have exceeded the amount and therefore the plaintiff executed a letter. The plaintiff in the other suit T. Narayana Rao executed a document as per the settlement between the parties, wherein the above facts were admitted and also finally admitted his liability to refund a sum of Rs. 23,33,410/- and also promised to pay the same within six months. The said document was sought to be marked as an exhibit through the defendant.
This was objected to by the plaintiff on the ground that the said document is a promissory note and it is not being properly stamped. Therefore, the said document is inadmissible in evidence.
Thereafter, the learned District Judge heard both sides in support of their contentions and thereafter relying upon a full Bench Judgment of this court in the case of Boliseti Bhavanarayana v. Kommuru Vullakki Cloth Merchant Firm (1996) 1 Andh LT 917 (FB) held that the disputed document is neither a promissory note nor a bond but is only an acknowledgment of debt. Therefore, the objection raised by the plaintiff is not tenable and accordingly overruled the objection and marked the same as an exhibit.
Aggrieved by that the plaintiff has come up in the present revision.
3. The learned counsel for the Petitioner /Plaintiff contended that the Court below has committed grievous error in passing the above order. It is contended by the learned counsel that the document – ‘promissory note’ was defined under Section 4 of the Negotiable Instruments Act, 1881. The same was also referred under Section 2(22) of the Indian Stamp Act. 1899 (for short the ‘Stamp Act’). If these two provisions are read together, as there is a promise by one party to the other party to pay a certain sum, the said document has to be treated as promissory note. Therefore, the view taken by the learned District Judge is clearly in error. The learned counsel also contended that the document, which was executed between the parties, whether It is a negotiable or not is not relevant, as per the decision of this Court in the case of Polla Rama Rao v. Dadi Narasimha Rao,. died Dadi Manikyamma 1984 LS (AP) 114, the learned counsel also contended that even with-reference to the negotiability of such document is also not relevant in view of the judgment of this Court in the case of Mabu Saheb v. V. Krishna Murthy (1997) 2 Andh LT 292. The learned counsel also contended that whether a document would come within the purview of the definition of ‘promissory note’ as defined under the relevant provisions was considered by the Madras High Court in the matter of in Re. Kappu Sami Chetiar (FB). As per the said Judgment the omission of the expression “to the order or would not render a document any the less a promissory note, if otherwise it fulfilled the terms of the definition of promissory note. According to the learned counsel, as per the above Judgment if there is an unconditional promise to pay certain amount, the document evidencing such transaction would amount to a promissory note. The learned counsel also relied on the decisions in R. Kannusamy v. V.V.K. Samy & Co.. Singapore : Thenappa v. Andiyappa ; Raj Bahadur Singh v. Mahadeo Prasad . Therefore, it is contended by the learned counsel that the Court below has clearly committed an error and hence the disputed document should be treated as promissory note, liable to be stamped as such and as the same was not stamped in terms of Section 35 of the Indian Stamp Act, the document is not admissible in evidence.
4. The learned counsel for the Respondent /Defendant, on the other hand, supported the order of the lower Court. The learned counsel contended that what was reduced into writing under the document is only a settlement, as per which certain amount was due by the plaintiff to the defendant and it was promised to pay the said amount due by the plaintiff to the defendant within a stipulated period. The said document is only an acknowledgement of the debt due by the plaintiff to the Defendant and the same cannot be treated as a promissory note. The learned counsel also referred to the definition contained in Section 4 of the Negotiable Instruments Act and contended that there is absolutely non-compliance of the requirements as defined in the Act. The learned counsel also strongly relied upon the Full Bench decision of this Court in the case of Bollsetti Bhavanarayana v. Kommuru Vullakki Cloth Merchant Firm (supra), which was relied upon by the lower Court and as per the said judgment the omission to incorporate in a document to pay “to, or to the order of a certain person”, “or to the bearer of the instrument” could not be construed as a promissory note. According to the Full Bench decision, the above two terms are necessarily be incorporated in a document in order to be treated such a document as promissory note. The learned counsel also contended that the Judgment of this Court, where it was held that in order to treat a particular document that it need not be a negotiable instrument or that it need not require the term “to. or to the order of the person” as held by this Court in the case of Mabu Saheb v. V. Krishna Murthy (supra) is contrary to the decision of the Full Bench and therefore it does not represent the correct law. in the light of the above Full Bench decision of this Court, the learned counsel contended that the trial Court has rightly held that the document in question is not a promissory note, liable to be stamped and was rightly treated as an acknowledgement of debt.
5. From the above rival contentions, the issue to be considered is whether the disputed document can be considered as a promissory note as contended by the plaintiff and the same is not admissible in evidence for want of stamp duty.
6. Before going into the merits of the issue, it would be appropriate to refer to the relevant provisions, which are as under :-
Sec. 2 (22) of the Indian Stamp Act. 1899 :- Promissory note :- “Promissory note” means a promissory note as defined by the Negotiable Instruments Act. 1881:
It also includes a note promising the 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 happen.
Article 49 (b) of Stamp Act :-
Promissory Note as defined by Section 2(22) —
(a) When payable on demand –
(i) When the amount or value does not exceed Rs.250- Proper Stamp duty is Ten
naye paise.
(ii) When the amount or value exeed Rs.250 but does not exceed Rs. 1.000 - Stamp duty is fifteen naye paise. (iii) in any other case - Stamp duty is Twenty five naye paise. (b) When payable otherwise than on demand --
7. As per the decisions of the various Courts including our High Court, in order that a document should be treated as a promissory note, it is necessary that there should be -(i) an unconditional undertaking to pay ; (ii) the sum should be a sum of money and should be certain; (iii) the payment should be to or to the order of a person, who is certain, or to the bearer of the instrument; and (iv) the maker should sign it. If these four conditions are present a document becomes a promissory note. However, there are certain decisions, where it was held that one or the other of the above conditions are not necessary to treat a document as a promissory note. At this stage it would be relevant to extract the relevant portion of the document to consider whether the said document would fulfill all the requirements in order to be considered as a
promissory note or otherwise, which is as under :-
“……I have agreed to refund the sum of Rs.23.33.410/- to M. Jojaiah. Both myself and Jojaiah have agreed to give up the interest as the same may approximately be equal, I am therefore executing this document in favour of M. Jojaiah this day admitting my liability to refund the sum of Rs. 23,33,410/- to him and promise to pay the same within six months from this day……”
8. The preamble of the document shows that there were regular transactions between the parties and thereafter there was a settlement about the amounts paid or received between the parties and ultimately there was a settlement. As per the said settlement the amount specified in the document was agreed to refund and it was also stated that both the parties have agreed to give up the interest. The relevant portion of the document shows that there was an admission of liability by one party to the other and agreed to refund the said amount. It also contains a promise to pay the same within a period of six months from the date of the document. The said document was signed by the executor and attested by two witnesses. When this document was sought to be marked as an exhibit, the plaintiff took the objection stating that it is a promissory note and therefore it is inadmissible for want of requisite stamp duty, as it is only an unstamped document. On the other hand, the defendant’s contention is the document is only an acknowledgement, which does not require any stamp duty. The Court below upheld the contention of the defendant and overruled the objections of the plaintiff and marked the same as an exhibit treating it as an acknowledgement.
9. The learned counsel for the Petitioner /Plaintiff strongly relied upon a judgment of the Madras High Court in the matter of Kuppu Samy Chettiar (supra). The said decision was rendered by a Full Bench of the Madras High Court, which arose on a reference under Section 57 of the Stamp Act by the Board of Revenue to the High Court. The dispute in the said case is whether the disputed document is a promissory note or a bond. In that case the document was titled as ‘promissory note’ executed by one party in favour of the other.
The body of the document shows that the executant has admitted that a sum of Rs. 3000/- was found due to the person in whose favour the document was executed and the same had to be paid together with interest in six equal instalments and discharge the same. It was also recited that “To this effect is the promissory note executed by me with my consent.” The said document was attested by one witness and was stamped by six one anna revenue stamps. The Madras High Court considered the said document in terms of the definition contained in Section 2 (22) and 2(5) of the Stamp Act. One of the arguments advanced was that the document does not contain the expression “to the order of. The other contention was that there was no unconditional undertaking to pay a certain sum of money and even on that ground also the document was held not as promissory note, but the same was held as a bond. in terms of Section 2(5), as the said instrument was attested by a witness and not payable to order or bearer whereby a person obliges himself to pay money to another. Relying upon the said decision the learned counsel for the plaintiff contended that the omission in the document to pay “to the order of is not fatal to treat the document in question as a promissory note.
Similarly, the learned counsel also relied upon the decision of a Division Bench of the same High Court in the case of Thenappa v. Andiyappa (supra). In this case the issue whether a particular document would fall within the term promissory note as defined under Section 4 of the Negotiable Instruments Act read with Section 2 (22) of the Stamp Act was considered while deciding an appeal where the suit was filed for recovery of a certain amount basing on a document styled as a voucher apart from the original cause of action. The issue was whether the said document is a promissory note and whether the same is not admissible in evidence. It was held by the said Court that though the document contains a provision that the stated amount is payable only after certain number of years, it is an unconditional undertaking to pay and the document is a promissory note within the meaning of the Act and therefore it is also a promissory note under Section 2 (22) of the Stamp Act. The Division Bench of the said High Court also held that a promissory note,
though it may be one as defined in the Negotiable Instruments Act, if it is not payable on demand, but will fall under Clause (b) of Art. 49 of the Stamp Act though the same will fall under the first part of the definition in Section 2(22) of the Stamp Act. Therefore, in that case it was held that in view of the prohibition contained under the proviso to Section 35 of the Stamp Act, the said document cannot be validated by payment of penalty and it will be inadmissible in evidence for any purpose.
The learned counsel also relied upon a decision of this Court in the case of Polla Rama Rao (1984 LS (AP) 114) (supra) where a single Judge of this court held that in order to consider a document as a promissory note, it is not necessary that the same is also negotiable. As per the said decision, a pronote cannot always be equated to a negotiable instrument and the negotiability need not be a test in all cases.
In the case Mabu Saheb (supra) a single Judge of this Court held that mere absence of the words “or order” does not render the document not a promissory note. What is required is unconditional promise to pay the amount made under the document in question.
The learned counsel also relied upon a decision of the Allahabad High Court in the case of Raj Bahadur Singh (supra) where a learned single Judge of the Allahabad High Court held that if a document fulfils the requirement of promissory note and all those conditions which are necessary for being a bond are not satisfied, the attestation would not make it a bond. Though attestation of a promissory note is neither required; nor prohibited by law, a document which is otherwise a promissory note does not cease to be so merely because it is attested.
In the case of R. Kannusamy (supra) a single Judge of the Madras High Court considered a similar issue and held that the executant undertaking to pay certain amounts, clear and unconditional, terms as to time limit for payment, payment of interest and jurisdiction of Courts, not affecting clear undertaking instruments would be promissory notes, notwithstanding that the preamble shows that it was an acknowledgment of an indebtedness by the executants.
10. Relying upon the above decisions, the learned counsel contended that merely there was omission as to the payment “to the order or to the bearer of the instrument” it does not effect the document to be treated as a promissory note. As there was a clear unconditional undertaking by the executant of the document. It should be treated as promissory note and as it is not stamped the same is inadmissible in evidence.
11. The Respondent, on the other hand, relied upon the Full Bench decision of this Court, which was also relied upon by the lower Court. The issue whether a particular document is to be treated as a promissory note or a bond was considered by a Full Bench of this court in the case of Bolisetti Bhavanarayana v. Kommuru Vullakki cloth Merchant Firm (supra). The full Bench also considered whether it is necessary to treat a particular document as an negotiable instrument under Section 13(1) in order to consider a document as a bond or a promissory note. Though the said issue is not relevant for our purpose, the issue whether the said document is promissory note or not was considered under the second issue. The Full Bench after referring to the definition of the terms contained in Section 4 of the Negotiable Instruments Act as well as Section 2(22) of the Stamp Act, held as under :-
“As the said document in question admittedly contains a ‘promise to pay the debt’ as also ‘stipulation to pay interest’, it cannot be an acknowledgement on the face of its description as given in Article 1 of Schedule 1 of the Stamp Act. It cannot also be a promissory note, because it does not satisfy all the ingredients of a promissory note as defined in Section 4 of the Negotiable Instruments Act, read with Section 2(22) of the Stamp Act. The document in question does not contain any promise to pay ‘to or to the order of a certain person’, nor ‘to the bearer of the instrument’. It is, therefore, also not a promissory note. Then what is the nature of the documents?”
As per the above decision a document in order to considered as a promissory note, it should contain a promise to pay “to, or to the order of a certain person” and “to the bearer of the instrument”. As these two terms were not incorporated in the document in question, therefore, the Court below has rightly treated that the document is
not a promissory note.
12. The learned counsel also relied upon a decision of this Court in the case of A. Lingaiah v. P. Sathya Babu . In this case a learned single Judge of this Court considered the documents in question In terms of Section 2(22), 2(5)(b) and 35 proviso of the Stamp Act as well as Section 4 of the Negotiable Instruments Act. In that case two documents were executed, which were said to be Identical where a stated sum was agreed to be repaid Immediately after Deepavali festival in one case and in another the amount is payable immediately after the festival of Ugadi. The recital shows that the executant has borrowed certain sum and agreed to repay the same without interest and the issue was whether these documents have to be treated as promissory notes or under any other description. The learned Judge of this Court considered various earlier judgments of this Court viz., in the case of Bahaduminisa Begum v. Vasudev Naick where a single Judge of this Court held that if in an instrument there is a promise to pay a certain sum of money to a certain person unconditionally, merely because it does not contain the words ‘order or bearer’ it cannot be said that it is not a promissory note within the meaning of Section2(22) of the Stamp Act. read with Section 4 of the Negotiable Instruments Act. It was further held that in order to bring an instrument within the meaning of Bond as defined under Section 2(5) (b) of the Stamp Act, the instrument must have been attested by a witness and must not made payable to order or bearer and if any one of the two things is absent from an instrument, then Section 2(5)(b) is not attracted. In that case, the borrower agreed to repay the amount to the lender on demand and the document was neither attested nor was made payable to bearer or order. In the case of Pulluru Vajramma v. More Agalah this Court considered where in a document the words “or order” are not present and on that basis the trial Court held that it is not a promissory note, but this court allowed the revision holding that the absence of the words “or order” will not affect the instrument and it will be promissory note within the meaning of Section 4 of the Negotiable Instruments Act. The learned single Judge after referring to some more decisions, finally held that the instruments in question therein are directed to be treated as bonds and not as promissory notes, reversing the finding of the Court below that they are promissory notes.
13. Though the above decisions referred show that different Benches have taken divergent opinions, even as to the requirement of a document to contain the words “or to the order” or “to the bearer”, in order to consider the same as promissory note, however, a Full Bench of this Court categorically held that those terms, are absolutely required in order to treat a document as a promisory note. Admittedly the disputed document does not contain such words to treat the same as a promissory note. Therefore it could not be considered as a promissory note.
14. Under the above circumstances, the revision petition is devoid of merit and the same is accordingly dismissed. No costs.