Chetlapalli Sitharama Ratna Ranganayakamma vs Vankamamidi Venkata Subba Rao

Subba Rao, C.J.—This is a revision against the order of the District Munsif, Repalle, holding that the document filed before him was a bond within the meaning of Section 2(5)(c) of the Indian, Stamp Act. On that liuding, he held that the document should be stamped as such and penalty of Rs. 330 should be paid thereon.

Learned Counsel for the Petitioner contends that the document is not n bond within the meaning of Section 2(5)(c) of the Indian. Stamp Act but only an agreement. The relevant part of the definition of ''Bond'' u/s 2(5)(c) reads:

any instrument so attested, whereby a person obliges himself to deliver grain or other agricultural produce to another,

The necessary ingredients of this definition are (i) it shall be attested by a witness and (ii) the document in itself creates an obligation to deliver grain or other agricultural produce.

As the question turns upon the terms of the document, it will be convenient to read it in entirety.

Letter executed on 10th April 1953, by Venkata Subbarao in favour of Ranganayakamma.

I and you have agreed that I should pay you 126 bags of paddy. Out of that I have paid you 42 bags of paddy and I hereby undertake to pay you the balance of 84 bags of paddy by the 30th of Vijaya Bahula Pushyami and take back receipt after due endorsement of payment thereon.

Learned Counsel contends that there was already a prior agreement between the parties to give paddy and the document really records that fact. I cannot read this document in that way. It is not as if Venkata Subbarao entered into an earlier agreement to give 126 bags of paddy to his sister and later on, executed this letter as a record of a preexisting liability. The ascertainment of the extent of paddy due to the sister, the payment of 42 bags and the execution of that document form part of one process. The produce due to the sister was ascertained, a part of that was paid and for the balance a letter undertaking to pay. it was executed. It is not a record of a past transaction undertaking a liability but in itself it creates an obligation. The words ''''I hereby undertake to pay the balance of 84 bags of paddy" are clear and unambiguous and they create an obligation to pay.

The decision of the Calcutta High Court in Hira Lal Sircar v. Queen Empress ILR Cal 757 (A), turned upon the facts of that case. The documents in question in that case were written in the account books of a firm of bankers and were in the following form:

Account of Sri Nimai Chandra Biswas of Puranagram.

Payments. Amounts due: Advance, 19th Assin 1301, through self in cash Rs. 75 (rupees seventy- five is taken by me as loan. I shall pay interest on it at the rate of Re. 1 (one per cent.) per mensem.

The learned Judges held that the documents did not create an obligation to pay money but they were only acknowledgments of pre-existing indebtedness. There was a pre-existing liability and the documents in terms were an acknowledgment of that liability. The learned Judges did not think that the mere mention of the rate of interest would convert what was an acknowledgment into a bond. ''This decision has no bearing on the present case.

Nor dees the decision in Radha Swami Sat Sang Sabha Vs. Raj Narain, , advance the Petitioner''s case any further. The document in that case purported to be an agreement entered into between Radha Swami Sat Sang Sabha, who were the Plaintiffs in the suit and Raj Narain, who was the Defendant in the suit. Raj Narain, the executant of the document, was indebted to the Radha Swami Sat Sang Sabha and he executed four promissory notes. On 11th July 1933, Raj Narain and the Sabha entered into a partnership and Raj Narain executed an agreement by which he made arrangements for the payment'' of the dues on the basis of the four promissory notes in a certain manner and it was also provided that, if the conditions laid down in the agreement were faithfully carried out, then interest on one of the loans would be remitted and interest on the other three loans would be reduced. The learned Judges held that the four promissory notes remained outstanding and that the document only provided for the method of payment and for reduction of interest under certain contingencies. In that view, the learned Judges held that the document was not a bond and that it was correctly stamped as an agreement. The document in that case did not create any fresh obligation and, therefore, it was held not to be a bond. But, in the present case, as I have already stated, the document itself clearly imposed an obligation and the fact that preliminary to the execution of the document the arrears were ascertained would not affect the character of the document.

In Magandas Khemchand v. Ramchandra Hiraji ILR 7 Bom 137 (C), the Defendant executed a document in favour of the Plaintiff, where under he narrated the fact that he borrowed from the Plaintiff, for his purpose, food-grains, etc., and, in consideration thereof, agreed to deliver certain grain within a particular time. Sir Charles Sargent, Chief Justice, held that the document was a bond. I therefore hold that, is in this case the document was attested and contained a clear obligation to pay grain, it is a band within the meaning of Section 2(5)(c) of the Indian Stamp Act. The order of the lower Court is correct.

The revision fails and is dismissed with costs.