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TMI Blog2012 (10) TMI 1247X X X X Extracts X X X X X X X X Extracts X X X X ..... in progress. When he sought to mark the promissory note, as an exhibit, objection was raised by the respondent, as to its admissibility. 2. The promissory note was written on an impressed stamp paper of ₹ 20/-, purchased in the State of Tamil Nadu. By executing that document, the respondent is said to have borrowed a sum of ₹ 7 lakhs on 12-05-2002. Placing reliance upon Rule 3(iii) of the Indian Stamp Rules, 1925, as they apply to the State of Andhra Pradesh, (for short 'the Rules'), it was urged that the instrument cannot be treated as valid, since it was executed in the State of Andhra Pradesh, by using a stamp paper, purchased in the State of Tamil Nadu. The trial Court passed a detailed order dated 31-08-2009, su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impressed stamp paper of ₹ 20/-, purchased in the State of Tamil Nadu, on 11-04-2002. In the course of the trial of the suit, an objection was raised as to the admissibility of the document. The objection is based on Rule 3(iii) of the Rules. It reads, Rule-3. Description of Stamps:-Except as otherwise provided by the Act or by these rules,- (i) all duties with which any instrument is chargeable shall be paid and such payment shall be indicated on such instrument by means of stamps issued by Government for the purposes of the Act; (ii) a stamp which by any word or words on the face of it is appropriated to any particular kind of instrument, shall not be used for as instrument of any other kind. (iii) Stamps purchased in Andh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ects, the Central legislature, and in other aspects, the State legislatures are conferred with the powers to legislate. This is evident from the fact that though the Act contains Schedule, which stipulates the stamp duty, each State has its own Schedule, covering that very subject. This is a typical enactment, whose subject figures in all the three Lists, viz., List-I, List-II and List-III of VII Schedule to the Constitution of India. Entry 91 of List-I (Union List) of VII Schedule reads. 91. Rates of stamp duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts. 9. From this, it is clear that the Parliament is comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II of VII Schedule. 15. In V.V.R. RAMA SHARMA'S case (supra), the issue, that fell for consideration before the Hon'ble Supreme Court was, as to whether use of stamps, purchased in one State, for execution of documents, in another State, would amount to violation of law. The instrument involved in that case was, the one of insurance, which, too, fell under Entry 91 of List I. The Officers of the Life Insurance Corporation of India were sought to be prosecuted on the ground that they used stamps, purchased in other States for execution of the documents in the State of Utter Pradesh. A Rule analogous to Rule 3(iii) of the A.P. Rules was also in force. Quashing the prosecution, the Supreme Court held, Para-22...If the instrument fal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , that was repelled, by placing reliance upon certain judgments. This Court in Gurana Asirinaidu v. Lenka Suryanarayana 2005 (1) ALD 713 and the Madras High Court in P. Moorthy v. A.R. Kothandaraman AIR 1978 Mad. 412 took the view that Section 11 of the Act, which permits use of adhesive stamps for promissory notes, does not, by itself, prohibit the execution of the promissory notes on impressed stamps. Emphasis was laid upon the word may , employed in that Section. The said issue is no more res integra. The principal objection was, about to the use of stamp papers, purchased from the State of Tamil Nadu. 18. It needs to be borne in mind that the stamp papers are printed and supplied by the Union Government, and individual States do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ription, the Collector may, on payment of the duty with which the instrument is chargeable, certify by an endorsement that it is duly stamped. Provided that where the stamp borne on the instrument is a postage stamp and the proper description of stamp is a stamp bearing the words Indian Revenue the Collector shall so certify, if the instrument was executed before and shall not so certify if it was executed on or after the 1st April, 1935. 20. The mechanism provided for under Section 37 of the Act, read with Rule 18 of the Rules ensures that the stamp duty of proper description is collected in the State, and the defect is cured. It is not as if that the stamp papers purchased in the State of Tamil Nadu, when used in the State of Andh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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