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TMI Blog1970 (11) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... gs of his own and was carrying on his business. On 16-6-1961, when the accounts of the defendant were taken, the sum owed by the defendant to the plaintiff's father's firm was settled at Rs. 15,000. The defendant agreed to pay the said debt after the expiry of two years, and, in view of the close relationship between the parties, a low rate of interest was fixed, namely, two annas per Rs. 100 per month to evidence the agreement he executed what the plaintiff styles as a 'voucher'. After the death of the plaintiff's father, the plaintiff became entitled to collect the debt and he, therefore, filed the suit on the original cause of action and consideration. 2. The defendant admits that he supervised the money-lending firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow the decision of the Full Bench in Perumal Chettiar v. Kamakshiammal, ILR (1938) Mad 933 = AIR 1938 Mad 785. In the result, he dismissed the suit. The plaintiff has preferred this appeal. 4. The relevant portion of the document may now be quoted: (original in Tamil omitted-Ed.) It may thus be translated: I have already received Rs. 15000 from your Colombo A. S. shop for doing business of my own. I shall pay it after two years on demand by you with interest at two annas per month per Rs. 100 to you or to your order and receive back this promissory note. It is stamped with revenue stamp of 25 p. (15 plus 10 p.). The first question which has to be considered is whether the instrument is a promissory note at all. There can be no doubt that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertaking. Therefore, it is a promissory note within the definition of the Negotiable Instruments Act. Therefore, it is also a promissory note under Section 2(22) of the Stamp ACT. For the purpose of duty Art. 49 of Schedule I of the Stamp Act is relevant. It reads:-- IMG It will be seen that the Article divides promissory note into two categories: (i) when payable on demand; and (ii) when payable otherwise than on demand. Only if it is payable on demand 25 paise stamp would be the proper stamp. If it is payable otherwise than on demand, the duty leviable would be that of a Bill of Exchange for Rs. 15000 and the promissory note would be insufficiently stamped. Under Section 35 of the Stamp Act, it cannot be validated by payment of the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the documents in that case were not promissory notes. The wording in the document was: I promise to pay you or your order after a period of two years on demand by you the principal together with interest the sum of Rs....... . They were stamped with four anna revenue stamps. The learned Judge held that there had to be a demand after the period of two years that it amounts to a condition and that, therefore, there was no unconditional under taking to pay the amount, which is the essence of the definition of a promissory note. The learned Judge distinguished the decision of Horwill J. the learned Judge, however, has not made any reference to the second paragraph of Section 5 of the Negotiable instruments Act, which says that a promise or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that clause (b) of Art. 49 will refer to the second portion of the definition in Section 2(22), namely, that it will include a note promising the payment of any sum of money out of any particular fund, etc. But we wish to observe that the classification in Art. 49 is not of the same pattern as the classification in the definition. Art. 49 divides promissory notes into two classes: (1) when payable on demand; and (2) when payable otherwise than on demand. Clause (a) will comprise only some of those promissory notes as defined in the Negotiable Instruments Act namely, those which are payable on demand, and clause (b) will include the rest. Thus, as defined in the Negotiable Instruments Act, if it is not payable on demand, will fall under cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in this country, that where a negotiable instrument is given in respect of an antecedent debt the creditor may sue on the debt and ignore the note. We are merely concerned here with the case where the note has been given at the time of the loan or in pursuance of the arrangement then made and embodies in full the terms of the contract. It was only in such a case which was before them, the majority of the Full Bench held that the particular document being the embodiment of the bargain and being inadmissible for want of sufficient stamp Section 91, of the Evidence Act would preclude any other evidence of the bargain and the suit would not be maintainable. Here, however, the very document contains the following crucial words: I have already ..... X X X X Extracts X X X X X X X X Extracts X X X X
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