TMI Blog2006 (3) TMI 796X X X X Extracts X X X X X X X X Extracts X X X X ..... ANTWERPEN the amount of USD ONE-EIGHT-TWO-ONE-THREE-ZERO-AND 00/100 payable at the UNITED BANK OF INDIA, MUMBAI 400001 drawing rate for demand drafts on...with interest at...per cent, per annum added thereto from date hereof to approximate due date of arrival of the remittance in...value received. ROSMIRA DIAMONDS BAVBA (Sd.) To Kamal Company 136, Panchratna, Opera House Mumbai-400004, India For Kamal Company (Sd.) Partner. 3. The facts leading to the making of the bill of exchange are these, Rosmira Diamonds Bavba sold rough diamonds to the defendants on the terms and conditions contained in an invoice dated April 16, 1997. In consideration of the advance made available by the plaintiff to Rosmira, Rosmira drew the said bill of exchange payable to the plaintiff. The defendant accepted the bill of exchange. The bill of exchange was presented for payment to the defendant by United Bank of India at the instance of the plaintiff. The defendant however, failed to make the payment on the due date. The defendant remitted a sum of US$ 49,950.00 on September 10, 1997, towards part payment. The defendant by its letter dated February 18, 1998, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le of stamp duty on a bill of exchange depending upon the value thereof and the period of payment provided thereunder : where payable otherwise than on demand.... (Here printed in italics) 8. It is clear therefore, from Section 3(b) and Article 13 that no stamp duty has been prescribed in respect of bill of exchange payable on demand. 9. The question that arise for consideration is whether the suit bill of exchange is one payable on demand or one payable otherwise than on demand. The question must be answered with reference to the provisions of the Indian Stamp Act and not with reference to the Negotiable Instruments Act. Under the Negotiable Instruments Act, the suit bill of exchange may not be considered to be a bill of exchange payable on demand. While considering whether the document is a bill of exchange payable on demand or not for the purpose of determining the stamp duty payable thereon, it is the provisions of the Indian Stamp Act and not the provisions of the Negotiable Instruments Act that are relevant. The Negotiable Instruments Act has nothing to do with the stamp duty, except providing for certain limited purposes, such as provided in Section 29 thereof. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent had been postponed to a future date. In this context, the learned judge called special attention to the provisions of Section 2(3)(b) of the Act and pointed out that the said provisions give an extended meaning to the expression 'bill of exchange payable on demand'. If I may say so with respect the learned judge was perfectly right in making this observation. If we read the definition of 'bill of exchange payable on demand' as given in Section 2(3) of the Act it may be somewhat surprising to discover that the expression 'bill of exchange payable on demand' may, literally speaking be quite often a misnomer, for the instruments which the definition takes in may not actually be payable on demand. Let us now read the definition to see for ourselves the deep chasm between the literal meaning of the expression 'bill of exchange payable on demand' and its technical meaning as given in the definition. 14. The learned judge, after setting out Section 2(3), went on to observe as under (page 159): 6. It will be seen that none of the three types of instruments enumerated above can be said to be payable on demand properly so called, but they are all i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nge payable on demand. 16. The original bill of exchange tendered by Mr. Tulzapurkar, the learned senior counsel appearing on behalf of the plaintiff, is therefore taken on record and marked exhibit A in evidence. 17. Mr. Tulzapurkar, further submitted that the stamp duty prescribed of Article 13 had been remitted by a notification dated August 1, 1989, which reads as under: ORDER New Delhi, the 1st August, 1999, STAMPS S.O. 1892. - In exercise of the powers conferred by Clause (a) of Sub-section (1) of Section 9 of the Indian Stamp Act, 1899 (2 of 1899), the Central Government, hereby remits the proper stamp duty chargeable under Article 13 of the Schedule 1 to the said Act in respect of usance bills of exchange, Where- (a) such bills of exchange are payable not more than three months date of sight; (b) such bills of exchange are drawn on or made by or in favour of a commercial bank of a co-operative bank; and (c) such bills of exchange arise out of bona fide commercial or trade transactions. No. 40/89. Stamps. F. No. 33/13/89-ST B.R. Mehmi, under Secretary. 18. It was not disputed that the suit bill of exchange was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erstanding is only between the defendant and Rosmira. The plaintiffs have nothing to do with the same. There is nothing on record that even remotely indicates that the plaintiffs were a party to or had in any manner consented to such an understanding. It is also contended that the defendant used to pay the price of the diamonds directly to Rosmira who in turn paid the amount to the banks. The mere fact that in certain cases, Rosmira's bankers accepted the payment without presentation to the acceptor cannot take the defendant's case any further. If a payee is paid by the drawer, he is hardly likely to refuse such payment. That by itself would not and cannot by any stretch of imagination affect the right against the acceptor. 24. The defendant further admits that five packets of diamonds were in fact delivered by Rosmira to them. The contention is only that Rosmira supplied five packets of diamonds instead of four packets, as ordered by the defendant. It is important to note that the receipt of the diamonds is expressly admitted. 25. Thus consideration of bill of exchange qua the acceptor/defendant is established. What follows in the affidavit in reply is only an attemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en no rate of interest is specified in the instrument, interest on the amount due thereon shall, notwithstanding any agreement relating to interest between any parties to the instrument, be calculated at the rate of eighteen per centum per annum, from the date at which the same ought to have been paid by the party charged, until tender or realisation of the amount due thereon, or until such date after the institution of a suit to recover such amount as the court directs. 29. There is nothing in Section 80 which even remotely suggests that the provisions thereof apply only to inland bills and not to foreign bills, nor is there anything in any of the other provisions of the Negotiable Instruments Act which suggests the same. Thus the bill of exchange being silent as to the rate of interest the plaintiff is entitled to the interest at the rate of 18 per cent, per annum. 30. Mr. Makhija's reliance upon, unreported judgment of this Court in Dorbyl Eastern Cops Division of Dorbyl Ltd. v. m. v. Navigator in Admiralty Suit No. 60 of 1996, dated October 19, 1995, is not well founded. In that case, the provisions of the Negotiable Instruments Act were not involved. Further that was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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