Pritam Singh vs Lal Singh and Another

Mehar Singh, J.—A licence for a petrol pump is held by Pritam Singh defendant at Patiala. He is in actual use and occupation of the petrol pump. He took with himself one Manohar Singh as a partner. Subsequently there were differences between them followed by a suit Manohar Singh for dissolution of the partnership with regard to the petrol pump. While that suit was pending, on February 3, 1965, the parties, appeared in court. There also appeared in court Lai Singh Babu Ram, plaintiffs. Five cheques, dated November 28, 1964, for a total amount of Rs. 20,000, drawn by the plaintiffs in the name of the defendant were produced in the court and actually handed over by them to him in court. The defendant endorsed those cheques in favour of Manohar Singh. On that settlement was reached between him and Manohar Singh that all liability of the defendant to Manohar Singh was discharged, with the result that the suit of Manohar Singh was dismissed. A document was executed between the defendant, on the one side, and the plaintiffs, on the other, simultaneously. It is the nature and character of that document that is in question.

A suit has been brought by the plaintiffs against the defendant to recover an amount of Rs. 17,800/-, out of the amount of Rs. 20,000/- of the cheques, it being their allegation that the balance has been paid by the defendant to them in cash, and it is in that suit that the plaintiffs rely on the document referred to above to support their claim against the defendant. In the trial court the defendant claimed that the document was an acknowledgment of a debt within the scope of Art. 1 in Schedule I to the Stamp Act and as it is not properly stamped, hence It is inadmissible in evidence. The trial court has by its order of December 20 1965, found the document not to be an acknowledgment under Art. 1, Schedule I of the Stamp Act and has obviously disallowed this objection of the defendant. It is that order which is sought to be revised in this revision application by the defendant.

It is apparent on the very words of Art. I in Schedule I to the Stamp Act that for an ''acknowledgment of a debt'', a debt must preexist to the fact of its acknowledgment. If there is no debt in existence, obviously no occasion for its acknowledgment can ever possibly arise. A document which relates to the passage of money from one party to another as a loan or consideration for some transaction and is an Initial document having no relation to pre-existing debt, is a document which evidences liability created by it as such. It cannot possibly be described as an acknowledgment of a debt. What happened in this case is that the document in question says that on February 3, 1965, cheques of the value of Rs. 20,000/- were given by the plaintiffs in the name of the defendant to him in the court. then the defendant endorsed those cheques in the name of his partner Manohar Singh and with the payment to Manohar Singh in that manner his partnership with the defendant came to an end. The document further recites that the consideration for the cheques wis the taking into partnership of the plaintiffs by the defendant in the business of the petrol pump, At the end of the document it is stated that it was a receipt for the amount paid by the plaintiffs to the defendant. Ignoring what is stated at the end of this document, the document itself is a document which refers to an original transaction in itself between the defendant on the one side and the plaintiffs on the other. The cheques were handed over and immediately this document was written. There was no pre-existing debt which was being acknowledged and the document cannot possibly be described as an acknowledgment of a debt. The learned counsel for the defendant first urges that in the written statement a plea taken by the defendant is that the plaintiffs advanced the amount on November 21, 1964, but this does not appear on the face of the document in question. It rather shows that although the cheques bear the date November 28, 1964, the same were actually handed over to the defendant by the plaintiffs in court on February 3, 1965. The substantial argument of the learned counsel for the defendant is that in a matter like this it is the intention of the parties that has to be seen, which is true enough, but I have not understood as to how where there is no debt, any intention can ever create an artificial debt so as there may be its acknowledgment. The nature of the document has to be seen as such. In this case the facts bearing on the nature of the document are to be found in the document itself. Those facts leave no manner of doubt that it is not a case of acknowledgment of any debt and what was happening was that the debt was being created at the very moment. So that on these considerations it cannot be said that the document in question is an acknowledgment of a debt within the meaning and scope of Article 1 in Schedule I of the Stamp Act. The learned counsel when further says that the circumstances of the case be taken into consideration and then an inference is available that the document is in fact acknowledgment of a debt. I have been finding it rather difficult to follow the argument because to my mind there must be a debt, before it can be acknowledged. If there is no debt, there is no occasion for acknowledgment of a debt. The document in question itself shows that the cheques were handed over by the plaintiffs to the defendant on February 3, 1965, and simultaneously the document in question was executed. So that there was no debt when the document was executed. The approach of the trial court is correct that document in this case is not an acknowledgment of a debt. The learned counsel for the defendant has attempted to go into the details of the claim of the plaintiffs and the pleas in defence of the defendant, but at this stage those questions do not arise, for the pleadings of the parties cannot possibly affect the nature of a document which came into existence long before the date of those pleadings.

This revision application is dismissed, but the parties will have to bear their own costs. Their counsel are directed to appear in the trial court on April 14, 1966.