P L D 1954 Lahore 525 (PLP)

KAIKAUS, J. This judgment will dispose of Regular First Appeals Nos. 31, 34 and 35 of 1951. The suits out of which these appeals have arisen were filed by the Punjab National Bank against different defendants, and they were dismissed on the basis of an identical preliminary issue. The first of these suits, i.e., the one relating to Regular First Appeal No. 31 of 1951 was filed against eight defendants, out of which defendants Nos. 1 and 2 are principal debtors, defendants Nos. 3 to 5 are guarantee brokers and defendants Nos. 6 to 8 are the sureties for the guarantee brokers. The allegations in the plaint are that defendant No. 2 i.e., Dewan Iqbal Nath, for himself, and on behalf of defendant No. 1, a concern called Dewan & Co., had requested the plaintiff to open two separate cash credit accounts in its books and to allow them cash' credit facilities up to the limit of Rs. 1,00,000 and Rs. 2,00,000 respectively. Two separate promotes for these amounts had been executed. The suit had been filed for recovery of the amounts actually advanced and for interest thereon. The second suit was filed against eleven defendants, of whom defendants Nos. 1 to 5 are principal debtors, defendants Nos. 6 to 8 guarantee brokers and defendants Nos. 9 to 11 sureties for the guarantee brokers. Defendant No. 1 is a firm of which defendants Nos. 2 to 5 were partners. Allegations in the plaint are that defendant No. 1 had requested the plaintiff to open a cash credit account and to allow them cash credit facilities up to the limit of Rs. 1,00,

000. A pronote for Rs. 1,00,000 had been executed. 'In the third suit there are altogether seven defendants, defendant No. 1 Iqbal Dewan Nath being the principal debtor, defendants Nos. 2 to 5 guarantee brokers and defendants Nos. 5 and 6 sureties for guarantee brokers. Defendant No. 7 is the Custodian of the Evacuee Property and in this‑particular case he has been impleaded because not only had the debtors executed a pronote and an. agreement in favour of the plaintiff bank but had also deposited title‑deeds, of some agricultural lands as collateral security. There are similar allegations with respect to defendant No. 1 as there are in the other suits. He had been granted a cash credit facility up to the limit of Rs. 12,00,000 and had executed an agreement and a pronote in favour of the bank. These suits were contested only on behalf of the principal debtors. Some of the other defendants did put in their appearance at an early stage of the case but absented them selves afterwards. All these suits had been filed through Mr. Bhopindar Nath Khanna who was the Manager of the Lahore Office of the plaintiff bank. It had been alleged in the plaint that he was authorised to file the suit on account of a general power of attorney that he possessed from the plaintiff‑bank. The defendants objected that Mr. Bhopindar Nath Khanna did not possess a valid authority for filing these suits, which were liable to be dismissed. A preliminary issue was framed in all the three suits which is in the following words :‑ Whether the suit has been properly filed ? In support of this issue the plaintiff produced a power of attorney, copy of which is Exh. P.

1. This power of attorney had been executed by two Directors of the bank, Mr. Yodh Raj and Mr. Amar Nath Chopra. Under the Articles of Association of the bank the Directors could appoint a sub‑committee for the purpose of delegating their powers. The two Directors abovementioned had, according to the evidence led, been appointed as a sub‑committee and had executed a power of attorney in favour of Mr. Bhopindar Nath Khanna. Reliance was also placed on behalf of the plaintiff on resolutions autho rising the institution of suits against the defendants in the three suits. The learned Senior Sub‑Judge, who heard the suit, did not reject the power of attorney on the ground that even if executed under circumstances proved in evidence, it would not authorise Mr. Bhopindar Nath Khanna to file the suits. He came to the conclusion, however, that this power of attorney could not be admitted in evidence on account of section 18 of the Stamp Act. The power of attorney had been executed in India. Section 18 requires that a document executed outside Pakistan should be stam6ed within three months of its arrival in Pakistan. The learned judge came to the conclusion that it had not been proved to have been stamped within the time allowed by law and, therefore, could not be admitted in evidence. An argument was put forward before him that the document had been admitted in evidence without objection and, therefore, section 36 of the Stamp Act barred the consideration of any objection as to its admis sibility on the ground of stamp. This objection the learned Senior Sub‑Judge rejected on the ground that according to the record the document had been admitted subject to objec tion. An application was then put in before the learned Senior Sub‑Judge under section 35 of the Stamp Act with the prayer that even if the document was regarded as not properly stamped, penalty and duty may be charged and the document read in evidence. The learned Senior Sub‑Judge refused to do this on the ground that duty and penalty could only be levied under section 35 of the Stamp Act if the proper stamp duty had not been paid. In this case, according t4 the learned Judge, there was no question of non‑payment of stamp duty or deficiency in stamp duty. The objection related to the period within which it ought to have been stamped in Pakistan and that defect could not be cured under section 35 which applied only if a document was not duly stamped. According to the learned Senior Sub‑Judge the document was duly stamped but it was liable to be excluded from evidence on the ground that it did not comply with the provisions of section 18 of the Stamp Act. We will take up the objections of the learned Senior Sub- Judge seriatim. We will first consider whether in this cage the document had in fact been admitted in evidence without objection at the time when it was proved so as to attract the application of section 36 of the Stamp Act. With the plaint only a copy of the power of attorney, which is a registered document and may have been needed in a number of cases, had been filed. Mr. Raghu Nath Parshad, Manager of the Punjab National Bank, was produced as a witness by the plaintiff on the 14th of February 1950. He produced the original of the power of attorney and proved its execution. He then stated that Exh. P. 1 was a copy of that document. The original, though proved in the presence of Court, was not placed on the file. In order to appreciate whether the document had been admitted subject to objection, it is necessary to quote here the relevant passage from the evidence of 'this witness. The following is the passage:‑ I have brought the original power of attorney in his favour, which is signed by Directors Mr. Jodh Raj and Amar Nath Chopra. I can identify their signatures. I had seen them writing The copy of the power of attorney is Exh. P. 1. 1 produce certified copies of resolutions Exhs. P. 2 to P. 7. 1 produce Exh. P. 8, certified copy of the Articles of Association and Memorandum of the Bank (subject to objection.") Learned counsel for the plaintiff‑appellant contends and even makes a statement at the bar that in fact the words "subject to objection" at the end of this passage refer only to Exh. P. 8, the copy of Articles of Association. He says no objection had been taken to the power of attorney at the time when P: W. 1 proved it. No objection was also taken to Exhs. P. 2 to P. 7 because they were according to learned counsel, properly certified under the Banker's Books Evidence Act, but when Exh. P. 8 was produced it was objected to, for it was not a copy of a book maintained by the bank and, there fore, not covered by the said Act. The stand taken by the learned counsel receives corroboration from the fact that he did afterwards produce a certified copy of the Articles of Association which is Exh. P. 9 and for that purpose he asked for and was granted a number of adjournments and paid costs of adjournments three times amounting to more than Rs.

100. We are of opinion that had an objection as to the Stamp on the power of attorney been taken at the time when the state ment of Mr. Raghu Nath Parshad was, being recorded, it would have been specifically mentioned and would have been recorded at that stage of his examination where he referred to the original or the copy of the power of attorney and not after the sentence in which he refers to Exh. P.

8. The contention of‑the learned counsel on this point also receives support from the fact that when this document was sought to be proved before the Commissioner who recorded the statement of Lala Amar Nath, Secretary of the Punjab National Bank, at Delhi, 'an objection was taken to the admis sibility of the power of attorney on the specific ground of section 18 of the Stamp Act. Lala Amar Nath was being examined by the plaintiff before the Commissioner with respect to this power of attorney. The defendants did not at that time state that they had already taken an objection to the admissibility of this power of attorney in Court, although they made reference to the fact that this power of attorney had been produced by Mr. Raghu Nath Parshad (P. W. 1). The learned Senior Sub‑Judge has, in his judgment, repelled the plea under section 36 of the Stamp Act on the ground that‑from the record he finds the document admitted subject to objection. Had he stated any fact from his memory the effect might have been different. But he has simply interpreted the record and we find no obstacle in the way' of our coming to the conclusion that the power of attorney was not admitted subject .to objection in spite of the fact that the learned Senior Sub‑Judge, who decided the case is the same who had recorded the statement of P. W.

1. We hold that the document had not been admitted subject to objection. The effect of this admission would, under section 36 of the Stamp Act be that henceforth no objection to its admissibility could be taken on the ground of stamp. The fact that the document was admitted in evidence without the learned Senior Sub‑Judge applying his mind to the question of admissibility makes no difference. It has been held by a Division Bench of this Court in Nur Hussain v. Shamas‑ud- Din (Civil Revision No. 95/48.) that for the purposes of the application of section 36 it is immaterial whether the Court that admits the document in evidence applies its mind to the question of admissibility or not. Once the document is properly admitted under Order XIII; rule 4, no further objection to its admissibility on the ground of stamp can be taken. Of course, we do not mean to say that had the document been admitted subject to objection, section 36 would still apply. In that case the matter would be still under consideration of Court. It could not be said in that case that the document had been admitted in evidence at all. We have fully discussed the question relating to section 36 of the Stamp Act but really that question is not of any importance in the circumstances of the case, for there is no reason to exclude the document from evidence. The only objection taken is that under section 18 the power of attorney ought to have been stamped within three months after its arrival in Pakistan. This document was, accord ing to the evidence, despatched on the second of April 1948 from. India and the information that it had been delivered in Pakistan was received in India on the 3rd of May 1950. It was presented to the Collector under section 18 on a date which does not appear from the record. It was sent. to the Financial Commissioner who has the authority to stamp the document with an impressed label, and the date on which he put the stamp is 22nd of September 1948. The learned Senior Sub‑Judge held that the onus was on the plaintiff to satisfy him that the document was stamped within three months of its arrival in Pakistan and this onus he had failed to discharge. We do not think the learned judge has reached a correct Conclusion. Under rule 12 of the Stamp Rules 1925 a document executed outside Pakistan which requires to be stamped with an impressed label has to be produced before a Collector. The. Collector, if he is not himself the "proper officer" as provided in rule 9 has to send the document along with the fee which has' been paid to the proper officer who, so fare as the Punjab is concerned, is the Financial Commissioner as will appear from rule 2 and Appendix I to the Rules. The Financial Commissioner is then to stamp it in accord ance with the provisions of rule 11 and to send it back to the Collector for delivery to the person by whom it was produced. It will be observed that according to section 18(2) all that is needed is that the document should be 'pre sented within three months to the Collector. The section does not provide that it must be stamped within three months. The only question for decision is whether it was presented to the Collector within three months. The learned Senior Sub‑Judge has considered only the question as, to when it was stamped. If the Collector sends it to the Financial Commissioner and there is delay in its being stamped, the party who has presented the document within three months will not in any way suffer. In the present case, can we not from the fact that the Financial Commis sioner stamped it on the 22nd of September 1948 and that it was returned to the plaintiff by the Collector without being impounded, infer that it was presented within time to the Collector? If it was not so presented, would the Collector send it on to the Financial Commissioner at all? We have to presume that the officers concerned proceeded in accordance with law. In the circumstances, there is a presumption that the document was presented to the Col lector within three months of its arrival in Pakistan. If it was not so presented it is to be borne in mind that it would be the duty of the Collector under section 33 of the Stamp Act to impound this document if it was not validly stamped. Similar would be the duty of the Financial Commissioner. We would, therefore, hold that this document had been presented within three months of its arrival in Pakistan and does riot contravene the provisions of section‑18 of the Stamp Act. We may make it clear that, we do not regard it the duty of either the Collector or the Financial Commissioner under rules 11 and 12 to consider whether the stamp duty being paid on the document is correct or not. They have simply to affix to it stamps for the amount provided by the 'party putting in an application. But so far as the period of three months is concerned the Collector' and the Financial Commissioner both are expected to see that the application is within time. At the same time although they are not called upon by rules 11 and 12 to adjudicate as to the proper stamp payable on the document produced before them, they are required by law to impound a document coming to their notice if it is not properly stamped. Nor do we think that the decision of the learned Senior Sub‑Judge with respect to the refusal to receive duty and penalty is correct. Assuming that this document had not been stamped within three months, what would be the result? The only result would be that .it would not be a duly stamped document. The definition of a duly stamped document is given in section 2 (11) of the Stamp Act. It is as follows: 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 the Provinces and the Capital of the Fede ration." The words "duly stamped" have reference not only to the amount of stamp but also to the other requirements of law. If a document is not stamped at the time at which the law requires it to be stamped, the only result would be that it would not be duly stamped. For instance, if a pronote executed in Pakistan is stamped not at the time of its exe cution but afterwards, it will be document not duly stamped and would be hit by section

35. It should be obvious that a document stamped in violation of section 18 cannot be placed on a lower footing than a document not stamped at all. Suppose there was no stamp on the power of attorney. All that could have happened was that duty and penalty would have been charged. The only objection, therefore, to the document was that it was not duly stamped and for that reason could not be admitted in evidence. If a document be not duly stamped under section 35 it will become admissible, except in certain specified cases with which we are not concerned, on payment of duty, and penalty. The learned Senior Sub‑Judge fails to note that if the document was duly stamped as he says, there was no law under which he could exclude the document from evidence. Under section 35 of the Stamp Act the only reason why a document could be excluded from evidence is that it is not duly stamped, and if that objection was not there the question of its admissibility would not arise. However, the true position is that a document not stamped in accordance with section 18 would not be a document duly stamped. There remains the question whether the power of attorney is effective and whether its execution is proved. Under Article 62 (x) of the Articles of Association of the plaintiff‑bank, the Directors have authority to institute, defend and compromise suits. Under Article 62 (xiv) they can authorise any employee of the bank to exercise the powers vested in them and under Article 62 (xvii) they can appoint any person to be attorney of the company. Under rule 74 the Directors may delegate their powers to a sub‑committee. By resolution No. 12, dated the 24th of July 1945, copy of which is Exh. P. 2, the Directors had delegated their powers of appointing attorneys under Article 62 (xvii) to a sub‑committee of two Directors Mr. Yodh Raj and Mr. Amar Nath Chopra. This resolution is proved by Mr. Amar Nath Chopra himself in his evidence before the Commissioner. He produced the original minute books and there is a note on the record by the Commissioner that he had seen the original books, had found the copies of resolution to be in accordance with the original, and had returned the original minute books. The proper procedure should have been to question the witness specifically with respect to the genuine ness of the entry of this resolution, but as the minute books were being produced as genuine minutes by a witness who was the secretary of the bank and no objection was taken to the admissibility of the copy of the resolution which was marked as an exhibit, we do not regard it objectionable to act on this evidence. The execution of the power of attorney has been proved by Mr. Raghu Nath Parshad (P. W. 1) as well as by Mr Amar Nath. We find that the power of attorney was effective in giving authority to Mr: Bhopindar Nath Khanna to institute these suits. All the three appeals are accepted and the cases remanded to the Senior Civil Judge for trial according to law. Res pondents other than the Custodian shall pay the costs of the appeal to the appellant. Costs in the trial Court will be costs in the cause. As the suits had been dismissed on a preliminary ground, we order under section 13 of the Court Fees Act that the Court‑fee on all the three appeals be refunded to the appellant. A. H. Appeals accepted.