1. This is a revision application by the plaintiff against an order of the Additional District Judge, Jhalawar, holding that the Shah Jog Hundi on which the suit is based is inadmissible in evidence as it is not properly stamped.
2. I have heard the learned Counsel for the parties & am satisfied that the decision is erroneous.
3 A Shah Jog Hundi is only payable to a Shah namely a man of worth and substance known in the Bazar. The Hundi in suit short of superfluous verbiage runs as follows:
Kanhaiya Lal Dulichand of Manohar Thana conveys his greetings to Kanhaiya Lal Dulichand of Manohar Thana. We have deposited the sum of Rs 3 000/- for this Hundi with Kanahaiyalal Shrichand of Manohar Thana. Please pay to a Shah in accordance with the custom with regard to Shah Jog Hundis on Asad Badi 13/S. 2014.
Sd/- Dulichand 7-5-67 This Hundi was thus payable after a stated period. It was only payable to a Shah.
3. The above Hundi is not a bill of exchange as defined under Section 5 of the Negotiable Instruments Act as it does not contain an unconditional order directing payment of money to a specified person or to the bearer of the instrument see Mangal Sen v. Ganeshi Lal AIR 1936 All. 396.
4. By the local usage such a Hundi is negotiable.
5 The definition of "Bill of Exchange" under the Stamp Act is wider and includes a Hundi. Section 2(2) of the Stamp Act runs as follows:
"Bill of exchange" means a bill of exchange as defined by the Negotiable Instruments Act," 1881 and includes also a hundi, and any other document entitling or purporting to entitle any person, whether named therein or not, to payment by any other person, for any of money.
6. In the above Hundi time for payment is specified. It is therefore not payable on demand, within the meaning-of the Negotiable Instruments Act, Section 19 of which runs as follows:
A promissory note or bill of exchange, in which no time for payment is specified, and a cheque, are payable on demand.
7. The definition of a "bill of exchange payable on demand" under Section 2(3) of the Stamp Act is wider. All bills of exchange and all Hundis which are payable on demand are of course bills of exchange payable on demand for the purpose of the Stamp Act. Apart from such bills of exchange or Hundis the following classes of documents are also deemed to be bills of exchange payable on demand for purposes of the Stamp Act:
(a) an order for the payment of any sum of money by a bill of exchange or promissory note, or for the delivery of any bill of exchange or promissory note in satisfaction ot any sum of money, or for the payment of any sum of money out of any particular fund which may or may not be available, or upon any condition or contingency which may or may not be performed or happen ;
(b) an order for the payment of any sum of money weekly, monthly, or at any other stated periods; and
(c) a letter of credit, that is to say, any; instrument by which one person authorizes another to give credit to the person in whose favour it is drawn.
Bills of exchange payable on demand are exempt from stamp duty and on account of public policy the Legislature thought it fit to exempt the above classes of documents by enacting the fiction that they will be treated to be bills of exchange payable on demand although they are not actually so payable.
8. The Hundi in suit is an order for the payment of a sum of money at a stated period. Under Section 2(3)(b) of the Stamp Act an order for the payment of any sum of money weekly, monthly or at any other stated periods is to be treated as a bill of exchange payable on demand for purposes of the Stamp Act.
9. In my opinion the Hundi in suit being an order for the payment of a specified sum of money at a stated period is a bill of exchange payable on demand for purposes of the Stamp Act.
10. On behalf of the defendant it was contended that a reading of Clause (b) of Section 2(3) goes to show that it is applicable only to sums payable in more than one instalment. Under Section 13(2) of the Central General Clauses Act which is applicable for interpreting the Stamp Act "plural" includes "singular" and vice versa. If a sum of money is payable in two instalments at stated periods then it is indisputable that the document which contains an order for the payment of this money is a bill of exchange payable on demand under the Stamp Act. If instead of two instalments the money is payable in one instalment then I don't see why the document containing an order for payment should not be treated as bill of exchange payable on demand. For under Section 13(3) the word "periods" includes the words "period" and the relevant part of the clause would read-
an order for the payment of any sum of money...at any...stated period." The Hundi in suit is therefore a bill of exchange payable on demand within the meaning of Section 2(3) of the Stamp Act and is therefore exempt from the payment of any duty.
11. In an earlier case Tikamchand v. Laxmi Chand 1961 RLW 251 it was held that Shah Jog Hundi payable after specified date is payable on demand. The reasoning adopted in that decision is however not correct as was pointed out in Hanuman v. Fattu 1967 RLW 466.
12. In Tikamchand's case the decision in Partab Chand Ratan Ghand v. Gilbert AIR 1934 All. 695 (1) was followed. That decision related to a post-dated cheque and was not applicable to a Hundi. A post-dated cheque is not expressed to be payable otherwise than on demand and is therefore a cheque as defined in Section 6 of the Negotiable Instruments Act. By virtue of Section 19 of the Negotiable Instruments Act a cheque is always treated as being payable on demand.
13. In an unreported decision Meghraj v. Shivji S.B. Civil Revision No. 105/1962 decided on 14-8-1962 referred to in Hanuman's case 1967 RLW 466 the decision is Partab Chand Ratan Chand v. Gilbert AIR 1934 695 (1) was applied even to a promissory note. Under Section 19 of the Negotiable Instruments Act a promissory note in which time for payment is specified cannot be treated as being payable on demand. The Stamp Act does not contain an extended definition of a promissory note payable on demand. The decision in Meghraj v. Shivji was therefore erroneous.
14. In Hanuman's case the decision in Moolchand v. Shankar Datta 1965 RLW 33 was not referred to. Nor was Section 2(3) of the Stamp Act adverted to. The observations made in that case with regard to a bill of exchange are erroneous. The Stamp Act contains an extended definition of a bill of exchange payable on demand. This definition was not considered. The question as to whether or not a bill of expressed to be payable otherwise than on demand can be a bill of exchange payable on demand under the Stamp Act did not arise for decision in that case. Having reconsidered the observations made in Hanuman's case with regard to a bill of exchange in the light of the decision in Mool Chand's case 1965 RLW 33 I find that those observations are erroneous. These erroneous observations were followed by the learned Additional District Judge.
15. I accordingly allow the revision application with costs, set aside the order of the trial court and hold that the Hundi in suit is admissible in evidence as it is exempt from duty.