Peiris v. Saravanamuttu.
Present: Drleberg J.
In the Matter of the Election for the Colombo North Electorate.PEIRIS w. SARAVANAMUTTU.
Stamps—Election petition—Recognizance—Ordinance No. 22 of 1909, Schedule
B. part /-, item, 15 (1).
A recognizance given as security for respondent’s costs in an electionpetition is liable to stamp duty under Schedule B, part I., item 15 (1)to the Stamp Ordinance.
HIS was an election petition. The respondent asked for the dismissalof the petition on the ground that the recognizance given as
security for costs was not duly stamped.
M. D. de Silva, D. S.-G. (with Basnayake, G.O.), for the Attorney-General.—An election petition is not a civil proceeding, but has ratherthe character of a gwasi-criminal proceeding. (Windsor Election Petitionl;section 75 (3) and (4) of Ceylon Order in Council, 1931.) Under the existingStamp Ordinance, No. 22 of 1909, the only documents which are exemptedfrom stamp duty are those which come under section 4 (1). Under thissection instruments by or in favour of the Crown are exempted from■duty where the Crown would be liable to pay the duty. No exemptionof this nature could be claimed for this recognizance.
Parts II. and HI. of Schedule B are not exhaustive of the documentsnecessary to be stamped in law proceedings. If the document is notmentioned in parts H. and HI., resort may be had to part I. (Commissioner
of Stamps v. Banda2).
»1 O'M. <fc B. 6.
• SI N. L. R. 80.
DRIEBERG J.-—Peiris v. Saravanamuttu.
This recognizance is not for a definite sum of money, but only givesthe limit of the liability and should Come under item 15 (1) in part I. ofSchedule B. (Attorney-General v. Mount.1)
B.F. de Silva (with him L. G. Gurnasekera and Wijewickrema), instructedby S. A. Jayaeekara, for the petitioner.—The recognizance is not a bondas there is no hypothecation, but only an acknowledgment of a debt.
The recognizance is for an unascertained sum of money and the liabilityis contingent.
Soertsz (with Amerasinghe), instructed by N. Saravanamuitu, forrespondent.—The actual amount mentioned in the recognizance is thepenal sum in which the petitioner may become liable. The recognizancei6 a bond for a definite sum of money and should be stamped under item15 (b) of part I. of Schedule B. (Attorney-General v. Mount (supra). )November 12, 1931. Dribberg J.—
This matter came up before me on September 7, 1981. The only-ground on which the respondent asked for the dismissal of the petitionwas that the recognizance was not duly stamped. I directed that thematter should be argued after notice to the Attorney-General and this-was done on October 29.
I have set out in my order of September 9 the facts relevant to thisquestion and how it had 'been dealt with hi previous cases.
Two questions arise for decision: whether the recognizance is liableto stamp duty, and if so how it should be stamped.
An election petition is not a civil proceeding, but has rather the characterof a criminal or quaat-criminal proceeding. It i6 so regarded in England.In the Windsor Election Petition2, Willes J. admitted in evidence anunstamped promissory note on the ground that the Act which renderedstamps unnecessary in criminal proceedings applied. The Act referredto was the Stamp Act, 18913; a similar provision exists in section 36 (a) ofour Stamps Ordinance, No. 22 of 1909.
The Deputy Solicitor-General, who has placed before me and closelyexamined all the material available, pointed out the different manner inwhich in England provision is made for duty on documents used asevidence in proceedings and documents used for other purposes. Butit is not necessary to deal with this, for we have here one Act dealing withall documents liable to duty. Nor, as I shall point out, is the question. affected by the nature of ’the proceedings for the fact that they arecriminal would only be relevant if it was sought to admit the recognizancein evidence, in which case it could be admitted though not duly stamped,,under section 36- (c) of the Stamp Ordinance, 1909. But it is noto soughthere to have the recognizance admitted as evidence.
Whether a recognizance is liable to stamp duty is best ascertainedby examining the provisions relating to instruments of this nature inthe earlier Ordinances. A recognizance is an obligation of record whicha man enters into before some Court of Record or Magistrate duly author-ized, with condition to do some particular act, as to appear at theassizes, to keep the peace, to pay a debt, or the like (14 Halsbury 249
1 32 N. L. R. ,49.2 2 0*M. <k R. 1.
9 64 & 65 Viet. e. 39, «. 14 (4).
DRIEBERG J.—Petris 9'. Saravanamuttu.
referring to 2 Bl. Com. 511). It is a contract made with the Crown inits judicial capacity (Pollock on Contract, 7th ed.t p.145). It ist in fact,a bond which as an instrument of contract or obligation falls withinpart I. of Schedule B of the Stamp Ordinance of 1909.
In the Stamp Ordinance, No. 11 of 1861, " bonds given by any personto Her Majesty, or to any Public Officer, for the use of Her Majesty, forany debt or sum of money due, or to become due to the Grown, or to theGovernment of this Island ” were exempted from all stamp duty.
In the Stamp Ordinance, No. 28 of 1871, which repealed the Ordinanceof 1861, there was the same exemption in favour of bonds and mortgagesgiven for the same purposes, and the Ordinance No. 43 of 1884 whichrepealed No. 23 of 1871 granted the same exemption.
Ordinance No. 43 of 1884 was repealed and succeeded by the StampOrdinance, No. 3 of 1890. In this the exemption of bonds and mortgageswas extended to leases, the words of the exemption clause being “ Bonds,leases, or mortgages given by any person to Her Majesty, or to anyPublic Officer, for the use of Her Majesty, for any debt or any sum ofmoney due or to become due to the Crown, or to the Government of thisIsland ”. Up to this time therefore all bonds in favour of the Crownwere exempted from duty. In these Ordinances the exemption clauseappears in the Schedule declaring the stamp duty on bonds.
In the existing Stamp Ordinance, No. 22 of 1909, which repealed the•Ordinance of 1890, there is no exemption clause of this nature in part I.of Schedule B which provides for the duty on bonds and the exemption,if it exists, can only be under the provisions of section 4 of the Ordinance,which, after providing for the liability of the instruments and documentsin the Schedule B, enacts as follows, in sub-section (1); " Provided thatno duty shall be chargeable in respect of any instrument executed by,or on behalf of, or in favour of, the Government in cases where, but forthis exemption, the Government would be liable to _ pay the duty charge-able in respect of such instrument
The only instruments in favour of the Government on which, but forthe exemption the Government would be liable to pay duty are thosementioned in sub-sections (c) and (d) of section 28 of the Ordinance.In the case of conveyances, leases and agreements to. lease the duty ispayable by the grantee, lessee or intended lessee; sub-section (d) dealswith an instrument of exchange in which the parties pay the duty inequal shares and in such a case the Government as a party would beliable to pay half the duty. There is no exemption in the case of aninstrument in favour of the Government where the duty is not payableby the Government, and in the case of a bond section 28 providse that•the duty is payable by the person making or executing it. It followstherefore that exemption cannot be claimed for this recognizance undersection 4 (1) of the Ordinance, and no distinction is drawn between civiland criminal proceedings.
Before considering to what duty a recognizance is liable I might dealwith another ground on which exemption was suggested. There,, is nospecial provision for bonds given in criminal proceedings in the Supreme
232DRIEBERG J.—Petris v. Saravanamuttu.
Court; part II. of Schedule B, which deals with the Supreme Court, makesprovision only for civil proceedings. It cannot be said, however, thatthis implies that instruments in all other proceedings are not liable to-stamp duty.
In part 111. of Schedule B as amended by Ordinance No. 19 of 1927,.the provision for duty on bonds which existed in the Ordinance of 1909*was omitted. It was held, however, that a bond by an administratorwas still liable to duty for, though omitted from part III. which deals withtestamentary proceedings, it was still liable as a bond under item 15 (6)of part II. (Commissioner of Stamps v. Banda1). This ruling was approvedby a Bench of Three Judges in the case of Attorney-General v. Mount2, sofar as^ the liability of the bond under part II. was concerned, but it was-held that it was liable under item 15 (1) and not under item 15 (6).
The decision in Attorney-General v. Mount (supra) is conclusive on thequestion of how such an instrument should be stamped. In that case thebond was by an administrator for the due administration of the estateand was drawn for a sum representing the value of the whole estate. Itwas held that it did not fall within item 15 (b) which provides for “a. bond or mortgage not affecting land, given as security for the paymentof any definite and certain sum of money The bond was in the form90 of the Civil Procedure Code and is conditional in form, the bondbeing void on a full and final accounting by the administrator. In thiscase the bond is given under the provisions of clause 12 of the sixthschedule of the Order in Council which requires the petitioner to givesecurity for the payment of all costs, charges and expenses that may bepayable by him and provides that this security may be given by arecognizance or by a deposit of money or partly in one way and partly inthe other; as in the case of a bond by an administrator tiie recognizancedeclares that the persons executing it are bound to the King in the sumof Rs. 10,000, the condition being that they will pay all costs, charges andexpenses payable by the petitioner and that the recognizance shall bevoid on such payment being made.
The recognizance therefore is not given for a definite and certain sumof money, but for an unascertained sum and all that can be recoveredunder it is the amount which on the termination of the proceedings maybe found due by the petitioner, the sum of Rs. 10,000 being the limitof what may be recovered under it.
As was held in Attorney-General v. Mount (tupra) an instrument of thiskind can only fall under item 15 (1) and it is liable to a stamp dutyof Rs. 10 whatever may be the amount stated in it; it was stampedat execution, with stamps of the value of Rs. 25 and is therefore dulystamped.
This disposes of the only objection of those set out on the respondent’slist of July 22 which was pressed.
The respondent will pay the petitioner the costs of the proceedings
taken on his objection.
1 (1929) 32 N. L. R. 80.
* (1930) 32 N. L. R. 49.
PEIRIS v. SARVANAMUTTU