Santdas Moolchand Jhangiani and anr. Vs. Sheodayal Gurudasmal Massand - Court Judgment

Nain, J.

1. This is a revision application against an order dated 2nd December, 1969, passed by the learned Civil Judge, Senior Division, Nagpur. By this order he has decided a preliminary issue, being issue No. 8 in the suit, as to whether the document which the parties described as a deed of dissolution of partnership, or, in so far as it pertained to payment or certain amounts of money by the continuing partner to the outgoing partners, it was also a bond within the meaning of Section 2 and Article 13 of Schedule I of the Bombay Stamp Act, 1958.

2. The two plaintiffs and the defendant entered into a partnership under a deed of partnership dated 11th June, 1960 and carried on partnership business in Nagpur and Bhopal in the name and style 'Messrs. Oriental Engineering Company'. They decided to dissolve this partnership with effect from 1st April, 1966, settle the accounts of the partnership, and provide for the defendant continuing the partnership business, payment of amounts found due to the outgoing partners and several other matters. On 5th July, 1966 they reduced what they called 'the terms of dissolution' to writing. The interpretation of this writing which has been described by the parties as a deed of dissolution is the subject-matter of this revision application,

3. It appears that the plaintiffs to whom certain amounts were payable under this document filed a suit for recovery thereof in the Court of the learned Civil Judge, Senior Division, Nagpur. After the issues were framed -- and one of them being as to the proper stamp payable on this document, the learned trial Judge decided that it was not only a deed of dissolution but also a bond and should he stamped as such. He impounded the document under Section 33 of the Bombay Stamp Act, 1958, and asked the plaintiffs to pay the deficit stamp duty and penalty under Section 34 of this said Act before the said document was admitted in evidence. It is against the said order that the present revision application has been filed.

4. In order to appreciate the contentions of the parties, a reference to the terms of the document itself will be necessary. The parties to it are the two plaintiffs who are the outgoing partners and the defendant who is the continuing partner. The document provides that the partnership subsisting between the parties was dissolved by mutual consent with effect from 1st April, 1966, and the plaintiffs had retired from it and the said business with its goodwill, trade name, benefit of all the contracts, engagements, agencies, quota rights, tenancy rights etc., and the assets and liabilities, books of accounts and outstandings would belong to the defendant and thence-forward the said business would be his sole proprietary business. This term in effect amounted to a transfer of the right, title and interest of the plaintiffs in the said business to the defendant. The document recites that accounts of the partnership had been settled and a sum of Rs. 30,104.58 P. had been determined to be payable to the plaintiff No. 2. In addition, she was also given a sum of Rs. 10,000/- as what is described as a 'solatium'. It appears some friends and relations of the plaintiff No. 1 had advanced sums aggregating Rs. 33,986.60 P. to the partnership. The document provides that at the written request of those creditors who had advanced these amounts, the said amount had to he paid to the plaintiff No. 1, In addition, the plaintiff No. 1, was also given a sum of Rs. 15,000/- as a 'solatium'. We may assume that the word 'solatium' stands for the price of the goodwill which was included in the transfer to the defendant. It has been contended that in so far as this document provides for payment of the several amounts to the plaintiff No. 1 and the plaintiff No. 2, it is a bond, Clause 8 of this instrument provides that in consideration of the settlement of accounts and the provisions with regard to the payment of amounts found due to tho two plaintiffs, the plaintiffs assigned to the defendant all their share and interest in the partnership and in the business, goodwill, trade name, import and export licences, tenancy rights, quota rights, property, land assets, book debits and outstandings of the firm to hold the same absolutely. This, as we have stated above, may be construed as a transfer or conveyance of the plaintiffs' right, title and interest in the partnership to the defendant. It appears that except for sums aggregating Rs. 33,986.60 P. brought in by friends and relations of the plaintiff No. 1, the firm had other liabilities which were being taken over by the continuing partner. Clause 9 provides that the defendant would indemnify each of the plaintiffs in respect of those liabilities of the firm. Clause 10 provides that income-tax and sales tax liabilities would be discharged by all the parties in accordance with their shares. Clause 11 provided a negative covenant prohibiting the plaintiffs from carrying on business in the name and style of Messrs. Oriental Engineering Company at Nagpur and Bhopal or elsewhere. In order to enable the defendant to collect the outstandings of the partnership. Clause 12 provides for a power of attorney being granted by the plaintiffs to the defendant to enable him to collect those assets and also to discharge the liabilities of the firm. Clause 18 provides that as the partnership had been dissolved with effect from 1st April, 1966, the document would be deemed to be a ratification of the terms on which the firm was dissolved.

5. It would appear from the aforesaid terms of the deed of dissolution that in so far as it provided for the dissolution of the partnership with effect from 1st April, 1966, it would be a deed of dissolution of partnership. In so far as it conveyed the interest of the plaintiffs to the defendant in the partnership, it may be argued that it was a transfer or conveyance. In so far as it provided for payment of certain amountsto each of the plaintiffs, it may be argued that the document was a bond. In so far the defendant indemnified the plaintiffs in respect of liabilities other than certain specific liabilities, the document contained an indemnity bond. In so far as it provided that income-tax and sales tax liabilities would be shared equally, it is possible to argue that it was an agreement. In so far as it restricted the plaintiffs from carrying on the business in the name and style of Messrs. Oriental Engineering Company in Nagpur, Bhopal and elsewhere, it may amount to a negative covenant. In so far as the defendant was constituted a lawful attorney of the plaintiffs for the purpose of recovering outstandings and paying liabilities, the document contained a power of attorney. It is, however, contended before us that the document amounted only to a bond, in addition to being a deed of dissolution in so far as it pertains to payment of certain amounts to each of the plaintiffs. No contention has been raised before us that the deed of dissolution also constitutes several other documents referred to by us hereinabove and that the said document must bear a separate stamp for each of the clauses which pertain to the several matters referred to by us hereinabove.

6. Where several matters are contained in one instrument, what stamp is payable thereon in England has been dealt with in Halsbury's Laws of England, third Edition, volume 33, paragraph 492, pages 274-275. It is not necessary to set out the said paragraph in its entirety, but it will be sufficient to state the principles therein enunciated in so far as they pertain to the matter before us. The said paragraph provides that except where there is statutory provision to the contrary, every instrument containing or relating to several distinct matters is to be separately charged, as if it were a separate instrument, with duty in respect of each of the matters, and an instrument made for consideration liable to ad valorem duty, and also for other valuable consideration is separately chargeable in respect of each of the considerations. It seems that distinct matters means for this purpose matters which either fall under separate heads of charge or are separate transactions. There is authority for the principle that an instrument, stamped for its leading and principal object, covers everything accessory to that object. There are, further a number of cases in which various instruments, which in respect of their leading characteristic, were either not liable to duty, or if liable were properly stamped, have been held not to be chargeable with any further duty by reason of the inclusion of provisions considered to be merely ancillary to the leading object. Further stamp duty has been attracted where a provision baa been held not to be merely ancillary to another main provision but separate and distinct.

7. In order to determine what is the leading and principal object of the instrument which we are asked to construe, whether the other clauses which it is possible to argue attract separate stamp duty are accessory to that object or not and whether these clauses are ancillary to the leading object or are separate and distinct, must in India depend upon the provisions of the Indian Partnership Act, 1932, and the Bombay Stamp Act, 1958.

8. Chapter VI of the Indian Partnership Act, 1932; deals with 'dissolution of a firm'. Section 39 provides that the dissolution of partnership between all the partners of a firm is called the 'dissolution of the firm'. 'Dissolution of the firm' has been defined in some text books as the breaking up or extinction of the relationship which subsisted between all the partners of the firm. Section 40 provides that the firm may be dissolved with the consent of all the partners or in accordance with a contract between the partners. This is the dissolution by agreement. Section 41 provides for compulsory dissolution and Section 42 provides for dissolution on the happening of certain contingencies. Section 43 provides for dissolution of partnership at will by a notice given by any party thereto and Section 44 provides for dissolution by the Court in certain events. These sections provide for dissolution as such. Sections 45 to 55 which also occur in the same Chapter pertaining to dissolution of a firm provide for certain other matters which, in our opinion, arc ancillary to, arising from or dependent on the dissolution or partnership. For example, Section 45 provides for liability for acts of partners done after dissolution. Section 46 provides for the right of partners to have business wound up after dissolution. Section 47 provides for continuing authority of partners for purposes of winding up. Section 48 provides for the mode of settlement of accounts between partners and states that losses shall be paid first out of profits, next out of capital, and lastly, if necessary, by the partners individually in the proportions in which they were entitled to share profits, and that in winding up the assets of the firm are to be utilised first in paying the debts of the firm to third parties, next in paying to each partner rateably what is due to him, from the firm for advances as distinguished from capital contribution, then in paying to each partner rateably what is due to him on account of capital, and lastly, the residue is to be divided among the partners in proportions in which they were entitled to share profits. Section 49 provides for payment of firm debts in priority to separate debts of the partners out of the assets. Sections 53 and 54 provide for restraint on the outgoing partners from using the firm name or the firm property. Section 55 provides for transfer of goodwill after dissolution and the consequent agreements in restraint of trade.

9. It will be noticed from the above arrangement of Chapter VI of the Indian Partnership Act that matters pertaining not only to the fact of dissolution and fixing the date thereof but also matters arising out of the fact of dissolution which pertain to the winding up of the partnership, settlement of accounts, taking over of the goodwill and assets of the partnership, restrictions on the outgoing partners carrying on business in the case of transfer of goodwill to one of them, are all matters dealt with under the subject of 'dissolution of a firm'. This would at least indicate that in the Indian Partnership Act, the winding up of a partnership has been treated as a part and parcel of the dissolution of partnership and has not been treated as a distinct, separate or independent matter or transaction. In fact, the fact of winding up is so much dependent on the preceding fact of dissolution that but for dissolution the question of winding up and making other provisions consequent to it, would not arise.

10. A brief reference to some of the provisions of the Bombay Stamp Act 1958, would be necessary. The learned trial Judge has referred to Section 6 of the Bombay Stamp Act which pertains to instruments coming with in several descriptions in Schedule I and the stamp duty being paid on that description which attracts the highest stamp duty. We are in fact not concerned with the section. The learned trial Judge has not held that between a deed of dissolution and a bond the stamp duty paid should be the highest which is chargeable. What ho has decided is that apart from Rs. 30/-, the stamp duty paid on the deed of dissolution, the instrument is also liable to be charged as a bond. This would fall under Section 5 of the Bombay Stamp Act which provides that any instrument comprising or relating to several distinct matters shall be chargeable with the aggregate amount of the duties with which separate instruments, each comprising or relating to one of such matters, would be chargeable under this Act. We shall later on proceed to consider how Section 5 has been interpreted by the Supreme Court of India and by the other Indian High Courts, and where an instrument is stamped according to its leading and principal object, whether separate stamp duty would be attracted in respect o matters that are accessory or ancillary to the leading object, if these accessory and ancillary matters arise out of one had the same transaction. Section 2(c)(ii) gives one of the definitions of the word 'bond' and provides that 'bond' includes any instrument attested by a witness and not payable to order or bearer, whereby a person obliges himself to pay money to another. The contention of the defence in this case is that in so far as the deed of dissolution before us obliges the defendant to pay a certain amount of money to each of the plaintiffs and as the deed of dissolution is attested by witnesses, it would fall within the definition of a bond in the above provision. Article 13 of Schedule I to the Bombay Stamp Act provides ad valorem stamp duty on bonds, whereas Article 47 of the said Schedule provides a fixed stamp duty of Rs. 30/- on an instrument of dissolution of partnership.

11. The distinction between Sections 4, 5 and 6 of the Indian Stamp Act, 1899, which correspond in terms to Sections 4, 5 and 6 of the Bombay Stamp Act, 1958, has been brought out in the judgment of the Supreme Court in the case of Board of Revenue v. A. P. Benthall, AIR 1956 SC 85. It is observed in the said judgment that the object and scope of Sections 4 to 6 are not the same. Section 4 deals with a single transaction completed in several instruments, and Section 6 with a single transaction which might be viewed as falling under more than one category, whereas Section 5 applies only when the instrument comprises more than one transaction, and it is immaterial for this purpose whether those transactions are of the same category or of different categories. The test laid down by the Supreme Court is that in order to attract the application of Section 5, the whole question is whether the instrument comprises more than one transaction. In the case before us, we will have to determine whether the fact of dissolution of partnership and matters provided for in the instrument as a result or the winding up of the said partnership constitute one transaction or separate transactions, or whether the transaction consists of the dissolution of partnership and the other matters such as those providing for payment of amounts due to outgoing partners on settlement of accounts transfer of interest of outgoing partners, taking over of liabilities and goodwill, indemnity clause, power of attorney and other agreements contained in the said instrument are separate transactions or are merely matters flowing from, dependent on, or accessory to the main object of the dissolution of partnership and ancillary to that leading object.

12. In Ramswarup v. Joti : AIR1933All321 a Full Bench of the Allahabad High Court has reiterated the well established principle that in interpreting a physical enactment like the Stamp Act, an interpretation which is for the benefit of the subject must be accepted. We think this principle is unexceptionable. This judgment further goes on to state that the expression 'distinct matters' in Section 5 is equivalent to distinct transactions.

13. In another Full Bench decision of the Allahabad High Court in L.H. Sugar Factory v. Moti : AIR1941All243 , it has been held that in deciding the question whether an instrument does or does not fall within the purview of bond as defined by Section 2(5) of the Indian Stamp Act, the instrument must be considered as a whole and it is not permissible to divide it into several parts and look at it piecemeal and then to assign each one of such parts to some other article of Schedule I of the Act. In the case in hand, if we were to divide what has been described by the parties as a deed of dissolution into several parts and hold separately that one part amounts to agreement of dissolution of partnership and another part which provides for payment of certain amounts to outgoing partners is a bond, and to hold that the indemnity, power of attorney and agreement clauses would each attract a separate stamp duty under a separate Article of Schedule of that Act, and to hold that in so far as the interest of outgoing partners is transferred to the continuing partner, it is a conveyance, we would be doing exactly what this Full Bench decision of the Allahabad High Court prohibits us from doing. We are in respectful agreement with the principle laid down in that judgment, and in deciding whether the deed of dissolution serves its principal object or whether we should divide the document into several parts and look at it piecemeal and then to assign each ono of these parts to some other articles of the Stamp Act, we should indeed follow the rule laid down in this judgment.

14. In the case of Secy. to the Commr. of Salt, Abkari and Separate Revenue, Madras, In re ILR 43 Mad 365=AIR 1920 Mad 225, a Full Bench of the Madras High Court held that a sale deed in which the vendor mortgages lands not included in the sale as security for the due performance of his covenants need not be stamped both as a sale and a mortgage. At first sight, it would appear that where lands are mortgaged for the due performance of covenants, say for example, covenant for title contained in the sale deed, the transaction would appear to be a distinct and independent transaction and not ancillary to a sale deed. Such a provision is quite unusual in sale deeds, Even so, the Madras High Court decided that the stamp duty would be payable on the sale deed because the sale is the leading object of the instrument.

15. A Division Bench of the Lahore High Court decided in the case of Tej Ram v. Maqbul Shah AIR 1928 Lah 370 that Section 5 does not apply to a document which embodies different covenants relating to the same transaction. The test is not whether the instrument embodies distinct contracts, but whether it comprises distinct matters. Where the transaction is one and one only, the subject-matter of the agreement being the repayment of the amount advanced, the mere fact that there are two covenants in the deed, the first making certain properties chargeable in the Erst instance, and the second providing that in the event of the sale proceeds of the aforesaid properties being found insufficient, the mortgagee would be entitled to proceed against certain other properties, does not in any way affect the question. In that case, it was urged from the Bar that in reality the document embodied two distinct contracts; one by all the three executants mortgaging a house and its site for Rs. 6,000/-, and the other by two of them whereby they agreed to make one-half share in some shops liable as collateral security for the mortgage debt. Notwithstanding the fact that all the parties were not parties to the second covenant, the Division Bench of the Lahore High Court held that it was one transaction, and it did not matter if all the parties to the first covenant were not parties to the second covenant, and the test was whether the instrument related to the same transaction or whether it embodied distinct contracts.

16. In the case of the Bombay Company Ltd. v. The National Jute Mills Co. Ltd. ILR (1912) Cal 669, Mr. Justice Chitty of the Calcutta High Court had to decide whether an agreement to refer disputes to arbitration contained in a brokers note is required to be separately stamped as an agreement, apart from the stamp payable on the broker's note. It was argued by the counsel before the learned Judge that the arbitration was not a part of the same proceeding. The learned Judge, however, held that in his opinion, the agreement to refer any dispute whatever arising out of the contract to arbitration is a part of the contract itself, and not a 'distinct matter' within the meaning of Section 5 of the Indian Stamp Act. He, therefore, came to the conclusion that no separate stamp on an agreement was payable.

17. In the matter of Hamdard Dawakhana (Wakf) Delhi, : AIR1968Delhi1 , a Full Bench of the Delhi High Court held that for finding out the true character of an instrument, one has to read the instrument as a whole, and then find out its dominant purpose. A single instrument may embody several purposes, but what is relevant for the purpose of the Act is the dominant purpose of the instrument.

18. In In re Chief Controlling Stamp Authority Hyderabad AIR 1962 AP 145, a document which was a lease deed but was termed by the parties as a rental deed came up for interpretation before a Full Bench of the Andhra Pradesh High Court. The lease deed contained a guarantee by a third party for the purpose of the terms of the lease by the tenant. This would at first sight appear to be a distinct matter. But the Full Bench held that the covenant entered into by the surety was incidental and ancillary to the contract between the lessor and the lessee and formed part of the consideration for operating the lease. The surety clause was an additional term of the lease and formed an integral part of it. The lease and the covenant did not relate to two distinct matters but only to the termson which the lessor let the building and the lessee took it.

19. Thus the lease and the guarantee formed parts of a single transaction and the document in question was not a multifarious instrument relating to several distinct matters.

20. In interpreting a fiscal enactment like the Bombay Stamp Act, 1958, an interpretation which is for the benefit of the subject must be accepted. An instrument must be read as a whole to find out its dominant object. If is not permissible to divide it into several parts and to look at it piecemeal and then to assign each one of such parts to some other article of Schedule I of the Bombay Stamp Act. Section 5 of the said Act does not apply to a document which embodies different covenants relating to the same transaction. 'Distinct matters' in Section 5 means matters which are separate transactions. An instrument stamped for its leading and principal object covers everything accessory to that object and is not to be charged with any further duty by reason of the inclusion of provisions which are merely ancillary to the leading object. Separate duty is payable where a provision is not merely ancillary to the main object but is a separate and distinct transaction.

21. Applying the principles laid down by the Supreme Court and the several Indian High Courts as stated herein-above, we have to ask ourselves the question whether on a true interpretation the dominant purpose of the document which has been described by the parties as a deed of dissolution, and which description is certainly not binding on us, was to record the fact of dissolution of partnership and to provide for matters which were accessory to that object and ancillary to the leading object, or whether the several clauses pertaining to conveyance of interest of outgoing partners, taking over of liabilities by the continuing partner, indemnification of the outgoing partner to realise the outstanding, payment of amounts found clue on settlement of accounts, etc., are separate and distinct matters or they are accessory to the principal object of the instrument. Taking into consideration the fact that the Legislature itself in the Indian Partnership Act has treated the winding up of partnership as a part of its dissolution and the principles laid down which are set out hereinabove, we have no hesitation in coming to the conclusion that the dominant purpose and the leading and principal object of the deed of dissolution was not only to record in one sentence that the partnership was dissolved with effect from a particular date but also to provide for matters which flowed out of the severance of the nexus of partnership and the other things provided are accessory to that object and ancillary to the leading object of the instrument. Reading the document as a whole, we find that the dominant purpose was to provide for the dissolution of partnership and the ancillary purposes Were to provide for matters depending on the dissolution or flowing out of it. In our opinion, the deed of dissolution bears the correct stamp duty according to its principal purpose and its various covenants do not attract the separate stamp duty which they would have attracted if they have been contained in separate documents. We have also come to the conclusion that the clauses with regard to payment of amounts to the plaintiffs are not required to be stamped as a bond.

22. As against the view above propounded, on behalf of the defendants Mr. Padhye invited our attention to the case of Chinmoyee v. Sankari Prasad : AIR1955Cal561 . This was a case of an agreement for dissolution of partnership. The document provided that in lieu of the dissolution Rs. 20,000/- was to be paid by one of the partners to the other out of which Rupees 10,000/- was paid at the time of the execution of the deed of dissolution and the balance of Rs. 10,000/-was to be paid within three months from that date. The document further provided that the colliery property of the mother was kept in charge as security for payment of the above sum of Its. 10,000/-. It was contended that the document was not only a deed of dissolution but in so 'far as it pertained to payment of Rs. 10,000/-, it was also a bond. The Division Bench decided in the judgment of Renupada Mukherjee, J., as follows:--

'The above contention of Mr. Das cannot be accepted, because on an examination of the deed of dissolution I find that' it is not simply a deed for dissolution of a partnership business. It is a composite instrument comprising two distinct matters, one matter being the dissolution of a partnership business and the other matter being an obligation entered into by Anandamoyee to pay Rs. 10,000/- to the plaintiff for which she kept her colliery property under charge. This latter element invests the deed with the character of a bond as defined in Section 2(5)(a) of the Stamp Act.' Great reliance was placed on this judgment and it was argued on behalf of the defendant that this judgment directly covered the case in hand. We however, do not think so. It is not merely that the amount found on settlement of accounts was agreed to be paid, but in, addition certain property which was not partnership property was charged with the payment of the suit property. This was a matter wholly extraneous to the partnership or its dissolution. The judgment proceeds to define a bond as denned by the Indian Stamp Act and comes to the conclusion that the clause for payment of Rs. 10,000/- creating a charge amounted to a bond. We do not know what the Division Bench would have decided in the absence of a clause creatinga charge. We, however, take the view that this was not lost sight of by their Lordships of the Calcutta High Court and this fact influenced them greatly in coming to the conclusion that the provision with regard to payment of Rs. 10,000/-, was bond. We, therefore, think that this judgment does not come to the help of the defendant.

23. Another case relied upon by the defendant was a Full Bench decision of the Bombay High Court in the matter of Hiralal Navalram ILR (1908) Bom 505. In that case, by a document the executing party, purporting to be entitled to a share in a going pressing factory, transferred absolutely the whole of that share to the other person interested in the factory in consideration of a certain sum. The High Court held that the document was a conveyance on sale of property. It must be remembered that in that case there was no question of dissolution of partnership involved. It was not that on dissolution of partnership and settlement of accounts some partners were going out and another partner was continuing the business and there was a transfer by the outgoing partner to the continuing partner, but it was a transfer of a share during the subsistence of the partnership and the question of dominant purpose of the dissolution did not arise in that case arid had not to be decided. We, therefore, hold that the decision in that case has no bearing on the controversy before us.

24. Similarly, in the case of Board of Revenue v. T.M. Madalal Nadar and Co. : AIR1958Mad254 two persons were carrying on business in partnership. The total capital of the partnership was Rs. 76,000/- out of which Rs. 44,000/- had been contributed by one and Rs. 32,000/-by the other, and long before the dissolution, the latter had received this amount of Rs. 32,000/-, his capital contribution, and thereafter he entered into the deed of dissolution by which the partnership relation between himself and the former was severed. It was held by the Full Bench of the Madras High Court that the payment of Rs. 32,000/- was made not under the deed but during the time when the partnership was in esse. There were, therefore, no elements to render this deed one of conveyance. The document was properly stamped as a deed of dissolution. In that case, the question of certain amounts being found due to the outgoing partner on settlement of accounts and being paid to him and in consideration thereof his transferring his interest in the partnership to the continuing partner neither arose nor was decided, and, therefore, the question whether a clause pertaining to transfer would or would not amount to a conveyance was unnecessary to decide. This decision has also no bearing on the controversy before us.

25. On behalf of the defendant, Mr. Padhye further argued that the relationship of partners had become extinct by an oral agreement on 1st April, 1966, and the deed of dissolution was executed much later on 5th July, 1966 and it provided for matters otter than the mere dissolution of partnership or extinction of the relationship of partners. The intention of the document was, therefore, not to provide for dissolution of the partnership but to secure payment of monies. He also pointed out that what was being paid to the plaintiff No. 1 was not merely the amount found due to him on settlement of accounts but at the request of some of the creditors of the partnership who had perhaps brought in monies at the instance of the plaintiff No. 1, the amounts of those liabilities was being paid to the plaintiff No. 1 and, therefore, this matter was not ancillary to the dissolution. We are afraid we are unable to accept this contention. We do not think that the intention in writing the deed of dissolution was to secure payment of money. On a reading of the document as a whole, the dominant purpose appears to be dissolution and winding up. Winding up is by itself dependent on and a part of dissolution. The liabilities of the partnership were divided in this case in two parts. Some were taken by the defendant and those that were due to friends and relations of the plaintiff No. 1 were taken over by the plaintiff No. 1 and in lieu thereof he was to be paid those amounts. The providing for two kinds of liabilities in the deed of dissolution stands on the same footing. It does not matter if some of the liabilities were taken over by an outgoing partner and some were taken over by the continuing partner. This is a matter of agreement and arrangement between the parties. The fact that some of the liabilities were taken over by the continuing partner and others by an outgoing partner would not any the less make it a deed of dissolution.

26. Mr. Qazi, the learned Assistant Government Pleader, contended that in Chapter VI of the Indian Partnership Act, Sections 39 to 45 stood apart and were distinct from Sections 46 to 55. He contended that Sections 39 to 45 referred in terms to dissolution of partnership in various Ways therein provided, whereas Sections 46 to 55 related to winding up and not to dissolution. We, however, find that the entire Chapter VI of the Indian Partnership Act Tom Section 39 to Section 55 has been included in the Chapter heading 'Dissolution of a firm'. The Legislature obviously intended to make no distinction between dissolution as such and winding up which must necessarily arise from such dissolution. We do not think that Article 47 of Schedule I of the Bombay Stamp Act, 1958, which provides a stamp duty for a deed of dissolution of partnership merely contemplates a one sentence agreement of dissolution providing that the partnership was dissolved and fixing the date of dissolution. We think that such an agreement must of necessity cover other matters which arise directly out of the fact of dissolution, such as settlement of accounts, payment of amounts found due on such settlement, closing down or continuation of business, collection of outstandings and payment of liabilities. For this purpose, a power of attorney and an indemnity clause would also ordinarily be necessary. These are matters that depend upon the fact of dissolution and arise out of that fact and are ancillary thereto. Experience also shows that in deeds of dissolution the mere fact of dissolution of partnership and fixing the date of dissolution are not provided for, but the other matters which are provided in the instrument before us are matters normally provided for in a deed of dissolution. If we were to read each clause of the deed of this instrument separately and to try to find out what stamp duty it attracts under the several Articles of Schedule I of the Bombay Stamp Act, it would work not only a great hardship but would be violating the principle that a fiscal statute must be interpreted in a manner which is beneficial to the subject.

27. For the above reasons, we hold that the deed of dissolution in this matter is not liable to be stamped as a bond, and that its having been stamped as a deed of dissolution is sufficient. The revision application, is, therefore, allowed. The rule is made absolute. In the circumstances of the case, each party shall bear its own costs.

28. Rule made absolute.