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Report No. 67

7.11. Question of instruments liable to court fees.-

So much as regards the concept of power of attorney and the formalities, if any, requisite for such powers. Reverting to the definition in the Stamp Act, we may note that an instrument chargeable with court-fees is outside the definition-vide the words in brackets. Documents chargeable with court-fees have been excluded, for the reason that otherwise they would be subject to double liability.1 Since an advocate appearing or acting for his client does all his work in the name of his client,2 the usual Vakalatnama would, but for the excluding words, be regarded as a power of attorney.

1. Ramdev v. Lalu Nath, AIR 1937 Nag 65.

2. Hormusji v. Nana Babu, AIR 1934 Born 299 (302).

7.12. The principal enactment relating to court-fees is the Court Fees Act. Schedule II, Article 10, of that Act is material for the present purpose. It relates to Mukhtearnama or Vakalatnama for the conduct of a case.

7.13. There is a difference of opinion on the question whether a mukhtearnama or vakalatnama executed in favour of a person who is not a certificated mukhtear or pleader should be stamped under the Stamp Act or under the Court Fees Act. According to the Allahabad High Court,1 the documents referred to in Schedule II, Article 10, of the Court Fees Act, are restricted to documents given to and presented by duly certified mukhtears or pleaders under the Legal Practitioners Act, and therefore, a mukhtearnama in favour of a person who is not a certificated mukhtear falls within the definition in the Stamp Act and is chargeable with a stamp duty under this Act. A contrary view has, however, been taken in a Full Bench decision of the Punjab High Court.2

1. Permanand v. Sat Persad, 1911 ILR 33 All 487 (489) (FB).

2. Ganpat v. Prem Singh, (1922) 15 Ind Cas 122 (124) (FB) (Lah) dissenting from ILR 33 All 487.

7.14. Recommendation.-

Thus, there appears to be difference of judicial opinion on this point. In our view, if a person who is not a legally qualified practitioner conducts a case on behalf of a party, the power of attorney should be chargeable under the Stamp Act. We recommend that the Act should be amended for the purpose. We may note that the suggested amendment has been generally favoured in the replies to the questionnaire issued by us.1

1. Question 13, section 2(21)-Court Fees.

7.15. Section 2(22)-"Promissory note".-

The next definition is of 'promissory note' defined in section 2(22) as under:-

"(22) 'Promissory note' means a promissory note as defined by the Negotiable Instruments Act, 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."

7.16. History.-

The definition is more elaborate than the one in an earlier Stamp Act. In section 3(25) of the Stamp Act of 1869, "promissory note" was defined as including every instrument whereby the maker engages absolutely to pay a specified sum of money to another at a time therein specified or on demand or at sight. The definition was omitted in the Stamp Act of 1879.

7.17. Negotiable Instruments Act.- Under the Negotiable Instruments Act,1-

"A promissory note is an instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument."

1. Section 4, Negotiable Instruments Act, 1881 (Illustration not quoted).

7.18. Two parts of the definition.-

The present definition in the Stamp Act consists .of two parts. The earlier half simply refers to the definition in the Negotiable Instruments Act, 1881. The latter half includes notes promising the payment of any sum of money out of a particular fund which may or may not be available, or upon a condition or contingency which may or may not be performed or happen.1

1. Compare the definition of 'bill of exchange on demand' in section 2(3), supra.

7.19. It may be noted that the definition in the English Stamp Act, section 33(1), is rather wide.1 It has been pointed out2 that the Indian Stamp Act, unlike the English Stamp Act, does not ignore the definition in the Act relating to negotiable instruments. In the earlier half, it adopts the definition of 'promissory note' in the Negotiable Instruments Act.

1. Section 33, Stamp Act, 1891 (English).

2. Mohammad Akbar Khan v. Atar Singh, 1936 ILR 17 Lah 557 (566): AIR 1936 PC 171 (173).

7.20. Second half.-

So far, there is no difficulty. But the second half of the definition in our Act, which is similar to English sub-section (2), raises problems. It includes many documents not covered by the Negotiable Instruments Act. Should the legislature go beyond the definition in the Negotiable Instruments Act, for the purposes of the Stamp Act? Is there any compelling consideration that would justify the extended part of the definition? This is the question that we have to consider.

7.21. A brief analysis based on comparison with the Negotiable Instruments Act1 will be helpful

(i) According to the definition in the Negotiable Instruments Act, the note must be signed by the maker. This requirement does not expressly appear in the latter half of the definition in the Stamp Act. However one can disregard this difference as a very minor one.

(ii) Secondly, according to the Negotiable Instruments Act, the note must be in favour of a certain person or bearer; this requirement does not expressly appear in the latter half of the definition in the Stamp Act.

(iii) Thirdly, both the Acts require a promise to pay in substance, though the Negotiable Instruments Act uses the expression "undertaking", while the extended part of the definition in the Stamp Act uses the expression "promise".

(iv) Fourthly, under the Negotiable Instruments Act, the sum of money must be certain, while in the extended part of the definition in the Stamp Act, "any sum of money" will do.

(v) Fifthly, under the Negotiable Instruments Act, the undertaking to pay must be unconditional,2 while, under the extended part of the definition in the Stamp Act, it need not be so, and it also provides that the particular fund out of which money is to be paid may or may not be available.

The fourth and fifth points are of importance.

1. Para 7.17, supra.

2. Sankaran Namboodiripad v. Abraham, AIR 1973 Ker 22.



Indian Stamp Act, 1899 Back




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