Judgment:
R.V. Vasanthakumar, J.
1. This revision petition is directed against the order dated February 18, 1992, in O.S.No. 572 of 1987, wherein the trial court has held the suit document that is sought to be produced by the plaintiff as documentary evidence as being admissible as a promissory note. The defendants have raised an objection as to the admissibility of the document in question on the ground that the document was insufficiently stamped in view of the specific recital in the document, namely, 'being value received'.
2. The contention is that a stamp of the value of twenty-five paise has to be affixed for a receipt and the requisite stamp of the value of twenty paise has to be affixed on the document in question as the value is Rs. 8,000. It is to be seen that a stamp of the value of 40 paise has been affixed on the suit document, as such, it is contended that the document is insufficiently stamped by five paise since the document sought to be produced partakes of the character of a promissory note and a consideration receipt and if that be the case the document cannot either relied upon by the plaintiff nor be admitted as evidence.
3. The document, which is under consideration, reads :
' On demand I/we jointly and severally promise to pay Sri. T.P. Sathyanarayan, No. 85, C.T. Street, Bangalore-2, or order at Bangalore the sum of Rs. 8,000 (rupees eight thousand only) together with interest at 20 percent (twenty) per annum being value received by us this day in cash-dated-for the purpose of our business.
Dated at Bangalore this day first of February one thousand nine hundred and eighty four.
20 ps. 20 ps. stamp stamp (Sd.) For Vishnu Auto Finances(R.). Partners.'
4. For purposes of appreciating the contentions advanced by the petitioner, it would be relevant to refer to some of the provisions of the Stamp Act :
Section 72(1) of the Karnataka Stamp Act, 1957, reads :
'The Indian Stamp Act, 1899 (Central Act II of 1899), as in force in the Madras area, shall, notwithstanding anything contained in any law, extend to the whole of the State of Karnataka, and shall remain in force in so far as such Act relates to the matter specified in entry 14 of List III of the Seventh Schedule to the Constitution in respect of documents specified in entry 91 of List I of the said schedule.'
Section 2(22) of the Indian Stamp Act, 1899, reads :
' 'Promissory note' means a promissory note as defined by the Negotiable Instruments Act, 1881 (26 of 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;'
Section 35 of the Indian Stamp Act, 1899, reads :
' Instruments not duly stamped inadmissible in evidence, etc.- No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped :
Provided that -
(a) any such instrument not being an instrument chargeable with a duty not exceeding ten naya paise only, or a bill of exchange or promissory note, shall, subject to all just exceptions, be admitted in evidence on payment of the duty with which the same is chargeable or, in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, a sum equal to ten times such duty or portion ;'
5. The short question for consideration is whether the subject- matter of the suit document is a promissory note payable on demand or otherwise than demand. If it is payable on demand, the stamp affixed is sufficient, otherwise if it is construed as on demand coupled with consideration receipt, then it is insufficiently stamped and inadmissible. There is no dispute that taken alone by itself the promissory note is one payable on demand and hence sufficiently stamped. Section 2(22) of the Indian Stamp Act accepts the definition of promissory note in the Negotiable Instruments Act. Section 4 of the Negotiable Instruments Act defines promissory note :
'A 'promissory note' is an instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument.'
6. The subject-matter of the suit document contains an unconditional undertaking signed by the maker to pay rupees eight thousand with 20 percent interest to the plaintiff or his order on demand without fixing any time for payment. The only contention raised by the defendant is that in view of the endorsement 'being value received' in the suit promissory note itself, the character of the suit document changes from that of a promissory note payable on demand to a promissory note coupled with consideration receipt, and if the document is so construed then the same is insufficiently stamped as the requisite stamp in question would be forty-five paise and as the stamps affixed on the suit document are only of forty paise, the same is inadmissible. What is to be noted is whether the suit document would change the character of promissory note in spite of the endorsement as noted in the suit document 'being value received'. If the promissory note is payable on demand the stamp duty payable is under article 49(a) of Schedule I to the Indian Stamp Act and in the instant case stamps of more than the requisite value are paid. In the case on hand, the pronote taken by itself or read along with endorsement is payable on demand, as the true import of the words 'on demand' is that the debt is due and payable immediately. The suit document involved in this case satisfies the test that is to be adopted even read along with the endorsement. The requirements being :
1. It must be in writing and signed by the maker.
2. It must contain an unconditional promise to pay a sum certain in money only and nothing more.
3. It must be payable on demand or at a fixed or determinable future time.
4. It must be payable to or to the order of a specified person or to the bearer.
7. Before a document can be treated as a promissory note it should be promissory note both in form and intent. If indebtedness is acknowledged in a document in a defined sum of money payable 'on demand' that is enough to make the document a promissory note. Description of the instrument, as a promissory note, the language of the instrument taken as a whole, the circumstances under which it came to be executed, the intention of the parties manifest from the face of the document, all have cumulative bearing on a proper construction of the instrument and it must be judged by the words employed. The endorsement 'being value received' will not have the effect of altering the nature of the document as a promissory note because the parties have intended primarily that the document should be treated as a promissory note and the endorsement has no impact on the character of the promissory note. In view of the same, the order passed by the trial court is confirmed. Accordingly, this C.R.P. is dismissed.