1968 (6) TMI 66 - HC - Indian Laws

Summary

Issues:
1. Proper stamping of promissory notes executed in Singapore and endorsed in India.
2. Applicability of the Singapore Money-lenders Act on suits filed in India based on foreign instruments.

Analysis:

Issue 1: Proper stamping of promissory notes
The judgment revolves around the proper stamping of promissory notes executed in Singapore and endorsed in India. The defendants contended that the promissory notes were not properly stamped as per Section 19 of the Indian Stamp Act. The lower appellate Court held that when a suit is filed on a promissory note executed and endorsed outside India, there is no need for affixing a proper stamp in India. This interpretation is supported by precedents such as Simulu Ebrahim Rowthen v. Abdul Rahiman Mohamad (1898) 8 MLJ 182. The judgment clarifies that the requirement for stamping in India arises only when the instrument is presented for acceptance, payment, or negotiation in India. The court distinguished the case from Sivasubramania Thavan v. Kolankaraya Konar AIR 1941 Mad 868, emphasizing that stamping is not necessary for instruments executed and endorsed outside India and not transferred within India.

Issue 2: Applicability of the Singapore Money-lenders Act
The judgment also addresses the issue of whether the promissory notes should be considered inland or foreign instruments, in the context of the Singapore Money-lenders Act. The court determined that Sections 11 and 12 of the Negotiable Instruments Act, which define inland and foreign instruments, are not relevant when deciding the applicability of the Singapore Money-lenders Act on suits filed in India. The court concluded that the lower courts unnecessarily delved into the classification of the instruments as inland or foreign, as the critical consideration is whether the suits can be maintained under the Singapore Money-lenders Act. The judgment directs the trial court to assess the applicability of the Act independently, without relying on the classification of the instruments.

In conclusion, the High Court dismissed the appeals, upholding the lower appellate Court's decision on both issues. The judgment provides clarity on the stamping requirements for foreign instruments and emphasizes the need to evaluate the applicability of foreign laws independently from the classification of instruments under domestic laws.