1976 (8) TMI 181 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the agreement dated 6-6-1973 between the Bengal Paper Mills Co. Ltd. and the West Bengal Industrial Development Corporation Ltd. was a bond within the meaning of Section 2(5)(a) of the Indian Stamp Act, 1899.
2. Whether the Collector was justified in assessing duty of Rs. 18,000.10 P. on the said document under Article 15 of Schedule 1-A of the Indian Stamp Act, 1899.
3. Whether the Board of Revenue was justified in rejecting the petition dated 23-6-1973 of the Bengal Paper Mills Co. Ltd. and in holding that this was not a doubtful case.

Issue-wise Detailed Analysis:

1. Whether the Agreement was a Bond:
The court examined the definition of "bond" under Section 2(5) of the Indian Stamp Act, 1899, which includes any instrument whereby a person obliges himself to pay money to another on condition that the obligation shall be void if a specified act is performed or not performed. The document in question obligated Bengal Paper Mills Co. Ltd. to repay Rs. 15,00,000/- in three equal instalments without interest. The court considered several precedents, including Gisborne and Co. v. Subal Bowri, Jiwanlal v. Rameshwarlal, and Mahabir Prasad v. Peer Bux, to determine whether the document constituted a bond. The court concluded that the document was indeed a bond because it created an obligation to pay a specified sum on fixed dates, and the enforcement of this document did not involve quantification of damages by the court. The obligation under the agreement could be enforced independently of any damages.

2. Justification of Duty Assessment by the Collector:
The court upheld the Collector's assessment of stamp duty amounting to Rs. 18,000.10 P. under Article 15 of Schedule 1-A to the Indian Stamp Act, 1899. The court reasoned that the document was a bond as defined under the Act and thus subject to the specified stamp duty. The court examined the legislative history and definitions of bonds in previous Stamp Acts and concluded that the current definition includes a wide range of instruments, including the document in question. The court also referred to the ordinary meaning of a bond and relevant legal commentaries, reinforcing that the document created an obligation to pay money and thus fell within the scope of a bond.

3. Justification of the Board of Revenue's Decision:
Given the court's conclusions on the first two issues, the question of whether the Board of Revenue was justified in rejecting the petition and holding that this was not a doubtful case did not arise. The court did not find it necessary to address this issue separately, as the determination that the document was a bond and the assessment of stamp duty were upheld.

Conclusion:
The court concluded that the agreement dated 6-6-1973 was a bond within the meaning of Section 2(5)(a) of the Indian Stamp Act, 1899. The Collector was justified in assessing the duty of Rs. 18,000.10 P. on the document under Article 15 of Schedule 1-A to the Act. Consequently, the court did not find it necessary to address the justification of the Board of Revenue's decision separately. There was no order as to costs.