1969 (7) TMI 123 - HC - Indian Laws

Summary

Issues:
Admissibility of Shah Jog Hundi in evidence based on stamp duty requirements.

Analysis:
The plaintiff filed a revision application against the Additional District Judge's order deeming the Shah Jog Hundi inadmissible due to inadequate stamping. The Hundi, payable to a Shah after a specified period, did not meet the unconditional order criteria of a bill of exchange under the Negotiable Instruments Act. However, local usage deemed such Hundis negotiable. The Stamp Act's definition of "Bill of Exchange" includes a Hundi, and Section 2(2) encompasses documents entitling payment by any person. The Hundi's specified payment time made it non-negotiable under the Negotiable Instruments Act but qualified as a bill of exchange payable on demand under the Stamp Act.

The defendant argued that Section 2(3)(b) of the Stamp Act applies to sums payable in more than one installment, but the interpretation of "periods" includes singular instances. The Hundi, being an order for a specified sum at a stated period, qualified as a bill of exchange payable on demand under the Stamp Act. Precedents like Tikamchand's case were cited, but the decision was found flawed in Hanuman's case, emphasizing the extended definition of a bill of exchange under the Stamp Act.

In Meghraj v. Shivji, a promissory note was erroneously treated as payable on demand, contrary to the Negotiable Instruments Act. The decision in Moolchand v. Shankar Datta was not considered in Hanuman's case, leading to incorrect observations about bills of exchange. The High Court revisited these errors, concluding that the Hundi was exempt from duty under the Stamp Act and thus admissible in evidence. The revision application was allowed, overturning the trial court's decision and highlighting the importance of the Stamp Act's extended definitions in such cases.