Report No. 67
Offences: Sections 62 to 69
We now come to the provisions of the Act relating to offences. The provisions relating to offences may appear to be heterogeneous and are, in fact, so to some extent. There are provisions dealing with specific conduct, such as failure to cancel an adhesive stamp (s. 63), refusal to give a receipt (s. 65), failure to make out a policy (s. 66), drawing post-dated bills or marine policies (s. 67), and breach of rules relating to "sale of stamps" (s. 69). Three sections in this Chapter, however, are of a more general character. The first is section 62, which imposes a penalty for executing an instrument not duly stamped and for certain other action taken in relation to an instrument not adequately stamped. A more serious offence is constituted by section 64, which punishes certain acts done with intent to defraud the Government. Those acts may consist in failure to set out the facts and circumstances in an instrument or-vide clause (c)-"any other act calculated to deprive the Government of any duty or penalty under this Act."
Then there is section 68, under which not only the post-dating of a bill is punished-this is a specific act-but any person who, with intent to defraud the Government of duty "practises or is concerned in any act, contrivance or device not specially provided for by this Act or any other law for the time being in force" is also punished. This stands midway between sections 62 and 64. It is obvious that the same act may fall under several sections with varying penalties-a situation which is by no means satisfactory. While it is not our intention to suggest a radical re-arrangement of the sections, we do consider it necessary that the overlapping between some of the provisions should be removed.
22.2. Section 62-Introductory.-
To begin with, section 62(1) punishes any person-
(a) drawing, making, issuing, endorsing or transferring, or signing otherwise than as a witness, or presenting for acceptance or payment, or accepting, paying or receiving payment of, or in any manner negotiating, any bill of exchange, payable otherwise than on demand or promissory note without the same being duly stamped; or
(b) executing or signing otherwise than as a witness any other instrument chargeable with duty without the same being duly stamped; or
(c) voting or attempting to vote under any proxy not duly stamped.
The punishment is fine which may extend to five hundred rupees for every such offence. Under the proviso, when any penalty has been paid in respect of any instrument under section 35, section 40 or section 61, the amount of such penalty shall be allowed in reduction of the fine (if any) subsequently imposed under this section in respect of the same instrument upon the person who paid such penalty. We shall deal with sub-section (2) later.
22.3. Meaning of 'accepting'-clarification needed.-
It has been held1, that in section 62(1)(a), the word 'accepting' does not mean 'receiving'. It means "executing as an acceptor". Therefore, a person who merely receives an unstamped promissory note and puts it in a suit, is not guilty of an offence under section 62. It is desirable to bring out this aspect more clearly, by a suitable amendment. Only the person who makes the bill of exchange or promissory note, and not the person in whose favour it is made, should be liable2 under section 62(1)(a).
1. Queen Empress v. Ghulam Hussain, 1884 II,R 7 Mad 771 (773).
2. Queen Empress v. Nihal Chand, 1898 ILR 20 All 440.
22.4. Whether person receiving an unstamped instrument liable.-
The above point deals with questions concerning promissory notes and bills of exchange in the context of section 62. A controversy in a more general form has also arisen under this section, namely, whether receiving an unstamped instrument amounts to abetment of an offence. So far as section 62 is concerned, the question has now been answered by all High Courts1 in the negative, except by the Madras High Court.2 This also appears to be the English law.3
1. (a) Emp. v. Janki, 1883 ILR 7 Born 82 (83). (b) Queen Empress v. Mithulal, 1885 ILR 8 All 18.
2. ILR 23 Mad 155 (158) (Case under old section 67-Observations as to old section 62).
3. I.R.C. v. Maple, (1907) 77 LJ KB 55 (59).
22.5. Desirability of clarification.-
It is desirable to make suitable clarification on this general point1 also, by codifying the majority view. Mere receipt of an unstamped instrument should not be regarded as abetment, where there is no instigation or other positive act by the receiver. Of course, where, on the facts, incitement can be proved, the conduct will amount to abetment. For example, a creditor procuring the signing of an improper entry in his account book may be guilty of abetment, by reason of such procuration.
1. See cases listed in Chhanganlal v. Emp., AIR 1934 Nag 261 (263).
22.6. We may borrow an example from Oliver Twist.1 In that novel, Fagin, after getting Sikes to say that he (Sikes) would murder any one who should betray him, wakes up Noah Claypole, Fagin makes him (Slaypole) tell Sikes that the girl Nancy had betrayed him.2 As Sikes rushes out in a passion, Fagin says, "You won't be too violant, Bill; I mean not too violent for safety". Discussing the legal significance of these facts, Stephen3 says, "I think that the whole conversation taken together would be evidence to go to a jury, that Fagin did 'counsel' or 'procure' the murder committed by Sikes, which would make him an accessory before the fact; but if he had confined himself to merely telling Sikes what Claypole said he had heard, it would not have been enough."4
This hypothetical illustration shows the distinction between active instigation (on the one hand) and passive inaction (on the other hand).
1. Oliver Twist, Chapter 47.
2. Oliver Twist, Readers' Enrichment Edition (1966), p. 397.
3. Stephen, Digest of Criminal Law, 3rd Edn., p. 152, note.
4. See Howells v. Wynne, 15 CBNS 3.
22.7. Section 62(b).-
So much on the question of abetment. Clause (b) of section 62 uses both the expressions "executed", and "sign". The expression "executed", with reference to instruments, is define1 in the Act, as meaning "signed". The word "executing", in section 62, clause (1)(b), must mean very much the same as "signing", and it must be held to mean "signing" so as to complete the document so that it may have full legal effect.2
1. Section 2(12).
2. Emperor v. Brij Pal Saran, 1910 ILR 32 All 198 (per Richards J.).
22.8. Where certain parties to an arbitration signed an unstamped award, not as witnesses but by way of assent, (though this was unnecessary), it was held1 that they were not liable under section 62(1)(b). The High Court observed-
"It is impossible to say that every person who writes his name on a document of this nature otherwise than as a witness has committed an offence under the Act, because, if that was so, even a Judge who signed the document as an exhibit would be liable to a fine. It is a pity. No definition is given in the Act as to the meaning of the expression 'signing otherwise than as a witness'.".
This point does not necessitate an amendment.
1. Emperor v. Brij Pal Saran, 1910 ILR 32 All 198.
22.9. Proof of dishonest intention.-
But there is another matter which needs amendment. The Act specifically provides1 in section 43, proviso, that a prosecution cannot be started in the absence of proof of a dishonest intention to evade the payment of stamp duty,2 where penalty has been paid. This, in our view, should be expressly stated in section 62 also. In fact, we are of the opinion that intention to evade payment of duty should be an essential ingredient of the offence, in every case under section 62, and we recommend the insertion of a proviso to that effect. If this recommendation is carried out, obviously it will not be necessary to refer to section 43, proviso.
1. See section 43, proviso.
2. (a) Kanhaiya Lai v. Emperor, (1919) 54 IC 406 (All), distinguished in (1926) 34 ALJ 358;
(b)Compare (1933) 146 IC 1055 (Lah).
22.10. Vicarious Liability-Sub-section (2).-
As regards vicarious liability under the section, one particular case of vicarious liability-companies-is dealt with specifically in sub-section (2) (in relation to the issue of share warrants). That sub-section is as follows:-
"(2) If a share warrant is issued without being duly stamped, the company issuing the same, and also every person who, at the time when it is issued, is the managing director or secretary or other principal officer of the company, shall be punishable with fine which may extend to five hundred rupees".1
1. Compare section 35, Companies Act, 1882 (repealed).