J.J. Martis v. Cuthbert D'Souza

The question referred is whether a promissory note stamped with quarter anna postage stamps can be validated by the Collector under R. 18 of the Government of India Stamp Rules.

Sect. 37 of the Indian Stamp Act empowers the Governor-General in Council to make rules providing that, where an instrument bears a stamp of sufficient amount but of improper description, it may, on payment of the duty with which the same is chargeable, be certified to be duly stamped, and any instrument so certified shall then be deemed to have been duly stamped as from the date of its execution. R. 18 which has been made in pursuance of this power enables the Collector, where an instrument bears a stamp of sufficient amount, but of improper description, on payment of the duty with which the instrument is chargeable to certify by endorsement that it is duly stamped.

The answer to the question referred depends on whether the quarter anna stamps on the instrument are stamps of improper description.

A Bench of the Bombay High Court has held in Venkatraman Ganap Hegde…Plaintiff Applicant; v. Shankaranarayan Sitaram Bhat…Defendant Opposite Party. a case similar on the facts to the present case, that a pronote stamped with four quarter anna postage stamps was not an instrument bearing a stamp of improper description to which the remedial provisions of Sect. 37 could be applied. The Court followed the ruling of the Full Bench in Reference under section 57 of Act No. II of 1899 that, inasmuch as the rule (now R. 3 of the 1925 Stamp Rules) required that payment of the duty with which an instrument is chargeable shall be indicated on such instrument by means of stamps issued by Government for the purpose of the Act, a “Postage stamp,” not being a stamp issued for indicating the payment of duty chargeable on an instrument, did not come within the words “stamp of improper description”. But in Ma Pwa May v. S. R. M. M. A. Chettyar Firm (3) the Judicial Committee dissented from the view that a revenue stamp only can be a stamp of improper description within Sect. 37, observing:—“Their Lordships entertain no doubt that in pursuance of this section and the rules thereunder, the Collector would have been entitled in this case to exercise the powers given by the section. The contention to the contrary is that the section has no reference to any stamp except a revenue stamp pure and simple, and that a revenue stamp surcharged ‘Court fee’ is not within the meaning of the section a stamp of improper description. This appears to their Lordships to be putting too narrow a construction upon a remedial section, and their Lordships would not be prepared to assent to the opinion of the High Court of Allahabad in Reference under section 57 of Act No II of 1899 so far as it concerns Court-fee stamps in their present form”.

R. 16 of the Stamp Rules prescribes what stamps are to be used for denoting payment of duty. It says:—“Except as otherwise provided by these rules, the adhesive stamps used to denote duty shall be the requisite number of stamps bearing the words ‘Four-annas’ or ‘Two annas’ or ‘One-anna’ or ‘Half-anna’ and such stamps may be inscribed for use either for postage or for revenue, or for both postage or revenue”. The rule expressly recognises postage stamps as usable to indicate payment of duty on an instrument chargeable with duty. If postage stamps are of the description designated in the rule they are stamps of a proper description; and it seems to us that it would be only putting a reasonable construction upon the section and rule to hold that quarter anna postage stamps, not being included in R. 16, are stamps of improper description, and that if such stamps of sufficient amount are borne by the instrument it can be validated by the Collector under R. 18.

The costs of this reference which we fix at Rs. 50 will be added to the costs to be paid by the Defendant if the Plaintiff succeeds in the suit.

N. R. R.Reference answered.