P L D 1978 Karachi 425 (PLP)

(a) Stamp Act (II of 1899) S. (1) (3) Cancellation of stamp- Adhesive stamp affixed on a document cancelled by drawing a line across it cannot be used again without in some measure causing some visible damage to stamp itself Legislature not providing for cancellation of stamp in such manner as to make it impossible for a criminal minded persons to use stamp again Drawing a line across the whole stamp instead of signatures held constitutes effective cancellation of stamp. Motiram Nathome and another v. Manharam Tirathdaas and another ILR 1942 Kar. 56 pessumal reloomal Gagannal Harumal (1919) 5 SLR 34 and G. A Heven v. Sultan Khan AIR 1936 Oudh 176 ref. (b) Stamp Act (II of 1899) S. 35 sched, Art 49 read with Pakistan Stamp Rules 1925 r. 16 Affixation of 8 adhesive stamps of one each instead of stamp of 50 paisas on promissory note Held justified and promissory note not invalidated due to total amount of stamps being short by 2 paisas This is a suit tender Order XXXVIL rule

2. C. P. C. MW by the Standard Bank Ltd., which was subsequently merged into the Habib Bank Ltd., against Raga Hassan A Company, defendant No 1. and Mr. Abdullah Shamim, defendant No. 2 for recovery of a sum of Re. 3,77.441.03 with interest at the rate of 9 per cent, per annum with monthly rates and coo" of the snit,. The suit is based on two demand promissory notes. The first promissory note b dated 29.4,19678 which, It* is claimed was executed by defendant No. 1 In favour of the plaintiff for Re. 2 88.565.75 carrying interest at the rate of 9 per cent. per annum with monthly reetta. The second promissory note was also executed on 29‑4.1967 by defendant No. 2 in favour of the plaintiff for a sum of Re. 3,006000. By the order dated 8th November, 1971 the suit was decreed against defendant No. 2 as he had failed to apply for leave to appear and deleted the sod. By another order dated 9‑10-1972, Wave to appear and defend the suit as granted to defendant X10.

1. Accordingly, defendant No. l filed his written statement pleading that the suit as framed is not maintainable and it is barred by limitation . He further pleaded that in May, 1963, he had approached the plainer for opening a letter of credit for Rs. 17,420-1‑8 and paid a sum of Rs.35,630.25 to the plaintiff as 15 % margin money and other charges and it is in this connection the plaintiff had got a number of documents including this Promissory Note In bleat executed by defendant No. 1 and that by way of additional security shares of Inspectionon and reclamation Sees Pakistan Limited of the value of Rs. 1,71,000 were handed over to the plan tiff. Accordingly on the pleading of the parties the following issued were framed? (1) Is the suit as framed not maintainable? (2) Is the suit barred by limitation? (3) Did the defendant No. 1 execute a Promissory Note on 29.4‑196'1 in favors of the plaintiff for value he had received, if so, what was the consideration? (4) To what relief the plaintiff b entitled? (5) What the dowse should be? The plaintiff examined Mr.

8. P. khambat an Executive Officer of the Bank in support of its claim. Defendant No. 1 did not step in the witness‑bon nor did he examine an witness on his behalf. Mr. Khambsta who was at the relevant time Chid Manager of the Foreign Exchange Branch proved the execution of the Promissory Note by defendant No.

1. He also proved the delivery of letter of continuity (Eah. No. 5/'2) and further stated that the Standard Cooperative Hank was converted into a Company registered under the Companies Act, 1913 with limited liability and the old forms used by the Cooperative Hank was continued to be used by the Bank. Now, I would proceed to considers the issues. issue No. l.‑As regards the first issue, on my quern as to how ads suit as framed is not maintainable, the learned Advocate for defendant No. 1 failed to point out any defect in the frame of the suit. Been other wise, I do not find any defect in the frame of the suit. Accordingly. I decide this issue against defendant No.

1. Issue No.2‑The suit is based on a Demand Promissory Note dated 29‑9‑1967. The suit was died on 24.4‑1970 within 3 years from the date of on of Promissory Note. Under Article 73 of the Limitation Act, a suit based on promissory note payable on demand has to be filed within 3 years from the date of the Note. Under Article 68‑A ‑a suit under Order XJXVII of the Code of Civil Procedure, is required to be filed within 3 years from the date when the debt becomes payable and on a Demand Promissory Note, debt becomes payable immediately. Thus under both the articles, the period of limitation is 3 years and the suit has been filed within the prescribed time. The snit‑as thus net barred by limitation. I may however, mention, that the contention of Mr. Muzaffar Hassan was that since the Promissory Note ‑delivery letter (8xh. 512) bears the stem of 30th January, 1963, the Promissory, Note most have been delivered in 196 but this argument does not take into consideration the fact that this document at the bottom boars the date at 29th April. 1,

967. The date of 30th January. 1963 shows that this document was stamped on (hat date. And a document is normally sped befogs execution. Issue No 3,‑‑As regard this issue, the execution of the Promissory Note on 29.4‑1957 has been proved by Mr. D. P. Khambata and nothing was brought in cross‑examination which could show that the Promissory Note was not so executed Since defendant No. 1 failed to step in the witness-box the evidence of Mr. B. p. Khambata stands unrebuted, Accordingly. 1 decide the first part this Issue In favour of the plaintiff against defendant No.

1. As regards the considerations Mr. Khambata has stated in his evidence that in April, 1967, the Bank's dues against defendant No. 1 exceeded its. 300.000. However, at their request the Bank gave rebate in the amount duo frame defendant No., 1 on account of interest and other charges. Mr. Khambata has further stated that the plaintiff had arranged banking facilities for defendant No. I by providing credit for importing machinery from U K but on receipt of delivery from U. K. Bank, Defendant No.1 did not wire the documents by paying for them. Therefore, the Santo after paying for the do3uments, custom duty, sales tax and outer charges, cleared the goods, d nt No. 1 had taken partial delivery against partial payment and on 2941967 executed a Promissory Note for 1tr, i.SR,565.75. It is the one of defendant No. 1 himself as put to Mr. Khambata 4n his cross‑examination, that on 17‑4‑1967 the account showed debit balance of Rs. 2,86.213.75 as mentioned in the notice of the clank to defendant No. i (Exh. 5/4). Obviously, this amount does not include the interest far the month of April, 1967 which is normally charged towards the and of the month. Therefore, on 251‑4‑1967, when the defendant No. 1 executed Promissory Note, the amount of interest for the month of April. 1967 was included in the amount due had accordingly the Promissory Note of exact amount then due was executed. Thus I hold that the promissory Nee was executed for the consideration of the debt then due from defendant No.

1. Before I deal with the next issue I may mention that Mr Muzaffar Hassan his raissd objection to the validity of The Promissory Note on the ground that one of the stamps on the Promissory Note has not been effectively cancelled and as such the Promissory Note is invalid and was inadmissible in evidence. I may mention that Mr. Musaffar Hassan had raised similar objection as to the admissibility of the Promissory Note when the same was being produced in evidence and I bad overruled the same. However now I would deal with this objection in mail. The Promissory Note bears 8 adhesive stamps of one anna each an according to Mr. Muzaffar one of the stamps bears only a line across i which does not amount to cancellation of that stamp in the manner prescribed in, action 12(1) of the Stamp Act, 1890, and as such. She Promissory‑ Note is invalid. In order to examine this objection In detail it may be useful to reproduce the relevant provisions of the Stamp Act. Subsections (1)(a), (2) & (3) of suction 12 of the Stamp Act provide as follower‑ "Section 12(1)(a)‑--Whoever affixes an adhesive stamp to any instrument chargeable with duty which has been executed by any parson shall, when affixing such ,stamp, cancel the same that so it cannot be used again (2) Any instrument besting adhesive stamp which has not been cancelled so that it cannot be used again, shall, so far see such stamp M concerned, be deemed to be unstamped. (3) The person required by subsection (1) to cancel an adhesive stamp may cancel It by writing on or across the stamp his name or initials or the name or Initials of his firm with the true date of his so writing or in any other effectual manner.' Now, if an adhesive stamp is affixed on a document and it is cancelled b drawing a line some it, it cannot be used again unless it is removed from the document which may not be possible without in some measure causing some visible damage to the stamp itself. Moreover, under subsection (3) o section 12, the Legislature has not provided that the person required to dance an adhesive amp armed to a promissory note or to a document must do so in such a manner that It is impossible for a criminal‑minded person to QW that stamp again in any circumstances whatever. Here I may refs to a Division Bench, Judgment of Sind Chief Court in Motiram Nathomal and another v Mangharam Tirathdas and another (1 L R 1942 Kar. 56) wherein Weston. J. who wrote the opinion of the Court, at page 59 of the report observed:‑ "Whether a stamp has been sufficiently cancelled must always be a question of fact. On the meaning of clause (3) of section 12, we agree with the opinion expressed in Pessumal v. Gagonmol that the legislature has not provided that the person required to cancel an adhesive a stamp affixed to a document must do to in such a manner that it is impossible for a criminal minded person to use that stamp again in any circumstances whatever. We think cancellation is effected within the meaning of this clause, if it is done in such a manner that a person sag the stamp so cancelled will realise at once that it had already been used and should not be used again, or. In other words, if ix has been defaced in such a manner that it cannot be used again without tome manipulation of words, figures pen or ink. We think therefore, that the figures written on the stamp in the present case in ink are sufficient cancellation with this a the meaning of clause (3) of section 12." I may mention here that in this case the stamp on the Promissory Note did not titer the name or initial of the executants of the Note. It merely bore the figure 28/2. I may also refer to another case of Sind Chief Court in Pesrumol Reloomol v.Gagnmal Harumal ((1919) 5 S L R 34). In that case it was held that the drawing acteee a stamp of two lines was au sufficient cancellation within the meaning of section 12 of the Stamp Act. The present case is identical to the care referred to above see in that am two lines were drawn across a stamp and in the present case one line has been drawn one of the stamps. Reference may also be had to G. A. Heven v. Supra Khan (A1R 1936 Qudh 176) In this case the signature of the executants of the instrument ran across the whole of the stamp. It was held by the Division Bench that it constituted effective cancellation of the stamp. In the instant case the position is identical. Here instead of signature a line rune aceoss the whole stamp. It, therefore, constitutes effective cancellation of the stamp. Another objection raised by the defendant as to the validity of the Promissory Note is that it bears adhesive stamps of one arena each instead of stamps of 50 paisas and the 8 stamps are individually worth 6 paless each and tans tote total amount theca of being 46 paisas was short by two poises. A similar objection was raised in Ch. Imdad Ali v Haji Mir Qadir Baksh (P L D 1969 Quoits 53) and the Division Beach who decided the case, relying on ride 161 of the Pakistan Stamps Rules, 1983, had repelled tire objection. Thus I find no substance in these Objections also ‑and accordingly over rule the same. Javrurs Nor. 4 oral 5.‑Since the plaintiff has proved the execution of the Promissory Note on 29th April, 1967, which is for a sum of Re. 2,811,565.75, it will be entitled to a decree for the amount claimed In the suit with prndente llte and future simple interest at 8 per annum, and cods, of the suit and I accordingly decree the suit. Suit decreed.