1972 (12) TMI 92 - HC - Indian Laws

Summary

Issues:
Determining whether a Hundi is payable on demand or otherwise than on demand.

Analysis:
The revision petition challenged the trial court's order stating that the Hundi in question, being a bill of exchange payable on demand, was not liable to any stamp duty. The plaintiff filed a suit based on the Hundi under Order 37 Rule 2 C.P.C. The trial court framed a preliminary issue on the sufficiency of stamp duty on the document. The document in question promised to pay a sum of money 180 days after the date mentioned. The counsel for the petitioner argued that the document should bear stamp duty as it is a Hundi payable otherwise than on demand, as per Section 35 of the Indian Stamp Act, 1899.

The counsel for the plaintiff/defendant contended that the document was a Hundi payable on demand, not a promissory note, and thus, not subject to stamp duty. The court analyzed the definitions of bill of exchange, promissory note, and Hundi under the Act. It was established that the document in question was indeed a Hundi based on its language and format. The court delved into the distinction between a Hundi payable on demand and a promissory note payable otherwise than on demand.

The court referred to legal precedents to establish the interpretation of "payable on demand" in promissory notes. It was highlighted that a promissory note payable on a specified date or after a specified period cannot be considered payable on demand. The court also discussed the case law approving that a promissory note payable after a specific period is not payable on demand. The trial court's decision was based on a single judge's ruling in a previous case, Tikum Chand v. Laxmichand, which deemed a Hundi payable after a specified date as not payable otherwise than on demand.

The court disagreed with the trial court's decision and held that the document in question was payable otherwise than on demand and insufficiently stamped. The court set aside the trial court's order, finding in favor of the petitioner-defendant. The petition was allowed with no order as to costs, and the parties were directed to appear before the trial court for further proceedings.