Bhargava, J.
1. This appeal arises out of a suit for recovery of the amount due under an instrument which was held to be inadmissible in evidence by the learned Munsif, Gangapur holding that it was a promissory note and was insufficiently stamped. The document in question was executed on 5th December, 1951 and according to the law then in force it required a stamp of -/5/- whereas it bore a stamp of -/4/- only.
2. The learned Munsif having found that the document, which way the basis of the suit, was inadmissible in evidence dismissed the plaintiff's suit.
3. The plaintiffs preferred an appeal against the judgment and decree of the learned Munsif to the court of the Civil Judge, Gangapur. The learned Civil Judge, Gangapur held that the provisions of Section 35 of the Stamp Act related to procedural law and therefore, the admissibility of the document should be determined according to the Stamp Law which is in force on the date the document is sought to be tendered in evidence and not according to the law in force at the time of its execution. As the admissibility of the document came in for consideration on 2nd November 1957, and on that date the Stamp duty required was -/4/- he held that it was properly stamped and was admissible in evidence. He, therefore, allowed the plaintiffs' appeal and sent the case back for decision on merits. The defendants have now come to this Court against the above order of the learned Civil Judge.
4. At first this appeal came for hearing before a learned Single Judge of this Court and it was contended before him on behalf of the respondents that the finding of the first appellate court amounts to admitting the document in evidence, and therefore, the question of its admissibility was not open to question in this appeal by virtue of the provisions of Section 36 of the Stamp Act.
In support of this contention reliance was placed upon Ratan Lal v. Dau Das, ILR (1953) 3 Raj 833 : (AIR 1954 Raj 173). As the learned Judge was inclined to think that there should be difference between the finding that the document is admissible and an order that the document be or is admitted in evidence, he referred this appeal for hearing by a Division Bench as the case relied upon by the respondents was a bench decision.
When the matter came up before the Division Bench it was pointed out that the decisions of this court on the question whether the order of the court holding that the document is admissible in evidence amounts to admitting the document in evidence within the meaning of the provisions of Section 36 of the Stamp Act are conflicting. A contrary view was taken in Gordhan Singh v. Suwa Lal, ILR (1959) 9 Raj 362 : (AIR 1959 Raj 156), where the learned Judges held that:
"A document can only be said to be admitted In evidence when it is formally proved and tendered in evidence".
5. It is of course unfortunate that the previous decision of this Court in ILR (1953) 3 Raj 833 : (AIR 1954 Raj 173), and some other cases on the point were not brought to the notice of the learned Judges who decided Gordhan Singh's case ILR (1959)9 Raj 362 : (AIR 1959 Raj 156). In order to resolve this conflict this appeal was referred to a larger Bench.
6. I may observe at the very outset that the view taken by the learnted Civil Judge is not correct. The proper amount of duty required for an instrument is to be determined according to the law in force at thte time of the execution, of the instrument and not when it is tendered in evidence. The learned Civil Judge was in error in holding that the law in force at the time when the admissibility of the document is called in question will govern the case. Section 35 of the Stamp Act provides that :
"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, or authenticated by any such person or by any public officer, unless such instrument is duly stamped."
The words "chargeable and duly stamped" used in this Section have been defined in the Act in Sections 2(6) and 2(11). 'Chargeable' means, as applied to an instrument executed or first executed after the commencement of this Act. 'Duly stamped' as applied to an instrument, means that the instrument bears an adhesive or impressed stamp of not less than the proper amount and that such stamp has been affixed or used in accordance with the law for the time being in force in India.
7. It would thus be clear from the aforesaid definitions that the question whether an instrument is duly stamped must be determined with reference to the law in force at the time when the instrument is executed because it is under such law that it is chargeable with duty.
8. However, the learned counsel for the respondents has raised a preliminary objection that the document has been 'admitted in evidence' within the meaning of Section 36 of the Stamp Act by the order of the learned Civil Judge and therefore, it is no longer open to this Court to go behind that order even though that order may be wrong because the learned counsel concedes that the view taken by the learned Civil Judge is not sustainable in law.
The question therefore, for determination is whether the order of the learned Civil Judge in holding that the document is admissible in evidence amounts to this that the document has been 'admitted in evidence' and this Court is now precluded from examining this question.
9. Learned counsel for the appellants urges that the document cannot be said to be admitted in evidence unless it is formally proved and tendered in evidence. According to him it should become a part of the record before it can be said to be admitted in evidence. In the present case it is urged that the order of the court only amounts to a declaration that thte document is admissible in evidence. But in fact it has not been admitted in evidence and has not become a part of the record so long as it was not proved and endorsement was made on it according to the provisions of Order XIII Rule 4 of the Code of Civil Procedure.
In Ratah Lal's case, ILR (1953) 3 Raj 833 : (AIR 1954 Raj 173), the document was held inadmissible by the trial court land the suit was dismissed. An appeal was filed to the District Judge which was also dismissed. In second appeal a learned Single Judge of this Court held that the document did not require any stamp at all. He admitted the document and sent the case back for retrial on merits. Under Section 18 (2) of the Rajasthan High Court Ordinance special appeal was filed against the decision of the learned Single Judge and a preliminary objection was raised that as the document has been admitted in evidence by the learned Single Judge it cannot be called in question at any stage of the suit or proceeding. It was held that:
"Although it is necessary that the courts should strictly follow the provisions of Order XIII, Rule 4, C. P. C. and make the required endorsements on the documents admitted in evidence, that has nothing to do with the question whether the document has been . admitted in evidence or not. That depends upon the order of the court, and if there is an order of the court admitting the document, the endorsement under Order XIII, Rule 4 is merely the following up of that order.
Where, therefore, a document is held, by a court to be admissible in evidence on the ground that it requires no stamp or on the ground that stamp on it is sufficient, the document must be deemed to be admitted in evidence on the day the order is passed and Section 36 of the Stamp Act will come into operation."
In Gordhan Singh's case, ILR (1959) 9 Raj 362 : (AIR 1959 Raj 156), a preliminary issue was framed by the trial court as to whether the instrument amounted to a promissory note. The trial court held that it was not a promissory note but was an agreement and ordered that duty and penalty should be paid on it. Against this order a revision was filed in the High Court and a preliminary objection was taken that the duty and penalty having been paid on the document it should be deemed to have been admitted in evidence within the meaning of Section 36 of the Stamp Act and such a document cannot be called in question in the revision application.
It was held that "the document has not been formally proved and tendered in evidence as no evidence has yet been recorded. A document can only be said to be admitted in. evidence when it is formally proved and tendered in evidence. There are two stages relating to documents filed in court. One is the stage when all the documents are filed by the parties in court. The next stage is when the documents are formally proved and tendered in evidence. It is after the document is formally proved that the endorsement referred in Rule 4 of Order XIII of the Code of Civil Procedure is to be made. We accordingly find that the preliminary objection has no force."
I would thus appear that those decisions fully support the rival contentions of the parties. It would also be useful here to cite some other cases of this Court on this question. In Jahangir Khan v. Zahur, ILR (1951) 1 Raj 653 : (AIR 1952 Raj 129), it was held by a Division Bench of this Court that:
"Where, therefore, the trial court, held a document not to be a pro-note but an agreement and held it admissible on payment of deficit stamp duty which was paid and the objecting party filed the revision contending that the lower court was wrong in not holding the document to be a pro-note, it was held that Section 361 of Jaipur Stamp Act clearly barred the petitioner from re-agitating this question in revision and the promptness with which the objector has raised the point in revision is no consideration for ignoring the clear provisions of Section 36 of the Stamp Act."
It was held that
"As the plaintiff has paid the deficit stamp duty, the document should be considered to have been admitted into evidence by the lower court and we are of opinion that Section 36 bars the petitioner from re-agitating this question in revision." It may be observed that the document in this case was not formally proved or tendered in evidence and the revision was filed no sooner the order was made by the lower court. In Moon Lal v. Sampat Lal, ILR (1952) 2 Raj 1010 it was held that:
"Where a court finds that a document is not a promissory note and is admissible on payment of duty and penalty, and thereafter the party pays the duty and penalty, the document will be deemed to have been admitted in evidence and, in view of Section 36 of the Stamp Act, the finding of the court cannot be challenged in revision."
The case of ILR (1951), 1 Raj 653: (AIR 1952 Raj 129), was followed in this case. It was urged in Jahangir Khan's case, ILR (1951) 1 Raj 653 : (AIR 1952 Rai 129) that if the above view of the law was to be accepted then the decision of the trial court will be final in such matters and the High Court will have no opportunity of revising that decision and the learned Chief Justice in the course of the judgment suggested a method by which it will be possible for the High Court to revise suck orders; i.e., that as soon as an order like the one in revision is passed, the party, against which it is passed, should immediately make an application in writing to the court that it intends moving the High Court in revision, and ask for a reasonable time, say one month or six weeks, to be granted to it to do so. It should also pray to the court that in the meantime duty and penalty should not be realized. If a revision is filed within the time allowed, the party should pray to the High Court for an order for stay of proceedings in the court below. Thus by the time the .revision comes up for decision before this Court, the document would not be admitted in evidence, because duty and penalty would not have been paid upon it.
Learned counsel for the appellants contends that these observations run counter to the view taken in Ratan Lal's case, ILR (1953) 3 Raj 833: (AIR 1954 Raj 173) to which the Hon'ble Chief justice was himself a party and mean that the mere order of the court holding a document to be admissible is not sufficient in cases where penalty and duty is required to be paid. To this question whether there is any distinction in such cases where the court holds a document to be admissible in evidence as either requiring no stamp or being sufficiently stamped and where if holds that the document is admissible on payment of duty and penalty, I shall advert to later on.
At present the point for consideration is whether once the question regarding the admissibility of a document on the ground whether it is sufficiently stamped or not has been judicially determined by a court, can that question be agitated again either before the same court or before the superior courts in appeal or revision? The answer to this question will depend upon the meaning of the word's 'admitted in evidence' used in Section 36 of the Stamp Act which runs as follows:
"Where an instrument has been admitted in evidence such admission shall not, except as provided in Section 62, be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped."
10. For proper appreciation of this question it will be useful to examine the principle underlying this Section and its origin. Section 31 of the Common Law Procedure Act, 1854,--17 and 18 Vict. C. -125--enacted as follows :
"No new trial shall be granted by reason of the ruling of any Judge that the stamp upon any document is sufficient or that the document does not require a stamp."
11. Order XXXIX, Rule 8 of the Rules of the Supreme Court (England) 1883, enacts as follows:
"A new trial shall not be granted by reason of the ruling of any Judge that the stamp upon any document is sufficient or that the document does not require a stamp".
In Siordet v. Kuczynski, (1855) 17 CB 251, it was observed by Willes, J. that:
"The intention pf the statute was, that all questions as to stamps should be, finally disposed of at nisi prius; and I think that we shall best give effect to that intention, if we hold that, when once a document, has passed the ordeal of an; investigation at nisi prius as to its liability to stamp duty, or the sufficiency of the stamp, it should be subjected to no further discussion."
In Enayetoollah, v. Shaikh Meajan, 16 Suth WR 6, it was observed by Ainslie, J. that;
"We think that the provisions of the stamp-Jaw by which unstamped or insufficiently-stamped documents are excluded were never intended to create or put an end to the rights of the, parties to a suit but primarily in the interests of the Government revenue. It is perfectly immaterial as between the parties to a suit whether a certain document does or does not bear a certain mark which goes to show that the Government dues had been, paid. The only thing which is necessary to be seen as between them is whether the document is genuine or not. No authority has been shown to us against the decision quoted above. On the other hand, several other cases may be quoted as following the judgment in Volume XI and we have no doubt that, as frequently had by this Court, the question of admissibility of a document is one for the first court to decide, and that question having been decided by the first Court the decision should be final."
In Nirode Basini Mitra v. Sital Chandra Ghatak, AIR 1930 Cal 577 (1), it was remarked by Rankin, C. J. that:
"These stamp matters are really no concern of the parties and if the objection was taken at the time when the record was made up by the trial court, there it might be rejected, if not, the matters stopped there."
Section 36 of the Indian Stamp Act embodies the same principle and should be construed in that context the question of admissibility of a document in evidence is to be considered once and is considered as final and not open to question because the rights of the parties are not affected by it and the decision only affects the interest of the Government revenue for which ample provision has been made under Section 61 of the Stamp Act which provides for revising of the decisions of the subordinate courts regarding the sufficiency of stamp duty paid on the instruments. It is not to be judged from party's point of view that his right to approach the higher court, is taken away if this interpretation of law is adopted.
As pointed out above Section 36 has not been enacted for protecting the rights of the parties but in the interests of the Government revenue. When the object in enacting this Section is only to protect the interest of the Government revenue and that interest is amply safeguarded by the provisions contained in Section 61 then where a court passes an order that the document does not require any stamp or is duly stamped the order should be treated as final. The order removes the impediment from the way of the party from formally proving the document. All that the court is required is to determine whether the document can be let in evidence and if it holds that the document is admissible and can be let in evidence there is the end of the matter. It is admission of the document for the purposes of Section 36 of the Stamp Act. To say that despite the order holding the document as admissible in evidence it cannot be considered to be 'admitted in evidence' for the purposes of Section 36 of the Stamp Act till it is formally proved, would be giving too narrow interpretation to the words used in the Section keeping in view the principle underlying the provision.
Suppose a document is tendered in evidence by a party and an objection is raised by the other side regarding its admissibility on. the ground that it is not sufficiently stamped and the court judicially determines that question and decides that the document is admissible and postpones the case for formal proof of the document, or say that the court while deciding the question of admissibility passes an order that the document is admitted in evidence or fur- ther also makes an endorsement as required by Order XIII Rule 4 of the Code of Civil Procedure and still postpones the case for formal proof of the document, can it be said in all these cases that the document has not been admitted in evidence as it has not been formally proved? To my mind there is no distinction in either case and the order in each case is equivalent to the admission of the document and the question regarding the admissibility of the document becomes final and the provisions of Order XIII Rule 3 of the Code of Civil Procedure cannot come into play, so as to reopen that question. Keeping in view the object underlying this provision I am of opinion that when the court has determined the question that the document does not require any stamp or is sufficiently stamped (sic) the document admissible in evidence, it should be deemed to be admitted in evidence, for the purposes of Section 36 of the Stamp Act even though the document has not been formally proved. Express or implied decision of the court which is involved in every case of admission of a document should receive greater consideration than the mere mechanised process which follows it.
The view taken in Gordban Singh's case, ILR (1959) 9 Raj 362: (AIR 1959 Raj 156), that even though the document is held to be admissible in evidence by the trial court and deficit duty and penalty has been paid it cannot be considered to be admitted in evidence, to my mind with all respects) does not seem to be correct. It is true that the mere production of the document does not amount to its admission in evidence, but to bold further that even the order of the court holding it to be admissible does not amount to admitting the document in evidence for the purpose of Section 36 of the Stamp Act will be taking a too narrow view of the term 'admitted in evidence.'
A similar question came up for consideration in Mangal Sain v. Gobind Das, 139 Pun Re 1890, where the first court held the instrument sued upon to be a promissory note insufficiently stamped and inadmissible in evidence on payment of duty. The court of appeal held the instrument not a promissory note, and admissible in evidence on payment of duty, as an agreement. In second appeal it was held that the instrument having been admitted in evidence, the admission cannot be called in question.
Similarly in Brij Raj Saran v. Joti Parshad, AIR 1923 Lah 657, it was held by a Bench consisting of Shadi Lal, C. J. and Martineau, J. that:
''Where the decision of the Judge let in the instrument, subject only to the plaintiff paying the prescribed duty and penalty, which it had never been suggested he was not prepared to do It was held that the instrument was for the purposes of Section 38 of the Stamp Act admitted in evidence by the judgment even though the full stamp duty and penalty had yet to be paid," and there was merely an order of the learned Single Judge in first appeal on the basis of which the document was held to have been admitted in evidence. Ratan Lal's case, ILR (1953) 3 Raj 833: (AIR 1954 Raj 173) has also been followed in Vinayak Dattatraya v. Hasanab Haji Nazarali, AIR 1961 Madh Pra 6.
12. Before I conclude I may point out with the greatest respect that the distinction pointed out in Moon Lal's case, ILR (1952) 2 Raj 1010, does not appear to be On any sound principle. If the court holds that the document is admissible in evidence on payment of duty and penalty that order too should be final and not open to challenge in revision irrespective of whether the duty and penalty has been paid or not. The order means that the document is not one of that class which cannot be admitted in evidence even after payment of duty and penalty. The preliminary objection should therefore, prevail and the appeal should be rejected on this ground alone; but since the question with regard to the nature of the document has been argued at length before this Court I propose to deal with that question also and decide whether the instrument is a promissory-note or not.
13. The document in question is on a page of the creditors account book and is written in Hindi. Translated into English it reads thus:
"Account of Badri son of Loharia and Jhunta son of Deva Patel by caste Kharwal resident of Amarpur Hatim dated Magsur Sudi Smt. 2008 corresponding to 5th December, 1951. Interest at the rate of Re. 1/- per cent. p. m.
Rs. 1300/- in cash in words (Rupees thirteen hundred). British coin, borrowed from Pannalal Phulchand Muniin, Gangapur. This amount is payable on demand. Shall pay this money to Pannalal Phulchand Munim of Gangapur with interest whenever he shall demand it.
Two two annas stamp Left hand thumb impressions of Badri, Jhunta of Lakhan.
Whatever is recorded above is correct. After taking the money we have put our thumb impressions. By the pen of Birdhichand scribe at the instance of Badri and Jhunta."
14. Then there are other subsequent entries on the credit and debit side of the account.
15. Promissory note has been defined in Section 2(22) of the Stamp Act as under:
"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.''
16. Though the definition of a promissory note for stamp purposes is wider than the defi-j nition given in Section 4 of the Negotiable Instruments Act (No. XXVI of 1881), yet to fall within this extended definition it should be a promissory note in all respects save for the contingency affecting the payment in the ordinary mercantile sense.
17. Learned counsel for the appellant contends that the document in question contains all the attributes of a promissory note. According to him it contains an unconditional undertaking to pay a certain sum of money to a certain person and is signed by its maker. However, learned counsel for the respondent urges that it is not a promissory note because the parties never intended to create one at the time of its execution. He says that the maker of the document is an illiterate villager, ignorant of usages of merchants and traders who in their dealings generally execute such instruments. He further says that the document has been executed in the account book of the plaintiff which shows that the parties did not intend to create a negotiable instrument which generally a, promissory note ought to be.
Learned counsel for the appellant contends that a promissory note need not be negotiable according to the aforesaid definition. According to him both under the Negotiable Instruments Act and the Stamp Act there can be promissory notes which may not be negotiable. Therefore, to insist that before a document may be held a promissory note it should also be intended to be negotiable would not be in consonance with its definition as given in the said Act. The test of negotiability, learned counsel urges, should not be applied in determining the nature of the instrument because it is not warranted by the definition clause. If the requisites mentioned in the definition are satisfied then the instrument must be held a promissory note regardless of the fact that it may or may not be negotiable.
Learned counsel for the respondent in support of his contention has relied upon the following decisions: Chiranji Lal v. Ram Nath, ILR (1952) 2 Raj 879: (AIR 1953 Raj 211); Gordhan Singh v. Suwa Lal, ILR (1959) 9 Raj 362: (AIR 1959 Raj 156), Raghunath Prasad v. Mangi Lal, ILR (1959) 9 Raj 641 : (AIR 1960 Raj 20), Mohammad Akbar Khan v. Attar Singhr AIR 1936 PC 171, Karam Chand v. Firm Mian Mir Ahmad Aziz Ahmad, AIR 1938 PC 121.
18. Learned counsel for the appellant relies upon Sushil Chander v. Wall Ullah, AIR 1941 All 158.
19. More than once this question was raised before this Court in more or less the same form and after reviewing the case law on the subject it was held in Chiranji Lal's case, ILR (1952) 2 Raj 879 : (AIR 1953 Raj 211) that :
"The intention of the parties at the time of execution of a document is to be looked into in order to find out whether it is a promissory note or not. It is necessary to look into the terms of the document and the surrounding circumstances to see whether it was intended to be a promissory note. Merely because it contains a promise to pay would not necessarily make it a promissory note."
Again in Gordhan Singh's case, ILR (1959) 9 Raj 362: (AIR 1959 Raj 156) it was held that:
"In order that a document may fall within the definition of 'promissory note' contained in the Negotiable Instruments Act, 'it is necessary that (i) there should be 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 Besides fulfilling the above terms, the instrument must pass three further testa, viz., (1) the promise to pay must be the substance of the instrument (2) there must be nothing else inconsistent with the character of the instrument as substantially a promise to pay and (3) the instrument must be intended by the parties to be a promissory note.
It is a question of fact in each case whether a particular document is to be regarded as an acknowledgment or promise, and in order to decide the question, the primary intention of the parties and the real characteristics of the document must be looked into.
There is a distinction between an intention to negotiate an instrument and an intention to create an instrument, which can be negotiated. It is rarely that in actual practice, one comes across a promissory note, which has been negotiated. But such promissory notes are frequently created with the intention of creating a document to which the presumption under Section 118 of the Negotiable Instruments Act might apply so that a suit for recovery of money may be based on it."
20. In Raghunath Prasad's case, ILR (1959) 9 Raj 641: (AIR 1960 Raj 20) to which one of us was a party it was held:
"The definition of 'promissory note' in Section 2(22) of the Stamp Act must be construed in the light of the definition of 'Promissory note' in the Negotiable Instruments Act. By virtue of the definition of a 'negotiable instrument' contained in Section 13, a promissory note payable to order or to bearer is a negotiable instrument, If the document on the face of it is of such a nature that it could not have been intended to be negotiable, such a document cannot be a promissory note. Where the document' was executed in a bahi and could not be taken out of it without tearing the leaf and could not be transferred in order to be negotiated within the meaning of Section 14, the document could nob be a promissory note within the meaning of the Negotiable Instruments Act.
No doubt under the inclusive part of Section 2(22) of the Stamp Act certain non-negotiable documents are included within the definition of 'promissory note' in the Stamp Act. It may become non-negotiable if the conditions falling under the inclusive part of the definition in Section 2(22) have been added to it but otherwise it must fulfil all the tests of being a promissory note as laid down in the Negotiable Instruments Act."
21. It will thus appear that the first two cases do not go to the length of clearly laying down that an instrument in order to be a promissory note must also be a negotiable instrument unless it falls within the wide definition of 'promissory note' as given in the Stamp Act but the learned Judges who decided those cases only pointed out that besides the other requirement the instrument must be intended by the parties to be a promissory note--which is a question of fact in each case and should be decided by looking into the primary intention of the parties and the real characteristic of the document. The third case, however, directly decides the question which has been raised before us.
22. Charmers in the introduction to his book on Bills of Exchange at page 38 says that:
"the law throughout has been based on the custom! of merchants respecting them: the Old form of declaration on bill used always to state that it was drawn 'secundum usum et consuetudinem mercatorum.' In the time of Holt, C. J. a controversy arose between the Courts and the merchants as to whether the customary incidents of negotiability were to be recognised in the case of promissory notes. The dispute was settled by the Stat. 3 and 4 Anne. c. 9, which vindicated the custom and confirmed the negotiability of notes. Again, in 1873, the Court of Queen's Bench were of opinion that documents other than bills and notes could not be endowed by custom with the incidents of negotiability. But the efficacy of custom was again upheld by the Exchequer Chamber in 1875, in Goodwin v. 'Roberts, where it was determined that foreign scrip might be rendered negotiable by custom, so as to pass with a good title, and free from all equities to a bona fide purchaser."
23. The Negotiable Instruments Act which defines a promissory note which has been adopted by the Stamp Act also was enacted for the benefit of trade and commerce and the principle underlying it is that pronotes, bills of exchange and cheques should be negotiated as apparent on their face without reference to secret title to them. The Act deals only with three classes of negotiable instrument, which are in common use. Therefore, in order to determine whether the instrument is a promissory note or not it should also be kept in view whether it would be a promissory note in the common acceptation of men of business or persons among whom it is commonly used. In other words it should be a promissory note in the popular sense of the term also.
24. In several English cases the same view has been expressed and the language under the Indian law and English law is almost the same. A promissory note under Section 83(1) of the Bills of Exchange Act 1882 has been defined as:
"A promissory note is an unconditional promise in writing made by one person to another signed, by the maker, engaging to pay, on demand or at a fixed or deterrninable future time, a sum certain in money, to, or to the order of, a specified person or to bearer."
Under Section 33(1) of the Stamp Act of 1891 it has been defined thus:--
"For the purposes of this Act the expression 'promissory note' includes any document or writing (except a bank note) containing a promise to pay any sum of money."
33(2) 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, is to be deemed a promissory note for that sum of money."
24a. It was observed by Pollock, J. in Mortgage Insurance Corporation, Limited v. Commrs. of Inland Revenue, (1888) 20 QBD 645 that:
"The question is, what is the dominant; the substantial effect of the instrument? In this respect the prior decisions assist me in forming a conclusion. The Courts have said that in order to determine the question two things must be inquired into what is the intention of the parties, and what is the instrument in the common acceptation of men of business or persons among whom it is commonly used. The two caseg referred to in argument give authority for applying those tests. It is unfortunate, I think, that in a statute dealing with revenue matters natural terms have been enlarged so as to create a sort of legislative document other and different to the document which is commonly known by the term used. In the Section we have to construe here the legislature have taken a term of well-known meaning, and have then said it is to mean something else."
In Speyer Brothers v. Commrs. of Inland Re-nue, (1907) 1 KB 246, Collins M. Rule observed that:
"That depends upon the definitions in the Stamp Act, 1891, of a 'promissory note' and a 'marketable security.' The former is defined by Section 33 of the Act thus: '(1). For the purposes of this Act the expression "promissory note' includes any document Or writing (except a bank note) containing a promise to pay any sum of money. (2). 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, is to be deemed a promissory note for that sum of money.' That definition undoubtedly covers a great many things that would not be embraced in what may be called a commercial promissory note as defined in Section 83 of the Bills of Exchange Act, 1882. On the other hand, as has been pointed out more than once in decided cases, it is not possible to give any absolutely unlimited extension to the definition" in the Stamp Act. The ordinary sense of the expression 'promissory note', although it does not conclude the matter, is a factor in determining whether a particular document falls within the definition in the Stamp Act or outside it. That factor, from the point of view of a person conversant with negotiable instruments, has been under consideration more than once in the cases that have been cited to us, more particularly in British India Steam Navigation Co. v. Inland Revenue Commrs, (1881) 7 QBD 165, and in a subsequent case in the Court of Appeal the point was considered by Lord Esher and the Lord Justices who formed the Court--Brown, Shipley and Co. v. Inland Revenue Commrs., (1895) 2 QB 598. We cannot, therefore, in arriving at a conclusion in this case, exclude the popular sense attached to the expression 'promissory note.' I agree with the learned Judge that the document in question, though capable of coming within the definition of a promissory note, is not that which a commercial person would, call a promissory note. It has at the incidents that have been pointed out by the counsel for the Crown. It is made by a foreign Government and has coupons attached to it. It is not necessarily a promise to pay a fixed definite sum; the sum paid may vary, and the interest may also vary, by payment upon notice before maturity. These are not matters consistent with the ordinary notion of a promissory note, though the document is capable of falling within the statutory definition in the Stamp Act."
''Bills of exchange or promissory notes are always prima facie negotiable. They may how-ever, contain words prohibiting transfer of indicating an intention that they should not be transferable." (Halsbury's Laws of England Third Edition Page 161).
25. Under Section 13 of the Negotiable Instruments Act a promissory note payable either to order or to bearer is a negotiable instrument. Under Explanation (1) of that section, a promissory note is payable to order which is expressed to be so payable or which is expressed to be payable to a particular person and does not contain words prohibiting transfer or indicating an intention that it shall be transferable.
It is, therefore, clear that even if a promissory note is payable to a particular person it will be deemed to be payable to order and will be negotiable instrument under the Negotiable Instruments Act unless expressly or by implication its transfer is prohibited. Therefore, looking to the definition of the promissory note in the Stamp Act as well as in the Negotiable 'Instrument's Act, it seems that a promissory note should, in its popular sense as understood by men of business, be negotiable. The only exception which the Stamp Act provides is that it need not be negotiable in cases where it falls within the wider definition as given in that Act. If it does not fall within the wider definition of the Stamp Act, then under the Negotiable Instruments Act it need not be negotiable in those cases, only where expressly or by implication it is not transferable. In all other cases a promissory note should stand the test of negotiability. There can be promissory notes which may not be negotiable but such notes can only be those which fall within the above mentioned exceptions. Barring these exceptions if they are intended to be promissory notes they should be negotiable.
This conclusion also flows from the two Privy Council cases viz., Mohammad Akbar Khan's case AIR 1936 PC 171 and Karam Chand case, AIR 1938 PC 121. In the first case their Lordships in the light of the definition of the promissory note as given in the Stamp Act observed:
"If this document is otherwise within the definition of a promissory note, it would, seem that it must be negotiable, for there appear to be no words prohibiting transfer or indicating an intention that it should not be transferable. It must be admitted that it would be a somewhat unusual visitor in the accustomed circles of negotiable paper."
Their Lordships further observed that:
"They prefer to decide this point on the broad ground that such a document as this is not and could not be intended to be brought within a definition relating to documents which are to be negotiable instruments. Such documents must come into existence for the purpose only of recording an agreement to pay money and nothing more, though of course they may state the consideration. Receipts and agreements generally are not intended to be negotiable, and serious embarrassment would be caused in commerce if the negotiable net were cast too wide."
26. The instrument in that case was not held to be a promissory note on the ground that it did not contain an undertaking to pay but because it did not stand the test of negotiability.
27. In the second case of AIR 1938 PC 121, the documents Exs. B and C were in the following terms and contained all the attributes of a promissory note.
"Received from you this 5th day of Asuj; 1986i Sambat corresponding to 20th September, 1929, a cheque for Rs. 10.000 drawn by you on Messrs, Grindlay and Co., Ltd. Peshawar. The amount would be repaid with interest thereon at the rate of Rs. 11-4-0 p. c. Time ten months. The principal amount will be paid with interest after ten months from this date."
"Received from you this 23rd of Asuj, Sam-bat corresponding to 8th October, 1929, cheque No. 50284 dated 8th October, for Rs. 10,000 drawn on the Imperial Bank of India, Limited, Peshawar. The amount to be paid back with interest at the rate of Rs. 11-4-0 p. c. after ten months.
This principal amount with interest thereon to be repaid after ten months from this date."
But their Lordships thought that they were not promissory notes because they were never intended to be negotiable instruments.
28. Their Lordships were fully alive as has been observed in that judgment that
"there was a strong current of authority in India to the effect that documents of this character containing a promise to pay (and it could hardly be contended that those under consideration did not contain such a promise) came within the ban of Section 35, Stamp Act" but were pleased to point out that:
"Since the judgment of the Judicial Commissioner's Court, a decision of this Board, Mohammad Akbar Khan's case, AIR 1.931 PC 171, has made it clear that the shadow resting upon these exhibits throughout the case was unreal; that documents of this nature which were clearly never intended to be negotiable instruments at all are not promissory notes and are not therefore, for want of a stamp, inadmissible in evidence."
"If this decision had been before the learned Judicial Commissioners, their Lordships doubt if they would have come to the conclusion they did."
29. This judgment of their Lordships of the Privy Council makes the position still clearer that an instrument although containing a condition undertaking to pay money must also be intended to be a negotiable instrument before it could be held a promissory note. Sushil Chander Chaturvedi's case, AIR 1941 All 158, relied upon by the learned counsel for the appellant is distinguishable as was pointed out in Chiranji Lal's case, ILR (1952) 2 Raj 879: (AIR 1953 Raj 211).
30. I am therefore, of the view that a promissory note besides fulfilling the requirement, as laid down in Section 4 of the Negotiable Instruments Act must also be intended by the parties at the 'time of its execution to be a promissory note as understood by commercial persons in its popular sense which means that unless it falls within the exception provided in the wider definition of the Stamp Act, or is otherwise, expressly or by implication made not transferable, it must be intended by the parties to be negotiable instrument. If the instrument does not fall within the above mentioned exceptions and does not stand the test of negotiability, it will not be a promissory note even though it contains an unconditional undertaking to pay money.
31. Now applying these tests to the present document I find that:
1. the maker of this document is an illiterate villager--ignorant of the mercantile custom and usage and probably may not have even heard of promissory notes.
2. the document is not in the form in which promissory notes are generally written by the mercantile community. On the other hand it is in the form in which money lenders keep accounts of their customer,, in their account books.
3. it is contained on a page of an account book where there is also an account of another person.
32. Having regard to these features I am inclined to hold that the parties never intended to create a promissory note as understood in its popular sense. Merely because they affixed a stamp of -/4/- which was the requisite stamp duty before the amendment of the Jaipur Stamp Law it cannot be inferred that they intended to create a promissory note. Generally promissory notes are not executed in account books of the nature which has been produced before us in this case. I accordingly, hold that the document is not a promissory note and is an agreement and is admissible in evidence on payment of duty and penalty.
33. In view of my findings I dismiss this appeal, but I make no order as to costs.
Sarjoo Prosad, C.J.
34. I have read with much interest the able judgment prepared by my brother Bhargava. Since I find that I cannot persuade myself to agree to the view taken by him on the preliminary point, I consider it necessary to state my own reasons for the same.
35. One of the main questions which necessitated the reference to this Full Bench was about the interpretation of Section 36 of the Indian Stamp Act, on which there is an apparent conflict of opinion in this Court. The Section runs a., follows:
"Where an instrument has been admitted in evidence, such admission shall not, except as provided in Section 61, be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped."
Bapna J. who made the reference was inclined to think that there should be a difference between the finding that the document is 'admissible' and an order that ''the document be or is admitted in evidence." The learned Judge was not prepared to agree with the view expressed in ILR (1953) 3 Raj 833 : (AIR 1954 Raj 173) and some of the earlier decisions of this Court where it was held that a mere finding that a document is adequately stamped and as such admissible in evidence amounts to an order admitting the document in evidence within the meaning of Section 36 of the Stamp Act.
A later Division Bench judgment of this Court to which the learned Judge was himself a party; ILR (1959) 9 Raj 362: (AIR 1959 Raj 156), had taken the view that-
"A document can only be said to be admitted in evidence when it is formally proved and tendered in evidence. It is after the document is formally proved that the endorsement referred to in Rule 4 of Order 13 of the Civil Procedure Code is to be made."
The conflict, therefore, had to be resolved and we have to answer the preliminary objection raised by the respondent that the order of the learned Civil Judge holding that the document was sufficiently stamped amounts to an order admitting the document in evidence within the meaning of Section 36 of the Stamp Act and, as such, is no longer open to question in this Court.
36. I cannot deny that I have felt attracted to the line of reasoning discovered in the judgment of my learned brother upholding the preliminary objection, based as it is, upon a historical analysis of the evolution of the principle underlying Section 36 of the Stamp Act and also some of the earlier decisions of this Court on the point which seem to constitute a sort of a Cursus Curiae for this Court.
I have also no doubt that in matters of procedure--a view to which I have invariably adhered,--the Court should endeavour to take a liberal view of the provisions of the statute so as to advance the remedy, in so far as it is reasonably permissible to do so without doing any violence to the language of the statute Experience shows that most of these technical objection based On inadequacy of stamps or want of registration "are hurled by designing parties against their opponents with a view to perpetrate and not prevent fraud upon the straight course of justice. The Court, therefore, has to be very careful in construing the provisions of such legislation, so as not to encourage such objections and thereby defeat the ends of justice. But with all this there is also the duty and obligation of the Court to interpret the law as it stands and not unduly stretch the language of the statute. The main difficulty, therefore, which I feel in the matter Of adopting the view, is the plain language of Section 36 itself where the statute clearly uses the words "where an instrument has been admitted in evidence."
"Admitted in evidence" is a technical expression and refers to a well-establiahed rule of procedure which is known to all courts of law. We are aware that there are really two stages relating to documents filed in court: the initial stage is, when the documents are presented by the parties in Court and then comes the next stage of evidence when the document is formally proves and tendered in evidence. It is only then that a document can be said to be admitted in evidence and thereafter an endorsement is made under Rule 4 of Order XIII of the Code of Civil Procedure. The legislature in using the expression "where an instrument has been admitted in evidence" must have been conscious of this well established rule of procedure and if it really intended that a mere finding as to the admissibility of the document is sufficient for the purpose, it would have clearly said so.
For instance, it would have used the expres sion "where an instrument has been held to be admissible in evidence'' instead of the positive expression which it has actually used. Even after a document is declared to be admissible, it may or may not be admitted in evidence because it depends upon the evidence which is actually ad duced in support of its admission. There may be some eases where a decision on the point of admissibility itself may be sufficient to admit the document in evidence without any formal proof of the same but that is far from saying that in the eye of law there is not a well known distinc tion between the stage where a document is mere ly held to be admissible and the stage where a document is actually admitted in evidence after its formal proof or waiver thereof. Having re gard, therefore, to the clear language of the statute, I am unable to uphold the preliminary objection set up by the respondent. I agree that the remedy pointed out in ILR (1952) 2 Raj 1010, is really artificial and does not depend, if I may say so with the utmost respect, on any sound principle but, as I have shown, in fact I may be taken to express my disagreement with the actual principle of the decision as well, since I! am inclined to think that the later decision of this Court in ILR (1959) 9 Raj 362: (AIR 1959 Raj 156) took the correct view of the law on the subject.
37. On the merits of the case, I find myself , in complete agreement with my learned brother. The two decisions of the Privy Council in AIR 1936 PC 171, and AIR 1938 PC 121 throw a flood of light on the investigation of the question. There appears to be no doubt in my mind that the test of negotiability is the popular commercial test in determining whether the parties intended an instrument to be a promissory note. Receipts and agreements generally are not intended to be negotiable and as pointed Out by the Privy Council "a serious embarrassment would be caused if the negotiable net were cast too wide. Besides, it would be "a somewhat unusual visitor in the accustomed circles of negotiable paper.' I, therefore, entirely agree both with the reasons and the decision of my brother Bhargava that the instrument in question was not a promissory note, but merely an agreement which was admissible in evidence on payment of duty and penalty. Therefore, in the net result I would also dismiss the appeal but without costs.
Bhandari, J.
38. I agree with my Lord, the Chief Justice,
39. BY ORDER OF THE COURT:--The ap peal is dismissed but without costs.