Sharma, J.:— This is the plaintiffs' appeal, and has arisen out of a suit for the recovery of Rs. 510/- against the defendant-respondent.

2. The plaintiffs alleged that the defendant's father, Genua, has money dealings with the plaintiffs' firm, and that on Magh Sudi 11, Samwat 2000, corresponding to 4-2-1944, according to the account, a balance of Rs. 376/2/- was found against Gomla, the father of Gidna defendant, and that a balance was struck in the khata and thumb markea by Gomla. Inteiest was stipulated at the rate of Rs. 1/9/- per cent per mensem. After the striking out of this balance, Gomla died, and Gidha, son of Gomla, has been sued for the recovery of the amount of Rs. 376/2/- principal and Rs. 133/14/- interest, total Rs. 510/-. It was pleaded by Gidha defendant, ‘inter alia’ that the document in suit was a promissory note, and was insufficiently stamped, inasmuch as it was chargeable with a stamp duty of 2 annas, whereas a stamp only of the value of 1 anna had been affixed. The document was, therefore, not admissible in evidence.

3. The plea of the defendant was given effect to by the learned Munsif, Nim-ka-Thana, and on appeal, the learned Civil Judge, Nim-ka-Thana, too agreed with the Munsif, and confirmed the decree of dismissal. Against this decree the plaintiff went in second appeal to Jaipur High Court. It was heard by a Single Judge of that Court, who referred it to a Division Bench, and on the supersession of the Jaipur High Court by this Court, it has come up for hearing before us today. During the pendency of the appeal in the High Court, Gidha defendant died, and his sons, Ramnath and two others, have been substituted in his place.

4. It has been argued by Mr. R.K Rastogi on behalf of the appellants that the document in suit was not a promissory note, but was a mixture of an acknowledgment and agreement. It has been argued that in order to see whether a document is a promissory note, the intention of the parties at the time of the execution of the document is to be looked into. In the present case, the primary intention of the parties was to acknowledge a certain liability, and to agree to pay a certain rate of interest on the balance found. Simply the words “the money will be paid when demanded by the owner adding interest at the rate of 1 pice per rupee” towards the end, do not convert the document into a promissory note. The circumstances, from which he has asked us to infer that the document was not a promissory note, are that the balance was struck in a ‘bahi’, and that apart from the words about the payment, the document only furnishes evidence of a certain liability found after going into the accounts. He has cited two recent rulings of the Privy Council in — ‘Mahomed Akbar Khan v. Attar Singh’, AIR 1936 PC 171 (A) and — ‘Karamchand v. Firm Mian Mir Ahmad Aziz Ahmad’, AIR 1938 PC 121 (B). He has also relied upon a ruling of the Nagpur High Court in the case of — ‘Ganpatdas Kaludas v. Harivallabh Onkarji’, AIR 1941 Nag 1 (C). He has also cited a ruling of the Court of Appeal of England in the case — ‘Mortgage Insurance Corporation, Ltd. v. Commrs of Inland Revenue’, (1888) 21 QBD 352 (D).

5. On behalf of the respondents, we have been referred to a ruling of the Allahabad High Court in — ‘Sushil Chander v. Wali Ullah’, AIR 1941 All 158 (E), and it has been argued that the learned Judges had before them a document practically in the same language as that of the document in suit, and that on a consideration of the two rulings of the Privy Council, cited above they came to the conclusion that the document was a promissory note, and being insufficiently stamped was inadmissible in evidence.

6. We have considered the arguments of both the learned counsel. One important question that emerges from a perusal of all the authorities placed before us is that the intention of the parties at the time of the execution of the document is to be looked into in order to find out whether the document in question is a promissory note or not. In AIR 1936 PC 171 (A), the recitals in the document before their Lordships of the Privy Council ran as follows;

“This (one) receipt is hereby executed by H and A, residents of Hoti, for Rs. 43,900, half of which amount comes to Rs. 21,950, received from the firm of L, for and on behalf of M of Hoti. This amount to be payable after two years. Interest at the rate of Rs. 5-4-0 per cent per year to be charged. Dated 1st April 1917. Stamp has been duly affixed.”

7. It was held by their Lordships that the said document was not a promissory note but was merely a receipt containing the terms on which the amount was to be refunded. One of the circumstances, amongst others, which was taken into consideration by their Lordships was that the document was not drawn on paper with an impressed stamp, as would have been the case, if the document were a promissory note, and that the stamp, which was affixed, was sufficient only if the document were a simple receipt.

8. Reliance was placed upon the ruling in (1888) 21 QBD 352 (D), cited above. Learned counsel for the respondents argued that in the case before their Lordships there were no words showing express promise to pay, and, therefore, the ruling did not apply to the facts of the present case. It is true that the document did not say in clear terms that the money shall be repaid to the creditor, but their Lordships held that being primarily a receipt, even if coupled with a promise to pay, it was not a promissory note. The dictum of their Lordships is clear that even if a receipt is coupled with a promise to pay, it would not be a promissory note. In the latter case in AIR 1938 PC 121 (B), quoted above, however, there was an express promise to pay in the documents, each of which ran as follows:

“Received from you this day……… a cheque for Rs. The amount would be repaid with interest thereon at the rate of… per cent. Time ten months. The principal amount will be paid with interest after ten months from this date.”

9. Their Lordships held that the documents were clearly never intended to be negotiable instruments and were not promissory notes and were not therefore inadmissible in evidence for want of a Stamp, and they could be relied upon to show the real nature of the transaction.

10. Certain authorities of the Indian High Courts were placed before their Lordships in order to show that such documents were held to be promissory notes. But in spite of that, their Lordships recorded a finding that the documents before them could not be considered to be promissory notes, as upon the language of the documents as well as the circumstances of the case, intention of the parties could not be said to be to bring a promissory note into existence. In the English case in (1888) 21 QBD 352 (D), cited above, it was held that simply because a document contained a promise to pay, it could not be said to be a promissory note. Lord Esher M.R, observed that

“The intention of the parties is an element to be taken into account in considering what is the nature of the document.”

11. Their Lordships had before them the provisions of Section 49 of the English Stamp Act, which is substantially in the same language as Section 35 of the Indian Stamp Act. It was observed by Lindley L.J, that:

“If the instrument is not merely a promise to pay but contains a promise to pay in connection with a number of other stipulations, then it is not a promissory note within the meaning of S. 49. Unless some restriction of that kind is placed upon the words of S. 49, they would include every document containing a promise to pay.”

12. In AIR 1941 Nag 1 (C), hereinbefore referred to, it was held by Niyogi J. that

“It is necessary to look into the terms of the document and the surrounding circumstances to see whether it was intended to be a promissory note in the sense of its being intended to be used as a negotiable instrument. The mere use of the words “I promise to pay” would not necessarily make it a promissory note.”

13. The document in that case recited that the whole capital as well as interest would be repaid by three years from the date. The learned Judge held that the parties did not intend the document to be a negotiable instrument, and that in reality it purported to incorporate only the terms of an oral agreement between the debtor and creditor. It could, therefore, be validated on levy of the penalty, if it was insufficiently stamped. Further on, the learned Judge observed that

“Documents must be construed as a whole, and every part of the documents must receive attention and the intention should be gathered from the whole context of the instrument so as to make one entire and consistent construction of the whole.”

14. Thus, on the authorities cited by the learned counsel for the appellants, we need not be embarrassed by the portion of the document containing a promise to pay. It is permissible to consider carefully every part of the document and also to examine the surrounding circumstances in order to find out whether the document is a promissory note or not.

15. Before we discuss the language of the document in question, it would be profitable to give the actual words of the document. The document runs as follows:

“Hisab Gomla Gidha Heer beta pota heer ka dhani Meetha Ramji hali tan Sirohi ka ko miti Mah Sudi 11 Samwat 2000 ka biyaj dar Rs. 1/9/-.

Rs. 376/2 Baqi raioo lena rupaya teenso chhintar anna do Hanuman Sahai Kaluram lena Gomlo Gidho dena rupaya dhani mange jab de dewange biyaj pisa rupaya soon desyan jorkar.

-/1/- tikat ko Tareekh 4 February 1944. Da. Gomla Gidha Heer Ka Ba. Hazarilal Mahajan Ki. No. Gomla ka guntha banwan ki Ba. Hazarilal Mahanan.”

16. Rendered into English, it reads as follows:

“Account of Gomla Gidha Ahir, son and grandson of Heera (residents of) dhani of Meetha Ramji, village Sirohi, dated Mah Sudi 11, Samwat 2000, interest at the rate of Rs. 1/9/-.

Rs. 376/2/- as arrears (in words) rupees three hundred seventy-six and annas two, due to Hanuman Sahai Kaluram and recoverable from Gomlo Gidho. Rupees will be paid when they will be demanded by the owner adding interest at the rate of one pice per rupee.

Stamp of -HI- dated 4th February, 1944.

Sd. Gomla Gidha Ahirs, written by Hazarilal Mahajan.

Left hand thumb impression of Gomla written by Hazarilal Mahajan.”

17. It would appear from the language of the document given above that it was the primary intention of the parties that a balance of the previous account be struck in the khata of the debtor in the account books of the creditor. A certain rate of interest was also recorded in order to save any dispute about the rate. This khata was stamped with one anna stamp, which, according to the law prevailing in Jaipur at that time, was chargeable on acknowledgment. A promissory note for an amount above Rs. 250/- was chargeable with a stamp duty of -12/-. Neither in the khata nor in the plaint is the document described to be a promissory note. The parties cannot be said to have intended that the document would be negotiable. On a careful consideration of the language of this document and the authorities cited on behalf of the plaintiffs, we are of opinion that the parties did not intend that the document in question should operate as a promissory note. All that they intended was to furnish an evidence of the balance due against the debtor with stipulation to pay interest at a certain rate. Considering the entire circumstances of the case, we are not prepared to hold the document to be a promissory note simply on account of the words about payment having found place towards the end of the document.

18. The only authority, after the two Privy Council authorities cited above, which has been placed before us on behalf of the defendant-respondent, is that of the Allahabad High Court in AIR 1941 All 158 (E). That case is, however, distinguishable from the present case. In that case it does not appear that a balance of the previous account was struck in the khata of the debtor in the account books of the creditor. The document was stamped with as. 3-6 stamp, whereas the proper duty was a stamp of as. 4. The duty chargeable on a receipt or an acknowledgment was -/1/- only. Among the factors, which influenced the learned Judges, was the factor that the parties would not have stamped the document with as. 3-6 stamp, if they did not intend that it should operate as a promissory note. There was yet another factor which strongly tipped the balance in favour of the defendant. In the plaint itself the plaintiff described the document as a promissory note. Considering the circumstances given above along with the fact that the money was made expressly payable on demand, the learned Judges came to the conclusion that the parties intended that the document should be a promissory note. We have been unable to And out anywhere in the said judgment that the document was held to be a promissory note simply because the money was made payable on demand.

19. We are of opinion that the lower Courts were wrong in holding the document to be a promissory note. To our mind, the document should at best be considered to be an agreement, and should have been stamped as such. As it was insufficiently stamped, it could be used in evidence only on the payment of necessary penalty. The appeal is allowed, the decrees of the lower Courts are set aside, and the case is sent back to the original Court for decision on merits in the light of the observations made abcve. Costs hitherto shall abide the result of the case after remand.

B/D.H.Z

20. Appeal allowed.