Report No. 67
10.30. Case of two instruments.-
We shall now deal with another question arising out of section 15. It is to be noted that where two instruments are written on one paper, it is the second instrument which is to be treated as '"unstamped" within the meaning of section 15, and not the first one. Thus, in a Madras case,1 a deed of release was endorsed on a deed of conveyance for Rs. 100. The conveyance bore an impressed stamp for one rupee, but the endorsement of release was unstamped. It was held that the conveyance was valid, and the release could be validated on payment of the deficient stamp duty and the penalty under section 39 of the old Act I of 1879 (section 40 of the present Act).
1. Reference by Collector of Stamps, Madras (in re:), 1888 ILR 11 Mad 40: (Collins, C.J., Kernan, Aiyer, Brandt & Parker, JJ.) (Case decided under old section 14, corresponding to present section 15).
10.31. A similar view (regarding the admission of a document in evidence on payment of deficient stamp and penalty), was taken in another Bombay case,1 where an endorsement of transfer written on a duty stamped simple money bond, was in issue. The question to be considered was whether the case fell under that part of section 14 (old section 13) which forbids a second instrument being written upon a paper on which an instrument has already been written. It was held, that the endorsement was chargeable with duty, but could be stamped under old section 34-present section 35.
1. Prahlad Laksmanrau Nikane v. Vithu, 1893 ILR 17 Born 687 (Parsons, Telang and Candy, JJ.)
10.32. Recommendation to make it clear that the second instrument is intended.-
In our opinion, it is desirable to codify the proposition emerging from the above cases, in so far as they hold that it is the second instrument which is to be deemed to be not duly stamped. The clarification will be confined to instruments falling under existing section 14 and will not extend to new section 14A. We may state that the suggested amendments have been generally favoured by the replies received to our Questionnaire.1
1. (a) Q. 31-section 5.
(b) Q. 32-section 15 and second instrument.
10.33. Recommendation.- Accordingly, we recommend that section 15 should be revised as under:-
Revised section 15
"15. Every instrument written in contravention of section 13 or section 14 or section 14A shall be deemed to be unstamped".
Explanation.-In the case to which section 14 applies, it shall be the second instrument which shall be deemed to be unstamped.
10.34. Section 16.- Section 16 is as follows:-
"16. Denoting duty.-Where the duty with which an instrument is chargeable, or its exemption from duty, depends in any manner upon the duty actually paid in respect of another instrument, the payment of such last-mentioned duty shall, if application is made in writing to the Collector for that purpose, and on production of both the instruments, be denoted upon such first-mentioned instrument, by endorsement under the hand of the Collector or in such other manner (if any) as the State Government may by rule prescribe."
Sometimes, the duty payable on some instruments depends upon the duty paid on other instruments that have already been executed and stamped. Examples of such instruments are-subsidiary instruments, as opposed to the principal ones under section 4, the counter-parts or duplicates of instruments under Article 25, leases under the proviso to Article 35, instruments of partition under proviso (a) or (c) to Article 45, and instruments of settlement under the proviso to Article 58. Similarly, at times, the exemption from duty in favour of some instruments, (for example, the entry of an advocate or attorney on the roll of a High Court when he has previously been enrolled in a High Court) depends on the duty paid on another instrument.
10.35. In order to render these instruments as either partially stamped or totally exempt from stamp duty, because of the principal documents having been fully stamped, section 16 lays down that on production of both the instruments and on an application to the Collector, an endorsement would be made by the Collector on the subsidiary instruments, denoting the payment of the duty actually paid in respect of the principal instrument.1
1. Compare section 11, Stamp Act, 1891 (English).
10.36. The necessary endorsement will be made by the Collector, only if an application has been made in writing to him, for the purpose. If the party interested does not apply for the necessary endorsement and, therefore, does not obtain it, then he has to produce, when required, both the instruments, in order to render the partially stamped or exempted instrument admissible in evidence.
No change is needed in this section.