1994 PLP 1465 (CLC)

MIAN ALLAH NAWAZ, J.‑‑‑This appeal by Muhammad Afzal plaintiff, under section 96 of the C.P.C., is directed against the judgment and decree passed by the learned Additional District Judge, Bahawalpur dated 22‑12‑1991, dismissing the summary suit instituted by the appellant.

2. The relevant facts are: that the appellant instituted a summary suit under Rule 2 of Order XXXVII of C.P.C. against the respondent for the recovery of Rs.8,00,000 (Rupees eight lacs only) on the basis of a promissory note dated 15‑8‑1989. After service the Respondent entered appearance, submitted an application under rule 3 of Order XXXVII of C.P.C. for grant of permission to appear and defend the suit. This application was contested. The respondent, in reply, contended that the action was initiated on the basis of pronote which was insufficiently stamped and did not confer any right upon the appellant to file the suit. After hearing the parties, the learned trial Judge allowed the application. On the divergent pleadings of the parties, the learned trial Judge framed necessary issues and the case was fixed for evidence of the parties. On 29‑12‑1991, when the appellant produced Abdul Majid to prove the execution of the promissory note dated 15‑8‑1989, the respondent‑defendant raised an objection to the admissibility of the same by saying that it was insufficiently stamped and was, therefore, inadmissible in evidence as prescribed by section 35 of the Stamp Act (hereafter called as the Act). After hearing the parties the learned trial Judge found merit in his objection and dismissed the suit.

3. The learned counsel for the appellant, in support of this appeal, contended that pronote as well as receipt were executed on a printed form (hereinafter referred to as Mark `A'), that the receipt was executed on the left side of mark `AW while pronote was written on the right side of the same; that the receipt was required to be charged with stamps of 80 paisa denomination while pronote was liable to stamp duty of Rs.10. Continuing further, the learned counsel contended that the stamps of 80 paisa was affixed on the left side of Mark `A' while stamps of Rs.4.80 was affixed on the right side of this document. The remaining stamps were affixed on the back side of the instrument. On these facts t was vehemently contended that the pronote as well as receipt were correctly stamped and were incorrectly held by the first Court to be insufficiently at stamped. Reliance was placed on Sajida Abbas Zaidi v. Irshad Ali Jafri 41996 C :1018).

4. On the contrary the learned counsel for the respondent vigorously supported the impugned decision by saying that the pronote and receipt were separate instruments within the terms of section 2 of the Act and were chargeable with different duties as prescribed in Schedule I to the Act. Relying upon this ground, the learned counsel for the respondent pointed out that the. stamps of Rs.4.80 was a fixed on the side of Mark `A' wherein pronote was executed and 80 paisa stamp was affixed on the left side of Mark `A'. Explaining further, the It learned counsel stated that the remaining stamps were affixed at the back of Mark `A' in the space which was in fact for the purpose of receipt and not pronote. On the strength of these circumstances it was contended that the pronote ate, on the basis of which the suit was lodged was insufficiently stamped w file receipt was excessively stamped. The learned first Court according to the learned counsel was correct in holding that the promotes it in was insufficiently stamped and correctly dismissed the suit. Reliance was placed on Sheikhupura Central Cooperative Bank Limited v. Tawakal Ullah (PLD 19'77 Lah. 763).

5. After hearing. he learned counsel for the parties, we find force in the arguments of the learned counsel for the appellant. Before we proceed to deal with the point in issue we find it expedient to examine the relevant provisions of the Act, namely, sections 3, 4, 5, and

6. Section 3 of the Act is a charging section. It prescribes that instruments which are enumerated in the Schedule to Act are liable to duty. Section 4 deals with several instruments embodying single transactions relating to sale, mortgage, settlement. It states that where a sale, mortgage or se clement is effectuated in several instruments, the principal instrument shall be only chargeable with duty fixed in Schedule and each other instrument shall be liable to duty of Rs.4 instead of duty if any prescribed in the Schedule. This section further confers right upon the parties to transactions to determine which of the instrument shall be principal instrument for the purpose of subsection (1) of section 4 of the Act. Section 5 deals with almost different instruments. It is applicable to an instrument embodying separate and distinct matters. it lays down that such instrument shall be charged with aggregate amount of duty with which the separate transactions would be liable under the Act.

6. Section i deals with an instrument which though pertains to one matter, yet it .savers to two or more descriptions in first Schedule. This section is inapplicable to documents embodying two or more distinct matters completed in one instrument. Unlike section 5, this provision is applicable to those documents which give the account of single transaction in such a manner that such account conforms to one or more items given in Schedule I of the Act. This section prescribes that, while determining duty on such instrument, the executant shall affix the stamp duty taking into consideration highest duty fixed by Schedule on that description of document For example if document contains a writing with respect to promissory n to and receipt of amount promised to be paid in pronote, then such instrument falls within the ambit of section 6 and executant is required to affix duty which is prescribed for pronote in Schedule of Act. If any authority is needed refeilence be made to Board of Revenue v. N. Narasimbar (AIR 1961 Mad. 504)

7. Applying the above principle to the facts and circumstances of the case in hand, we are clear in our mind that Mark `A' contains the writing of pronote as well as receipt. The pronote contains the promise to pay money while receipt embodies the acknowledgement of money received by the executant. We are, therefore, clear that the pronote as well as receipt are account of same transaction which falls within two descriptions in the schedule chargeable with separate duty. This document, therefore, in our opinion falls within the ambit of section 6 of the Act and executant was required pay stamp duty on the pronote without paying anything for receipt. The perusal of Mark `A' shows that on the front side of the instrument executant afford stamp of 80 paisas on the side of receipt and Rs.4.80 on the side of pronot The remaining stamps were affixed on back of instrument. From the above is clear that Mark `A' was over stamped and sufficiently stamped. In our pinion this document, .therefore, is duly stamped within the ambit of the Act.

8. Having come to the conclusion that Mark `A' was duly stamped, we find no force in the contention of the learned counsel for the respondent. The precise argument of the learned counsel for respondent is that the stamps affixed on the back of Mark `A' were situated on the side of printed form which was reserved for receipt and not for, pronote, This argument is highly fallacious. It is mere fetish of technicality. The perusal of the Act does not show such intendment. The underlying purpose of the Act is to secure payment of duties as prescribed in the Schedule on the instrument. It does not prescribe the place where the stamp is to be affixed. The law only specifies that the stamps whether impressed or adhesive be affixed on tie same has to be cancelled. The law does not particularise the place of stamps. The Stamp Act is a charging statute and is subject to principle of strict construction. It is an elementary principle of interpretation of statutes that fiscal statutes are to be construed strictly in favour of the subject. These statutes are to be applied strictly in accordance with plain letters of language aid not otherwise. Applying this principle to facts and circumstances of this case we are inclined to agree with rule laid down in Sajid Abbas Zaidi v. Irshad Eli Jafri (1990 CLC 1018). After survey of the Stamp Act his Lordship Mr. Justice Syed Abdur Rehman held: "The next contention of the defendant's counsel was that the stamps on the pronote were not sufficient. It was pointed out that the pronote and its receipts, which are printed on the same leaf, have been stamped on the back of the leaf in such A way that the stamps of Rs.5 are on the back of the pronote portion of the leaf and stamps of Rs.10 are on the receipt portion of the leaf, hence it would appear that there are only Rs.5 stamps on the pronote. This contention also is not correct. When the pronote and the receipt of the pronote are on the same leaf, the mere fact that some of the stamps are on the portion which falls on the back of the printed receipt, would not lead the Court to treat those stamps as on a paper other than that of the pronote. Hence the pronoto is sufficiently stamped..." The authority reported as Sheikhpura Central Cooperative Bank Limited v. Tawakkalullah (PLD 1977 Lah.763 proceeds on distinguishable facts and is not applicable to the facts and circumstances of this case. Applying the aforenoted principle to the fats and circumstances of this case we have no doubt in our mind that Mark `A' was duly as well as sufficiently stamped and the learned Courts below had erred in dismissing the suit.

9. In the light of the for going discussion this first appeal is accepted. The judgment and decree passed by the learned Additional District Judge is hereby set aside and the case remitted to the Original Court for deciding the same afresh on merits after giving the opportunity of hearing to the parties. The respondent shall bear the costs of the proceedings throughout. H.B.T./M‑1469/L Appeal accepted.