‘The Stamp Act. 1899 (As applicable in the Province of Sindh) WITH COMMENTARY, STAMP RULES AND ADMINISTRATIVE INSTRUCTIONS PROFESSIONAL EDUCATION FOUNDATIONGOVERNMENT OF SINDH BOARD OF REVENUE, SINDI 79, Pakistan Secretariat, Karachi EX-MEMBER (RS&EP) BOARD OF REVENUE, SINDH. FOREWORD Stamp duty is an orderly and voluntary contribution towards the government kitty, which culminates in “the sanctifying, legalising and legitimizing of due process of transactions. It confirms an act as lawful, legal and with full force of the law. It also confirms the rights of both the parties involved in the said transaction. Stamp duty has always had a back seat because it is a voluntary duty and because its due importance and duties of the citizens through its payment, were never highlighted, People were éither ignorant or were arrogant as transactions duty charges were of voluntary nature. Hopefully, with the publication of this Book alongwith its commentary would assist the citizenry at large and members of the legal community to understand the same well and thus advance and be active proponents for fulfillment of a vital national duty. It shall help the governed and the government in their quests for fulfillment of their responsibilities with full and sound knowledge of the Stamp Act, 1899. I wish the authors of this Book viz Mr. Abid Husain & Mr. Muhammad Ismail Memon, Ex-Deputy Chief Inspector of Stamps,to have a resounding, success in disseminating information at the door-step of the targeted clients. Sd/- (MUNAWAR OPEL) EX-MEMBER (RS&EP) BOARD OF REVENUE, SINDH.AUTHORS MUHAWIIAD ISMAIL MERION ABID HUSAIN Ma, LLB, FA. CA. (Scotian) : ‘AGIS. (London) FOIS, FACS. This book is published as it was a long felt necessity that the changes and amendments, made from time to time, in different sections and articles of the Stamp Act are brought together and published in a-consolidated form and the Act uptodated in its application to various segments of the Society. I congratulate the authors for their excellent work and thanks to Mr. S. Haroon Husain for the assistance provided to the authors in bringing about this book. In the end, | have to thank the authors for assigning this book to our Foundation. Abid Husain’ Chief Executive, PROFESSIONAL EDUCATION FOUNDATIONTHE STAMP ACT, 1899 CONTENTS ‘Sections: 13, 14, 15. 16, 17. 18. 10. CHAPTER 1 Preliminary ‘Shortie, extent and commencement Definitions CHAPTER Il Stamp-Duties A.— Of the Liability of Instruments to Duty Instruments chargeable with duty Severl instruments used in single transaction of sale, mortgage o setlement Instruments relating to several distinct matters Insitumefts coming within several descriptions in Schedule + Pobcies of searnsurance Bonds, debentures or other secure issued on loans under Act Xl, 179 Power to reduce, amit or compound duties B. OF Stamps and the mode of using them Duties how tobe pald Use of achesve stomps Cancatation of adhesive stamps Instruments stamped with impressed stamps how tobe writen Only one instrument to be on same stamp Instrument writen contrary to Section 19 or 14 doomed unstamped Denoting uty €.— OF the time of stamping Instruments Instruments executed in Pakistan ez. Instruments other than bils endnotes executed out of Pakistan, ot. Bile and notes drawn out of Pakistan, ot. D.— Of Valuations for Duty (fay Pages 7 7 8 8 18 18 18 at at 2 21 2 22 220, 2 22, 2. 208 24, 28 26. 27. ara 27-8 arc 28 23. 36. 36. 37 38, v8. 40. an. 42, Conversion of amount exprossed in foreign currencies Stock and marketable securities how to be valued Etfoct of statemont of rato of exchange or average price Instruments reserving interest Cortain instruments connected with mortgages of marketable secures to be chargeable as agreements How transfer in consideration of debt, or subject to future payment, et. o be charged Valuation in ease of annuity, et, Stamps where value of subject -matter is indeterminate Facts affecting duty to be set forth in instrument Valuation of urban immovable property Valuation of rural immovable property impounding of powers ofatlomey Direction as to duty in case of certain conveyances E.— Duty by whom payable Duties by whem payable ‘Obligation to give receipt in certain cases CHAPTER Il : Adjudication as to Stamps Alucication as to propor stamp cette (a a) probe) CHAPTER IV Inetruments not Duly Stamped ‘Examination and impounding of instruments ‘Special provision as to unstamped 1 sipts Instruments net duly stamped inadmissible in evidencs ate Admission of instrument where not to be questioned Aaission of improperly stamped instruments Instruments impounded how deatt with Collector's power to refund penalty paid unde Section 38, sub-section (1) Collector's power te stamp instrumants impounded Instruments unduly stamped by accident Endorsement of instruments on which duty has been paid under Section 35, 40 or 41 Prosecution fr offence against Stamp-iaw Persons paying duy of penalty may recover samo in certain cases Power to Revenue-authorty to refund penalty or excoss du (ia) contain cases: 22 23 23 23 23 2 24 2 5 25 25 25 25 a 28 29 a ey 3a 38 39 39 40 a “a a3 44 4546, 47, 48. 49, 50, 8. 52, 53 5a, 55. 56, sr. 58, 58, 60. 6 63 64. 6. 66, 7 a, 6a, 70. a 72. Non Power of payer to stamp bills and promissory notes received by him unstamped. Recovery of duties and penalties Allowances for Stamps in certain cases Allowances for spoiled stamps ibilty for loss of instruments sont under Section 88 CHAPTER V ‘Application for relief under Section 49 when to be mada ‘Allowance in case of printed forms no longer required by Corporations Allowance for misused stamps Allowance for spoiled or misused stamps how to be made ‘Allowance for stamps not required for use Allowance on renewal of certain det References and Revision CHAPTER VI Control of and statement of case to, Chief Revenue Authority Statement of case by Chief Revenue Authority to High Court Power of High Court to callfor further particulars as to case stated Procedure in disposing of case stated Statement of case by other courts to High Court Revision of certain decisions of courts regarding the sufficiency of stamps Criminal Offences and Procedure CHAPTER VIL Penaty for executing, te. instrument not duly stamped Penalty of failure to cancel adhesive stamps Penalty for omission to comply with provisions of Section 27 Pena for refusal to give receipt, and for devices to evade duty on receipts Pena for not making out policy, or making one not duly stamped Penat for not drawing full numberof ils o marine policies purperting tebe in sots Penaly for post-dating bills, and for ether devices to defraud the revenue Penalty for breach of rule relating to sale of stamps and for unauthorised’ sale Institution and conduct of prosecutions Jurisdiction of Magistrates Place of trials (ara) 48 46 48 55 58 59 er 7 6 69 6 6 70 70 0CHAPTER Vill ‘Supplement Provisions V0. Boat, i tobe opan to inspacton 7A, Powers to make rules relating io sale of stamps 75, Power te make rules generally to cary out Act 76, Publication of ules 76-A, Delogation of certain powers 77. Saving 28 to court a 78. Aetto be translated and sold cheaply 79. (Repealed) SCHEDULE |. — Stamp-duty on Instruments .. SCHEDULE 1. — [Repealed] APPENDIX | Valuation Table of Karachi Division APPENDIX. Il Remissions and Reductions APPENDIX It ‘The Stamp Ales, 1925, APPENDIX IV Sindh stamps supply and sale rules, 1940 ‘APPENDIX V ules regulating disposal of spoit, cancelled and unserviceable stamps APPENDIX VI ules regulating grant to refund and renewal of Court Fee stamps APPENDIX Vil ules regulating retund of the value of Court Fee stamps affixed to documents unnecessarily or in excess of logal requirements. [APPENDIX Vil ‘The West Punjab inspection and Audit Rule, 1949, APPENDIX IK Delegation of Powers Rules, 1962. (4/2) n 2 rR 72 3 73 73 @ at Bt cn pn a FA on "iIMPORTANT NOTE REGARDING CHANGES IN THE SCHEDULE THE SCHEDULE APPENDED TO THE STAMP ACT, 1899 HAS BEEN THOROUGHLY REVISED AND RATIONALIZED THROUGH THE STAMP (SINDH AMENDMENT) ORDINANCE NO. XVIII OF 2002, IN WHICH THE NUMBER OF CHARGING ARTICLES HAS BEEN REDUCED FROM 71 TO 31 ONLY. RESULTANTLY, THE ARTICLE NOS. HAVE ALSO BEEN CHANGED IN THE REVISED SETUP. THE READERS OF THIS BOOK ARE REQUESTED TO CONSULT THE TABLE APPEARING AT THE END OF THE REVISED SCHEDULE, WHILE REFERRING TO THE COMMENTS UNDER VARIOUS SECTIONS AND ARTICLES, WHICH CONTAINS COMPARATIVE ARTICLE NOS. IN THE OLD AND THE REVISED SCHEDULE. AUTHORS, Bla)é THE STAMP ACT, 1899 (Il OF 1899) (271n January, 1899} (An Act to consolidate and amend the law relating to Stamps) Whereas i Is expedient to consolidate and amend the law relating to stamps; itis hereby enacted as follows: CHAPTER | PRELIMINARY 1. |, Shorttitle, extent and commencement: (1) This Act may be called the Stamp Act, 1899, : (2) Itextends to the whole of Pakistan, (3) It shall come into force on the first day of July, 1899. 2 Definitions: inthis Act, unless there is something repugnant in the subject or context, — (1) “banker includes a bank and any person acting as a banker; COMMENTS, 1. "Bank", “Banker” The word "bank" connotes the business of utilising money received for purposes of profit and such a business must have a commercial side. In Wharton's Law Lexicon a “bank” is defined as “a place where money is deposited for the purpose of being tent out at interest, returned by exchange, disposed of to profi, or to be drawn out again as the owner shall call for it; and a “banker” Is defined as “one who receives money to be drawn out again as the owner has occasion for i, the Customer being lender, and the banker borrower, with the super added obligation of honouring the customers cheques up to * the amount of the money received and stil in the. banker's hands", According to, Halsbury’s Law of England, a bank is a corporation, partnership or individual carrying on the business of banking. A banker is such individual or a member of such partnership; but for some purposes, the term banker includes ‘corporations or partnerships carrying on the business of banking. A banker therefore, is any original partnership ol company carrying on the business of banking, the business of banking Is receipt of money from or on account of a customer to be repaid on demand or when drawn by cheque. (H.L cases 28, 43; (1907) 29 All 773: 776; 1 1.0. 712) A ‘bank’ has been defined in Webster Dictionery as “an institution which trades in money; an establishment for the deposit, custody, and issue of money, as also for making loans and discounts, and facilitating the transmission of remittances from one place to another", It defines a banker as “one who keeps a bank or is engaged in the business of banking: “one Who receives money on deposit and makes loans, negotiates bills of exchange” As datined by Hart in Law of Banking a ‘banker’ js a person or company carrying on the business of receiving moneys, ~ and collecting drafts, for customers subject to the obligation of honouring cheques drawn upon them trom time to time oy the customers to the extent of the amounts avallable on theit current accounts, ‘The distinction between an ordinary money lander and a banker is that the former lene’s his own moneys where as the Latter tend's the moneys of others, namely, the customers. (AIR 1927 Mad. 478) 2. ‘Person’. ‘Person’ as defined in the General Clauses Act 1897 includes aay company oF association or body of individuals, whether incorporated or not. It Includes a partnership or corporation. The definition does not exclude a minor fo be a parson, ‘A government fail within the purview of the word, (PLD 1965 Kar. 337) (2) “bill of exchange” means a bill of exchange as defined by the Negotiable Instruments Act, 1861, and includes also a hundi, and any other document entitling or purporting to entitle any person, whether named therein or not, to payment by any other person of, or to draw upon any other person for, any sum of money;COMMENTS: 1. Bill of exchange Section 3 of the Bill of Exchange Act, 1882.defines the term “Bill of Exchange’ as under: (1) A ill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person Giving it. requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future fime a sum certain In money to or to the order of a specified porson, or to bearer. (2) An instrument which does not comply with these conditions, or which orders any act to be done In action to the payment of money, is not a bill of exchange. (2) An order to pay out of a particular fund is not unconditional within the meaning of this section, but an unqualified ‘order to pay, coupled with (a) an indication of @ particular fund out of which the drawee is to reimburse himselt for a particular account to be debited with the amount, or (6) a statoment of the transaction which gives rise to the bill, is unconditional. (4) A Bill is not invalid by reason: a) that It is not dated; {©) that it does not specity the value given, or that any value has been given therefore; (c} that it does not specity the place where it Is drawn or ihe place payable. Essentials of a bill of exchange. The expression ‘bill of exchange’ as dotined in the Stamp Act contains two parts; firstly It means a bill of exchange 1s defined by the Negotiable Instruments Act 1881 and secondly it includes certain other instruments which may not fall within the definition as laid down by the Negotiable Act. “The essential of a bill of exchange under the negotiable Instrument Act, are as follows: 4, There must be an instrument in writing ‘The instrument must be signed by the maker: ‘The instrument must be one which contains’ an order; ‘The order must be an unconditional one; ‘Tho order must be for the payment of money: The order must not be for anything else; ‘The person ordered must be certain; ‘The money must be payable to a certain person or to his order or to bearer. 3, Letter of credit. A lettor of credit is not-a bill of exchange as defined in sub-section (2) but by virtue of the special provision in sub-section {8) itis bil of exchange payable on demand for purposes of the Stamp Act. (S.2 (3) Stamp Act). {@) “bill of exchange payable on demand” includes {a) an order for the payment of any sum of money by a bill of exchange or promissory note, or for the delivery of any bill of exchange or promissory note in satisfaction of any sum of money, or for the payment of any sum of money out of any particular fund which may or may not be available, or upon any condition for contingeney which may or may not be performed or happen; (b) an order for the payment of any sum of money weekly, monthly or at any other stated periods; and (e) a loiter of credit, that is to say, any Instrument by which ene person authorises another to give credit to the persen in whose favour it is drawn;(4) “bill of lading” includes a “through bill of lading,” but does not Include # mate’ COMMENTS: rocelpt; Bill of lading. “Bill of lading” means a document signed by the ship owner or by the - master or any other agent of the ship ownor which states that certain specified goods have boon shipped upon a particular ship, and which purports to set out the terms fon which the goods have been delivered to and received by the ship. (54 LJ. Q.B, 156) Bill of lading is usually drawn in a set of three. One copy is meant for use by the Captain of the ship and other Is transmitted to the consignee and the third is retained by the consignor. Possession of the bill of lading Is the possession cl goods. As such it is symbol of the right to property in the goods specified tharein, (52 Li. Q.B, 481) Abill of lading is not transferable when the payment is to be received under a letter of credit for the purpose of collecting the price. (AIR 1959 Cal. 328) (5) “bond” Includes — (2) any instrument whereby a person obliges himself to pay money to another, on condition that the obligation ‘shall be vold If a specified act ts performed, or Is not performed, as the case may bs (b) any Instrument attested by a witness and not payable to ordor or bearer, whereby a person obliges himself to pay money to another ; and (©) any instrument so attested, whereby a person obliges himsolt to deliver grain or other agricultural produce to another; COMMENTS 1, Pre-roquisits of bond : ‘The following are the pre-requisits of a bond (2) the instrument must be one by which a person undertakes to do something ; {b) the thing to be done must be payment of money or the delivery of grain orother agricultural produce, but the instrument need not be for a definite sum of money; (c)' a bond to pay money must be of one of two types, namely (it must contain a condition of deteasance as described in clause (a) S. 2.5 or (ii) it must be attested by a witness and must not be payable to order or bearer ; (a) a bond to doliver grain oF other agricultural produce must ba attested by a witness, ‘The definition in the Stamp Act covers both the single bond or the double or the conditional bond of the English Law. ‘This definition, however, is not exhaustive, as the word includes" shows, and may cover instruments which may not fall strictly in the definition e.g., an agreement containing a simple obligation to pay money may be a ‘bond’ though not attested. (AIR 1941 All, 243 + AIR 1940 Nag. 240). The distinction between an obligation under a bond and an obligation under an ordinary contract is that breach of an obligation under a bond does not, to use a legal expression, sound in damages whereas ‘damages’ is what one who breaks an ordinary contract is subjected to. (AIR 1916 Low Bur. 100 (104) ). Where instrument contained agreement that executant would pay certain amount to his pleader, In addition to what ho had already paid himif case ended successfully but that itt falls, he would pay nathing, hold, that this was “vond! under clause (@), (1870 Pun Re. No. €2 p. 209 (210) 0.8.) Where A owes money to B on some promissory notes. A and B enter Into an agreement under which A promises to pay a certain sum of money to B and the latter promises not to sue on the promissory notes in lieu of which the agreement Is entered Into. The agreement Is not a conditional ‘bond’ under clause (a). (5 Low Bur Rul 102 (106) F.8) ‘An agreement to do or forbear from doing a certain act with a penal clause providing for the payment of a certain sum of money on breach of the agreement is liable to be stamped not as bond but as an agreement. (AIR 1927 Nag. 72) 2. Simple money bonds — Clause (b) In case of simple money bond under clause (b) the document must be one by which a person obliges himself to pay money to another. The important word in this definition Is the word ‘oblige’ and no document can be a bond within it unless 3itis one which itself creates an obligation to pay money. (22 Cal. 787). A police constable who was ollered traning as ctiver of police lorries executed a document stating What he was bound to the Goenmont in a sum of Rs. 200. I from tie date of competion of his training remained for three years io Ne police 1a aoa was to be void other wise tt was to romain in full force and effoct. Hel, that the document exeested AY the police constable wes a bond under the above clause. (United Previnces Board's order in tle No 473(18)—letter No. 735) dt. Feb. 24, 1927). 3. Agr ment and bond distinguished. 2. understand that point erred to.me for opinion is whether the document dated 12th June 1935 on the Tl is & nero agreement requiring stamp as such or whether it afso a bond which requires to be stamped as a bond under Art 15-ef the 1st Schedule of the Stamp Act. 3, inmy opinion the document is a simple Kabala or agreement forthe sale and purchase ofa share in immeveable property and that it has been correctly stamped with a stamp of Re 1/ 44, tis aprinelpte of law that inorder to ascertain the nature of an instrument for the purpose of determining the slam uty to which ffs lable the Instrument must be read as a whole and the purpose ol the instrument must be gathered from the reading thereo! as a whole. It is not permissible to Foot out portions of the instrument, to read such portions: tapat trom thelr Context and conetrve them ino instruments ofa nature cfferent from that which the entire instrument wintended to be. I this was permissible then every kabala for the sale of immovable property attested by a witness ‘would contain a bond: for every such Kabala provides that a specitied sum which is the purchase money Is to be paid Ia specilied manner alter a specified ma, Such a clause answers the definition of "bond" in section 2 (8) (©) of the Stamp Act. 5. Inthe present case itis sought to root aut of the instrument which is an agreement for the Sale of share in immovable property that portion in it which contains the provisian for the payment of the purchase price and to style this @ Bond. Sub clause (1) and (2) of paragraph 1 of the instrument appearing al page 3 thereo! contain merely one of the termes of the agreement spectying the particular made in which the purchase money in the transaction je to be paid by the vendee to the vendor. Its immediately followed by paragraph 2 which provides that on payment of the purchase money in that manner the sala will be completed by the execution of proper conveyance, 6. A bond has to be distinguished from an obligation under a contract. The distinction is clear. The remedy for the breach of the terms of a bond is the recovery of the amount of:the bond, The remedy for the breach of term inthe contract is damages. As has been stated by a learned avihor “the distinction between a bond and an obligation under an ordinary contract Is that a breach of an obligation under a bond does not “sound In damages is what one who breaks an ordinary contract Is subjected to, 7. The tact in the present case would be this : If there was a breach in respect of sub clauses (1) and (2) of paragraph 1 of the agreement on the part of vendee could the vendor sue the vendee forthe amount of Fis. 26000/- under ini instrument, The answer Is emphatically no. Ifthe vendee committed such a breach the only remedy of the Vendor would be a sult for specific performance of the contract as a whole anda claimtor damages is the alternative, By no manner of means would the vendor succead in a suit on the so-called bond. 8. Itmaybe argued that penal clause is contained in sub clause (2) of paragraph 1 of the agreement under consideration Which ig attested. There is clear authority that agreements with penal clauses are not bonds even if attesied vide Gisborne & Co., Vs Subal Bowrie |, L. R. 8 Cal 284 and in the matter of Gajrasing |. L. R. 9 All. $85 (FB) {am therefore of opinion that the instrument in this ease has been correctly stamped and no question of fine arises. (Opinion of the Government Pieader, Karachi No. 513 dated 6th July 1936 to the Revenue Commissioner for Sind). 4, Suttas for delivery of cotton or indigo-Attestation. [A sutta attested by @ witness and executed for the detivery of cotton on a certain day, is a “bond” within the meaning ‘of section 2 (4) of the Stamp Act, 1879, and, as such, Is liabie to stamp duty. The transfer of a sutta of the above description fea transior Under Anicie 60 (b). As regards indigo suttas, the form in which they are said to be drawn would constitute them bonds under the Stamp Act unless unattested. If unattested an indigo sutta would be covenant with a penalty attached i.e. an agreement fo deliver a certain quantity of Indigo, and in the event of non-delivary to pay damages. (G.1, Resolution No, 6509 dated Sth December, 1887). (6) “chargoable” means, as applied to an instrument executed or first executed after the commencement of 4thls Act, chargeable under this Act and, as applied to any other instrument, chargeable under the ain force akistan when such instrument was execcted or, where several persons executed the tea lifferent times, first execute: Bevnene execuled the Jesiteuinent at @) "cheque * means a bill of exchange drawn on a specified banker and not expressed to be pa . otherwise than on demand : a (8) Repeated by A.0. 1937. (8) "District Officer (Revenue) means the District Officer (Revenue) of a District. 2. ‘Through out Chapter Ill, for the word " Revenue” shall be substituted. ‘ollector", the words “Chief Inspector of Stamps, Board of 3, __ Through out Chapter Iv, for the word "Collector", the words "District Officer (Revenue) or Chief Inspector of Stamps, Board of Revenue” shall be substitued. 4. _|_In sections 61 and 73, for the word "Collector", the words “Chief Inspector of Stamps, Board of Revenue" shall be substituted. ~ 5. __Inother Chapters, for the word "Collector" ‘of Stamps" shall be substituted. the words * istrict Officer (Revenue) or Chief Inspector COMMENTS: 1. Investment of powers of Assistant Collector to certain officers: ()_ In exercise of the powers conferred by Sub-Section (2) & (9) of Section 16 of the Sindh Land Revenue Act 1967, the Board of Revenue Singh is pleased to confer the powers of Assistant Callector Grade-1 under the said Act on the followings Inspectors of Stamps of Board of Revenue Sindh, for the purpose of recovery of Stamp Duty/dues as arrears of Land Revenue under the said Act. Such powers are to be exercised by thern subject fo the control of the Collector concemed from the date of issue af this notilicatios 1. Mr. Gul Hassan Chandio, Inspector of Stamps, Larkana Circle 2. Mr. Salahuddin Sang, inspector of Stamps, Hyderabad Circle, 3. Mr, Ghulam Abbas Shah, Inspector of Stamps, Sukkur Circle. * (vide Board of Revenue, Sindh Notification No. 27-12-1995-Estt:lV, dated 28-11-1995) (i) In exercise of the powers vested under Section-16, Sub-Section (2) & (9) of the Sindh Land Revenue Act, 1967, as amended by Sindh Law (Amendment) Ordinance, 2001 (Sindh Ordinance No.XXXVI of 2001) issued on 28-11-2001, the Senior Member, Board of Revenue, Sindh is pleased to confer the powers of Assistant District Officer (Revenue) of the first grada on the following Assistant Chief Inspectors of Stamps Board of Revenue Sindh, for the Purpose of Recovery of Stamp Duty/dues as arrears of Land Revenue under the said Act. Such powers to be exercised by them are subject to the control of the District Officer (Revenue) conceme: 1. Mr. Fazal Ahmed Khan, Assistant Chief Inspector of Stamps, Board of Revenue. 2. Mr. Suhail Ahmed Khan, Assistant Chief Inspector of Stamps, Board of Revenue. 3. Mr. Abdul Jabbar Jalbani, Assisiant Chief Inspector of Stamps, Board of Revenue, (Vide Board of Revenue, Sindh Notification No, 27-12-1995-EsttlV, dated 19-02-2003) 2. The Collector has got specified duties to perform under the various se under: S. 16 to endorse denoting duty, 8. 18 (2) to receive foreign documents and to send them under rule 12(2) tothe proper officer to be stamped with special adhesive stamps. Ss. 31 and 32. to adjudicate and to certily as to stamps. Ss 40, 41 and 42 to deal with impounded and voluntarily brought instruments. Ss. 43 and 70 to sanction prosecutions for offences under the Stamp Act. S. 48 to recover duties and penalties. $s. 49 and 52 to 55 to make allowances for spoilt stamps. S. 56 to make references to the Chief Revenue authority. 8. 81 to apply for ravision. S. 73 to authorize any person to inspect books etc. to secure stamp duly, ns of the Act and they are as (10)"conveyance” includes a conveyance on sale and every instrument by which property, whether © movabie or immovable, Is transferred inter vivos and which is not otherwise specifically provided for by ‘Schedule |:COMMENTS: 1, Trade Mark. Trade-mark is property and an agreement to sell a trade-mark is liable to ad valorem stamp duty as @ conveyance on sale. (1898 OB 356 (359) : 65 LJQB 657) ‘Share in @ patent and a sole licence to use Ina particular area, the Invention protected by the patent are property ‘and an agreement for the sale of such a share or licence. is lable to stamp duty as a conveyance on sale (1897-18 175 (180, 184). 2. Assignment of contracts. Inctrument assigning the benefit of a contract amounts to a conveyance. ((07}9 Bom LR 119 (124), 122). 3. Company cases. Where by deed of “apport” executed in France, property in France, transferred by one English company to another English company, consideration for transter being shares of laitor company to be Issued and delivered to former company in England, Insitumant held conveyance on sale. (77 LJ. KB 55). Where share holders of A company then in course of being voluntarily wound up entered into agreement in writing with B company that shareholders of A company should respectively exchange their shares in A company for shares in B company, and upon B company allotting to them shares to which they were respectively entilad they should thenceforth hold their fespective shares in A company in trust for 8 Company. Agreement held amounted to conveyance on sale to B comapny of equitabie interest In shares of A company ( (1899) 1899-2 QB7 (12,13) : 68 LJ QB 204), Where consideration for transfer of whole undertaking of one railway company to another raliway company consisted ‘of purchasing company taking on itself labilties of vendors andcreating and allolting to shares-holder of selling company preference ‘stock of purchasing company, Deed held conveyance on sale. ( (1864) 39 LJ Ex. 173 (176)+1 WR (Eng.) 10). ‘An agreement between old bank and its liquidators and new bank that former should transfer all its property and effects to new bank consideration baing that new bank should discharge all debts and liabilities of old bank, anc that every member ff old bank should, in respect of oach share held oy him in old bank be entitled to claim allotment of one share of equal value in new bank, — By deed old company and its liquidators transferred its Immovable property to new company at agreed value. Deed held conveyance on sale. { ('96) 20 Bom. 432 (434, 435) FB). A conveyance to the company, of property which Is the property of the share-holders in their individual capacity Is ust ‘as much a conveyance as if the share-holders were totaly oifferent persons. (1894-1 QB 516). Where a share-holder exchanges his shares with another the transaction may amount to a transfer by way of exchange or conveyance, (AIR 1937 Mad. 259 (260, 261) } Where 200 shares were allotted in consideration of writen agreement as regards transfer of business. Company submitted retutn as to atottment accompanied by agreement which formed consideration for allotment of 200 shares. Such an agreement held not conveyance, (AIR 1934 Lah. 533 (594) : 15 Lah. 509 (SB). ‘An agreement to transfer property in the future cannot be treated as a “conveyance” (AIR 1934 Lah. 530 (632) : 15 Lah, 501 (SB) + AIR 1937 Mad. 269 (260) : ILR (1937) Mad. 259 (FB) Contract constituting title of allottes not in writing. Under S, 104(2) of the Companies Act (1913) Prescribed particulars ‘of such contract mustbe filed and these particulars must Dear the same stamp duty which would have been payable ithe contract had been reduced to wilting. (AIR 1959 All §95 (597) ILR (1959) 1 All 652 (SB). 4, Release deed between co-owners. Benamal transaction ‘Aninstrument whereby a benamidar sustains and declarés the interest of the real owner and put such intention in writing land styles it as a reloase deed, it can only be interpreted and understood as release deed, pure and simple and cannot be a conveyance a¢ i is popuiarly understood. I na given case itis proved that a transaction is benami transaction and satistios the well-known test which revolve round such transaction, it Is a document whereby the benamidar concedes and accedes to the title of the real owner and it ean altract duly only as a release deed and not asa conveyance. {AIR 1978 Mad. 242, AIR 1975 Mad. 161) 6A court is not empowered 10 go behind the recitals and terms of the document betora it and hold that the object of the transaction is something different trom what the document discloses. (AIR 1977 Mad. 10). ‘A release by one co-owner of his interest in his share In the property in favour of other co-owners, Is not a conveyance and does not fall under Art 19, Sch, 1A, when ihere Is no division of property by metes and bounds, (AIR 1955 Mad, 641 (642) + ILR (1955) Mad. 1133 (FB) (32 Bom. 505 (FB). 5. Deed of dissolution of partnership. In case of dissolution of a firm having two pariners, one partner paying cortain amount tothe other his amount of capital alongwith his share of income upto the date of dissolution of the firm and also paying certain other amount being half share ofthe value of goodwill ofthe firm, the document in substance heldtobe one of dissolution of partnership and not ono of conveyance except that portion of agreement relating to payment in respect of goodwill (AIR 1972, Pat. 277) 6. Stamp duty-When payable. Stamp duty is payable on an instrument and not on the transaction which is embodied in the instrument, as such in the case of verbal transfer no stamp duty is required. (AIR 1945 Mad. 138 Also see PLD 1977 S,0, 644) 7. Partnership—Transter of share. Partner, on dissolution of partnership, transterting by instrument his share in partnership to stranger with whom continuing Partner might be disposed to enter into partnership. Instrument will amount to conveyance on sale. (1967) 2 Ex. 46 (50,59) {i1) “duly stamped”, as applied to an instrument, means that the Instrument bears an adhesive or impressed stamp of not less than the proper amount and that such’ stamp has been affixed or used in accordance with the law tor the time being in force In Pakistan; COMMENTS 1. Scope. Proper amount of stamp duty required for an instrument has to be determined in accordance with the Actin force at the time of execution or first execution of the instrument and not atthe time when the document is tendered in evidence. The Words “the law for the time being in force" refer to the Act under which the instrument Is chargeable under section 2(6): (('82) 5 Mad. 384 (996) (FB)+1885 Pun Re No. 7 p. 10 (10)) 2, Duly stamped. Where adhesive stanips have been alfixad to the instrument of transfer but they have not been cancelled, the instruments are not ‘duly stamped” and the company is justified in refusing registration of the shares concerned (AIR 1961 Cai. 526). But where promissory note was written on impressed sheet and another blank imprassed sheet attached to it lo make Lup deficiency in stamp. Promissory note held inadmissible in evidence as not being duly stamped, (AIR 1914 Mad. 358 (359). 3. An instrument is duly stamped — (1) When it is written on a stamped paper of the amount required by the law or bears a stamp of the amount required by the law and_is stamped in the manner required by the law Le, the Act and tho rules made therourider (vide sections 9, 4, 5, 8, 20 10 26, and 28 and the articles in the Schedule) ~ \ (2) When the stamp is of the proper description (Sections 10 and 11) (2) When the stamp is duly cancelled (section 12), (4) When the instrument is written in accordance with the provisions of sections 13 and 14, © When it is stamped at the proper time (sections 17, 18 and 19) (6) When two or more impressed sheets are used and written as provided in rule 7 of the United Provinces Stamp Rules, 1942, (Ret, 23 All, 213), 4, The omission of a stamp vendor to endorse on stamped paper particulars required by the rules would not render 7to Vv {(b) stamps embossed ar engraved on stamped papers such property for any Civil Court and an award by an arbitrator directing a partition; a document not duly stamped. (Ref. 11 Mad., 377) 5, The certificate ofa Collector endorsed on adacument under sections 92 (9) ané 2 (2) makes 2 document uly stamped. (12) “executed and “execution”, used with reference to instruments, mean signed and “signature” 5 COMMENTS, Meaning of the word “executed” explained: “The word “executed” in sub-section (12) of section 2 of the Stamp Act af 1889 means “signed” so tha! the word used Vit le eee nSomonts inthe Stamp Act does not have the signiicance attached 10 by the Cour in case 0 16 Rory a eee no wore oxecuted must be contrued according othe mearing asigned 10 by ie Rel ang oe conog a ra ae ne es tors to an inctument Delng brought 10 he proper ocer “before tie executed” thats belore t's Senet 1 tne Siar fone iis signed by any one, Tho fula wien compared with section 17 of the Act means thal en ingcorer™ whlch near oe efore oF a the tie of "signature" so thal when several persons have to sign i must be slerped betas ee aller No, 1082, dated 26h Apri, 1924, from tne Saitor to Government, Bemay othe Superintendent. ‘Stamps, Bombay) q (13) “impressed stamp” includes — {a} labels affixed and impressed by the proper officer, and shaman ncaa ovr document wich any ato ON purports to be created, transfert Noited, SSE edinguibhed or recorded, and also includes any photograph. disk. tape, fim, ‘soundtrack. in which images, songs, Instrument oF machine in visual, audible, or readable form. Ta ree ner ala are embodied which can be reproduced, with or without the aid of samo COMMENTS instrument” leviability of stamp duty. ty is oF (aiastsument means “signed”. I, therefore, evident that only an Instrument executed or signed betwoen the 5) "instrument of porttion’ means any Instrument whereby ¢0-owners of any property divide or agree te divide severalty, end includes also a final order for effecting a partition passed by any Revenue-suthority COMMENTS Specification of the final order which will be an instrument of partition. With roferance to reference No. 241 trom the Revenue Department, dated 8th January 1917, 1 have the honour state as follows i {--Tuncerstand inat may opinion is sought on the question as to what is the final order for elfecting a partion within the meaning of section 2 (15) of the Stamp Act where partition Is brought about by @ sult — (a) in the case of an estate assessed to the payment of revenue to the Government; {0} in the case of any other immoveable property or of moveable property. In case (a) the cour, in view of section S4 and Order 20, rule 18, of the Civil Procedure Gade, can merely declare the rights of the several partes interested in the propery. It has no juriscication to effec the partition, but must direct the same 8tobe made by the Collector. | am clearly of opinion that the decree containing such declaration and direction is not a final order tor offocting a partition ‘The final orderin such a case is that of the Collector tfecting the partition, for, be it noted, this order ne: by the court, 15 no conticmation {In case (b) if the court itself effects a partition without reference to a Commissioner of Commissioners (as it often does by consent), the decree giving effect to such partition is the final order. On the other hand if the coun does not itsel effect a partition it merely passes a preliminary decree declaring the rights of the parties and issuing a Commission under Order 26, rule 13 of the Civil Procedure Code. Aller the report of the Commissioner or Commissioners has been confirmed a decree is passed giving effect to the report. Its this decree only which is the final order. (Opinion of the Hon'ble the Advocate General No. 9 dated 25th January 1917, Vide para 1 of G.O. No, 5488 dated 2nd May 1917. R.D.) FF (16) “lease” means a lease of Immovable property, and includes also — (a) @ pata; (b) a kabullyat or other undertaking In writing, not being 2 counterpart of a lease, to cultivate, occupy or pay ‘or deliver rent for, immovable property; ‘i (©) any instrument by which tolls of any description are fet ; (4) any writing on an application for a lease intended to signity that the application is granted ; COMMENTS 1, Scope. An instrument will be a tease for the purpose of the Stamp Act although it does not fall within datinition in S. 105 Transfer of Property Act, i itis covered by any of the categories mentioned in clauses (a tod) {AIR 1933 All. 735), 2. Correspondence containing lease. Correspondence containing agresment for jaase complete in itself independently of draft of lease and engrossed lease, Correspondence requires stamp as lease even though engrossed lease is properly stamped. ( ('90) 17 Cal 48 (556) A letter written by a tenant to his landlord which is nol a mere record of an antecedent transaction but which contains a binding undertaking to pay rent is a lease (AIR (1948) Bom 336 (336, 337) ILR (1948) Bom. 342 (D8), 3, Sub-lease There is nothing in the definition ofa lease of immovable property to exclude a sub-lease or under-lease, Like instruments requires stamp paper under article $5 of the Stamp Act 4. Document varing terms of lease. Alter a complete lease has been executed, stamped and registered if another document is prepared and executed with a view to alter the firs! and substitute new terms so lar as the rent is concerned, new document requires to be itselt stamped with the stamp provided for a lease ( ('78) 20 Suth WA 36 37) (DB) } §, Lease-some instances : Deeds executed either on behatt of local bosies or by contractors in respect of markets, slaughter houses, cart stands or other immovable property belonging to local bodies are leases. (('33) Mad S.M. p. 112). A document executed by lessee convenanted that he would take certain permises from lease, make certain alterations 9in promises at his own cost, pay certain amount @ month as rent and period of occupation fied as five years and provided thatif he did vacate premises within five years he would be lable for rent of five years, document held loase as well as agreement (AIR. 1939 All 724 (725), “The words ‘undertaking In writing” in clause(b) contemplate a composite agreement signed by boththe lessor andlessoe as an unilateral agreement signed by the lessee only, Where the document is covered by clause (b) as containing an undertaking to occupy oF pay rent, It will be a lease for the purpose of this Act although the lessee has no interest in the immovable property and is only a licensee. (AIR-1939 All 435. AIR 1933 All 735). 6. Lease of immovable property defined in the Transfer of Property Act = “A lease of Immovable property” has been defined in section 105, Transfer of Property Act (IV of 1882), as "2 transfer of a right fo enjoy such property, made for a certain time, express or Implied or in perpotulty, in consideration of a price paid fr promised, or of money, of a shate of crops, service, or any other thing of value to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts .the transfer on such terms “The transterar is called the lessor, the transferee is called the lessée, the price is called the premium, and the money, share, setviee or other thing to be so rendered, is called the “rent.” 7. Clause (c)— “Tolls” such as ferry, bridge, falrs, market, road, fisheries and harbour tolls. 8, Clause (d)— The word “granted” written on the margin of an application for @ tease to indicate its acceptance would constitute the document a lease, (Syed Sutdar Raza v. Amzaé All, 7 Cat., 703) 9. Where a proposal for renewal of a lease was approved in writing, it was held that the correspondence required 10 be stampad and penalty paid, before the same could be admitted in evidence. (Boyed v. Krleg, 17 Cal., 548). See proviso (c) to section 36. 40, Inalicence no interest in immovable property is ransterredtoa licenses, while in a lease sole and exclusive occupation is given to the grantee, so as to amount to a transfer of an interest in immovable property to the grantee. (Madras Board of Revenue v. South Indian Railway, 48 Mad., 368). 11. But the above ruling was dissented from and a document in identical terms though styled as a licence was construed as alease. it was an instrument purporting to be a licence by a railway company to an oll company conferring a right of temporary ‘occupation ot apiece of land or a petroleum storage installation, Itwas held that exclusive occupation was given andthe document was a lease because under the ‘Stamp Act the dofinition of lease was wider than that in the Transfer of Propeny Act. (In re Burma Shell Oil Co., 55 All., 874). 12, An agreement to fet or sub-let is chargeable as a lease even if a formal deed of lease may be in contemplation. (Ret, 17 Mad.,280). Ita formal deed of lease is executed afterwards duty on it will not exceed the duty chargeable on agreement under article 5 (d) of the schedule as amended. (See Proviso to article 35 of the said schedule), (16-8) “marketable security” means a security of such as description as to be capable of being sold in any stock market in Pakistan or in the United Kingdom ; (17) “mortgage-deed” includes every Instrument whereby, for the purpose of securing money advanced, or to be advanced, by way of loan, of an existing or future debt, or the performance of an engagement, one person transfers, ss, 10, of in favour of, another, a right over or in respect of specitied property ; COMMENTS 4. Mortgage has been defined in section 58 of the Transfer of Property Act (IV at 1882) as follows : “A mortgage is the transfer of an interest In specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future dabt, or the performance of an engagement which may give rise to a pecuniary liablity. ‘The transteror is called a mortgagor, the transferee a mortgages; the principal money and interest of which payment is secured for the time being are called the mortgage money and the instrument (if any) by which the transter is affected is called a mortgage-deed.” 10: 2. The definition In the Stamp Act 1s more extensive because : (i) it includes movable property, (i) the performance of an engagement is not limited to an engagement which may give rise to a pecuniary labitty, and (li) it includes charges. (Mulla and Pratt), 3. *Specitied property” means property, both movable, and immovable descrioed so that it may be readily recognized and identified. (Najfoulla Mulla v. Nusir Mistri, 7 Cal., 196). 4, Transfer. Tho torm "anster” provided for in tis clase isa transfer valid inlaw. To make a document liable to stamp duly as a mortgage deed, it fs not enough if the document purports to effect a transfer. It must bo a legal “wransfer" There can be ve transfer unless the requicements ot Transfer of Property Act, $.5, and Regletration Act are satisfied. (AIA 1983 Mad. 764), 5. Consent dectee-Charges created on immovable property—Property not subject of sult~Decroe nat compulsorily fegisterable. ‘An Act imposing taxation always has to be construed strictly, that is to say, the Government has to show that the tax in question Is imposed upon a fair construction of the language used, and having regard to the tact that the schedule doos not expressly refer to any decree ol a Court except a decree for partition, and to the fact that the defination ot-"morigage deed does not in term clearly include a consent decree creating charge, coupled with the fact that section 29 seems fo indicate that Such a consent decrees of this nature ar@ not lable to siamp duty. (Civil Ret. No. 7 of 1934 made by N.D. Upponi, First Class ‘Sub-Judge, Vide G.R. A.D. No. 3909/33 dated 13th July 1835). 6. An instrument was styled as 2 deed of pledge of certain machinery and plant and a right was created in favour of the custodian : held, that the deed was a mortgage-deed within the meaning of this sub-section, [United Provinces Board's order in file no. 179 (16), letter no. 20SS/V.S., dated September 8, 1924] 7. A cartain mil appointed two men as its selling representatives for certain city, The latter deposited a secutily of upees one lakh for the performance of the terms of the contract, Held, that the document was neither an indemnity bond nor a security bond but a mortgage. Duty was chargeable as on a mortgage deed with possession. [United Provinces Board's order in fle no. 173 (24), Si.. 192). (18) “paper” includes vellum, parchment or any other material on which an instrument may be written ; (19) “policy of insurance” includes— (a) any Instrument by which one person, In considaration of a premium, engages to indemnify another against loss, damage or liability arising from an unknown or contingent event ; (b) a life policy, and any policy insuring any perspn against accident or’sickness, and any other personal insurances COMMENTS 1. Meaning of insuranes Insurance is a contract by which a person, company or society, in consideration of a gross sum or of a periodical payment undertakes to pay a large sum on the happening of a particular event, The consideration is termed the premium or premiums : the party enlering into the undertaking, the assurer or insurer ; the party for whose bene itis entered into the assured or Insured; the happening of the event, the risk ; and the instrument containing the contract, the palicy. (Merchantile Law by Smith). 2. Policy of insurance. A policy of insurance is the formal document embodying a contract of insurance. (AIR 1944 Sind 98102), ILR (1943) + Kar 491 (1925) 1925 App Cas639 (642): 94 JKB 712). A contract of insurance must be a contract for the payment of a sum of money, or for some corresponding benefit 10 necome due onthe happening ofan evant, which event must have some amount ol unce:taiaty about it, and must e 08 «vera Feo ee pethe interest ofthe person effecting the insurance [(1908) 1904-2 KB 658 (663,664) 73 LIKB 734) 3, Policy of Insurance and promissory note. + poliey of life insurance though it guarantees the payment of a certain sum of money, nol a grarieey note as st objects nor to merely eanvey sucha promise but to embody a contract containing several stipulation of a complex nature (154 ER 1127) (20) “policy of sea-insurance” or “sea-policy” {6} means any insurance made upon any ship or vessel (whether for marine or inland navigation), or upon ite machinery, tackle or furniture of any ship ot vessel, er upon any goods, merchandise of property of Any, description Faerie sa‘woard of any ship of Vessel, or upon the freight of, or any other interest which may be lawfully insured in, or relating to, any ship or vessel; and . (b) includes any insurance of goods, merchandise or property for any transit whieh Includes, not only 8 sea risk within the meaning of clause (a), but also any other risk incidental to the transit insured {rom the commencement tf the transit to the ultimate destination covered by the insurance ; ‘Where any person, in consideration of any sum of money pald or to be paid for additional ireight or etherwise, agrees to lake upon himself any risk attending goods, merchandise or property of any description whatever while on panne of any ship or-vessel, or engages to indemnity the owner of any such goods, merchandise or property from eny Fisk, loss or damage, such agreement or engagement shall be deemed to be @ contract for sea-insurance ; COMMENTS Certificate of marine insurance. ‘A contificate of marine insurance has been held to be a ‘policy of sea-insurance’, [19 Bom 130 (FB) } It mentions the sum for which the assurer declares the name of the ship, the voyage and the premium, and provides for the losses being paid on its production in confarmily with certain conditions in the possessions of the assurers, and lastly. it expressly guarantees the payment of losses and claims settled under i. The document on the face of ts does not contemplate the nocestily of any other document of a mare formal character being passed to the assured, and read wih the conditions to linich i raters, # clearly the instrument upon which the assured is intended to entorce his claim. It is, therefore, a document by which the parties executing engage to indomnity against losses arising from an unknown or contingent event [ 14 OB Rep NS 452 } (21) “power-ot-attorney” includes any instrument (not chargeable with @ fee uhder the law relating to court. fees for the time being in force) empowering a specified person to act for and in the name of the person executing it COMMENTS 1, Power of attorney. Power of attomey is detined by Strouds” as an authority whereby one is set in ture, stead or place of anather to act {or him. “Wharton in Law Lexicon, defines the expression as under > ‘A wrting usually but not always necessarily, under seal authorising another person, who is called the attorney of the person appainting him, to do any lawtu! act inthe stead of another, as to give seisin of lands, receive debis or sue a third person” 2. General power of attorney. Apower-of-atlorney authorising the agent to act goneraly or in more than one transactions is known as a general power: of-attorney. [AIR 1916 Mad 601 (603) : 38 Mad 134 (DB)}. A power of attorney will not cease to be one merely because it authorises the agent te remunerate himsell from the moneys he is asked to collect, [7 Bom H CR (AC) 10(17)} (22) “promissory note” means a pro issory note as defined by the Negotiable Instruments Act, 1881 ; 12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 oF may not be performed or happen ; COMMENTS 1. As detined by the Negotiable Instruments Act, @ “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, of to the order of, a certain person, or to the bearer of the instrument. [ Section 4, Negotiable instruments Act (XXVI of 1861). 2, Promissory note— Essential requisits ‘An instrument which contains merely a bare promise to pay money Is a promissory note. A statement of the consideration for the promise Is not detarmental to the character of an instrument as a promissory note. Such a statement does not affect ‘ts essential character as the the vehicle of a simple promise to pay. But whether what is stated is only the consideration or something more and whether itis such as to affect the essential character of the instrument must be determined on the language of each instrument and the facts and citcumstances of the case, The test in each case is to see what is the dominant and the substantial effect of the instrument. Whore the instrument ran :- “For my own nged (that is 10 say as price of 6,000 baskets) | borrow from you a sum of RS. 19,750 on condition of repayment on demand *. Held, to be a promissory note. An unconditional acknowledgement of debt is not a feature foreign to the structure of a promissory note, for such acknowledgement implies a promise to pay. { PLO 1956 Dacea 14 ] ‘The essentials of promissory note are = 1. It must contain an agreement for the payment of money. ‘The agreement must amount to an undertaking or promise, Subject to the provisions of the second paragraph of this sub-section the undertaking must be unconditional “Tho agreement: must be for the payment of money and money only The sum payable must be certain The instrument must be signed by the maker of the instrument. The money must be payable to or to the order of a certain person or to the bearer of the instrument ‘The instrument must not be a bank-note or currency note, . Test of promissory note. To determine that whethor a document is a promissory note is to be seen as to what is the dominent, the substantial effect of the instrument, For this purpose two tests are applicable ; 1. Is the intention of the parties that the instrument should be a promissory note ? and 2. Is the document a promissory note, in the common acceptation of the term by businessmen ? {AIR 333 Mad 306} 3. The promise to pay will nat be conditional when It is made dependent upon an event which is certain to happen al some time or other e.g., on the death of a certain person, or twelve months after notice or on the 1st January when a particular individual comes of age. 4. The sum payable must be money only. je. specie or other legal currency. It will not become uncertain itt includes future interest or is payable at an indicated rate of exchange or in instalments, and even it there is 2 provision that on default of payment of aa instalment the balance unpaid shall become due. { Section 5, Negotiable Instruments Act (XXVI of 1881) ]} = 5. “Certain person” means the person to whom itis clear that payment designated by description only : to be made although he is misnamed or 6. “Promissory notes” are meant to include documents, the contents of which consist substantially of a promise to pay a delinte sum of money and of nothing else, (am Singh v. Perumal, 92 |. C., 582). 7. Adocument which contains a promise to pay money and a certain quantity of grain is not a promissory note, (Mutt ~ Chetti v. Muttan Chett, 4 Mad., 296), 8. Adocument is a promissory note if, elther from express words or by necessary implication, a promise to pay money ‘can be gathered, (Muthurabilic v. Daipat, 3 Bom. L. F., 839). 139. An instrument whereby the promisor undertakes to pay * maarfat” another person Is a promissory note. (Malaram ¥. Brij Lal, 54 1. C., 976). 10. The promise to pay must to definite in its terms. (Carter v Agra Savings Bank, 5 All, 562). 14. Apromissory note, in which no time for payment is spacitied is payable on demand, [Section 19, Negotiable Instruments ‘Act (XVI of 1881). 42. The expressions “Al sight", “on presentment" mean ‘on demand” {Section 21, Negotiable Instruments Act (XXVI of 1881). 13. An acknowledgement of debt with stipulation to pay inte 1991 A. Lt, 230). is not a promissory note, (Ratan Singh v. Pirbhu Dayal. Punjab Amendment: 1122 A) “Public Office” includes a Government Office, a People’s Local Council, a Local Authority, A Statutory Corporation or a similar body set up by the Central or Provincial Government, commercial or industrial concern wheiher singly owned or run through partnership having more than twenty employees, a body registered under the Companies Act, 1913 and a Co-operative Society; (22 B) “Public Officer” includes an Officer-in-Charge of a Public Office, (Pb. Amendment Act, XXVI of 1973] N.W.F.P, Amendment: "{(22-A)‘Public officer’ Includes the Officer-In-charge of a Government Office, or any office of a Local Council a Local Authority, a Satutory Corporation or a similar body sel up by the Federal or Provincial Government a Commercial ‘or Industrial concern, whether singly owned or run through partnership having more than twenty employees, 3 body registered under the Companies Act, 1913, or a Cooperative Society). [Inst. by N.W.F.P. Act, Vil of 1977)" a7 Sindh Amendment: (22-A) ‘Public office’ includes @ Government Office or a Local Couneit, a Local Authority, a statutory corporation or a similar body set up by the Federal or Provincial Government or a commercial et0, whether singly owned or tun through partnership, @ body registered under the Company Law for the time being in force or a banking company as defined in the Banking Companies (Recovery of Loans, Advances, Credit and Finances) Act, 1997 or a co-operative society; (22-8) Public officer’ includes an Officer-in-charge of a public office. [The Stamp (Sindh Amendment) Act Vil of 1985}. (23) “receipt” includes any note, memorandum or writing— (a) whereby any money, oranybill of exchange, cheque or promissory noteis acknowledged to have been received, or aaa poco ea asaaeeeceeee eae {b) whereby any other movable property is acknowledged to have been received in satisfaction of @ debt, or (c) whereby any debt or demand, or any part of a debt or demand, Is acknowledged to have been satisfied or discharged, or (d) which signifies or Imports any such acknowledgment, name of any person; 1nd whether the same is or is not signed with the COMMENTS Pay Sipe if Issued In form of receipts llable to stamp duty like receipts, + in my opinion the receipts issued by the Karachi Municipality should be stamped for they are in form and in fact receipts. Iie open to the Karachi Municipality in cases where thay are paid by pay slips merely to deliver a statement of the taxes in respect of which payment Is made, but if that statement is in the form of a receipt, i! must be stamped. ‘A pay slip though it may be treated as negotiable is not a bill of exchange, cheque or promissory note, consequently it A gives B @ pay slip on a Bank in discharge of a dobt due by A 10 B, B nocd not give a duly stamped receipt for the same to A. If however B does give a raceipl to A such rocaipt must be stamped having regard to the provisions of section 2 (23) (c/o the Stamp Act, I! of 1899. (Opinion expressed by the Advocate General, Bombay, in the letter No. 21, dated 22nd March 1915, on a reference made by the Superintendent of Stamps, Karachi, in lettor No. 2531, dated 16 November 1914.) 14(24) “settloment” means any non-testamentary disposition, In writing, of movable or immovable property made— {8) In consideration of marriage; s (b) for the purpose of distributing property of the settler among his family or tligse for whom he desires to provide, or for the purpose of providing for some person dependant on him, or (©) for any religious or charitable purpose; and Includes an agreement In writing to make such a disposition and, where any such disposition has not been made inwriting, any instrument recording, whether by way of declaration of trust or otherwise, the terms of any stich disposition; and COMMENTS 1. Non-testamentary disposition—A disposition of property Intendedto take effect during thellile-time of thedisposer |g not testamentary and an Instrument recording the same falls within the definition of a settlement. (United Provinces Board's letter no, 628NV.S.—99, dated July 4, 1882, to Commissioner of Stamps, United Provinces). 2 The reservation of a life Interest does not of itself suffice to make the document testamentary. (Rajammal v. Ruthiammal, 33 Mad, 304), 3. Clause (2)— This will include deeds of dower as well as marriago soitloments. (U. P. Stamp Manual, 1945), 4, Clause (b}~ This will Include a family settlement ae well as a settlement in favour of one person. (U. P. Stamp Manual, 1945), 5. _ An instrument whereby a life interest In land In created in favour of the donee with reversion te the donor and his heirs is a settlement, (Ref. 21 Mad., 422). 6. ° Rassigned some land to a widow to be enjoyed by her during her tife timo, and also promised to pay her Rs. 78 a year for maintenance. Held, that the deed was chargeable with duty as a settlement. (United Provinces Board's order in file no, 69 (18, SL. 23]. 7. Swhile proceeding on pligrimage and Intending to devote himself to a religious life made ovar all his property to,his minor son under the guardianship of his mother, Held, that the deod was a settlement. [United Provinces Board's order in filo no, 141 (16), lottor no. 524/V.S., dated March 14, 1925]. 8. Clause (c)— “Waki” created by Musaimans, under the Musalman Wakf Validation Act, should be treated as a settlement for the purpose of stamp duty. [Circular endorsement no. 6/V.S.—173(8), dated August 12/13, 1916]. 9. Certain properties were to be devoted for charitable purposes and the deed was to have Immediate offect. It was stipulated that the executant would manage the propertles during his life-time as a trustee and not as.a proprictor. Held, that there was a disposition of property for charitable purposes and as such the instrument was a settlement [United Provinces Board's order in file no. 173(25), Sle 25}. 10, “Includes an agreement in writing”— If a formal deed Is subsequently drawn up and executed In pursuance of the agreement, the duty on the latter instrument shall not exceed four rupees (vide proviso to article 58 of the schedule as amended). 11, “Recording,” Le., recording the oral settlement already mad 12, Settlement and conveyance— A transfer of lan¢, In pursuance of a compromise of a widow's sult formaintenance is a convenyance, as the consideration was other than that specifically mentioned above. (Ref, 21 Mad., 422), 13. Settlement and gift— if the primary object of an instrument Is to make an unqualified and absolute git, It is a gift, but if the object Is to make provision for the donee it Is a settlement. (Ref. 7 Mad., 350). 14, Settlement and wili— If an instrument is Intended to have Immediate operation it Is a settlement, but if it is to 1d Into effect after the death of the executor, it Is a will. (Ref. 20 Bom., 210). 15. If the document is not revokable it is not a will, but a settlement, (Rajamnial v Authiammal, 33 Mad., 304) 16, Settlement and trust— Section 3 of the Trusts Act (Il of 1882) runs as follows: 15« A trust isan obtigation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the bensfit of another, or of another and the owner. 17. Article 64 of the schedule as amended provides for a declaration of trust. 48, A large number of instruments styled as Trust deeds ate covered by the definition of settlement. The words "By way of declaration of trust” were added by Act XV of 1904 to provent evasion of stamp duty by recording thot there had been an oral disposition of property. 149, Ithas been held, that even where thera has been an oral disposition priorthe Act of 1904 article $8 of the schedule would apply to the deed. (Jnve. Mansukhram, 7 Bom. L. R., 931). 20. _Saitlement not trust — A person transferred certain properties to the Board of Trustees and recorded that he ‘would not be able to look after the trust personally. It was held to be a transfer of property for religious and charitable purposes and as such a settlement. [United Provinces Board's order in file no, 173(24), sis. 138 and 148}. 21. Aperson executed a deed of waqt perpetuating the memory of his deceased father and provided for free medical treatment for the poor. Certain bye-laws framed for the management of the institution were also incorporated in the deed. The Collector agreeing with the Sub-Registrar was of opinion that portion of the document was chargeable as Articles of Association of a Company under artiela 10 of the schedule. Held, that article 10 applied to bye-laws under the Companies Act. The bye-laws Incorporated inthe settlement were anciliary to themain transaction andhadno reference to any company. [ United Provinces Board's order in file no. 173(29)/24,S1.4}.* 22. A person created a trust in order to pay off his debts and appointed trustees to manage his property. After tho debts were cleared off the properties were not to revert to the executant himself but to his son subject to the payment ‘of Guzaras to eertaln persons mentioned In the docd. The executant also allowed his second wife to adopt a son if necessary. Held, that the document was a seitloment as well as an adoption deed. (Section 5 of Stamp Act and 20 Bom., 210 followed). [United Provinces Boord's order in file no. 173(25), sl. 6]. 23. Settlement not raleaso — A deed styled as # deed of release recorded that the executant had already crested a trust of his properties for charitable purposes and by virtue of this deed relinquished all the claims to those properties. Held, that the decument was a deed of sottloment as recording tha terms of the previous disposition. It fell within the definition of settlement under section 2 (24) and not under article $5 of the schedule which provided for a releas {United Provinces Board's order In file 173(25),81, 7A). (25) “soldier” includes any person below the rank of non-commissioned officer who is enrolled under the Indian Army Act, 1911 or the Pakistan Army Act, 1952. 16CHAPTER il STAMP-DUTIES A= Of the Liability of instruments to Duty YB: instruments chargeablewith duty: Subjectto the provisions ofthis Actandthe exemptions contalnedin Schedule “Hf following instruments shall be chargeable with duty of the amount indicated In that schedule ae the proper duly therefore respectively, that Is to say— (a) every Instrument mentioned in that Schedule which, not having b is executed in Pakisten on or after the first day of July, 1899; n previously executed by any person, {b) every bill of exchange payable otherwise than on demand or promissory note drawn or made out of Pakistan on oratter that day and accepted or pald, or presented for acceptance or payment or endorsed, transterred or otherwise negotiated, in Pakistan; and : (c) avery Instrument other than a bill of exchange or promissory note mentioned in that Schedule, which, not having been previously executed by any person, Is executed out of Pakistan on or after that day, relates to any property situate, or to any matter or thing done or to be done, in Pakistan and is recolved in Pakistan : Provided thatino duty shall’he. chargeablé In respect of - A Cp abi Instruient executed:byyor of behalt of oF In JaVOUr efesharGovarnment:in'sases hero, but for this ‘exemption, the Government would be liable to pey the duty chargeable in respect of such instrument; (2) any instrument forthe sale, transter or otherdisposition, either absolutely, or by way of mortgage or otherwise, of any ship or vessel, or any part, Interest, share or property of or in any ship or vessel registered under the Merchant Shipping Act, 1894, of under Act XIX of 1838, or the Registration of Ships Act, 1841,as amended by subsequent Acts. COMMENTS 1. Classes of instruments : Instruments are divided into three classes a) those éxecuiad in Pakistan; {©) foreign bills of exchange or promissory notes negotiated in Pakistan; and LG at other instruments oxocuted out of Pakistan but relating to property or mates in Pakistan Tete are three dlstinet methods of stamping those Instruments under section 17, 18 and 19 of the Stamp Act 2. Proviso (1) : A comporation set up by the federal or Provincial Government can not be treated as Government and can not avail the ‘exemption from the payment of stamp duly under proviso (1) to Section 3 of the Stamp Act: “Finance Department reiterates iis inability to alow exemption fromthe payment of stamp duty chargeable onthe document) instrument executed by the Sindn Seed Corporation for obtaining loans from the State Bank, as the Sindh Seed Corporation is a comporate body established under Sindh Seed Corporation Act, 1976, and it can not be treated as Government’. (Advice tendered by the Government of Sinch, Finance Deparment in the case of Sindh Seed Corporation}, : 4, Several instruments used In single transaction of sale, morigage or settlement : (1) Where, in the case of any sale, mortgage or settlement, several instruments are employed for completing the transaction, the principal instrument only shail be chargeable with the duty prescribed In Schedule |, for the * conveyance, mortgage or setllement, and each of the other instruments shall be chargeable with a duty of four rupees Instead of the duty (if any) prescribed for It in that Schedule, 2 (2) The parties may determine for themselves which of the Instrument so employed shall, for the purposes of sub-section (1), be deemed to be the principal instrument : 7Provided that the duty chargeable on the instrument so determined shail be the highest duty wi chargeable in respect of any of the said instruments employed. 5, Instruments relating to several distinet matters : Any Instrument comprising or relating to several distinet mattes shall be chargeable with the aggregate amount of the duties with which separate Instruments, each comprising for telating to one of such matters, would be chargeable under this Act. 6. Instruments coming within several descriptions in Schedule I : Subject to the provisions of the last preceding section, an instrument 60 framed as to come within two or more of the descriptions in Schedule |, shall, where the duties chargeable thereunder are different, be chargeable only with the highest of such duties : Provided that nothing contained in this Act shall ronder chargeable with duty exceeding one rupee a counterpart or duplicate of any instrument chargeable with duty and in respect of which the proper duty has been paid. COMMENTS For distinguishing between matters which are or ar@ not distinct following rules may prove useful 41) Any matter which if not expressed would be implied by law-is not distinct, (2) Aay matter which is ancillary to the leading object of the instrument is not distinct, (3) Where several parties execule, their parts of the instrument are riot distinct if there is community of subject-matter either as to property or Interest.” (Mulla and Pratt) 7. Policies of sea-insurance :(1) No contract for sea-Insurance (other than such insurance as is referred to in Section 506 of the Merchant Shipping Act, 1894) shall be Valid unless the same is expressed in a sea-policy. (2) No sea-policy made for time shall be made for any time exceeding twelve months. {3) No sea-policy shall be valid unless it specifies the particular risk or adventure, or the time, for which itis made, the names af the subscribers or under-writers, and the amount or mounts insured. (4) Where any sea-insurance is made for of upon a voyage and also for tiie, oF to extend to or cover any time beyond thirty days after the ship shall have arrivet at her destination and been there moored at anchor, the policy shall be charged with duty as a policy for or upon a voyage, and also with duty as a policy for time. 8. Bonds, debentures or other securities issued on loans under Act XI, 1879 : (1) Nothwithstanding anything in this Act, any local authority raising a loan under the provisions of the Lecal Authorities Loan Act, 1879, or of any other law for the time being in force, by the Issue of bonds, debentures or other Securities, shall, in fespect of such Joan, be chargeable with a duty of one per centum on the total amount of the bonds, debentures or other securities jesued by it, and such bonds, debentures or other securities need not be stamped, end shail not be chargeable with any further duty on renewal, consolidation, sub-division or otherwise. (2) The provisions of sub-section (1) exempting certain bonds, debentures or other securities from being stamped ‘ond from being chargeable with certain further duty shall apply to-the bonds, debentures or other securities of all Outstanding loans of the kind mentioned therein, and all such bonds, debentures or other securities shall be valid, whether the same are stamped or not Provided that nothing herein contained shall exempt the local authority which has issued such bonds, debentures or other securities from the duty chargeable In respect thereof prior to the twenty-sixth day of March, 1897, when such duty has not already been paid or remitted by order issued by the Federal Government. (3) In the case of wilful neglect te pay the duty required by this section, the local authority shall be lable to forfeit to the Government a sum equal te ten per centum upon,the amount of duty payable, and a like penalty for every / month alter the first menth during which the neglect continues. Power to-recuce, remit or compound guties : The Provinelal Government may, by rule or order published “The official Gazette, — \ig) reduce or remit, whether prospectively or retrospectively, in the whole or any part of the territories under admitistation, the duties with whieh any instruments or any particular class of instruments or any of the instruments belonging £9 such class, or ony instruments when executed by or in favour of any particular class of persons, or by or in favour of ony members of such class, are chargeable, and 18\ 1 provide for the composition or consolidation of duties in the case of Issues by &y incorporated J in company oF other body corporate of debentures, bonus or other marketable securities. 2 ae : i <2, poec to samo ela nanent ne rn! Covert may by cin, be fll Gate Sra ““xempt from payment of the ‘any part of the duties on any instrument executed by of in favour of a banking company inthe normal couse of ts bankiog business s Explanation : For the purpose of this section * Banking Company * shall have the same meaning os assigned in the Banking Tribunals Ordinance, 1964 (Inserted by the Sindh Laws (Amendment) Ordinance, 1964.) COMMENTS Important Notifications : : I) on exercise of the powers conforrad by section SA ofthe Stamp Act, 1099, the Government of Sind are, lensed o exempt the folowing instruments executed by or in favour of benking companies from the payment of the stemp duty to the extent ‘specified against each, namely 7 DESCRIPTION OF INSTRUMENT Extent of Exemption 1. Any instrument for redeemable capital of a company as dofined under the Companies I ful Ordinance, 1984 (XLVI! of 1984), 2, Conveyance of any propery to oF by atanking company o o by ts customer in pursuance of f+ Duty in oxcass of duly unr Aele vance provided by euch banking company under any made of fhance net based on itorast, 40 {c) of the Schedule 1 to Stamp ‘Act, 1898. 13. Mortgage deed not being an agreement relating to depos of tle deads, pawn on pledge Sawamaemongepe deed providing for sharing of rant or other meee of theproperty in favour of a Dancg cent puaure of feanca roma sh brig ‘company under any mode of = do - finanes not based on interest. 44. instrument of further charge, Le. any insvument imposing a further charge on property mort: -do- faged as in item 3 above whelner possession of property i gven or agreod to he given oF not. 15 Lease of any property executed by a banking company fo 8 cuslomer in pursuance of france Any duty in excess of duty Paya provided by the banking compary under any mode of franca rot based on inleres Under clause (d) of Article Sof ‘Schedule 1 to the Slamp Act, 1698, 6. Ltr of crt intusing agreement forthe paring of any letor of erect by 8 banking company. Any duty in excess of duty payabis Under clause (¢) of Artie. § of Schedula 1 © the Stamp Act, 1895 = 7, Powar of aiomey in favaur of 8 banking company when given for canideretion end authorising Duly in excess of dity Paya utr 1 cme to sel’ any mimovable property im pursuance of france provided by tho barking der claus (4) of Arce <5: ‘Company. under any mode of finance not based on interest. 1. Reconveyance of propery including property mortgage for tnanea proving tor sharing of rant Duty in excans of Oy Paya me Earns tne propery ih favour of a barking company 19 pursuance of ance not Based dar Arie 54 of Schese | of Same ‘on intorest 1. Any instrument of transfor of radeomable capital of a company as defined under the Companies ‘Ordinance, 1984. to_noed of rust in pursuance of any rodeemale cata ot'@ company an dofned under fe nf Svopanies Ordnance, 1994 (Goverriment of Sindh, Finance Dapartment’s Notification No. PA/DS{B)-Misc-1/04, ddted 1st January. 199) Gy in exerci of the pontrs conferred by Clauso (a) of Secon 9 of the Stam Act, 1898, the Government of Bnet at 4 pleased to withdraw the extmptions from the payment of stamp duly appearing al Sl. No 1, 9 and 10 of the Government of ‘Sindh, Finance Department's Notification No. PA/DS(B)-Misc-1/84, dated 1.1.1985, yn immediate effect (Government of Sindh, «ete apetmenta NoUieaon No, SECY(ASGEPYEOR/S4-40, dated Ath July, 1894) Til In exercise of the powers conferred by Clause (a) of Section 9 of the ‘Stam Act, 1899, the Government of Siddh are wo eee to rect that with otect trom Tat July, 1984, the stemp diy on deberures, bonds (cluding, Patipaled Ten pleased te iccn Finance Cortfcates or any olher documents / instruments of dit or redoomable capital or of amorses Conca, rab saved by any person, company. Modarba or any corporat bod), incorporated under. ary ey fo 6 ge Sar ae anal slang reauced to and wil bo chargod a th ca of 015 par cont on et Issue and 01 pet eons ot cutezquent walaieis, (Government of Sindh, RS&EP Dopartmont's Notifcation No, SECY (ASREPY/BOR/94-392 dated 30th ‘une, 1994). iv) In exercise of the powers conferred by Clause (2) of Section 9 of the Stamp Act, 1899, the Government gress pleased fo withdraw the exemplon from the payment of Stamp Duly appearing at Sl. No. 6 of the Government of \ Sait Pieence Departments Notification No, PA/DS(B)-Miso-1/84, dated 1.1.1985, with immediate affect (Goverment of Sindh, RSAEP Deparlment's Notification No, CIS/RSBEP/GOR/95-308, dated 2nd July, 1995). 19 en See eeeae ») In exercise ofthe powers conferred by clauso (a) of sub-section (2) sf Section 33 of the Bombay Co-operative Socities Act, $825 (Bombay Vi of 1825), and in supersession of Goverment notitation in the Revenue Department No. 7696, dated tre | ath May, 1928, the Government of Sindh is pleased to remit the stamp duly wih which under th law fos the tee teva a force, inctuments other than those spectied inthe schedule hereto annexed, executed by or an behal of amy sonete he lime being registred under the sald Act, or by any olcer or member of any such society and felang tothe tasnone of suse sociely are chargeable SCHEDULE (1) Bilis of exchange, cheque, promissory note, bls of lading, letters oF cred, polcis of insurance, proxis and receipts and any igetrument chargeable with stamp duty under the indian Stamp Act, 1899, and fling witun Rem SY" List io ro Seventh Schedule to the Government of India Act, 1995. (2) Instruments executed by members of Urban Credit Societies Banks and other Financing Societies including the Sindh Provincial Co-operative Bank in respect of transactions relating to, loans and advances and the value of which exceed Rs, 2,000 or where the said transactions are connected on the security of Agricultural produce, if their value exceeds Rs. 10.000. (Goverment of Sindh, Revenue Department's Notitication No. A. 1937-59-8/H. (a) dated 14th June, 1939) \i)In exercise of the powers conferred by section 9 of the Stamp Act, 1899 and sub-section (2) of section 33 of the Sindh. Co- - Cperative Societies Act, 1925, and in partial modification of the Government of Sindh, Revenue Department Notification No re er SaiH(A), dated the 14th June, 1898, the Government of Sindh are pleased to withdraw, with effect from tet July, 977 Fenc wession of remission of stamp duty granted under the said notification in respect of the documents executed by’ or on Benait of @ Co-operative Housing Society. (Government of Sindh, Revenue Departments Notication No, 41-29-71-Budl) dated 30th July, 1977), 2) Jt exercise of the powers conferred by Clause (a) of Section 9 of the Stamp Act, 1899 (Act II of 1899), the Government of Sindh are pleased to order that the Stamp Duty in respect of the instruments in Column 2 of the table’ below shall not te ‘charged in excess of the amount mentioned against each in column 3 of the said table i) Pattition deeds in respect ultur sural areas; Rs, 25/- (i) Gifts in favour of legal hei ultural land in rural areas; Rs. 25/- (ii) Exchange upto 64 acres of agricultural land in rural areas Res, 25/- E (Goverment of Sindh, Revenue Department's Notification No. LR-141-75-Rev-V/837, dated 7th July, 1976). i) JP exercise of the powers conterred by clause (a) of Section 9 of the Stamp Act, 1899 (Act Il of 1699) the Government of Sian ate pleased to order that the stamp duty chargeable on transfor of shares under paragraph (a) of Article 62 of peredule to the said Act shall at the second stage when the shares are redeemed from the Investment, Corporation of Retna oUistared inthe name of the original owners, stand remitted. (Government of Sindh Revenue Departments Notification No, 23-12-71-Bud (Il) dated 8th December, 1972) rg Gxercise ol tne powers conferred by clause (a) of Section 9 of the Stamp Act, 1899, the Government of Sindh is pleased to muindrawr with immediate effect, the exemption from the payment of stamp duly granted in respect of the instruments ia ihe since Devermenerandum, agreement or securly bond fumished to-or made, or enlered into withthe Works Department or any Frames paniment in connection with the execution of public works under clause (c) of item No. 68 of the Government of Indic, Finenee Department ‘(Genital Revenues) Noiication Stamps No. 6, dated the 12th September, 1981 and the sed nowfenicn BORI9D, dares tee nave Been amended accordingly (Goverment of Sindh, RS&EP Departments Notiicaion No. SECY(RS&EP), BORI90, dated 1st July 1990) B.— Of Stamps and the mode of using them 12Puties how to be paid: (1) Except as otherwise expressly provided in this Act, all duties with which any instruments are Shargeable shall be psid, and such payment shall be indicated on such instruments by means of stamps. (2) according to the provisions herein contained; or {b) when no such provision is applicable thereto — as the Provincial Government may by rule direct. (2) The rules made under sub-section (1) may, among other matters, regulate, — (2) Inthe case of each kind of instrument — the deseripton of stamps which may be used ; (2) make case of instruments stamped with impressed stamps — the number of stamps which may be used; (©) In the case of bills of exchange or promissory notes written In any Oriental language — the size of the paper on which they are written,Ti Uae of adhesive stamps ¢ ‘The following ihstruments may be stamped with adhesive stamps, namely = {@) Instruments chargeable with aduty not exceeding twenty-five paisa, exeePt parts of bills of exchange payable otherwise than on demand and drawn in sets ; {b) bills of exchange, and promissory notes drawn er made out of Pakistan j “ {e) entry 98 an advocate, vakil or attorney on the roll of 9 High Court 5 (d) notarial acts; and (©) transfers by endorsement of shares any Incorporated company or other body corporate, 12g, Cancellation of adhesive stamps = (1) (a) Whoever affixes any adhesive stamps to any instrumert chargeable 12. TTauty which has been executed by any person shall, when affixing Such stamp, cancel the same so that It cannot be used again ; and (b) whoever executes any instrument on any paper bearing 2 adhesive stamp shall, at the time of execution, unless Look stamp hes been already cancelied in mannar aforesaid, cancel ‘the seme so that it cannot be used again. {@) Any instrument bearing an adhesive stomp which has nol bein cancelled so that it cannot be used again, shall, so. far as such stamp Ie concerned, be deemed to be unstamped. (0) The person required by sub-section (1) to cancel 2 adhesive stamp may cancel it by writing on oF across the stamp his name or initials ar the name of initials of his fem ‘with the true date of his so writing, or in any other effectual manner. : COMMENTS 4. Cancellation — What amounts to, crossing a stamp by drawing a line and signing on the second adjacent stamp is not cancellation of the first Stomp within the meaning of S. 12 of the Stomp Act. [ U. Kyaw v- Hari Dutt, A.LR. 1934 Rang 964] 2. Cancellation of Insurance Stamps. itis hereby noted thatthe adhesive stamps termed "INSURANSE introduced under the Government of india, Finance Departmant No. 901-F., dated 21st March 1921, whieh ark ©, Me vced on insicuments (Policies of Insurance}, chargeable wih ceparuly under Aricie 47 of Schedule | at she Stamp Aci G09, chould, in future, be cancelled, under Section 12 (") SEM) of tho sald Act, by the person using them by punchieg or ‘dotecing them with a rubyer stamp so that they canine! $e re elsin, (vide Government Ordor, Revenue Department No iat dated 25th May 1921 and Notice No, 863 dated 13th wees $Ba1, issued. by the Superintendont of Stamps, Karach)) — _13,,. instruments stamped with Impressed stamps how to be written : Every instrument written upon paper stamped 15 an impressed stamp ahall be written in sueh manner thet the ‘stamp may appear on the face of the Instrument and vonnot be used for or applied to any other instrument, “shy Only one instrament to be on seme stemp : No second Instrument chargeable with Cut shall be written upon J riece of stamped paper upon which an Instrument Chargeable with duty has already been written provided that nothing inthis section shell provent an endorsement which is duly stamped or is not chargeable with duty being made upon any instrument for the purpose ot Teanaterring any right created or evidenced thereby, oF wt a aiedging the receipt of any money or goods the payment oF ‘delivery of which is secrued thereby. 45, instrument written contrary to Section 13 or 14 deemed) unstamped : Every instrument writtan In contravention AB sgenion 13 of Section 14 shell be deemed to be unstampeds 46, _ Denoting duty : Where the duty with whieh am instrament ls eargoable, or its exemption from duty, depends «Jey manner upon the duty actually paid in respect of another Tnstrument, the payment of such fast-mentioned duty Hany manne’ oP is road in wriing to the Collector for thet purpose, 9° Gt ‘production of both the instruments, cannneseatupon euch firtimentioned instrument, by endorsement under the hand of the Collector ar in such other oe ont any) a the Provincial Government may by rule prescribe. atCOMMENTS his section applies whan the duty payable on an instrument depends on the duty payable on anther instrument, tor example (1) A supplementary instrument under section 4; (2) Counterpart or duplicate chargeable under article 17; (3) Lease (4) An instrument of partition ; (5) Sottioment ; i (6) Av instrument conveying property subject to @ morigage in favour of the mortgagee (vide proviso to the explanation to section 24); and Lape ore cases tha production of Both the instruments would be necessary to prove that the subsequent instrument the te aerate Comes within the exemption. “To avoid this inconvenience provision ie made it cevvon ve wee uty under {he fist instrument 19 be endorsed by the Collector on the second. No other manner has been preecrewas (Mulla and Pratt C.— Of the time of stamping instruments ae a ceaxecuted In Pakistan, etc :All instruments chargeable with duty and executed by any person in Pakistan shall be stamped before or at the time of execution. Brovided that where during the period referred to in section 23 ofthe Registration Act, 1908, the rate of stamp duty on sunracument presented for registration is enhanced such document shall not be accepted for registration unless Ine rropee duty as inforce at the time of its presentation is duly paid. Soeued ements other than bils and notes executed out of Pakistan, eta: (1) Every instrument chargeable with duty Sreetted only out of Pakistan and not being abil ot exchange, or promissory note, moy be stamped anloe eon eat atter it has been first received in Pakistan, {2} here any such Instrument cannot, with reference to the description of stomp prescribed therefor , be uly ihe some, yg Private person, it may be taken within the sald period of threo months to the Collector, whe chal stamp fhe sare: in such manner as the Provincial Government may by rule prescribe, with a stamp of euch wales os tee person 80 taking such instrument may require and pay for. Tas on commana “otes drawn out of Pakistan, ete: The first holder in Pakistan of any billof exchange, payable otherwise ~ than on demand er promissory note drawn or made out of Pakistan shall, before he presenis the sane or, acceptance jo the proper stamp and cancel the same Provided that,— (2) {at the time any such bill of exchange, or note comes into the hands of any holder therest in Pakistan reigerePer adhesive stamp is attixed thereto and cancelled in manner preseribed by Section 1? ance > shine trae pagransen te believe that such stamp was affixed or cancelled otherwise than by the perecr oe Salt armed auited by this Act, such stamp shal, 90 far as relates to such holder, be decrved te have bone duly affixed and cancelled; 0) remind cantained in this proviso shall relive any person from any penalty incurred by him tor omitting to atfix or cancel a stamp. D. ~O1 Valuations for Duty 2g. Conversion of amount expressed in foreign currencies Qherthanines aruinstrument is chargeable with ad valorem duty In respect of any money expressed in any curreney Qther than that of Pakistan, auch duty shall be calculated on the value of such money athe currency of Pakistan according {to the current rate of exchange on the day of the date of the instrument, 22(2) The Federal Government may, from ime to time, by notification inthe official Gazett c , , icatlon inthe official Gazettes, prescribea rate of exchange {2 ano conversion of rian orany foreign currency ite th currency of Pakistan forthe purposes of clculting stamp duty, and such rate shall be deemed to be the current rate for the purposes of sub-section (1). 2 Stock and marketable securities how to be valued : . Whefe an instrument is chargeable with ad valoreum duty in rospoct of any stock or any marketable or other security, such duty shall be calculated on the value of such stock or security according to the average price or the value thereof on the day of the date of the instrument, 22. Effect of statement of rato of exchange or average price = ‘Where an instrument contains a statement of current rate of exchange, or average price, as the case may require, and {s stamped in accordance with such statement, it shall, so far as Tegards the subject-matter of such statement, ‘be presumed, until the contrary Is proved, to be duly stampa 23, Instruments reserving interest : Where Interest Is expressly made payable by the terms of an Instrument, such instrument shall not be chargeable with duty higher than that with which it would have been chargeable had na mention of interest been made therein. 22-A__ Certain instruments connected with mortgages of marketable eeeuritls to be chargeable as agreements: (1) “where an instrument (not being a promissory note or bill of exchange) — (2)! glven upon the occasion of the deposit of any marketable security by way of security for money advanced or to be advanced by way of loan, or for an existing or future debt, or (b) makes redeemable or qualifies @ duly stamped transfor, Intended asa security, of any marketable security, it shall bo chargeable with duty as If It were an agreement or memorandum of en agreement chargeable with duty under Article No. 9(e) of Schedule. (2) Atelease or discharge of any such Instrument shalt only be chargeable with the like duty. 24. How transfer in consideration of debt, or subject to future payment, etc., to be charged : Where any property ie iransferred to any person in consideration, wholly or in part, of any debt due to him, or subject either cortalniy oF Contingentiy to the payment or transfer of any money or stock, whether belng or constituting s charge or Incumbrarce Gpon the property or net, such debt, money or stock Is to be deamed the whole or part, a8 the case may be, of the consideration In respect Whereof the transfer Is chargeable with ad volorem duty provided thst nothing in this section shall apply to any such certificate of sale as ts mentioned in Aaticie 11 of Schedule. Explanation :1n the case of a sale of property subject to amortgage money ortroney charged, togetierwith theinterest it any) due onthe same, shall be deemedtte bopart ofthe consideration see tes ale: Provided that, where property subject to a mortgage is transferred to the mortgage, ho shall be entitled te degust from the duty payable on the transter the amount of any duty already paid In respect of the mortgage. Mlustrations (1) A owes B Rs. 1,000, A sells a property to B, the consideration belng Rs, 500 and the release of the previous debt of Fis. 1,000, Stamp duty is payablo on Rs. 1,500. (2) Assolls a property to B for Rs, 500 which is subject to a mortgage to C for Rs. 1,000 and unpaid Interest ‘of Fis. 200. Stamp duty is payable on Rs. 1,700. (9) A mortgages a house of the value of Rs. 10,000 to B for Rs. 5,000. B afterwards buys the house {rom A. Stamp duty is payable on Re, 10,000 less the amount of stamp duty already pale for the mortgage, 25, Valuation in case of annuity, ote. : Whera an Instrument is executed to socure the payment of an annuity or Giher sum payable periodically, or where the consideration for a conveyance is an annuity or other sum payable porlodically, tno amount secured by such Instrument or the consideration for such conveyance, as the case may bey Shall, for the purposes of this Act, be deemed to be, — ¥ 23(2) where the sum is payable fora definate period so that the total amount to be paid canbe previously ascertained such total amount ; (b) where the sum is payable in perpetuity or for an indefinite time not.terminable with any life in being at the date of such instrument or conveyance — the total amount which, according tothe terms of such Instrument or conveyance, will or may be payable during the period of twenty years calculated frem the date on which the first payment becomes due; and (c) where the sum is payable for an indefinite time terminable with any life in being at the date of such instrument of conveyance — the maximum amount which will or may be payable as aforesaid during the period of twelve years calculated from the date on which the first payment becomes due, 26. Stomp where value of subject-matter is indeterminate : Where the amount or value of the subject-matter of any instrument chargeable with ad valorem duty carinot be, or {in the case of instrument execuled before the commencement of this Act) could not have been, ascertained at the date of its execution or first execution, nothing shall be claimable under such instrument more than the highest amount or value for which, if stated in an instrument of Ihe same description, the stamp actually Used would, at the date of such execution, have been suificient : . Provided that, in the case of the lease of 2 mine in which royalty or a share of the produce Is received as the rent Cr part of the rent, it shall be sufficient to have estimated such royalty or the value of such share, for the purpose of stamp- duty — (a) when the lease has been granted by or behalf of the Government, at such amount or value as the Collactor may, having regard to all the circumstances of the case, have estimated as likely 10 be payable by way of royally or share to the Government under the lease, or, (®) when the lease has been granted by any other porson, at twenty thousand rupees a year ; and the whole amount of such royally or share, whatever it may be, shall be claimable under such lease : Provided also that, where proceedings have bean taken in respect of an instrument under Section 31 or 41, the amount certified by the Collector shall be deemed to be the stamp actually Used at the date of execution 27. Facts affecting duty to be set forth in instrument : The consideration (if any) and all other facts and circumstances affecting the chargeabilty of any instrument with duty, or the amount of the duty with which it is chargeable , shall be fully and truly set forth therein. 5 COMMENTS 1. The procedure to be followed by the officers in determining stamp duty on instruments where the consideration and other facts are not given. In the case of such an agreement as that executed by P.A.H. to H.A.A. fora term of 11 years stipulating to pay annually 4 khandis of Doka or Ghonsaivel rice in husk and 1,050 bundies of hay, tne stamp duty should be fixed by the Collector under paragraph 3 of Article 39 (a) of Schedule 1 of the Stamp Act in accordance with what he considers to be ‘the value of the average ‘annual rent reserved.” The practice followed by the officers of the Registration Department in cases of Instruments like the one in question \s to draw the attention of the parties presenting such deeds to section 27 of Act 1 of 1879 which requires that the ‘consideration (il any) and ai other facts and circumstances alfecting the chargeability of any instrument with duty shall be fully and truly set forth therein’ and to the penalties imposed by Section 63 of the sarne Act. This leads fo the detect in document being supplied, that is, the value of the consideration is shown therein and the stamp duly determined accordingly. in eases in which the partios rafuse to express the money value, the’ documents are forwarded to the Collector of the district for the adjudication of the propor stamp duty being leviable thereon. This is a very reasonable practice. (L.A, No. 10-B dated 26th January 1883, and G.R. No. 1238, dated 16th February 1883), 2, How to determine the Stamp Duty on a deed of gift where the value of property Is not sat forth, On a reterence as to how to determine of the stamp-duty on a deed of gilt where the value of the property was not set forth, the Board directed that “the attention of the executant il alive, may be drawn to Ss. 27, 61 and 63 (now Ss. 27, 62 and 64) of the Stamp Act, and he be required to set forth the value of the property gifted. Should he retuse to supaly the elect he must be proceeded against under S. 63 (now S. 84). II the executant be dead, the grantee should be asked the value cof the property and the deed stamped accordingly. If the grantee refuses to stamp the deed, it should be impounded, and the 24grantee warned that the deed may be held of no avail, if nat property stamped. Thare is now way in which he ean be compelled 0 stamp the deed, not being liable under section 29 of the Stamp Aci.” [Bom: Reg: Cir No. 2 of 1880} 43, Instrument has to be stamped according to true intent and meaning of bargain-Acceused himsett principal mortgagee purchasing benami certain land subjact to Incumbrance, Incumbrance as part consideration deliberately omitted in sale-deed. ‘Amount mentioned tor below real consideration. Stamp chargeabie Is on amount due under mortgage plus amouat mentioned jn sale-deed-Party omitting to do so is gullly under S. 64 (b), (See note under S. 64 (b).) Sindh Amendent 27-8. Valuation of Urban Immovable Property: Where any instrument is chargeable with advalorem duly under Article 25 ot Article 31 of Schedule I, the valve of the property Involved shall be calculated according to the valuation table notified by the Collector in respect of properties situated in a particular area or locality Provided that where the value given in the valuation table, when applied to any property, appears to be excessive, the Commissioner may, on application made to him by the aggrieved person, determine its correct value ‘nd for that purpose the provisions of section 31 and section 92 shall apply mutatis mutandis. (Inserted by Sindh Finance Act, 1986). 27.-B, Valuation of rural immovable property : Where any instument is chargeable with advaiorem duty under Article 23 or Article 31 oF Artiole 93, of Schedule |. the value of the property involved shall be calculated according to the valuation table notified by the Collector in respect of properties situated in particular rural areas Provided that where the value given in the valuation table, when applied to any property appears to be excessive, the Commissioner may on application made to him by the aggrieved person, determine its correct value land for thal purpose the provisions of section 31 and section 32 shall apply mutatis mutandis. (Inserted by Sindh Finance Ordinance, 2000). : 27--C.Where any conveyance deed executed in pursuance of a power of attorney is presented for registation, the registering authorty shall before registering the deed, satistyiselt by the documentary evidence that the consideralion has been paid to the original owner and oxagutant of the power of attorney, otherwise the power of atfomey shall be ‘zerned 10 be a power given for consideration and shall unioss already stamped according to Article 48 of Schedule. be impounded and sent to the Collector for adjudication and recovery of proper duty under section 27-A. (Inserted by jhe Stamp (Sindh Amendment) Ordinance, 2000) COMMENTS Valuation Table of urban and rural properties: ‘The Valuation Table of urban and rural properties of entire Sindh Province can be seen at Appendix-1 of this book: 28. Direction as to duty in case of certain conveyance : (1) Where any property has been contracted to be sold for one consideration for the whale, and is conveyed to the purehaser in separate parts by different instruments, the consideration shall be apportioned in such manner as the parties think fit, provided that a distinct consideration for each separate pert Is set forth in the conveyance relating frereto, and such conveyance shali be chargeable with ad valorem duty In respect of such distinct consideration. (2) Where property contacted to be purchased for one consideration for the whole, by two or more persons jointly, Grby any person for himself and others, or wholly for others, is conveyed in parts by separate instruments to the persons by or for whom the same was purchased, for distinct parts of the consideration, the conveyance of each soparate part Shall be chargeable with ad valorem duty in respect of the distinct part of the consideration therein specified. (3) Where aperson, having contracted for the purchase of any property but not having obtained a conveyance iherect, Contracts to soll the same to any other person and the property Is in consequence conveyed immediately to the sub- purchaser, the conveyance shall be chargeable with ad valorem duty In respect of the consideration for the sale by the original purchaser to the sub-purchaser. ‘ (4) Where aporson, having contracted forthe purchase of any property but not having obtained a conveyancethereot, Contracts to sell the whole, or any part thereof, to any other person or persons and the property Is in consequence conveyed by the original selier to different persons in parts the conveyance of each part sold to a sub-purchaser shall be chargeable with ad valorem duty in respect only of the consideration paid by such sub-purchaser, without regard 25to the amount of value of the original consideration ; and the conveysnce of the residue (if any) of such property “to the original purchaser shall be chargeable with ad valorem duty in respect only ofthe excess of the original consideration ‘over the aggregate of the considerations paid by the sub-purchasers : Provided that the duty on such last-mentional conveyance shall in no case be less than one rupee. (5) Where @ sub-purchaser takes an actual conveyance of the Interest of the person immediately selling to him, which is chargeable with ad valorem duty in respect of the consideration paid by him and is duly stamped accordingly. any conveyance to be afterwards made to him of the same proporty by the original seller shall be chargoable with a duty equal to that which would be chargeable on a conveyance for the consideration obtained by such original seller, ‘or, where such duty would exceed five rupecs, with a duty of five rupees. E—Duty by whom payable 28, In the absence of any agreement to the contrary, the expense of providing the proper stamp shall be borne in the case of any instrument described in any of the following Articles. of Schedule - namely No.t. (Acknowledgment and Receipt) by the person(s} executing the samo. No.2. {Affidavit or declaration) by the deponent(s).. No.3. (Agreement or Memorandum of an Agreement (a) and (b) by the purchaser(s) by the person(s) in whose favour the reconveyance is executed, (d} by the partner(s); and (e) by the executants(s), (Allotment Order or Transfer of Allotment Order} by the persons (s) in whose favour itis issued. (Bank Guarantee) by the person(s) in whose favour itis issued. (Bill of Entry) by the executant(s). (Bond) by the executant(s) (Certificate of Sale) by the purchaser(s) (Cortificato or ether document) by the company or body corporate issuing such certificate or document. (Chartor Party} by tho chartorer. (Contract) by the contractor. (Conveyance) vendee or transferee. (Counterpart or Duplicate of an instrument) equally by the executants except in case ofthe lense hy the lesseo. No.A8, (Exchange of Property Instrument) by the parties in equal share. No.1, (Financing document) by the borrower. No.20. (Gift Instrument) by the donee(s) No.21. (Lease including an under-lease or sub-lease, an agreement to let or sub-let and the surrender of a lease) by the lessee. (Letter of Credit) by the person(s) in whose favour itis drawn, (Mortgage deed or a deed of further charge) by the mortgagee. |. (Mortgage deed or any other financing document) by the mortgagee, (Notarial Act) by the Notary Public. : (Partition instrument) by the parties in their respective shares or for the execution of order by court arbitrator as directed by the court or arbitrator. No.25, (Policy of insurance) by the person(s) in whose favour the policy No.27. (Power of Attorney) by the Attorney otherwise by the Principal. No.28, (Promissory Note) by the executant(s). No.29, (Release)by the person renouncing aclaim upon another porson oragainstany specified property. No.30, (Settlement) by the person(s) making the settlement. No.31. (Transfer) by thetransferee. issued. 26COMMENTS \ Consent decree-Charges created on immoveable property - Property not subject of ¢ult-Decree not compulsorily Registerable; ‘An Act imposing taxation always has to be construed strictly, that is to say, the Goverment has to show that the tax in question is imposed upon a fair construction of the language used, and having regard to the fact that the schedule does not expressly refer to any decree of a Court except a decree for patltion, and to the fact that the definition of “mortgage-deed" does nol in terms clearly include 2 consent decree creating a charge, coupled with the fact that section 29 seems 0 indicate that such consent decrees of this nature are not llable:to stamp duty. (Civil Ref, No. 7 of 1934 made by N.D. Uppeni, First Class sub-Judge. Vide GR.R.D No, 3909 33 dated 18th July 1935) 30. Obligation to give receiptin certain cases : Any person recelving any money exceeding twenty rupees in amount, or any bill of exchange, cheque or promissory note for an amount exceeding twenty rupees, or receiving in satisfaction = oF part of satisfaction of a debt any movable property exceeding twenty rupees in value, shall, on demand by the person paying or delivering such money, bill, cheque, note or property, give a duly stamped receipt for the same. Any person receiving or taking credit for any premium or consideration for any renewal of any contract of fire- insurance, shall, within one month after receiving or taking credit for such premium or consideration, give a duty stamped receipt for the same. caCHAPTER ill ADJUDICATIONS AS TO STAMPS 31, Adjudication as to proper stamp : (1) When any instrument, whether executed or not and whether previously stamped or not, is brought to the Collector , and the person bringing It eppiles to have the opinion of that officer as to the duty (if any) with which it Is chargeable, and pays a fee of such amount (not exceeding five rupees and not less than fifty paisa) as the Collector may in each case direct, the Collector shall determine the duty (if any) with which, in his judgement, the instrument is chargeabl (2) For this purpose the Collector may require to be furnished with an abstract of the instrument, and also with such affidavit or other evidence es he may deem necessary to prove that all the facts and circumstances affecting the chargeability of the instrument with duty, or the amount of the duty with which It is chargeable, are fully and truly sot forth therein and may refuse to proceed upon any such applicatlonunti such abstract and evidence have been furnished accordingly Provided that — {a) no evidence furnished in pursuance of this section shall be used against any porsen in any civil proceeding, except in an enquiry as to the duty with which the Instrument to which it rolates is chargeable ; and {b) every person by whom any such evidence is furnished shall, on payment of the full duty with which the instrument to which it relates is chargeable, be relieved from any penalty which he may have incurred under this Act by reason of the omissionto state truly in such instrument any of the facts or circumstances aforesald, COMMENTS ZF Firm imi Although this section prescribes no time limit for making an application for adjudication as to the proper stamp-duty, but if the instrument is brought to the Collector within ona month of its execution the applicant would be entitled to have the Collector's cerificate endorsed on the instrument on payment of the deficit duty, if any, but without having to pay the penalty But he seeks the Collector's adjudications atter the expiry of one month, the Collector has to proceed under S, 33 to impound the document and to determine under S. 40 whether the instrument is duly stamped and in case he Is of opinion that it is not duly stamped the applicant wil have to pay the deticit duty together with the prescribed penalty. The time limit given In proviso (a) to S. 32 does not govern application under this section, [AIR 1946 Mad 437 (440): ILA (1947) Mad 141 (DB)), 2, Refund of excess duty pald through erroneous adjudication, As the excess duty was paid through an erroneous adjudication of the stamp duty by the Collector's Office, itwas ordered by Government that refund af such duty may be paid (G.A. R. D. No.806/3 dated 23rd June 1933) 3. Meaning of Collector for purposes of the Stamp Act. ‘Memorandum from the Remembrancer of Legal Affairs (Mr. G. Davis, 1.C.S.), No, 6416, dated the 30th November 1934:- In this case a deed of settlament was execuied by the patties in the disirict of Surat and was presented for adjudication {9 the Collector of Surat under section 31 of the Stamp Act. The Collector determined that in his judgement the instrument was chargeable with a duty of Rs. 300, The duty was paid and the Collector under section 32 certified by endorsement onthe instrument that the {ull duty with which the instrument was chargeable was paid. itis stated that the property which was conveyed by the instrument was situate in the city of Ahmedabad. In viow of section 18 of the Bombay Finance Act, 1932, which amends the Stamp Act, the instrument which related to the immoveable property situate within the limits of the city of Ahmedabad was chargeable with the duty of Rs, 499. The questions which arise for consideration are :- (1) whether the Collector of Surat had jurisdiction to adjudicate the amount of duty, and whether the certificate of adjudication given by him is legal and final; and (2) whothor the deficit duty can be recovered. 2. In regard io the first question, it dows not appear that section 31 of the Stamp Act prescribes any limit of jurisdiction eitheF territorial or otherwise within which the Collector has to make adjudication, That section provides that when an instrument is brought to the Collector and the person bringing it applies to have the opinion of that officer as to the duty with which itis chargeable and pays a fee prescribed for such certificate, the Collector shall determine the duty with which in his judgement the instrument is chargeable. The section was enacled as it was realised that in this country there was greater 28ignorance than in England on the part of those who had to execute documents, a5 fo the roauivenentt ‘of the stamp law, it was Ey desirable that a pereon should have the opportunity without ability to any tine eae on payment of a very small adjudicated Sees bylaw ol resolving all honest doubts as to the amount of duty with which the instrument might bbe chargeable. (Ses tee ee scorl's speech in the Counel, extract published in Desals Stamp Act, p. 127). The elfect of sections 0 ‘and 92 Is to we oocte the Collator to be an cficer empowered to gwve adv to the public regarding the aroun! cf aay tt which any corre unin ie Brought, to him ie chargeable. The Commisgioner, Northern Division, contends thas ew of the use of tose nov instead ola before the word ‘Collector'in section 31, the wards ‘the Colleton means the Cones of the District re artho propery is situate. This contention isnot correct. The instruments which are charges © ‘stamp duly under the Stamp Aet 1898, ate not only insirumante which relate to immovable propery, but sive moveablo property and to matters in sich no propery Is involved but which give rise to morelyjural relations (see Fofoy 0! Me rae article 47, Power of Attorney, wee ust Momotandum of Assocation of a Company, artcie 39, Entry as an Advocate) © does rot, therefore, appear that Shy words can be read with cection 31 and 32 which would limit the jussicton ‘of the Collector to any territorial limits or in Jny other manner. The Collector of Surat has therefore jurisdiction to receive deed tor adjucication and the certificate given Bhim is vald and tinal in all placos where section 31” and 82 are in toree, may Oe ‘noted in this connection that sections by him ie wove enacted in an all India Act of 1899, When those sections were enacted, there were 10 ocal amendments of the Aet_nor were such amendements contemplated. 3, Under section 32 (2) the instrument which bears the Gallactor's endorsement under section & {2) shalt be deamed to be duly stamped. Under section 56 the Chief Revenue authority has no power to interfere with the decision of the Collector {LUR. 25 Mad. 751) given under section 32 which sia Chapter fi. The Govt! fhas also to accept the decision of the Collector (a 2s Mae 2 as conclusive. Although, therefore, the Collector's acjuciation is erroneous 0 he present case, it fs binding ono ec yewe and no nelion can ba taken In respect of the Instrument under section 93 19 recover the deticit duty. (G.R. No. $419/33, R.D., daled the 11th January 1935) WV: eritcate by Collector : (1) When an instrument brought to the Collector under Section 31, 1s in his opinion, a description chargeable with duty and — {@) the Collector determines that it Is already fully stamped, or {bythe duty determined by the Collector under Section 31, or uch a eum ae, 9 Ihe duty already pald in respect, he dy eto fp aqualto the duly e0 determined, has been pal, the Collector shall cont Sy ‘endorsement atthe ee netrument that the full duty (stating the amount) with which It ls chargeable hes ‘been paid, (2) Wen such instrumentia, nhis opinion, net chargeable with duty, the Collector shalt certify in manneratoresaid ‘that such Instrument is not so chargeable, {@) Any instrument upon which an endorsement hes been made unde! the section, shall be deemed to be duly seiped oF nat chargeable with duty, 38 the case may be and, i chergoa with duty, shall be receivable Ta rchce or otherwise, and may be acted upon and registered as it it had Been ‘originally duly stamped Provided that nothing in this section shall authorise the Collector to endorse — (9) any instrument executed or first executed in Pakisten and brought to him after the expiration of one month iio the date of ts execution or first execuilon, #8 the case may Pe ; (0) any instrument executed or first oxecuted out of Pakistan and brought to him after th mmenths after it has béen first received in Pakistan o an first received 0 Pe to) anyinetvrent chargeable witha ty ol xcaeangtwanty-ve pla ray lof erenangs os FTomste anyineiument charGeat in after tho drawing er execution there, on paper not duly stamped, COMMENTS 4. Impounding of document — Collector has no juriediction- ‘The Collector has no power 1 impound an instrument prosented to him under this section, Were 4 document comes inte the possession ofa Collector under 8. 3 for his opinion within one monyn of fs ‘execution and the Collector determines Ihe proper duty payable thereon, tne Collector has no jurisdiction to impound te document under S, 33 it the party refuses ine prety Goticent duly. (AIR 1961 SC 727 AIR 1961 All @5% (Pr. 9-0) LR (1952) All 870 (OB), : Where an instrument which has already been “executed” within the meaning of that term a5 ot neo §.2(12)ispresented potore the Ootectar for his opinion under S, 31 ofthe Act the Collector cannot, i he is of opinion ‘that the instrument requires 29 Seed see see Re eee eeeTa aay mich has rol been paid or has only partly been paid, impound the instrument under $ 99, {AIR 1956 Ail 453 (457) ILA (1956)/all 687 (FB)) 7 2. Certitieat of Collector-Finalty of \inere 2 Collector, under § 32 of the Stamp Act treats a document as boing of a particular character, and levies duty £n as such, his decision is tinal ang cannot be challenges in a Court of Law, except under S. 57 of the Stamp Act on reference by the Chief Controlting Revenue Authority. [Gangaram Shewakram v. Malik Nur Anmed. 28 S.L.A. 266] 3. Contficate granted by Collector under Section 32 — Validity who can challange, When a certificate is grantod by the Collector under Section 32, its validing can only be challenged under Section 57 na reference by ihe Clot Conroling Revenve Authority to a High Gout and mot by te ial age ene eares hag V. Flim of Pareram Hassanand. 94 10. TA7=A TR 1938 $8 BTS ne na ea ueoe: 4, Forms'of Certificate under Section 32. (Specimen), (1) Gert under Section 32 (1) (a) of Act II of 1899 that this instrument is duly stamped. . (2) Certtles uncer Section 32 (1 (0) of Act I of 1899 that the fll duly of Rs... has been paid in respect of this instrument, correo oe (9) Cenitied under Section $2 (2) of Act Hl of 1889 that this Instrument is not chrageabie with stamp duty 30: CHAPTER IV - INSTRUMENTS NOT DULY STAMPED 34, Examination and impounding of instruments : (1) Every person having by law or consent of parties autnorily 33. acolve avidence, and every person in charge of a pubilc office, exespt an officar of police, belore whom any instrument (Rargeabie In his opinion, with duty, Is produced or comes In the performance of his functions, shell, It eppears fo nim that such instrument Is net duly stamped, impound the same, (2) Forthot purpose every such person shall examine every Instrument so chargoable ane se produced or coming bofore Ken'in order to ascertain whether It ls stamped with 9 stamp of the value ond description required by the law In force in Pakistan when such instrument was executed or first executed : Provided that— (2) nothing herein contained shall be deemed to require any Magistrate or judge of & Criminal Court to examine Grimpound,it he doos not think fit soto do, any Instrument coming before him in ‘ne, ‘course of any proceeding . Seine proceeding under Chapter Xil or Chapter XXXVI of the Code of Criminal Procedure, 1899 (0) Inthe case of Judge of a High Cour, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints In this behalf (2) For the purpose of this section, In cases of doubt {e) the provinelel Government mey determine what offices shall be deemed to be puble efioes and {e) the Provinciel Government may determine who shall be deemed to be persons in charge of public offices. COMMENTS 1 chapter IV «the procedute for impounding and effecting recovery in the case of documents not duly stamped has been ‘Summarized and laid down in the Punjab Stamp Manual, 1994, as under: ay 8.08 al pubieoficors, wth cetaln exceptions ere requlrdo examin ever) Insurer charge with duty which comes 6 a Pine perfomance of thet ofa uncon, and to impound any Intrrnant wile) Paves be dll comes eeijnaer gosto nerUment may be admttegin eviserco ina. Court ithe party recovered an numer rouge i raul etn the daoument when be hes cone wih Bo theater from whem ne ae 8. aoe ea scouted al al ncrumets wth he exzaptns of roceptschargoabio wth the aly of Om Sore 40 2), shoul be ro yom ho provisions of Ss. 35, 40 ant and the Collector eannct cory the impounded onument Sher vying a penalty of alter prosecuting the offender. 3tSection 34 permits an aucit officer to have an unstamped receipt stamped in the course of an ausit of a public account, and S. 35 (b) allows an unstamped receipt to be admitted in evidence on payment by the person tendering it of a penally of rupee one. Procedure to be adopted by the Court : 1 a document is brought, the Court should determine whether 'a document is sutticiently stamped, if not it should give finding under what provision of the Stamp Act the document is lable to stamp duty and then determine exact amount of deficiency Payable and call upon the party who wants the document to be admitted, in evidence to pay up the deficiency with ten limes Penalty. (Law Notes 1973 Lah. $11}. 3, “Impound” The word “impound” according to the Oxford Dictionary means “to take legal or formal possession of * ; according to Webster, “to shut up and place in a pound; hence to seize and hold in the custody of the law" ; according to Wharton's Law Lexicon, “to place a suspected document in the custody of the law.” 4. In order to attract provision of S. 33 (1) three conditions must be fulfilled, . (i) the authority empowered to impound a document must be the authority specified therein, (i) the Instrument in question is not stamped according to the provisions of this Act. (ill the instrument is produced or comes in the performance of his functions, {AIR 1959 Pat 353) 5. lt may be noted that the impounding of document and imposition of penalty is not warranted betore it is admitted in evidence, Where a Division Bench of the High Court not only impounded an insufficiently stamped document produced before it in appeal but assessed the amount of the penalty and sent it to the Collector for roalising the amount it was held that the |udgment relating to the assessment of penalty was not warranted by the provisions of the Stamp Act and did not constitute a bar to hearing the mattar by the Full Bench in relerence under S. $5 affer the assessment of penalty by the Collector. TAIR 1955 Hyd, 17 (Pr. 6) : ILR 1954 Hyd, 562 (F8)} 8. The word “produce” means produced in the ordinary course of law and not produced under compulsion. Hence, the mers production of a dacument in compliance with an ilegal demand will not confer authority to impound. Where, however, on recelving the complaint against a person for having committed offences urider Ss. 64 (c) and 68 (c) of this Act a Megistrate 'ssues a search warrant under which a numberof insufficiently stamped document are seized, tho Magistrate ean impound them 3s the word 'come” in this section is sufficiently wide to include the production of documents under a search warrant, (AIR. 1942'Lah. 265 :25 Mad 525} 7. Similarly where document was voluntarily tendered by a party as part of his évidence.and it was'not withdrawn when the Inspector af Stamps raised a question regarding the suifliency of stamp and the party contested tne matter and argued {hat the stamp affixed thereon was sulficient. Hold, that those facts were enough to constitute ‘production’ within the meaning of the section, [AIR 1958 All 659] 8. Where the Inspector of Stamps, while inspecting the records In the record room of the District, noticed an award and a decree passod In terms of the award which documents, in his opinion should have been stamped, and sent a report 10 {hat effect to the Chiat Inspector of Stamps and a copy thereo! to the District Judge it was held that if the District Judge was £1 perusal of the report of the Inspector of Stamps, of the opinion that the decree and the award had nol been duly stampod hhe had power under this section to impound the same. {AIR 1955 All 615 (615)] 8. Where parties fall to furnish requisite stamps for a final decree-for partion the Court cannot draw up the decree fon insufficiently stamped paper and impound it under this section. (AIR 1956 Med. 207] 10. Proviso. Where a Court has collected the deficiency in stamp duty and penalty and has admitted a document in evidence under Proviso (2) 10 8.35 and granted a ceniicate under $.42 (1) its not open to the Collector, on the document being subsequently produced Dotore him, to impound it under S.93 (1). Where a document is brought under 8.31 belore a Collector for adjudicstion as to Proper stamp duty alter the period of one month prescribed by S. 92 (3), proviso (a), the Collector has to impound the docursent Under this section ithe Is of opinion that it is not duly stamped. (AIR 1941 Lah, 65: AIR 1949 Mad.¢37] . 3211. tis optional to a Magistrate or Judge of a criminal Court to examine or impo! a 0 alae aie jpound the document Ht he thinks 1s 12 A.Colecor, in pueuanco of craton to curate of monay fender ening Stat ‘exhorbliant rates of intrest Insructed a Tahsldar to make cetan inquires, Te eer er thereupon summoned certain money fenders to produce their chittas, On thei production, the ‘Tahsildar impounded them as they were insufficiently stamped. ft was) ‘he(d that the documents ane Snot be said to ba produced before the Tahsiidar in the performance of his functions and hence hha had no powerte impound them. (AIR 1945 Pat 6] 4a The Court collected deficiency in stamp duty and penalty and admitted document in evidence under proviso (a) ¢ a5 and granted certificate under S.42 (1) —Colector oF srcument being subsequ-rtly produced before him cannot impound under 8.33 (1). [AIR 1941 Lah. 65 (68)) 14, Amero handlag over of a document, ovenit Kis as ares of summons from Cour, cannot be said tobe production, -tnore must be voliion onthe part of the person bringing into Cov! Ase ittor some purpose. The mechanical act of carrying There Cunent a8 a rosult of an order of Court and handing f ovet te o use igor of Court would nat be production though such the cocimeome within the meaning of the term ‘comes before he eG the performance of is judicial function"[AIR 1953 Nag 698 (701)] 45, “Duly stampes ‘The expression is datinad in $.2 (11) ofthis Act. The uty chargeable on an Instrument must be decided with relerence to the Act inforce at he date of the execution of the document [1885 Pun Re No.7 (Rev)} 16. impounding takes place when word “impounded = ‘endorsed on document and signature af presiding office! is aifized 19 endorsement 80 a5 10 show that nature of custody of serument had changed and thal it s 10 be treated therealier sempounded" document. Document is considered to Be impounded not whan oral order is given but when I's aclualy taken ae eedy by afticer of Court in pursuance of ts order. (AIR 1842 Lah 257 (260)] 17. wean the document is fled and the question of proper star's raised, the Court is competent to impound it. The only purpose of an unstamped letter of covar is to (ound, or ercpa tor delivery of policy and nothing else. Such letter of cover only purpose able wih duly as such under the Act bul ii Dears he siete preseribed by the Act for a policy of insurance, Foo cent anea is inability and will become a competant document 0 ‘Which 2 claim for loss could be made. Such a document thar} Wiloe eubsequently impoundod and stamped afar is execution oF ‘enalty realised. [AIR 1988 All 659 (660) (0B): AIR coe Andh Pra 424 (427): AIR 1961 Cal 48 (51, 52) (DBI) 18, Suo Motu objection Even i a party takes no objection to the insuficiency af Starep ot withdraws such objection, the Court or officer before whom the document fe produced is Bound sv0 mat 0 fase Such bjection and fo impound the document # nat duly stampec [AIR 1925 Lah. 552 (654)} 49, Mere filing of document without attempt to tender It in evidence of prove It does not attract provisions ot S.33. ere production of a copy of @ document or is trangloraie without an attempt to prove it oF without an attempt 10 tender were raty in evidence does not amount to the production of oer before person concerned nor does the document under arom cumstances come before the person concerned ia it performance of his functions 89 a6 10 altract the provisions of 3155, jal Singh Sunder Singh v. Ahmad Yar Khan ALS: 1996 Lah 985) 20, Bills of Exchange already cashed-whether they con Be impounded under Section 33 and duty recovered. ve at ot exenang have aeady been costae, Tey cemnat eae; be PH Srey sedion 99 ofthe Act we ar es rere ments ICN COTe EE Se pvtormance oth unctions. 2 09 Rave Tl a ePements which do aat come The autortis mo per tunene or have once passu UDR NaN Mt ‘eakur Das v. The Crown LLR, baler er nN reg EO, page TEE, ANS iment te Act for prosecuting & Cah 745 Ms ayaa m0 mM Me PLANT Ta reer ent to recover unpald stamp Suly paren wha ae rey pois eA er yer erdtor, i for reeavery of stam exch he ate by ol Remabranct ol Leal Afar No 3679 Slee ae ly 1985, Vide G, R. RD. No. $798! So ated eth AUQUST 1985)21. Impounding-Insuiticieney of Stemp. Collector to make final decision, 72. nae Petiod during which Instruments remain impounded cannat be deducted In computing the period of limitation under Registration Act, rs ariod during which an instrument remains impounded under the provisions of Chapter IV of the Stamp Act, 1879, Bt por gegteted in computing the period of limitation mentioned in Section a4 cto Registration Act 1877. In the case of ay impounded instruments forwarded to the Colloctor by Registrar ara ‘Sub-Ragistrar under Section 39 of the Stamp Act tho Gieicalion should be made by the Collector with as ito deley as possible, (CS Ne” 1524, dated 22nd December 1881, Vide G. A. 126, dated 10th January 1682), ocureene ee clestor has received an executed document and given his opinion under Section 32, and the presenter of the document thereatter declines to pay the full sum adjudged. the Collec ‘may consider the instrument as having been « Produced before him under this section. (Ct. Government of India Resollion no" 6456 sce November 11, 1875). 74 euniot Inspector of Stamps and the inspectors of temps of the Board of Revenue declared to be persons Incharge of public offices for the purpose of this section: raenaicise ofthe powers conferred by clause (b) of sub-section (2) of Section 29 of the Stamp Act, 1899, the Governor Ot West Pakistan is pleased to deciare the Senior inspoctor of Stampe ao ne Inspectors of Stamps of the Board of Revenue Don ersens incharge of pubic offices for the purpose of Section 89 of ie sid me (Government of West Pakistan, Revenue Pepariment’s Netiication No.9198-64203-St, dated Oth February, 1963), fine pata acla! Provision as to unstamped receipts : Where any recelpt charges {Ne Peles ls tendered to or produced before any officer unstamped Ie the course ‘account, Feenpiteer may in his discretion, Instead of impounding the instrament, require a duly stamped receiptto be substituted therefor, \ 35. Instruments notduly stamped inadmissible in evidence etc., :No instrument chargeable with duty shall be admitted i wuidence for any purpose by any person having by law or consent ey Parties authority to receive evidence, of shall be, acted upen, regletered or authenticated by any such porson or by any public officer, unless such instrument is duly stamped: Provided that— (2) any such instrument not being an Instrument chargeablo with a duty not exceeding twenty-five paisa only, saga of exchange or promissory note, shall, subject to all just exceptions, be admitted in evidence on BF the amvaure Cuty With which tho samois chargeable, orin the case of ay neta Insutficiently stamped, af the amount required to make up such duty, together mitt g Penalty of five rupees, or when ten times the amount of the proper duty or deficient portion thereof exccete roe fupees, of a sum equal to ten times such duty or portion; (6) where any person from whom a stamped receipt could have been ‘demanded, has givenanunstampod receipt - ir geiaen cele it stamped, would be admissible in evidence ageinet ning then such receipt shall be admitted 'n evidence against him on payment of a penalty ef ene ruieve by the person tendering it; (c) where 8 contract or agroement of any kind Is effected by correspondence consisting of two or more letters and any one of the letters bears the proper stamp, the ‘contract or ‘agreement shall be deemed to be duly stamped; (2) nothing herein contained shall prevent the admission ear'y instrument in evidence in any proceeding in Brctiminal Court, other than a proceeding under Chapter Silo ‘Chapter XXXVI of the Code of Criminal Procedure, 1898; {6) Rething herein contained sholl prevent the admission of any instrument in any Court when such instrument has paen executed by or on tehalt of the Govornment, or short a bears the certificate of the Collector as Provided by Section 32 or any other provision of this et - 34COMMENTS 4. Document not duly stamped. Under 8.95 of the Slanfp Act a instrument not duly stamped Is not admissible in ‘evidence for any purpose includings collateral purpose. I must be taken to be non-existent. Ap Vmetamoed document eannt be admitted for any purpose, Fre collateral Pi Pennat be edmiited under any circumstances 1 3.6171 2 somo deed bearing deficient stamp duty cannot be mean hal Zygonce of use to correberate the oral evidence of the (act ‘of the sale. However, an Instrument not duiy stamped is not invalid. Such 9 document is only subject to the disabilities mentioned in $.35 of the Stamp Act namely that the document cannot ve itteg in evidence or registered or authenticated ar acted upon by any public officer. However, an original instrument not uly stamped can be admitted in evidence on payment of deficit duty ‘and penalty. [PLO 1971 Lah 936) : ar o ne admis, ot. ofan instrument under tis section does nat depend on 20 objection by a party. [AIR 1925 tan 552 (654)] : : shy unatamped instrument ray be 2 “valuable security" within the meaning of S477, Penal Code, {(89) 12 Mad 148 (1509) Were mortgages evidenced by unstemped documents suppressed by delencant ‘the prohibition in this section will come: into play. [AIR 1948 Mad 457 (458)] Final decree for parton not drawn on proper stamp is not admiesibie in evidence. [AIR 1946 Mad 534 (535}] Merely because an instrument cannot be admited in evidence [or 20Y Pree eT .¢ because it cannot be acted upon by the porsons specified in the section, dows not mean Mat swuch an instrument is invalid, and itis not irrelevant to observe oF pe tne words have to b¢ construed stritly, because they arp fo bo found in a provision of a penal nature. Theretore, nor ia be against al cannons of construction to enlarge the meaning of Pose, ‘words, 80 as to render invalid instrument whieh soe Oe na mie-chif of te section. After al, instruments, which are no! uly ‘stamped, are executed every day, and most persons, who incur obligations under such instruments, honodt het ‘lebiities under such instruments, regardless ofthe provisions _erreetton 38, In any event, tis section is atracted only when a” insert ig produced before the persons specified in tho Oe ior example, an instrument would be produced In evidence on ‘yhon there is a dispute about t, theretore, ifthe Second the Legilature had been to randar invalid all instruments not propor ‘stamped, It would have made express provision trae pact, and it would also have provided some machinory for enforced its mandate in those cases in which the parties vidnot nave occasion 1o produce unstamped instruments before the perso specified in tho section. Additionally, there is nothing Sid not nave nich would suppor the plea that an instrument becomes watt falls within the mischief of the section, Alter aaerainattumentis invalid, must beinvaliforallpurposes, but provco (°) ‘section expressly saves unstamped instruments ae eral proceedings, while the other provisos tothe section enable We paties 10 overcome the disabilities attached in ret Sroment aot propery stamped by paying the requisite duly fooekher ‘with a penalty, therefore, this would suggest that (2 nsfet of te section i 19 protect public revenue. Again # an inciymeny Is invalia, it should not be admissible in evidence, sre sts go stated in section 35. But the next section proseibes (halt 2 Instrument has bean admitted in evidence, howsoever ai sy its admisebilty cannot be questioned al any stage thereater, ‘and even the appelate Court’s powers to entertain stpjoction about the admissibility of documents have boon removed by See ‘61, which instead empowers the appelale Court ae calect tne duly payable on the unstamped instrument togelner Witt & penalty. These provisions 2s well as other provisions + coer IV al he said Act such as sections 89, 98, 99 and 40, ca ony Badto the conclusion that the object of he Legislature Tr chatting the said Act was to protect public revenues and nol to pranere sith commercial ile by invalidating instruments vital eo aeeaeawathtlow of trade and commerce, [PLD 1978 SC 278] 2. Stamps affixed not cancelled. go far as an uncancoted samp is concerned te instrament whieh iis aed shal 6s et bo unstamped go where ca requ Tour ane sap bee ont three cancoled one ants SA So Uncancelied one anna So whee dbo conigeregae nce slamped, Where an instrument's Oe Tenilystampedand inadmissie inevidence stamp shoul he Samp Act Consaquonty no decree canbe pascad onthe basi lhe Pronotes which are inadmissible iegeidence,, [PLD 1963 Kar, 905 (p. 906). 7 ‘Winere a prorote contained eight one anna achesive stamps one of which remained uncancelled held the stamp cannot - pecancellog atthe appeate stage. Further held the eight stamp ite Fo ignored then tha pronote remains insutficiently stamped be cancel ar by 2 stamp of one anna, and thus inadmissible in evidence under S. 95 of the Stamp Act. {PLD 1977 Lah. «63 (p. 778), 20 DLR 196 DISSENTED FROM] Ita pronote is stamped with several achosve stamps, alithe tarps tA ‘be cancelled, It any one stamp is not cancalled the instwenent cannot be deemed to be duly stamped ands inadmissible ln ‘evidence. {PLO 1964 Kar. 172+AIR 1933 35 ESCO eeeLah. 148+AIR 1934 Lah 606] a duly stamped’, jihe wording in S. 35 shows that unless a document's propery stamped, it cannot be admitted to evidence, The words junless such instrument is duly stamped’ in S. 35 are clear to convey that meaning. However, in datermining the nature of an [s0) 3 Coe tam duty the Court must only consider the insttumont ast Is and ehoule nevseo a extraneous circumstances, U8) 24 Cut L Tim 144 (148): AIR 1997 Fang 392 (9647 AIA 1907 Rang LA neg (08) | 4 Adhesive court-tee steps end Impressed stamps, i Oy Darsone aha GamTPS 35 Wel as impressed stamps used under the General Stamp Ad or Cour Fees Act can legally Be used By porsons other than whose name they bear as purchaser, [ FLD tare wan Ace } 5. Stamp objection —Duty of the Court. {fan cblection is taken to tHe admissibility of a document onthe ground that ti not Stamped and registered, the Court Frege eae bath the questions. i finds that the document requires reglettation so therefore is inadmissible, being dog Tree, the document ise wil ave tobe rejected. The Court cannat first sek ihe donne ore be stampad and Gecide whether it would required registration. [ ('58) 1955-1 Mad. . Jour a8? (ae 458) J Hag i culy ofthe Court to determine the quostion of admissioilty judicial, as soon ae i is tendered and betore I ls marked as exhibit. [ AIR 1961 SC 1655 ] 4.2" @rstamped document marked as exhibit in the case and used by paris in examination ‘and cross-examination Sa, oer aamiting document in evidence is nat Hable to be reviewed er evereen IAIR 1981 SC 1655 (Pr), +AIR 1957 Raj 47, (Reserved). 6. Refreshing memorary. 2 pa aett though inadmissibe in evidence may be used to reteesh the memory of a witness while uncer examination. [AIR 1995 Pat 375 (376)) 7. Cross-examination. rag nc nnet be cross-examined as to the contonts of a document not admissible for want of a stamp, [ (1858) 175 ER 729 (724, 725) : 115 RR 906, | 8. Corroboration. Ar cislamped instrument of partion cannot be used for cortoboreng oral vidence for the Purpose of determining oven the factum of partion as distinct from its tems. [AIR 1946 P.C. 51} 9. Proxy. sore the proxy is not property stamped or stamp on it not cancelled, voto gion by person holding proxy cannot be held valid. [AIR 1928 Bom. 80}, 10. Counterpart 2r Jpslamped counter part ofa partnership deed which Is executed at the same time as the original does not stand Meutap, Same looting as the copy ot the original and tharetore ite admissible in evidence or Payment of duty and penalty even ‘ovah no proat of loss of the original deeg on a proper stamp paper is gen (nin sacs Punj 441 (Pr. 13) Where the pronotes on the basis of which suits were flled were not Properly stamped and were thus not admissible epcence under section 95, Stamp Act, 1890, on the question whether the. eodey ear ae back on original consideration by accucing evidence other then the pronotes and claim decree for money font on thar ‘basis, hold, that ithe promissory note embodies Bi eens of Contract and the instrument i improperly stamped, no sul on te net lie in view of the bar of section Stine yaanee Act 1872 and section 35, Stamp Act, 1699. But Ili does nol embody a fer of the contract the true nature sate i ansaction can be proved anc ihe lenders ciaimeanbe decreed on that basi¢ the eas the execution of the promissory ” docuniy cmemporencous with the borrowing cannot exclude tha possbiliy of ine Werens, having been given as collateral Securlly oF By way of conditional payment. Whether a suit les on the dobt apart beer ine instrument, therefore, depends on 36the circumstances under which the instrument was executed, In those cases where an instrument has been given as collateral + Becutity or by way of conditional payment, a suit on the debt would lle and there would be a cause of action Independent of = the instrument for ts recovery, Since, in the case, the prohotes in question did not embody all the terms ot the contract, nether section 91 of the Evidence Act, 1872 nor section 35 of the Stamp Act, 1899 would be a bar in the way of the lander to fle a suit for the recovery of the debt alleged to have been advanced by him as loan. {PLD 1969 Ker. 805 (pp. 918, 919) } : 12, Inadmiseibility in evidence of an unstamped Promissory note payable otherwise than on demand, Where a promissory note, payable otherwise than on demand, was unstamped, the Legal Remembrancer gave it as his opinjon thatthe promissory note referredto, nothaving been duly stamped betore or atthe time of the execution, was bsolutely ‘ull and void for all purposes from thé very first, thé dofect which rendered it so being, under the exception In the 1st provise of S. 34 incurable by any subsequent payment of duty and ponaity ; and that it cannot be said that there is any revenue due fo Government which ought to be recovered on acoount of stamp duly chargeable. And in the opinion of the Advocate General, the defect cannot afterwards be remedied and the document cannot be admitted in evidence ; the Collector is not entitled to demand the stamp duty which ought to have been paid on such an instrument. (G.R, No. 7569 dated 30th October 1882). 13. Promissory note.in form but attested by two witnesses — Not a bond, A document which purports to be a promissory note in form and to be payable to order, is a promissory note even though itis alfested by two witnesses and not a bond and cannot be validated according to S. 35 {a) of the Stamp Act. {Govinda v. Hari Bhaoo A.L.R. 1993. Nag. 991 ] 14. Applicability—Foreign promissory note not stamped as such—Admissibility. A foreign promissory note which is not stamped as such Is not excluded by S. 35 of the Stamp Act fram being admitted in evidence in a sult tiled by the promisse against the maker of the note for recovery of the amount due on the instrument . [Gangaram Shewakram v. Mullik Nur Ahmed, 28 S. L. R. 266), 15. Proviso (a) of S. 35 is co-axtensive with the main provision of Section 35 just as no instrument chargeable with duty can be admitted into evidence or actod upon, ragistered or authenticated so the proviso stipulates that If there is no proper stamp or there Is deticiency of the stamp that may be atfixed afterwards on payment af penalty and the instrument alter payment of the duty and penalty becomes effective and can be acted upon. [PLD 1970 Azad J& K 66+AIR 1924 PC 221 J 16, Penalty. Penalty payable in such a case fs 10 timas of the duty in accordance with the provisions of clause (a) of the proviso to section 95 of the Stamp Act, The Court has no discretion in the matter to award lessor penalty [1969DLC314 (0, 317)) {tthe above deticit amount plus penalty is paid no objection can be made as to the instrument insutliciently stamped. [PLJ 1975 Kar. 295] on payment of a duty and penalty document can not only be admitted in evidence but also acted upon. [AIR 1952 All 996 + AIR 1921 Cal 613}. 17. Promissory note. Although a promissory note payable on demand is liable to duty as a "bond’,It cannot be treated as a "bond" for the purposes of this section and must be held to be inadmissible even on payment of penalty AIR 1945 Mad 42 (42) } 18. Instrument chargeable with duty of one anna or half anna (not exceeding twenty five paisa): ‘Such Instrument are accepted under proviso (a) to this section, theretore, it an instrument is chargeable with a duty of one anna or hall an anna, if not duly stamped, are totally inadmissible and cannot be admitted in evidence even on payment of duty and penalty. An acknowledgment contemplates a pre-existing debt. Where It is not the contention of the piaintilf that the entry in his bahi was on the settlement of previous account the entry is not an acknowledgment and is not hit by S. 35 land does not require to be stamped with one anna stamped. [AIR 1933 All 577 (61) 1961 Jab Lj. 477 (477) ] Although a "receipt" is chargeable with duly of one anna, it Is admissible in evidence on payment of penalty, as provided ‘under proviso (b). An instrument containing acknowladgment of debt not covered by Art|, will if not duly stamped, be admissibie * + on payment of penalty. [ AIR 1933 Ali 179 ] : 19, Burden of paying Burden of paying the deficit duty and penaity under this section falls in the first instance on the person who seeks to have the document admitted in evidence, (80) 30 All 271 (272) (DB) 3720. tamps used not of proper description. In such a case the value of stamps cannot be taken into account in calculating deficit duty. (19 Mad 1) 21. Certificate of sale. Cattticate of sale once granted without stamp, the Coutt is not bound to grant another certificate on proper stamp in order to enable purchaser to avoid penalty under this section. [9 Bor $26] 22. Suit already disposed of. Suits already disposed of and decrees signed and sealed — Provisions ofthis section are wholly inapplicable Cour cannot tovy deficient stamp duty and penalty on any instrument admitted in evidence. [AIR 1927 Cal 472 (479) } 23, Proviso (b) Under this proviso, an unstamped receipt is admissible on payment of a ponaity of Rs. 1. A person tendering the raca/pt In evidence eannot be required to pay the duty on it in addition fo the penalty of Rs. 1. [Ind. Rul 1932 Lah. 624 :24 AllS74) 24, Proviso (c). This proviso is applicable in those cases where a contract or agreement is affected by correspondence. Corespondence containing complete agreement independently of subsequent draft and engrossed lease which lessor refuses to execute— Correspondence must be stamped and penalty, paid before it can be admitted in evidence. [(90} 17 Cal 548 (656) } Where an agreement reters to anether Gocument, so that the two papers in fact from only one agreement, iis sufficient it one of the papers only bears an agreement stamp. {[(1834) 149 ER 1145 (1448) ] 25, Proviso (d) ‘The prohibtion.as laid down in the first par of S. 35 does not apply to the proceedings in a Criminal Court, except proceedings under Chaptor XIl or Chapter XXXVI of the Criminal Procedure Code. Therefore, with the exceptions io these proceedings, @ Magistrate isnot justified In excluding from consideration a document on the ground ofits net Belng duly stamp. {AIR 1916 Cal. 310) 26, Document bearing Collector's certificate Under proviso (e) of this section, an instrument bearing certificate of the Collector under section 92 is admissible in ‘evidence though not duly stamped. [3 All 118] 27. Party succeeding on stamp objection. ‘A party winning the case merely on the strength of a stamp objection may be deprived of his costs. [911 1 K.B, 127] 36. Admission of Instrument where not to be questioned : = Where an instrument has been admitted in evidence, such admission shall not, except as provided in Section 61, be called in question at any stage of the same sult or proceeding on the ground that the instrument has not been duly stamped. COMMENTS 1. There are two stages rolating to documents fled in Court. One is the stage when all the documents ate fled by the parties in Court The next stage is when the documents are formally proved and tendered in evidence. It fs alter the cocument fe ormally proved that the endorsement relerred in rule ¢ of O. 13 of the Code of Civil Procedure is to be made and the document is thus admitted and the admissibifty of the document cannot therealter be questioned : Where on the date af the institution Gf the plaint the Court ordered the plaintitf to pay the proper stamp duty and penalty on the suit document, it cannot be said that the document has been admitted on that even if the palintit nas paid the duly anc penalty and itis open to the defendant to raise in his writin statement an objection to the admissibilty of the document in evidence, (58) ILR (1959) 9 Raj 1965 (1466) } 2, Where the Court finds in course of the judicial proceeding that the document is admissible, it is really admission tor the purpose of S. 36 and cannot be called into question, It Is net correct to argue that the order of the Court merely declares 38‘Admissibility, and is not equivalent to admission simply because the officers of the Court take some time te note the particulars and put the mechanical marks. [ AIR 1961 Mach Pra 6 (Pr 5} | 3. Under this section, it matters nothing whether the document was admitted wrongly or rightly or admitted without objection cr after hearing or without hearing such objection.’ [AIR 1999 All 588 (590: ILA’ 1999 All 846 (DB)+AIR 1958 Pat 494:PLD 1971 Se. $18 } ] 4. This section refers to all instruments that have been admitted in evidence, whether on payment of the detict duty and penalty or on the ground that they have been duly stamped or are not chargeable with stamp duly. It contemplates all casos ff erroneous admission In evidence. [AIR 1952 All 996 {Pr 32) : ILR (1952) 2 All 984 (DB). ) 5. Stamping—Matter of revenue Section 36 of the Stamp Act, 1899 ts categorical In is terms and no limitation can be read into It more particularly as the limitation intended by the Legislature has been incorporated therein, Stamping is a matter of revenue’ with which the parties are unconcerned and if the Legislature In categorical terms states that once a document is admitted it cannot be questioned fater on at any stage of trial such categorical language must be given effect to, It is possible to take the view that if the purport of section 35 was to impose a duly such a purpose must be given offect to and not allowed to be set at naught by section 36 but its effect being only limited to sato-guarding revenue due to tho State, it is a matter of no concern to the parties . [ PLD 197 Kar. 49=PLJ 1977 Kar, 74+AIR 1961 SC 1965+AIR 1934 Mad S00+ILR 13 Bom. 449 + PLD 1956 Dacca 14+PLD 1981 Dacca 596+1975 SCMR 167 | 6. Initial of the Judge. Instrument tendered in evidence having on it office note with number of exhibit ~ Word “Judge” written below for Judge's signature — Judge not signed nor initialed Instrument held could not be said to have bean “admitted in evidence” “AIR 1948 Sind 194 (194):ILR (1940) Kar 195 (OB) #7, _bamiccon of improperly stamped instruments : ‘The Provincial Government may make rules providing that, where an instrument bearsa stamp of sufficient amount but of improper description, it may, on payment of the duty with which the same is chargeable, be certified to be duly ‘stamped, and any instrument so certified shall then bedeemed to have been duly stamped as from the date of its execution. COMMENTS 1. Stamp of improper description. The expression ‘improper document’ does not include a description of stamp appropriate for purposes altogether outside the Stamp Act, but must be confined to a stamp which Is used for the purpose of denoting the stamp duty chargeable on an instrument, but which is impraper in a particular case, having regard to the Act and the Rule, {('01)24all219(218) (SB) (Disapproved on another point in AIR 1929 PC 219). } 2. Use of Postage, Telegraph or Court f stamp. Lam directed to acknowledge receipt of your letter No. 42/XIll 630 A, dated the 3rd February 1900, enquiring whether Instruments, such as a receipt bearing postage or telegraph or cour! fee stamps, can be dealt with a bearing "a stamp of sufficient ‘amount bul ‘of imprdper description," under section 37 of the Stamp Act, li of 1899 and Rule 16. 1.G, Notitication No. 786, S. R,, dated 17th February 1899, that is to say, whether such an instrument can be certified to be duly stamped on payment of the duty with whien it is chargeable, or under certain circumstances, without such further payment. In reply | am to say that Government of India agree with the view of the Board of Revenue that a stamp of “improper description” within the meaning of section 37 of the Act must be one of the stamps described in the Stamp Act, The contrary view is not, however, entirely untenable, and it would be well a Judiciat ruling could be obtained. In the absence of such a ruling it should be held that the instrument deseribed do not come within the moaning of section 37 of the Act, (Letter No, 2412. S. R., 22nd May 1900, from the Under Secretary to the Government of India, to the Secretary to the Governmaont of N.W.F.P. and Oudh). (G.B. Resolution No. 3770, dated 14th June 1900.) . "38 Instruments impounded how dealt with: (1) When the person impounding an instrument under Section 33 has by law or consent of parties authority 10 receive evidence and admits such instrument in evidence upon payment of a penalty as provided by Section 25 or of duly as provided by Section 37, he shall send to the Collector an authenticated copy of such instrument, together with a certificate in writing, stating the amount of duly and penalty levied in respact thereof, and shall send such amount to the Collector, or to such person as he may appoint in this behalt 39(2) In every other case, the person so impouncing an instrument shall send it jn original to the Collector. COMMENTS 1. Scope. Section 38 provides the procedure t6 be following by the person impounding an instrument under s. 93. Ihe has authority to resolve ovidence and admis ine instrument in evidenes an payment of duty and penalty, he has to adopt the procedure as Iais dovin in subsection (1) of this section, in other cases the procedure as laid In subsection (2) would be adopted. [AIR 1926 All 478 ] Mere placing of document on record does not mean thal the document has been admitted in evidence. Therefore, 3 document, not admitted in evidence, can be Impounded under S. 33 and the matter can be referred to the Collector undor'S.28 (2) for action under 8.40 of the Stamp Act, 1899. [PLO 1967 Lah, 564 ] 2, Sub-section (1). When an instrument not duly stampod is tendered in Court the duty of the Court is to follow the procedure laid down In S. 95 , Proviso (e) and this subsection Lo., to receive the deficiency and penalty and admit the document in evidence and 10 other things mentioned in this subsection. The Court cannot, in such a case retuse to admit the instrument in evidence and follow the procedure in subsection (2):of this section. [ AIR 1926 All 478 } ithas been held that thejrisciction to Gece the question of stamp duty and penalty conferred by tho provi to section 435 is only incidental to tho reception of a document in'evidence, Ifthe panty at whose instance the document was brought to the Gout and who wantod ito have ft a5 pat of his evidence in the ease wanted first an acjudcation by tho Collector es to the proper stamp duty and penalty lovable‘ the Court has only to accede to that request and not impase a decision which the pary Sie not want Even wire the party has frst ipvted the Court to decide the malte, i, bolare the Court pronounced te order, the pany nas resiod fof it the Court has only to Tolow the procedure prescribed in Sections 33 and 38 (2) iar 1958 Trav-ce, 529 (Pr. 6) ] Where a document Is merely produced before Court and the petitioner does not seek to get the document admitted in evidence the case is plainly one to which this sub-section applies so that the Court should send the document in original to the Collector. (AIR, 1959 Mys 172 (172): ILR (1957) Mys. 175] ‘When a document is not sent to the Collector under this sub-section, there is no case pending before the Chie! Revenue Authority and that Authority cannot state a case itself for the opinion of the High Court and cannot similarly be asked to state ‘a case for the opinion of the High Court.{ AIR 1960 Cal. 1340 (44) ] Gye7% impounding of document. Once an insulticiently stamped document comes before a Court or an officer entitled to take evidence under the law cot by consent of the parties, Ii has to be Impounded under section 33 of the Stamp Act, and under section 35, of the same Act it shal be admitted in evidence on the payment of the deficiency and the penalty. Alter that, the procedure prescribed in ‘sub-section (1) of section 36 of the Stamp Act comes into play. The procedure outlined in sub-section (2) of section 38 would apply in olwer cages, Tho fact that the stage al which the insufficiently stamped document comes to the notice of the‘Court is not one of recording evidence makes no difference to the procedur 1o be observed withregard to the impounding of the document and the levying of the deficiency of duly and the penalty thereon. It Is clear, therefore, that once the Court has impounded them Under section 33 of the Stamp Act, the procedure prescribed in section 35 of the samo Act comas into play, and if that happens, then subsequently action has to be laken under sub-section (1) of section 28 and not sub-section (2) thereat. if the document is filed and the party wants it to be admitted in evidence, then the Court can collect the duty and penaity and then admit it in evidence. Buti the party insteading of requiring the document to be admitted in evidence merely wants the, Cour to sent it to the Collector to be deallh with under S. 36 (2) the Court cannot compel the party to pay duly and penalty and have it admitted in evidence. { PLD 1983 Kar 982 (p. $68) AIR 1975 Anch Pra 96) Collector's power to refund penalty pald under Soction 38, sub-section (1) : (1) When a copy of an instrument is sent to the Collector under Section 38, sub-section (1), he may, if he t fit, refund any portion of the penalty in excess of five rupees which has been paid in respact of such instrument. (2) When such instrument has been impounded only because it has been written in contravention of Section 12 of Section 14, the Collector may refund the whole penalty so paid. 40COMMENTS This section deals only with cases falling under Section 38 (1). Those falling under Section 38 (2) aro deal with in Section 40. 2. Sub-section (1) provides for a partial retund of penalty In cases where the penalty recovered is more than Rs. 5 3. Sub-section (2) provides for total refund. In both cases itis in the discr oF not. 1 of the Collector to refund the penalty 40. Collector's power to stamp instrument impounded : (4) When the Collector impounds any instruments under Section 33, or receives any instrument sent to him under Section 38, sub-section (2), not being an instrument chargeable with a duty not exceeding twenty-tive palsa only or a bill of exchange > or promissory note, he shall adopt the following procedure— (2) it he is of opinion that euch instrument is duly stamped, or is not chargeable with duty, he shall certly by endorsement thereon that it is duly stamped, or that it is not so chargeable, as the case may be ; {©) it he is of opinion that such instrument Is chargeable with duty and is not duly stamped, he shall require the Payment of the proper duty or the amount required to make up the same, together with a penalty of five rupees jor fhe thinks fit, an amount not exceading ten times the amount of the proper duty or of the detlcient portion theteot, whether such amount exceeds or falls short of five rupees : Provided that, when such instrument has been impounded only because it has been written in contravention of Section 1. of Section 14, the Collector may, if he thinks fit, remit the whole penalty prescribed by this section, (2) Every centticate under clause (a) of sub-section (1) shall, for the purposes of this Act, be conclusive evidence of the matters stated therein. (3) Where an instrument has been sent to the Collector under Section 38, sub-section (2) the Collector shall, when he has dealt with it as provided by this section, retura it 10 the impounding ofticer. COMMENTS 1. Scop Section 40 lays dowa the procedure to be adopted by the Collector when he himself impounds the Instrument under S, 33, oF receives an Instrument under S. 38 (2). According to S. 40 (1) (b) i the Collector is of the opinion, that such instrument is chargeable with duty and is not duly stamped, he shall require the payment of the proper duty or the amount required to make up the same, together with a penalty of five-rupees ; or, fhe thinks tit (an amount not exceeding) ton times the amount of the proper duty or of the deticient portion thereof, whether such amount exceeds or falls short of five rupees, The Semi- Golon aiter the words together with a penalty of five rupees" is somewhat misleading and might lead to the conclusion that the Collector shall require payment of an amount not exceeding 10 times of the proper duty or of the deficient duty, inclusion of the proper duty or the deficient duty. But that is not so. The section empowers the collector to require payment of the proper duty or deficient duty and penalty equal to 10 times the proper duty or deficient duty in addition. A document not admitted in ‘evidence can be impounded under S. 33 and the matter can be refarred 10 the Collector under S. 38 (2) for action under this section. [ PLO 1960 W.P, (Rev) 70 PLD 1967 Lan, 564) Itis the Collector alone who has the powerto assess the penalty, though the Court or any other officer having the authority by law may impound the document. [AIR 1955 Hyd. 17 ] Tho Stamp Act does not provide anywhere that the Collector can cancel his orders once passed under S, 40 (1) (ab or (b). [AIR 1957 Raj. 211 ] 2. Procedure The Collector is bound under S, 40 to determine whether the instrument is properly stamped. If he finds that itis not properly stamped, he has to pass an order requiring the payment of the duty as well as a penally the minimum of which is Rs. §/- and the maximum ten times the proper duty. [PLD 1960 Lah 211 J Where 2 Collector considering an instrument to be insufficiently stamped, levies the deficient stamp duty and penalty bbut subsequently, before endorsing his certificate on the Instrument comes to know that the instrument is sutticientiy stamped : 4ame may cerity thatthe instrument is fully stamped and relund the sums colected under his efroneous orders, as sums fevied” By mistake. (C38) Mad SM p. 41] Tho Collector or his successor can refund the duty collected in excess of the correct duty and penalty. [ ( 3 3) Mad. SM. 41] 3. Certifieste of 1@ Collector — Finality. Where the Collector certilies under clause (a) of sub-section (1) about the chargeability of the instrument or that it 1s duly stamped. Such a certificate is conclusive, The correctness or validity of such certticate cannot be questioned. Question of stamp cannot be reopenad by a reterence to the High Court under 5. $7, [AIR 1941 Lah. 65: ILA 1940 Lah 626 AIR. 1938 Ouch 226+AIR 1916 All 181 } : Power of interference by the Chie! Revenue Authority under S. $6 (1) can only be exercised befare the Collector nas ‘endorsed certificate on the instrument. [AIR 1932 Cal 736: 25 Mad 752 ] Until the Collector certifies by endorsement the required payment under S. 42 (2), the Chief Revenue authority has . a tull scope to Interpose iis control under S, 56 (1) 58 (1) at the instance of the party concemed or otherwise and require tne Collector o exercise his power as it directs. [ (02) 25 Mad 752 (760, 761) (SB) (39) 34 Pun LA 630 (631) |. Betore the Collector has occasion to give any certificate under S. 42 an order passed by the Collector under subs. (1) (b) can be interfered with by the Chiet Revenue authority directly under S. $6 or indirectly, by making a reference to the High Cour under S. 57.{ (02) 25 Mad 752 (760, 761) (SB) AIR 1932 Lah 495 (496) : 19 Lan'745 (SB) + AIR 1995 Lan 449 (480) ‘The conclusive presumption under the sub-section, is not applicable where the Collector endorses the certificate on instrument which has been accepted under this section, as such as certificate is without jurisdication [AIR 1926 All359), It order of the Collector Ie wrong, It is subject to revision and if it is contrary to law, itis subject to the jurisdiction of the High Court as provided undor the Constitution. [AIR 1957 Andh. Pra 237 | 4. Jurisdietion of the Civil Court, ‘A.Civil Court has jurisdiction to entertain a suit for relund of stamp duty and penalty illegally realised by the Collector from the plaintif under the Stamp Act. [AIR 1959 Orissa 144 (148): 6LA (1959) Cut 16 (DB) } 5, Person who can be compel to pay stomp duty/pensliy. According to Allahabad High Coun, it Is the person who wishes a document to be admitted in evidence in Court, who primarily is the person from whom the requisite duly and penalty should be recovered, [30 All 271} 6. Notice to the executant ‘Section 40 does not speciically provide for notice to the executant of the document. But itis expected that the Collector. ~ before he decides whether the instrument is property stamped or not, would give notice fo the executant so that he may put torward his point of view belore the Collector, in case he desires to do so. {AIR 1957 Raj 211 (212) ILR (1956) 6 Raj 224 (DB) | ‘The principles of natural justice require that a notice should be given to the parties concerned. {AIR 1957 Andh Pra 237 (242) ] 1 7, Document placed on record — Does not amount to be adniltted. ‘The document is admitted In evidence only when itis proved in accordance with the provisions of the Evidence Act and is exhibited and thera is a chain of authorities to support the view that mere placing of the decument on the record does not mean that the document has baen admitted in evidence. [AIR 1922 Lah 401 (2): AIR 1935 Mad 888:-PLO 1961 Dacca 596: AIR 1927 Lah 115) Where the document has not been admitted the only order that can be passed by the trial Courtis toimpound the document under S33 af the Stemp Act and to have deterred action under section 35 Proviso (a) till such time the document is sought to be admittad in evidence by either party. In case this eventuality does not arise the Cour is empowered under the provisions - fof Section 38 (2) to reler the matter to the Collector for action under section 40 of the Stamp Act,[PLD 1967 Lah 564} ~ Where a document is merely produced before the Court and the petitioner does not seek to get it admitted, the case 42's plainly one to which S. 38 (2) applies and the Court should send the document in origiral to the Collector [AYR > 1959 Mys 172 (172) : ILR (1987) Mys 175} 8. Impounded instruments when no duty and penalty levied, how to be dealt with, Memorandum fram the Remembrancer of Legal AMfairs No. 1758 dated goth May 1927 — “The intention of the lagislature appears to be that it documents other than instruments chargeable with a duly of one anna or half anna or bills of exchange or promissory notes, which are insufficiently stamped are produced before an otticor entitled tw receive evidenes, he may accept them in evidence (section 36) alter levying the delict duty and penalty. I they are produces before any other officer, he may impound them (sec. 38) and send them to the Collactor who will return them after levying the deticit duty and penalty (sec. 40). Instruments chargeable wih a duty of one anna orhalf an anna, bills of exchange and promissory ‘notes, if insutficiently stamped, are treated differently. The defect in the case of such documents is intended to be Irremediable. They cannot be received in evidence (sec. 95) nar can the Collector levy deficit duty and penalty on ther. The intention appears tobe that such documents should be permanently impounded. Thisisinitsetf sufficient punishment, even i there is no prosecution.” (Wide G. R. R. D. No.8765/24 dated 7th June 1927) 8. Forms of certificates under Se n 40. (Specimen). (1) Contig undar Section 40 (1) (a) of Act II of 1899 that this instrument Is duly stamped. (2) Certified under Section 40 (1) (a) of Act Il of 1899 that this instrument Is not chargeable with stamp duty, (3) Received tro insulficient stamp duty Rupees, Centilied under Section 40 (1) (b) of Act Il of 1899 that the properiadditional stamp duly RE... and penalty Rupees, hava been paid in respect of this instrument, "40.-A_(1) Where on examination of a copy of an instrument or otherwise itis detected that particular instrument is not duly stamped, the matter shall-be reported to the Collector, (2) On receipt of a report under sub-section (1), the Collector’shail by notice require the person who Is liable to pay the proper duty to produce the original instrument before hirh within the period specified in the notice. (8) The Collector shall, on receipt of the original instrument under sub-section (2) of copy of such instrument or otherwise, notwithstanding anything contained in this Act, deal with the instrument or make order in respect thereof as provided in section 40". (Inserted by the Stamp (Sindh Amendment) Ordinance, 2000), 1. Instruments unduly stamped by accident : any instrument chargeable with duty and not duly stamped, noty being an instrument chargeable with a. duty not exceeding {wenty {ive paisa only or a bill of exchange or promissory nota, Is protuced by any person ef his own motion botore the Collector within one year Irom Mie date arity igealia Grist execution, and such person brings to the notice of the Collector the fact thet such Instrument is nel duly stampe: ad offers to pay to the Collector the amount ot the proper duty, or the amount required to make Up the same, 2 the Collector is satistied that the omission to duly stamp such instrument has been occasioned by accident, mistok ef urgent necosalty, he may, Instead of proceeding under Section 99 and 40, receive such amount and proceed 38 next hereinatter prescribed. COMMENTS Under this section the Collector can receive duty or deficit duty without levying any penalty in cases where the omission duly to stamp an instrument has been occasioned by accident, mistake or urgant necessity. But the document must be produced by the person concerned within one year 42. Endorsement of instruments on which duty has been paid under Section 35, 40 or 41 : (1) When the duty and penalty (i any) leviable in respect of any instrument have been paid under Section 95, Section 40 or Section 41, theperson admitting such instrument in evidence or the Collector, asthe case may be, shall certty by endorsement thereon that the proper duty ar, as the case may be, the proper duty and penalty {stating the amount of each) have been levied In respect thereo!, and the name and residence of the person paying them. (2) Every instrument so endorsed shall theraupan be admissible in evidence, and may be registered and acted upon ~ . and authenticated as if it had been duly stamped, and shall bo dolivored on his application in-this behalf to the person from whose. possession il came into the hands of the olficer impounding it, or as such person may direct 43Provided that— (2) no instrument which has been admiiied In evidence upon payment of duty and a penalty under Section 35, Shall be so delivered before the expiration of one manth from the date of such impounding, or i the Collector has cerlilied that its further detention is necessary and has not cancelled such cenificate; (6) nothing in this section shail affect the Code of Civil Procedure, Section 114, Clause 3. COMMENTS 4. Certificate by Collector—Conctusi Acertficate issued by the Collector under this section is conclusive as regards question of stamp duty. It's not competent for a Civil Court to go behind it, (AIR 194 Lah 65] ‘iter he Collector nas endorsed the corticato under this Section, the Chist Revenue authority cannot exercise its = powers ot sonal under S. 8 (1) nor ean itreler tho case fo tho High Gourt undar S, 67. [AIR 1958 All 417 (419) LR (1958), 2 Al 246 (SB) | : Whore a Sub-Ragistrar makes a reference and a cortificate under this section is issued, the matter is concluded so {far as he is concemed and ha has 10 register the document. The word “may” in this context has the same force “as shall” the executive authorities are Gissatistied with the order of the Collector their remedy is by way of a revision to the Chiet Revenue authority under S. 56 (1) of the Act. [AIR 1957 Raj 211] Where a document purports to be a deed of adoption but is in reality a daed of gift and is stamped as an authorty to adopt, if the Collector validates and cottties it under section 42, his decision js final and binding and cannot be set aside by a vil Court, 7 N. |. R. 26 ralied on. [Ajodhya Prasad v, Parashram ALR. 1929 Nag. 272.) 2. Forms of Certificates under S. 42 (Specimen) (1) Corltied under Section 42 of Act If of 1899 thal the proper stamp duly or additional stamp duty Rupees has been paid in respect of this instrument (2) Received trom insufficient stamp duty and penalty Fupees. Cerftied under Section 42 of Act I 1899 that the proper stamp duly Rupees and penalty Rupees have been paid in respect of this Instrument 43. Prosecution for offence against Stamp Léw : The taking of proceedings or the payment of a penalty under this Chapter In respect of any instrument shall not bar the prosecution of any person who eppears to Rave committed an ‘offence against the Stamp Law In respect of such instrument : Provided that no such prsecution shall be instituted In the case of any instrument In respect of which such a penalty has been paid, uniess it appears to the Collector thet the offence was committed with an Intention of evading payment of the proper duty. COMMENTS: ee 1, Opportunity to pay. An opportunity must be given to a patty to pay the penally before the Collector exercise his discretion of sanctioning = a prosecution under S. 70. [(63) 7 Bom 62 (SB) (DB), (82) 8 Cal 259 (261) (08)] Where no opportunity was given to accused to pay duty and ponalty ho being free {rom any criminal intent, his conviction will be set aside, [AIR 1921 Pat 233 (234)] 2, Proviso. ‘The Proviso to this section is mandatary in iis torms and betore a prosecution is sanctioned in respect of an instrument covered by this section the Collector must come to the clear finding that there exists an intention to evade the payment of proper duty. [AIR 1924 Pat 293 (234)+(28)29 Cri L Jour 997 (299)] 3. The question of intention of evading the Sizmp-law is one exclusively for the determination of the Collector and the Griminal Court is bound to convict upon the mere proof of the facts, J.e. on the production of an unstamped or under stamped document and the evidence that it was executed by the accused person. [United Provinces Board's Circular Letter No.3/V.S.— 33/4), of 28-11-1918] [See also section 61(4),) 4444. Persons paying duty or penalty may recover same in certain cases : {1 sree any duty or penalty has beon paid, undar Section 35, Section 37, Section 40, or Section 41, by any person {cp eet ol an instrument, ang, by agreement ar under the provision at Section 28 or any other racers a one time THe ner nant was executed, some other person wos Boundio bear ne expanseol proving he propercie ra ection ‘he lirst-mentioned person shall be entitled to recover trom such other person the amount of the duty oe penalty so paid sinew bebose of Such recovery any certlicate granted in respect of such instrument under this Act shale concluewe evidence of the matters therein certilied. : one ace Semnee may, Hl the Court thks tt, be included in any order as 10 costs In any suit oF proceeding to which Fee any ae Paes and in which such instrument has been tondered in evidence. I the Coun does nok ncleoe ve ann 'n such order no further proceedings for the recovery of the amount shall be maintainable COMMENTS 1. Person bound to pay stamp duty can not recover the same under this section : a raargen vino had to pay detet duty ary penalty was bound by law to provide the proper stamp duty, ne has 3° 19m, (9 Teeaver the same under cub-section (1) of this section (Purshotam amv. Mangal ava 1636 Ae Ji, 187) 2 sade ik section deficit duty ane penalty can be recovered from the person who is lable to pay duty under section Tie ee Sargement. i such a porson is nota party to the suit the recovery can be made ty s separate si cere fpeaTty 0 the suit the court may include the amount of detct duty and penaly poid by ine plait 45. Power to Revenue authority to refund penalty or excess duty in certain cases : (1) Where any penalty is paid under Section 35 or Section 40, the Chief Revenue Authority may, upon application in wring made within one year trom the date of the payment, rofund such penalty wholly or in eee oeengcelsnihe opinion of the Chiet Revenue Authority stamp-duly in excess of that which I legally chargeable tice eather an Paid under Section 25 or Section 40, auch authority may, upon application in writing mae three months of the order charging the same, refund the oxcess, COMMENTS, 1. Who can apply, ery Toe TO™ Me Penalty has been imposed has the only remady of applying for refund under this Section. ( 80) 5 Gal 311 (314) (OB)} . 2, Section 61, Font rh ave Gi nas no application when refund ofthe excess duty or penalty is dsked for bythe’ parson tendering ihe document in evidence, This section provides the only remedy to the aggrieved party. (AIR 1951 Pat 62S (Pr 3) 3. Civil Suit. init oat has Jutissiction to entertain a suit for round af stamp duly and panally legally realised by the Cellecror from the plainti under the Stamp Act. [AIR 1959 Orissa 144 (145, 146): ILR (1959 Cut 16 (OB)] 4. Exceptions made by executive order. ee sae, re estictlons imposed by the Ac itis open to the Provisional Government to make exceptions by passing an executive rule. (1.G. Reso : No. 125 dated 14Ih January 1881), Non-liabllity for loss of instruments sent under Section 30 : (2 Hany mmetcument sent to the Collector under Section 36, sub-section (2), 18 lost, destroyed or damaged: during Vanamission, the person sending the same shall not be table for such loss, destruetlen or damage, ‘ (2) when, any Instrument ls about to be so sent, he person from whose possession it came inte the nande sane person impounding the same, may require a copy thereo! to be made at the expense et cock ara ‘mentioned person and authenticated by the person impounding such instrument, 4547, Power of payer to stamp bills andl promissory notes received by hin unstamped.— When any bill of exchange or promissory note chargeable with the duty of five palsas, oF fifteen paisas Is paid ter saymont unetamped, the person to whom it is so presented may affix thereto the necessary adhesive stamp tnd upon cancelling the same in mannet here In before provided, may pay the sum payable upon such bil or ote, and may charge the duly against tHe person who ought to have paid the same, or deduct it from the sum payable 28 aforesaid, and such ill or néte shall, 60 far as respects the duty, be deemed good and, valid : Provided that nothing herein contained shall relleve any person from any penelty or proceeding to which he. may be liable in relation to such Bill or note. COMMENTS: ‘Section 47 which is an enabling one cannot be interpreted as permitting the bill being stamped by an intermediate holder of the bill who is nether the drawer nor the drawee in order to validate such bill and thereby enable himself or a subsequent holder of the bil to bua the drawer. (AIR 1925 Sind 241 (241)] ~48, Recovery of duties and penalties ; [All duties, pensities end other elims required to be pald under this Chapter mey be recovered by the collector by distress and sale of the mafable property of the person trom whom the same are dus, or by eny ‘other process for the time belng In fotce tor'the recovery of arrears af land-revenue, COMMENTS 1, According to Madras High Coutl the solution of the question as to who is the person against whom the collector could proceed under Ss. 40 ard 48 has to be searched for elsewhere than in Ss. 29 and 44, and the true coer oote atoning ne provision of 8. 17 and 62. Se. 17 and 62 show thatthe agreement betweon the partes and sre icone of §29 & 4 are applicable ony Detwoon the pares leaving the Collector's right under Sb. 40 and 48 aoe eae RIA 1950 MAD 454 (458) UR (1056) Mad 1074 (DB). (30) All271 and AIR 1940 Lah 316, Disdonted trom) 2, Acoortding to the High Court of Andhra Pradesh, agreeing with Lahore view, where several persons jointly executed a document, the Collactor can probed, under Ss. 40 and 48, against any of them, as they are all jointly and, Soverally liable . He iS not Bound to collect the pro rata shares from each, (AIR 1966 Mad 454 (458) : ILA (1956) Mad 4074 (0B)] 8. A deed was executed by three persons two of whom are not traceable. The third objected to the payment of duties - and penalty, imposed by the Collector, on the ground that the deed was filed against him in the court by one Of the untraced persons. Held that the duty and penally could be realised from the person present who could after making the payment recovar the proportionatf share payable by the othor two executants under section 44 of the Stamp ‘Act (U. P. Board's order No. 173(28), Sis. 125 and 145.) 4, Where an agreement was tehdeted in evidence and a'decree was pasted on its basis without deficiency land penslty are boing realized, it was held! that the amount could be realized under this section by the Collector (Baldeo Prasad V Ajodhya Prasad, 12 Lké., 782, relying on Ketra Mohan Saha V. Jamini Kanta Dewan, S¢ Cal, 445). 5, Powers conferred for the purposd of recovery of stamp duty : In exercise of the powers conferred by Sub-Section (2) and (8) of Section 16 of tho Sindh Land Revenue Act, 1967, the Board of Revenue, Sindh is pleastid to confer the powers of Assistant Collector Grada |, under the said Act Zen Mr. Muhammad Ismail Memon, Senior Insbector of Stamps, Board of Revenue, Sindh for the purpose of recovery of ‘stamp duty/dues as arrears of Land Revenue under the sald Act, Such powers are to be exercised by him subject to the Eonttel of the Collacior concerned frém the date of issue of this notffcation (Government ot Sindh, Revenue ‘Department's Notification No, 27-12-1994-Estt IV, dated 7th Apr, 1994). Note : The powers conferred under this Notilication, when read with Section 48 of the Stamp Act, 1899, correspond to the powers of the Collector as defined in Ciduse (b), Sub-section (9) of Section 2 of the said-Act, for the-purposo of recovery stamp duty/dues. 46CHAPTER V. ALLOWANCES FOR STAMPS IN CERTAIN CASES . General orders, 1. Tho Collector cannot dolagate any o his powers to any subordinate to him, nor any one can sign“ notes under S 2 (9). Page 5). : ul dre 2. Appeal against Collector's order. ‘The powers exercised by the Collector under this Chaptor shail in all cases be subject to the Control of Chief Revenue Authority. {Section 56 (1)] 3, Inhorrent Powers of Government to sanction refunds, ~ 1. But whether section 51 or 54 applies Government have inherrent powers to refund any amount paid for stamp duty itthey consider that a propercase has been made out, without any bar as o limitation. twill be for Revenue Department to consider whether a proper case has been made out. (Opinion of the Rememberancer of Legal Affairs, No. 2119 dated 12th April 1934; GR. R. D. No. 2417/33 dated 16th May 1934.) 2. Government have, however, an inherrent power to grant refunds provided they are satistied that a proper case hag been made out. The power of Government is not limited to cases acivally provided in Chapter V of the Stamp Ack. of 1899. (Memo from the Remembrancer of Legal Affairs, No. 4107, dated 23rd July 1984; G, A. A.D, No. 24428 33 dated 28th August 1934). 7 4. In cases of doubt, the Superintendent of Stamps, Karachl to be consulted. {it willbe sufficient, fall the Collectors in Singh should consult the Superintendent of Stamps, Karachi in doubtful cases before granting refunds or renewals of unused oF spoilt Non-judicial and Court-too stamps. (Letter No. 3534 dated 8th October + 1914 from the Commissioner in Sind). 5. Evidence as to circumstances of claim to refund or renewal. ‘The Collector may require any parson claiming a refund or renewal under Chapter V of the Act, or his duly authorised gent, to make an oral deposition on oath or aftirmation, or to file an affidavit, sotting forth the circumstances under which tho claim has arisen, and may also, if he thinks fit, call for the evidence of witnessos in support of the statement set forth in any such deposition or affidavit, (Rule 19 of the Stamp Rules, 1925). 6. Payment of allowances in respect of spoiled or misused stamps or on the renewal of debentures. When an application is made for tho payment, under Chapter V of the Act, of an allowance in respect of a stamp which has been spolled or misused, of for which the applicant has not immediate use, or on the renewal of a debenture, and an order is passed by the Collector sanctioning the allowance or calling for further evidence in support of the application then, ifthe amount ~of the allowance or the stamp given in lieu thereof Is not taken, or if the further evidence required is not furnished, as the case may be, by the applicant within one year of the date of such order, the application shall be struck off, and the spoiled or misused ‘stamp (ii any) sent to the Superintendent of Stamps or other officer appointed in this behalf by the Local Government for destruction, = (Rule 20 of the Stamp Rules, 1925). 7. Application for refund or renewal exempt from Court fe 1nd appeal to the Chief Revenue Authority not exempt. When an application is presented to a Collector for refund of the amount paid to the Government for stamps which have become spolled or unfit for use, of are no longer requited for use and for renewal of stamps which have become spoiled fr unfit for use Is exempt from payment of court foo stamps under general exemptions of the Court Foes Act, Vil of 1879. But an application fr refund addressed to the Chief Revenue Authority is virtually an appeal from a Collector's order and therefore does not come within the exception cited and it must bear the proper court feo stamp 8, Provisions not applicable to Court Fee Stamps. ‘The provision of Chapter V refer to non-judicial (impressed and adhesive) stamps and have no bearing to Court Fee impressed and adhesive) stamps, therefore refund or renewal of Coyrt Fee stamps cannot be governed by these provisions. For Court Fee stamps there are separate rules. a7‘9. Specimen forms of orders sanctioning refund or exchange of stamps under Chapter V. (W) Refund. : Refund of Rupees (800/-) eight hundred only on account of spoiled Non-judicial stamps worth Rs. 20 and Hundt Stamps worth Rs. 24/- sanctioned under Section 49 (a) and (c) (1); 50 (2) (3) and 53 (c} of the Stamp Act, Hl of 1899. (i) Exchange. Exchange for Rupees (5) five only in respect of a Non~Judicial stamps worth Rs. §/- sanctioned under Section 49 (d) (2). 50 (3) and §3 (a) or (b) of the Stamp Act, Il of 1899, 10. Refund or renewal when sanctioned, stamps to be defaced. When the Collector sanctions a refund or renewal, he shal then and thare record his reasons for granting such refund or renewal, and shall punch or mark the stamp paper In such a way that it can never be presented again, and shall forward It for destruction to the Superintendent of Stamp (Government of India Notification No. 8787, dated 28rd October 1673). - 11, Refund when refused, procedure to be adopted. When applications for the refund of the value of spoited stamps are rejected in accordance with the rules laid down In the Stamp Manual, the words “refund refused” should be written across each stamp. In the case of stamps for which there | no immediate use (Section 54 of the Stamp Act) the endorsement should be so made as not to cancel the value of the stamps and preclude thelr being used subsequently I the owner so desires. {Madras Board B.P, Mis. No, 165/1105-A, 7th September, 1912}. 12, Refund or exchange should be allowed In reasonable tim In the course of audit of refund schedules of a Treasury, it was observed that Non-Judicial stamps worth Rs.8/4/- has been tendered for refund on 10th December 1934, and rofund allowed after more than two years. It was pointed out that why such a delay had occured in granting the rofund when it could have been granted within a week's time as the case was not ‘a complicated one, In another case it was also pointed out where a Non-juridicial stamp worth Rs.10/- was tendered for refund ‘on 14th November 1935 and refund order passed on 10th February 1937 that there has been an inordinate delay. in order to allow refunds in reasonable time the Treasury Oilicer was asked to instruct all Mukhtlarkars to see that there should be no delay in granting refunds or renewals of spoilt stamps. [Letter No. 1042 dated 1 4Ih May 1937 fromthe Superintendent of Stamps, Karachi 7 Allowances for spoiled stamps : Subject to such rules as may be made by the Provincial Government as to wvidenee to be required, or the enquiry to be made, the Collector may, on application made within the period prescribed In Section 50, and if he is satisfied as to the facts, make allowance for Impressed stamps spolled in the cases hereinafter mentioned, namely : {a) the stamp on any paper inadvertently and undesignedly spolled, obliterated or by error In writing or any other means rendered unfit for the purpose Intended before any instrument written thereon is executed by any person; (ere stamp on any document which Is written out wholly or in part, but which Ie not signed or executed ‘by any party thereto; {c) in the case of bills of exchange payable otherwise than on demand or promissory notes— (1) the stamp on any such bill of exchange signed by or on behali of the drawer which has not been accepted ~ ‘or made use of in any manner whatever or delivered out of his hands for any purpose other than by way of tender for acceptane: led that the paper on which any such stamp Is impressed does not bear any signature Intended as or for the acceptance of any bill of exchange to be afterwards written thereon; (2 ihe stamp on any promissory note signed by or on behalf of the maker which has not been made use of in any manner whatever or delivered out of his hands; (9) the:stamp used or intended ta be used for any such bill of exchange or promissory note signed by, ur on tbohall of, the drawer thereof, but which from any omission oF error has been spolled or rendered useless, although the same, being a bill of exchange, may havebeen presented tor acceptance of accepted or endorse or being a promissory note, may have been dolivered to the payee : provided that another comple 1d and” 48duly stamped bill of exchange or promissory note is produced identical in every particular, excey (d) the stamp used for an instrument executed by any party thereto which— (1) has been afterwards found to be absolutely void In law from the beginning ; (2) has been afterwards found unfit, by reason of any error or mistake ther for the purpose originally intended; (2) by reason of the death of any person by whom It is necessary that it should ba executed, without having ‘executed the same, or of the refusal of any such person to execute the same, cannot be comploted so 2s to effect the Intended transaction in the form proposed; (4) for want of the execution thereof by some materidl party, and his inability or refusel to sign the same, is, fact incomplete and insufficient for the purpose for which it was intended; (8) by reason of the refusal of any person to act under the same, orto advance any money Intended to be thereby secured, orby the refusal ornon-acceptanca of any office thereby granted, totally falls of the Intended purpose; (6) becomes useless in consequence of the transaction Intended to be thereby effected being effected by some other Instrument between the same parties and bearing a stamp of not less value; (7) is deficient in value and the transaction Intended to be thereby offected has been offected by some other Instrument between the same parties and bearing a stamp ot not less value; (8) Is Inadvertently and undesignedly spolled and In lieu whereof another instrument made between the same partles and for the same purpose Is executed and duly stamped : Provided that, in the case of an executed instrument, no legal proceeding has been commenced in which the instrument could or would have been given or offered In evidence and that tho instrument is given up to be cancelled. Explanation : The certificate of the Collector under Section 92 that the full duty with which an instrument is chargeable has been pald Is an impressed stamp within the meaning of this section. COMMENTS: 1. Scope. ‘According to Stamp Manval, 1934 “Impressed” stamps only are referred to in this section which term includes impressed labels as well as sheots (section 2 (12) and an unstamped document certified under section 32. In connection with clause (c) no refund can be granted in the case of bills of exchange which have been used as cover and sent to firms in England or home partners or directors, although such bills may not have been negotiated (Government of India Resolution No. 2696, dated 7th ‘June, 1889). Refunds under sub-clause (6) of clause (d) of this section are allowable independently of the refund rules in and ‘Under the Act iisol in the case of stamps rendered useless solely in consequence of changes of law oF rula. Sub-clause (7) of clause (d) makes it cloar that a person who throws aside an insufficiently stamped deed, and gots a new deed in the samo terms drawn up and proporly stamped, is entitled to get a rafund made to him of the duty which is first of all paid upon the insutficiently stampod and superseded deed. Registration does not ipso facto affect the right to refund the value of a stamp of a document which has been ragistered, and when refund is made in such a case the ragfistration office should be informed. 1d stamps in cases referred to in subsection (d) 6, 7 and 8 must be produced betore the Collector. The rules applicable are rule 19 and 20 of the Stamp Rules, 1925. (Pb. S.M. Para 36, Part IB, Chap. 2] 2. Impressed stamps. ‘Ths provision as to allowance for spolied stamps under this section Is restricted to Impressed stamps, and does not apply to adhesive stamps... [ ('33) Mad S. M. p. 50] 3, Vold In Law. ‘An agreement not enforceable by law Is said to be vold. [The Contract Act IX of 1872. 8. 2 (9)). Every agreement, of which the object or consideration is unlawtul, is ve", The consideration or object of an agreement is said to be unlawtul, if it ig forbidden by law ; of is of a such nature that, / ermitted, it would dofeat the provisions of any law ; or itis traudiant ; or involves or implies injury to the person or proper of another ; or the court regards it as immoral or opposed to public policy. (The Contract Act. 1X of 1872, S. 23}. 494, Explanation of Section 49. Rotund or renewal can be granted under this section only when the stamped papers alleged to be spoiled fall clearly within one of the severat clauses of the section, and application is made within the time prescribed in section $0 Clause (a) provides forthe case of stamps inadvertently and undesignedly spoiled before any instrument has been executed on them. Clause (b) for the stamps on any document which written wholly or in part, but which is not signed or executed by any party thereto. Clause (6) for the cases of spoiled stamps used for executed bills of exchange or promissory notes. Clause (2) for any other spoiled impressed stamps on which an instrument has been duly executed. 5. inadvertently or wrongly endorsed stamps by stamp vendors, (i) tfan incorrect endorsement has been inadvertently made by a stamp vendor, the stamp should be considered as spoiled under section 49 (a). (i) Stamped papers wrongly endorsed by the licensad stamp vendor may be treated by the Collector as spoiled and exchange allowed, Such papers need not remain long in the hands of vendor who should as early as practicable apply to the Collector for exchange. (Letter of Inspector General of Registration and Stamps, Bombay No : 1238 of 1884. 6, Clause (c). Bills of exchange are drawn in parts, each part is numbered and contains a provision that it shall continue payable only so long as the others remain unpaid ; but the whole. set constitutes only one bill and is extinguished when one of the parts, if a separate ill would be extinguished (see Sec. 192 of of Negotiable Instruments Act XXVI of 1881). 7. Refund on bills of exchange used as covers. Refund of the value of stamps affixed to bills of exchange which have been used as covers and sent to home firms and home partners or directors who are payees should not be granted. (G. of LF. & C, N 1696; dated 7th June 1889 vide GR. No: 4967, dated 11th July 1889), ‘ 8. Presentation for acceptance : Gi. (c) (1) — A cenain firm crew a bill of exchange in a sot of throo bills in their own favour upon another firm, signéd the bills as dtewees and blank endorsed them as payoos. They thn discovered an error in the bills, and drew a fresh set of bills in lieu of the spoiled set, and applied for rotund of the stamp duty. Held, that as the bills did not leave the hands of the drawers, the value of the spoiled stamps may be refunded under S. 61 (b) now S. 49 (c) (1), [Mad Bd's Pro. No. 137 dated 40th January 1884), A 9, Interpretation of clause (c) (3) But, now the corresponding clause (a) of the present Act applies of stamps rendered unfit by an error In writing oF any oiher means, as the undermentioned ruling was brought to the notice of the Government of India in view to the section being amended in consequence of the hardship caused to the public by following the interpretation of the High Court of section Bi (a) Act 1 of 1879, “Section 51 (a) of the Stamp Act (1879), which pormits the allowance being made for spoiled stamps, applies only to cases of accidental spoiling of the paper of which the stamps Is made, and does not cover cases of the use of the paper in an ordinary way in which mistake has been made.” The Government of India replied that, In particular case referred to, ifthe bill of exchange (which was rendered unfit for use through a clerical error in filing it up) was not executed a refund was admissible under section 51 (a) {now S. 49 (a) rit was executed but not delivered to the payee or deposited as security or in any way negotiated, issued, putin circulation or otherwise made use of and if it had not boen accepted by the drawee a refund was claimable under section 51 (b) (now 49 (c) (1)) and ifthe instrument had been prosented tor acceptance of acceptad or endorsed, a retund might be claimed under section 51 (0) (now Section 49 (c)} provided another complote and duly stariped instrument was produced. (,G. Letter No:3227.S.R. dated 27%h July 1886). 10. Clause (4) Sub-clause (1). In the Act of 1879, this clause was so framed as to be applicable to documents which had been ‘found by a competent Court to be void in law from the beginning.” In the present Act all reference to the Court has been omitted, vide extract from speech of the Hon’ple Sir James Westland, “There is one change which has been made in this Chapter to which it is necessary to draw attention because | think that the present provisions of the Act are based upon a misunderstanding. The provisions of the English Act, from which the 50indian law is taken, are that if a document is found to be void in taw from the beginning, the parties who ‘lund ofthe dy whic hay have pai upon povided vo lgal praceodngs hove Sea eh oe can ch would have been given in evidence. As adopted inthe Ae of T879iNs secon was wordes ee oe nese anata cacument have boen fund by Couto aw obo void This reteonee tot Engish a wl show oe ase ee eh by 2 Cou be voi, must have boon reduces in evanca store iat Gaur ans must have Seen rate eer ene producing. Theres no reason why duty shouts ouch 8 ase bo cunded, Wo have ears ened ee Lewin tis respect sos to bring tito contrmy ih he Engioh Lass 11, Clause (4) (6) — Same perties. Whore a sale-deed executed in favour of A, but A dio before registration of dacument — Second sale-deed on stamp af same value executed in favour of A's widow — Second document may be considered to have been executed between same patios and refund can be granted under sub-clause () (6) [('33) Mad Si. p. 52 J Retunds under this sub-clause are allowable independently of the rotund rules in and under the Act iiselt in the case of stamps rendered useless solely in consequence of change of faw or rule. {('34) Punj. § M Part LB, Ch. 3 | 42, Clause (a) (7). Sub-clause (7) of clause (d) of S. 49 makes it clear that a person who throws aside an insulliciently stamped deed, and gets @ now deed in the same terms drawn up and properly stamped, is entitled to get a refund made to him of ihe duty which he first of all paid upon the insulliciontly stamped and superseded deed. | ('34) Punj. S M Part LB, Ch, 3 ] 13, Sub—clause (7). Insufficlently stamped paper. {1) The Act of 1879 did not provide for retund or renewal of stamp in cases in which it was of less value and used inadvertently, even when a second instrument was executed upon full stamp and now this defect has been removed: as the present clause makes it clear that the person who throws aside an insufliclontly stamped deed, and gets @ new deed in the terms drawn up and properly stamped, is entitled to get a refund made to him ol the duty which he first of all paid upon the insufficiently stamped and superseded deed [vido also para 19 of the speech of the Hon'ble Sir James Westland, dated 21st March 1898] (2) We have inserted a new sub section (7) because a doubt has arisen whether the existing sub-section (6) covers the case of ne second instrument being executed solely bocause the stamp on the original instrument was of insufcient value. [Select Committee's Report 18th March 1898 para 14], 14, Sub-section (d) relates to stamps spoiled or rendered useless after execution on account of— (1) being found (by the parties not by a court) to be void in, or (2) mistake in crating, or (8) death of a necessary party, or (4) refusal to execute, or (5) refusal to act, or (8) execution of another instrument for the same purpose, or (7) deficiency in stamp duty, or (8) the stamp being accidentally spoiled. 15. Documents ceased to be required. ‘Tho guarantee letters, Indemnity bonds and powers of attorney and the like which have ceased to be required for the Purpose for which they were executed and bearing proper stamp duty, cannot be admilted under section 49 (d) for the purpose of refund or exchange. 16. Collector to administer an oath while making enquiries regarding the refunds of the value of spoilt stamps. The Collector being a person empowered by law (viz. by tho Stamp Act and the Rules made under it) to take evidence thas authority under section 4 of the Oaths Act. 1873, to administer an oath. The proceeding before the Collector under section 51 of tho Stamp Act may not perhaps be a jucicial proceeding within the meaning of section 199 of the Penal Code, That section, however, is not confined to cases of giving false evidence in judicial proceedings, and in the opinion of His Excellency the Governor 51‘General in Gouncil, the punishment provided for giving false evidence in cases other than judtal proceedings is Wel 10 6 costo the purposes of the enquiry regarding the relunds of the value of spo stamps. (G. |. F & C, No. 2698 dated 19th September 1879, vide G, R. No. 5212 dated 29th idem). 47, Collector cannot delegate his authority to his subordinates to grant refunds or to make enquiry. (1) The Collector alone can grant refunds of the valve of stamps. Olicer-in-charge of tho Treasury must accordingly feter to him for separate orders in each caso (G. of I. No. 3767, dated 23rd October 1873). (2) Where a person had applied fora retund and the Collector made over the application fr inquiry to a Deputy Collecier, wae held that the Deputy Collector was not entitled to put the witnesses produced on their oaths, and consequently thusterence to the statements of euch witness, no charge of making a false statement or giving false evidence nae sustainable, the Collector himself being the officer and no other, to whom power Is given to make inquiries inte the applications for allowances for spat stamps to take evidence in reterence thereto, and to grant or reluse Such appication, He cannot delegate his authority in the matter. (Empress vs. Niazali 5. All. 17). 48, Cancellation and destruction of spollt stamps. (1) When the Collector of a District sanctions a refund or renewal he should then and thore record his raasans /or {ranting such retund or renewal, should punch or mark the stamped paper in such a way that can nover be presented Spain, and should then forward it for destruction to the Superintendent of Stamps, (G. |. F. D. No. $767 dated 22rd October 1873, vide G. R. No, 6077 dated 4th November 1873). (2) Stamp soldio the public when returned will generally be more or less spoiled or disfigured and should note reissued. if 2 relund of the value of any such stamp Is granted the Collector should follow the course laid down in G. of 1. Circular No.3767 dated 23rd October 1873, (G. of ILF.D. No, 6592, dated 16th November 1874 vide G. A. No. 6429 dated Sth December 1874). 19, Right of refund of helr of the deceased person. “The heir of the deceased person has a right to claim a refund on a spoilt stamped paper which has come intohis possession as heir (G. R. No. 1073 dated 15th Febquary 1882). 20, Refund of stamp duty paid on Fire Insurance Policies taken out for long period but cancelled after a short duration, In reply | am to forward a copy ot a letter from the Government of Bombay, No.825, dated the Bih February 1801 (win enclosure) trem which it willbe seen that the difficulty complained of by the Caloutia Insurance Companies has been satistaciorly fret in Bornbay, The companies there do not pay the stamp duty on policies Issued less than twelve months but in cases in wunich they have been patd the duty and the policy Is cancelied before it has been current for twelve months, the whole duty |e deducted from the premium for the unexpired period of the policy before the refund is made. The Governor General-in-Councit ig not aware of any reason why a similar practice should not be adopted in’ Calcutta without disturbing the custom by whch the stamp duty on all Fire insurance polici is paid by the companies. Before refunding the prerrium for the unexpired period ol the policy which has been cancalled, the companies can daduct the difference between the stamp duty actually pald and the proper duty for the period curing which the policy has bean in force, The companies thus have the remedy in their own hands and the Govertiment of India do not think it necessary to undertake legislation on the subject. (Government of India Letter No.1735:K, dated 28th March 1901 vide B.G.R. No. 2490, dated 17th April 1901). 21. Grant of the refund of the value of missing spolied stamps on the production of Collector's Certificate. {l) (Paragraph 4 of Letter No.3007, dated 22nd October 1896, from the Collector of Broach). “The Superintendent of Stamps, Bombay now suggests that a certificate should be submitted in lieu of the missing paper and | am propared to certiy that the stamped paper was duly cancelied in this office and has since been lost. 1 have therefore ine honour to request that the Government may be moved to direct the acceptance of such a certificate by me as ‘sufficient voucher for the retund.* Resolution. In the circumstance stated the Collector's Certificate may be accepted as a voucher for the refund. Care ‘should howeverbe taken that tho rotund is not admitted a second time on the production of the missing stamped paper. (GA.A.O. No. 9902 dated 7th December 1896). i) Letter No,1964 dated 8th February 1897 from the Collector of Khandash. “The Huzur Deputy Collector, Khandesh, tells me that the daily sheet of the 191h October 1696 of Chopda Taluka was 52gine’ mis-sent or lost somowhore together withthe voucher which accompanid it, and has not been traced yet. Amongst the Vouchers were two stamped papers and two recsipt for the rafund of the value of the stamps. | send herewith a copy ol Inter {rom the Superintendent of Stamps, to the Huzur Deputy Collector. In this letter the Superintenciont says that the retung for {wo stamped papers of eight annas each alleged to have been lost in transit cannot be passed uniess the sanction of Govern mort is oblaines, the loss of the papers being certilied by me.” Resolution, The refund. applied for should be sanctioned on the Collector certtying the fact of the loss of the stamped Papers. (G.A.R.O. No. 2035 dated 15th March 1897). 22, Adhesive Label. Section 49 of the Stamp Act refers to Improssed stamps and labels , while section, 52 and 54 refer to allkinds of stamps. dealt within the Acl. It follows therefore that achesive labels are excluded from the operation of S. 49, and consequently, relunds can be made in their case if they are misused or not used, but not if they are spolled.......Since these labels are not intended te be written upon as impressed stamps are, they were purposely excluded trom the operation of S. 49.....Aofunds in respect of spoiled adhasive labels under any circumstances mentioned in section 49 of the Stamp Act should not be granted. (G.ALALD. No. 3687 dated 2th March 1915), 23, Refund of Stamp duty endorsed under section 42 of the Stamp Act, I! of 1899. There sooms to be no doubt that the present case is one in which the stamp duty ought to be refunded, and although, according to the explanation in section 49, the only cerificate which is mentioned as equivalent to an impressed stamp is a ceriicate under section 32, | think that Government would, in view of the above decision, be justified in authorizing the relund, There Is no difference in the effect of a certificate issued under section 32 and one issued under section 42, althaugh the wording 0! the sections is not quite the same. In the former section an instrument which has been cerfied shall be deemed to be duly stamped and shall be recelvable in evidence and acted upon and registered as if it had been originally duly stamped, whlla under section 42 an instrument which has been certtied shall thereupon be admissible in evidence, and may be registered and acted upon and authenticated as if it had been duly stamped. Under section 2 (11) “duly stamped” means that the instrument bears an adhesive or impressed stamp of not less than the proper amount. ! do not think that the explanation to section 49 should be necessary treated as exhaustive and consequently the above mentioried decision would apply to a case under section 42, it Government were disposed to adopt it. [Para S of Letter No. 306, dated 11th February 1925, from the Solicitorlo Government, GR.R.D., No. 8045/24, dated 20th March 1925}. 24. Refund of Stamps rendered useless in consequance of the subsequent changes In the law. 1. Lam directod to request that with the permission of—you will issue necessary instructions with a view to the renowal or relund of the value of the old stamps which had been Issued for use previous to the introduction of the General Stamp Act XVIII of 1869 and which have been rendered useless In consequence of the subsequent changes in the rates of duty proscribed by thal Act. 7 ‘i . 7 7 : 3. As there seems to exist some misappehénsion with regard to the application of section 45 of the General Stamp ‘Act XVII of 1869 (now section 49 of the Stamp Act Il of 1898], | am to take this opportunity of explaining that the rules under that section apply exclusively 10 cases in which stamps have become unfil for the purpose for which thay were procured through some act or ommission on the part of the person possessing them, and not to cases in which stamps obtained for use under the old law have been rendered useless in consequence of the subsequent changes in the law. (Circular No. 811 dated 28th May 1870 from Government of India to all Local Governments and Administrations.) 50. Application for relief under Section 49 when to be made : ‘The application for relief under Section 49 shall be made within the following periods, that Is to say— (1) In the cases mentioned in clause (d) (5), within two months of the date of the instrument ; (2) in the case of a stamped paper on which no instrument has been executed by any of the parties thereto, within six months after the stamp has been spoiled ; y (3) in the case of a stamped paper In which an instrument has been executed by any of the parties thereto, within six months after the date of the instrument, or, ifit Is not dated, within six months after the execution thereof by the person by whom it was first or alone executed : 53Provided that— (a) when the spolled Instrument has beon for sufficient reasons sent out of Pakistan the appileation may be made within six months after it has been received back In Pakistan (0) when, from unavoidabie circumstances, any instrument for which another instrumenttes beer substituted aeenst be given up to be cancelled within the aforesaid period, the application may be made within six months after the date of execution of the substituted Instrument, COMMENTS 4. Explanation. ‘The Provisions of $.50 apply 10 the application for relia! mado under S. 49. Clause (1) refers te cases montioned in aub-lavee (eo! &. 43 (2); clause (2) relores to cases mentioned In sub-clausos (a) and (0) of S. 48 and the period under aoe aee (o)hcen extended to two yoars under G. RR D. No, 9525 dated 19th September 1906; clause (6) retor fo a ceaea clauses of &. 49 (c) and (d) which refer to executed documents. it should particularly be noted thal the provisions Sia) ‘and (0) fo clause (8) 10 S. 50 tele to executed intruments and specially proviso (b) should be read with sub-causes + (6 to €) to S. 49 (9). 2. Refund in case of torn, spelled stamps etc. When applied for after six months, Jam directed to acknowledge the recsipt of your letter No, 6099, dated the 27th July 1892, and of ts enclosures, regarding an application trom Messts:, _ator refund of the value of certain spoiled stamps amounting to Rs.283. Under the law, applications for refund should be made within sixmanths fromthe date on whieh the stamps wore purchased, spolledor rendered uselass. In order o most cases of undue hardship this perlogwas extendedtoiwelva months ty Ne Resolution spine Department No.125 dated {in Janvary 186%. In the present case, it appears thal the stamps were spolied or rendered UO invtor eee in each cage more than one year, and in some instances more than six years, before an application for rotund was made to the Collector of. "and no satistactory explanation is given of the cause of delay. In many cases (aS MRavstamngs have become usslase merely Because Dy careless keeping they were torn or spoiled. Such a case 2s ils 6° to olihe king contomplated when provision was made forthe refund of the value of spoiled or useless stamps, and ine Gevernot Fees Gounot fs unable to sanction the refund applied for. (G.LF, & ©. No. S. F. S314 dated 10th August 1892 : vide GA. No. 7042, dated Sth September 1892.) 4, Powers of Lecal Governments and subordinate revenue authorities to deal with and entertain applications for refund or renewal of stamps. Under Chapter VI of tho Stamp Act, 1879 (now Chapter V of Act It of 1888), provision is made for renewal or relund of the valve of the stamps spolied of rendered useless, or which for any reasons are nat required by the possessor, of lhe sation that the applioation for such renewal or refund shall be mage within six months from the date on which itwas rendered useless or on which it was purchased. Inatances have occured in which this limit has operated as 2 serious hardship. Wiihout any fraudulent motive holders of spoiled of Useless stamps are sometimes Unavoldably prevented from applying for refund ot renewal wihin the prestibes oad and'¢0 cannot under the provisions of the Act, obtained any-ele. In such cases an order of the Governor! of leas ae eneesary before tho refund can be sanctionad, For the future the Governor General in Council authorizes the Local Ha eet io allow, of in thlr dscortion to celegate power to any subordinate Revenue Authority not bolow the rank of he Collector ot Deputy Convrissionor of the District to alow refunds ar renewals of spelled or useless stamps or the repurchase Sr stamps net Fequited, subject to such time limit not exceeding Imo years as may appear 10 them suitable. {Government af india Resolutions) (Bombay Government Resolutions ) No :,125 dated 14th January 1881. No, 601, dated 26th January 1881, No : 5468 S. R. dated 14th December 1898. No : 464 dated 20th January 1899. No : 6982 Exe, dated 19th December 1905, No : 1028, dated rd February 1908 No : 4738. Exe ; dated 14th August 1908 No : 9525, dated 19th September 1908 ‘The Commissioners in this (Bombay) Presidency, the Collectors including the Collectors and Deputy Commissioners in Sind, the Collector and Superintendent of Stamps, Bombay and the Poltical Resident Aden are empowared to deal wih plications for refund or renewal of spait or useless Non-Jucielal stamps provided thatthe application for enewal ound aoeje within two years from the date on which the stamps were spoiled or rendered useless. (Government Resolution Revenue Department, No : 9525 dated 19th September 1908) 54sKmay be noted that though the Deputy and Assistant Collectors incharge of Sub-divisions, the Huzur Mukhtiarkare and [he Mushitarkars have been declared under Section 2 (9) of the Stamp Act, I of 1899 to pertorma the functions of the Glee yaar phaster V ofthe said Act, they are not the Collectors of districts, therefore they are not competont to entertain applications {or relund oF renewal of spolled or useloss Non judicial stamps under the provisions of Government Resolution, R. Ne aeee dated 19th September 1908, 4. Intention of G.R. R.D. No. 9525, dated 18th September 1908, ZThe period of two months proseribed in Section $0 (1) for cases falling under section 49 (d) (6) of the Stamp Act, It of 1899 is not affected by G.R.R.D, No. 9525, dated 18th September 1908, the extension of the period of relund to two years is meant to apply in special eases of hardship and covers thoss cases for which the poriod praseribed Is six months {in rospact, of spoilt and useless stamp) L.e. with the exception of those falling under Section 54 of the Act. (Letter No. 886 dated ard May 1932 from the Superintendent of Stamps, Karachi to the Colloctor of Larkana.) 5. Refund of the value of spoiled stamps purchased 9-1/2 years before, 1, {'beg to submit that the question as to the refund of the stamps of As. 2/-, may, il appears, be disposed of under the latter part of clause (a) of section 51 (now 48) of the Stamp Act, 1879. 2. Although itis doubtful, as the Collector of Broach suggests, ifthe circurnstances of the case under consideration Could bring it within the first part of this clause, which refers to “the stamps on any paper inadvertantly spolled or obliterated’, it seoms clear that the latter part of the clause, i.e., the words, by any means rendered Untt for the Purpose intended., before any Instrument is executed “by any person" could be applied to the present case. 3. The document intended to be written an the stamp paper in question was incomplete and remained unexecuted, ‘The evidence taken on enquiry under section 51 (now 49) is not found by the Collector to be unreliable, but a doubt only Is suggested that, to avoid the effect of section 54 (now also 54) (as the stamp was purchased some 3/, years before }, the holder of the stamp may possibly have restored to a sham mortgage. 4. As for the point raised in para 3 of the Commissioner, Northern Division's Memorandum, it appears from the facts Stated that the intended transaction was broken off and that there was no prospect of its ever being completed, Moreover it does | think necessarily follow that, ‘the purpose intended” [vide the said clause (a) ] was execution of that particular document. The words seam to'be used generally and to include the writing of any instrument which might be executed upon a stamo of that value. It is clear that this partially used stamp paper was rendered untit for the writing of any other Instrument. 5. It this view be correct then clauses (a), (b) and (c) of section 51 (now 49) would cover eases of unexecuted spoiled or incompleted documents [etauses (D) and (c) applying spaciticaly to bills of exchange, cheques and promissory notes] while clause (é) would apply to stamps used for executed instruments, 6. In the absence, therefore, of any finding that the evidence was unsatisfactory and disclosed a sham transaction it must be held that the case falls under latter part of clause (a) section 51 (c/o the opinton of the Punjab Financial Commissioner referred to by the Collector). Accordingly | would submit that the refund claimed may be allowed, it the claim was made within six months alter the stamp had beon spoilt or rondored unfit. (L.R. No. 380, dated . 20th March 1897, vide G.R, No, 3843, dated 21st May 1897), 6. Time fixed for making allowance : All applications for allowances must be made within afixed time. The Act prescribes a period of sixhwo months, calculated from different dates, as showin below :- 7 1) Spotted stamps (Section 49): 4) it the stamped paper has not an executed instrument writtan on it, or if I has no instrument written on itirom the date of spoiling. b) Otherwise — from the date of instrument ; or if it is not dated, the date of first execution. li) Substituted instrument (Proviso (a) to Section 50) : It from anavoidable circumstances any spoiled instrument for which another Instrument has been substituted can ‘not be given up to ba cancelled within the aforesaid period —tromthe date of exeuction of the substituted instrument. iii) Instruments received from abroad (Proviso (b) to Section 50) : {tthe spolled stamp instrument has been sent out of Pakistan — from the date it has been received back in Pakistan. 55,WV) Misused or useless stamps (Section 2) In the case of mis-wsed or useless stamps — from the date of the instrument; or ii is not dated, the date of first bxoqution. : ¥) Stamps not required for use (Section 54) : In the case of stamps not required for use — from the date of purchase of stamps. Vi) Gases falling under Section 49 (¢) (5) + In cases fatling under Section 49 (d) (5) — prescribing the period of two months —from the date of the instrument. 51. Allowance in case of printed forms no longer required by Corporation The Chief Revenue Authority or the Collector if empowered by the Chiof Revenue Authority in this behalf may, without limit of time, make allowance for stamped papers used for printed forms 6f instruments by any banker or by tny incorporated company or other body corporate, if for any suificient reason such forms have ceased to be required by’the eald banker, company or body corporate: provided that such authority Is satisfied that the duty in respect of such stamped papers has been duly pat. COMMENTS 4, Delagation of powers of Chilet Revenue Authority under Section 51 of the Stamp Act, 1899, to certain officers: ‘The Atsistant Superintendent of Stamps, Karachi has been empowsred to exercise the powers of the Chief Revenue Authority under Section 51 of the Stamp’ Act, 1899, within the limits of Karachi Division. (Order No, 386, dated 19th February, 1917, issued by the Commissioner-in-Sindh}. : In okercise of the powers conferred by section St of the Stamp Act, 1899, the Board of Revenue , Singh is pleased to-delegate thé powers of the Chie! Revenue Authority under the said section to all the Collectors/Deputy Commissioners in Singh, excepl Karachi, where the Assistant Superintendent of Stamps s already exercising the powers as aforementioned. (Board Of Revenue, Sindh’s Notification No. STAMPS/86/35, dated 22nd January, 19868). 2. Gyélostyled documents come within the definition of “printed’ ‘The Investment Corporation of Pakistan is a body corporate having come into existance. by virtue of the Investment of Corporaiién of Pakistan Ordinance 1966 (Ordinance No. IV ef 1966). As such the present matter is covered by Section 51 ‘of the Stamp Act. Letter bf tha Deputy Commissioner addressed to the Secrétary, Board of Revenue indicates that the claim of Investment Corporation was rejected on the ground that according to the then Deputy Commissioner, the cyciostyled Stamp papers did not come wilhin the definition of printed forms as Statad in Section 51 of the Stamp Act. tt appdars that the Deputy Commissioner has glven to0 narrow an Interpretation tothe word “printed” as used in Section 51 of the Stamp Act, As'is evident {rom the ordinary dictionery meaning the word Print” can be used for writing on paper by various mechanical processes. Cyclostyle is also a mechanical process of printing on papers, as such the non-judicial stamp papers prinied by cyclbstyle are covered by the word “printed” as used in Section 51 Stamp Act. The Deputy Gommissioner fherefore, took an erroneous view that the claim of Investment Corporation was time barred. The.case may be re-processed under Section 81 of the Stamp Act (Government of Sindh, Law Department's U.O. totter No. 15 (84)/75-256/232, dated 21st Juno, 1975). 52, Allowance for misused stamps : (2) When any person has inadvertently used, for any instrument chargeable with duty, 2 stamp of a description other than that preseribed for such Instrument by the rules made under this Act, or @ stamp of greater yalue than was necessary, of has inadvertently used any stamp for an Instrument not chargeable with any duty; or (b) when any stamp used for an instrument 15 been inadvertently rendored useless under Section 15, owing to such Instrument having been written ‘contravention of the provisions of Section 13 ; the Collector may, on application made within six months after the date of the:instrument, or if itis not dated, within ‘she months after the execution thereof by the person by whom it was first or alone executed, and upon the instrument, if chargeable with duty, being re-stamped with the proper duty, cance! and allow as spoiled the stamp so misused or rendered useless, 56COMMENTS 1. Scope : ‘This section atfords relief in casos where a mistake has been made aither in description or in the value of the stamp, ar where the provisions of section 19 have been violated (U.P. Stamp Manual, 1945). Application of sections $2 and 54 to all kinds of stamps. Ss, 52 and 54 apply to all Kinds of stamps (improssed as well as adhesive) used under the Act, but great caution shold be used in refunding the value of achosive labels. Stamped labels are a class of impressed stamps (1G. letter to the Government |” ‘of Bombay, No. 911 dated 6th June 1879). 3. Section 49 and section 52 distinguished. Section 43 deals with cases in which the impressed stamp has bean rendered unfit fbr the purpose intended, whereas section 52 deals with the cases, in which the stamp, impressed as well as adhesive, has been rendered useless by failure to observe the provisions of the Act and the.tules framed thereunder. The section empowers the Collector to grant refunds in following cases: (1) When the wrong description of stamp'tias boon inadvertently used. (2) When there has been a mistake in the writing of the instrument-on the stamp paper, so.that under sections 13 and 15 itis as though it were unstamped. (©) When there was no need of a stamp, or fora stamp of so high a value as was used. "4, Use of stamp of less value required. It will be observed that amongst the cases of misused stamps for which allowance may be made under section 52, is that when a person has inadvertently Used a stamp of greater valua than was necessary. Application by persons who have inadvertently used a stamp ol-léss value than that prescribed by the Act have sometimes been made under this section, For the proper procedure in such a case, see section 43 (d} (7) $3. Allowance for spoiled or misused-stamps how to be made In any case In which allowance Is made for spolled or misused stamps, the Collector may give in leu thereot— (a) other stamps of the same description and value; or {b). I required and he thinks fit, stamps of any other description to the same amount in value {e) at his discretion, the same value in money, deducting ten percentaum of that value. COMMENTS: Renewal of stamps damaged by fire to stamp vendors. ‘The Governor in Council Is pleased to direct the issue to the stamp vendors in question of othar stamps of the same description and value in lieu of those damaged by fire, The damaged stamps should be forwarded to the Suprintendent of Stamps, with a view to thelr being destroyed under the personal supervision of the Assistant Superintendent of Stamps. Their value should ‘bo written off the account. (G.R. No. 4965, dated 181h July 1899}. ‘ 54, Allowance for stamps not required for use : When any person Is possessed of a stamp or stamps winich have not been spoiled or rendered unfit or useless for the purpose Intended, but for which he has no immadiato use, the Collector shall repay to such person the value of such stamp or stamps In money, deducting ten percentum of that value, upon such person delivering up the same to be cancelled, and proving to the Collectors satisfaction — (a) that such stamp or stamps were purchased by such person with a bona fide Intention to use them; and 57.{b) that he hes paid the full price thereof: and (c) that they were so purchased within the per so delivered: 1d of six months next proceeding the date on which they were Provided thet, where the person is a licensed vendor of stamps, the Collector may, if he thinks fit, make the repayment of the sum actually paid by the vendor without any such deduction as aforesaid. COMMENTS 1, "Not required for immediate use”. ln the case of an impressed stamps which has been spoiled by an agreement having been written upon it which the person who wes to have exetvied thal agreement in his own name subsequently refused to sign. The proper course is to deal pir ihe case under Section Sd of the Stamp Act. That section applies to slamps for which the owner has no immediate use wit which have not been spoiled or rendered unfit or useless for the purpose intended, This is procisely the case in question. ‘Tho stamps spolled and rendered unit and useless for any other purpose, but nol for the purpose for which It was intended sree tee: and the owner of it has no Immediate use of it. Probably this section was primarily intended to apply when stamp weet been used oF spoiled at all, but it is s0 worded — perhaps intentionally — as to cover both cases. (L.A. No. 278 Gated 1st marcn 1881; vide G. R. No. 1480, dated 12th idem) 2. Use of stamps purchased more than six months ago is valid though a person cannot get back his money under this section, [AIR 1943 Oudh 314), 3. Explanation of proviso. {A proviso has been added by the present Act to this section to make special provision for a case of licensed vendors of stamps. (Statement of Objects and Reasons). Refund of the sum actually paid by a licensed stamp vendor can only be made under the proviso when the licensed vendor does not require stamps because there \s no demand for them. 4, Allowance to Stamp vendors. ‘Alowance to stamp vendors is made according to the orders contained in G: of LNo. 307 S. R, dated 23rd January 1899 and G.R, No. 1451 dated 22nd February 1893 :- When stamps are raturned into Collector's stores on > (1) resignation of the vendor's licence (2) revocation of license tor any fault of the licensee, (2) death of the vendor, (2) application of the vendor for leave.to restore any stamps, the stamps should be taken back at thelr full value less a deduction of ten porcentum in the rupee, bul that when they are returned on — {5} expiration of ticense., (6) recall of stamps by Government, (7) revocation of license for any other cause than that mentioned in (2) they should be taken back at their full value less only discount allowed on the sale to the licensed vendor. 5. Limit of the peried within which the refund of the value of unused stamp roturned by licensed stamp vendors to be made. tithe sanction for the value of unusad stamps returned by a licensed vendor who resigns his license, of whose license is canceliec vy a competent authority, of by the legal heir or representative of a deceased stamp vendor, is not acted upon 58Tore No mas, it should bo considered to have lapsed, unit itis renewed by the Collector on suflicient cause shown (GR. No. 7064 dated 13th July 1908), : oar 6. Stamps returned by licensed stamp vendors to be placed in store. [he stamps, however, which are taken back from a stamp vendor or his heirs may be placed in stores and re-issued (GA. 6429 dated Sth December, 1874.) Note. Spoil or otherwise damaged stamps relumed by the licensed stamp venders are not to be Kept in stock'or ré-i¢sued, but they should be dealt-with as spoil! stamps tendered by the public in general 7. Renowal of stamps “not required for Immediate use not allowes Section 5¢ permits only payment in money for stamps not required for immodiate use, hence no renewal ie. exchange can be made. 8, Section 54 applies to all kinds of stamps. ‘Section 82 and 54 of the Stamp Act, 1879, apply to all Kinds of stamps used under that Act, but great caution should be used in refunding the value of “adhesive labels”. (G.I. F. D. No. 91 dated 6th June 1879, vide G.R. NO. 5900, dated 231d idem.) 9, Adhesive stamps returned by persons for refund, “Adhesive stamps" (.e. Share Transter, Insurance, Foreign Bil, Agreement, Broker's Note, Notarial and Revenue) which hhave been tendered by the public tor refund, it fi for re-issue should be taken into store, il they are in quarter sheets or mutipios thereot, of stamps of the anna values, and block of 10 labels or labels thereo!, of rupee values, and ail loose labels should be destroyed. (G.R.R.D. No. 4016 dated 7th July 1937). 10. Application of G.R.R.D, No. 9525 dated 19th September 1908 to Section 54, Tho orders issued in Government Resolution R.D. No. 9525 dated 18th September 1908 apply to refunds or renewals of spoilt or useless Non-judicia stamp under Section 49 in certain cases and not to S, 54 which deals with stampe which nave nol been spolled or rendered usoless or unt. (Vide Letters No. 727 dated 20th March 1925 and 828 dated 26th March 1927 from the Superintendent of Stamp, Karachi to the Collector of Sukkur) 58. Allowance on renewal of certain debentures: When any duly stamped debenture Is renewed by the Issue of a new debenture in the same terms, the Collector ‘shall, upon application made within one month, repay to the person issuing such debenture, the viaus of the stamp on the original or on the new debenture, which-ever shall be less: Provided that the original debenture is produced before the Collector and cancelled by him in such manner as the Provinelal Government may direct, Explanation: A debenture shall be deemed to be renewed in the same terms within the meaning of this section notwithstanding the following changes. (a) the Issue of two or more debentures In place of one original debenture, the total amount secured being the same; (}) the Issue of one debenture in place of two or more original debentures, the total amount secured. being the same; {e) the substitution of the riame of the holder at the time of renewal for the name of the original holder ; and (4) the alteration of the rato of interest or the dates of payment thereof. COMMENTS 1, Object. The section is new and is intended to give-faci of Objects and Reasons), 5 to companies in raspsct of renewals of debentures. (Statement2, Explanation: We have also for the faclty of business connected with debentures provided in the Actitself forthe renewal of debentures without the payment of any oxtra duty. Al present, when a company wants to renew debentures, it has to pay jhe barre Cul vpea'iners ge upon the ofginaly Issued debentures. We have provided that when debentures are renewed they shal no! OE Chergeable with any new duly. and we alow also for certain alterations in tho terms of the debentures being aected wihevt now payment of duly. (The Hon'ble Sir Jamos Westland's speech, 15th Cctober, 1897, paragraph 14). 3, Mode of cancelling original debentures. When the Collector makes a refund under section 55 of the Act, he shall cancel the original debenture by writing on ‘or acrose it he word “cancelled” and his usual signature with the date thereot — (Rule 21 of Stamp Rules, 1928). 4, Refund of Stamp duty affixed on trust deed in respect to converted debentures, The claim of the Larkana Jacobabad (Sind) Light Railways, Limited, for refund of stamp duty paid on the mortgage deed of 2th Janusty 1926 does rot fall under any soction in Chapter V of the Stamp Act, 1899. Section 49 (d) (6) is inapplicable Because the subsequent mortgage deed of 2nd October 1933 cannot be said to effect the same transaction which was intended tobe olfected by the earlier deed. Section &5 also Is inapplicable. It applies oniyto debentures. t appears that separate debentures tre issued in terms of the mortgage deed of 1926 (styled trust deed by the parties) and exemotion trom full stamp duly is enjoyed nder the exemption in Article 2? in schedule I1o tho Stamp Act, The exemption makes a distinction Between a mortgage deed Ghd debentures ieeued in terms thereol. The mortgage deed cannot therefore, be regarded as itself a debenture. As there in no specific provision under which the claim of the Company falls they have no legal right to claim refund. Government hav however, an innerrent power to grant retunds provided they are sallslied hat a proper case has been made out (Vide Golaupmonce Dasee v, Prosonomayi Dasee, |. Ben L. R. 373, also Rememberancer of Legal Atfaics’ opinion Nos 1192, dated 3rd July 1923, 4489, dated 22nd July 1924,, 528, dated sth February 1927, 2119, dated 12th April 1994 and 3621, dated 26th June 1934). ‘The power of Government is not limited to cases actually provided in Chapter V of the Stamp Act, 1899. (Memo from R. ALNo. 4107, dated 23rd July 1934 Vide G.ALALD. No, 2417/33, dated 28th August 1994.) 60CHAPTER VI REFERENCE AND REVISION 56. Control of and statement of case to, Chief Revenue Authority : (1 gine powers exercisable by a Collector under Chapter IV and Chapter V and under clause (a) of the first Proviso to Section 26 shall In all cases be subject to the control of the Chie! Revenue Authority. (2) __ Itany Collector, acting under Section 31, Section 40 or Section 41, feels doubt as to the amount of duty with which any Instrument ts chargeable, he may draw up a statement of the case, and refer It, with his own opinion thereon, for the decision of the Chief Revenue Authority. (3) __ Such authority shall consider the case and send a copy ofits decision to the Collector, who shall proceed to assess and charge the duty (if any) in conformity with such decision. . COMMENTS: 1. Sub-Section (1) : The Lahore High Court has held, although section 56 only grants power to the Chiot Revenue Authority to exercise ‘control over the Collector, it cannot be regarded as a matter of arbitrary discretion with the Chiet Revenue Authority to entertain 2 petition or not. When powers are granted for a particular purpose, thera is a duty cast on the person empowered to act in furtherance of that purpose. It is to be observed that against the order of the Collector the only remedy available (apart trom @ civil sult which may lle in a case of lack of jurisdiction) is under section 56. If the Collector imposes a penalty of ten timos the stamp duty, the only authority that can reduce that penalty is the Chief Revenue Authority. The Chile! Revenue Authority cannot refuse to exercise its jurisdiction Le., t cannot refuse to consider a case, though alter considering a case il may pass such orders as it thinks fit. { PLD 1960 Lah 211 (p. 217)], Where in a revision question relating to interpretation of certain provisions of Stamp Act and the question of interpretatian of document is involved, the Board has no power to decide the matter itself but to refer the case to the High Court. {AIA 1975 Mad. Pra 209 } Where a document is impounded and sent to the Collector and the Collector acting under S. 40 (1) (b) calls upon the executant to pay up the deliciency and the penalty the ordar can be revised by the Chiof fovonve Authortly under & 58 (1) betore the stamp duty so demanded is paid, as tha matter must be deomod as pending before the Collector ill the certiicats of payment of duty and penalty is endorsed on the document under S: 42. Likewise ita Collector acting under S. 40 (1) (0) Fequites the payment of stamp duty from a wrong person his ordar Ie open to revision under section 56 (1), [ AIR 1992 Lan, 495 30 ANl271 J 2. Cancellation of licence of vendor. Order of Collector cancelling the licence of a stamp vendor does not come elther under Chapter IV of V and this order cannot be set aside by the Chie’ Revenue Authority under S. 86 (1). { ('42) 1942 Nag L Jour $44 (545) } 3. No revision ma Where no revision against order of Collector was filed to tho Board of Revenue but the latter was asked its opinion whether the order of the Collector was without jurisdiction it was held that the opinion of Board was not a decision by it but ‘mere expression of opinion on a question of faw. [ ('S4) 1954 All L Jour 520 (522) ] 4, Subsection (2). ‘Sub-section (2) confers upon the Board of Revenue power to deal with instruments which are already in existence and which have been made the subject of action by the Collector acting under Ss, 31,40 and 41 and not with instruments which ‘may or may not hereafter come into existence. [ AIR 1915 All 33 (34) : 37 All 125 (SB) | Making of the reference under Sub-s. (2) isin the discretion of the Collector and the public cannot compel him to tefer the question arising in any particular case to the decision of the Chiot Revenue Authority. [ AIR 1938 Bom 215 (217)) Reterence under sub-s, (2) is to be made by the Collector ithe feels doubt as to the amount with which any instrument 61