WICKREMASINGHE AND OTHERS
v.THE GOODWILL MARINE ACADAMY (PRIVATE) LTD.
COURT OF APPEALEDUSSURIYA J (P/CA)
C. COLOMBO 19398/MJANUARY 31,2000
Stamp Duty Act 43 of 1982 – S.5(5), S.24, S.33(l), S.69 – Surety Bondnot stamped – Could it be admitted in evidence – Could the deficiencybe furnished and Bond marked in evidence.
The cause of action pleaded against the 2nd Defendant Petitioner and the 3rdDefendant Respondent was based on the security Bond, the cause of actionagainst the 1st Defendant-Respondent was based on the agreement. Whenthe Plaintiff Respondent sought to mark in evidence, the Security Bond,objection was taken that the Bond was not duly stamped.
The District Judge over-ruled the said objection holding inter alia thatthe deficiency in stamp duty could be furnished under the proviso toS.33( 1) and the Bond marked in evidence thereafter. The District Courtalso ruled that the Bond was exempt from stamp duty in as much as theAgreement was stamped and that as the Bond had been filed as a part andparcel of the Plaint, the Plaintiff is entitled to mark it in evidence.
On leave being sought –
Under the proviso to S.33(l) such an unstamped bond may beadmitted in evidence upon payment of the proper duty or the amountrequired to make up the same and a penalty not exceeding threetimes the proper duty. This was not done at the time the documentwas sought to be marked when the objection was taken.
Neither the 2nd Defendant Petitioner nor the 3rd Defendant Respondentwere parties to the agreement, hence the Bond is not exempt fromstamp duty.
The mere fact that the Bond was filed with the Plaint does not meanthat it can be admitted in evidence.
Wickremasinghe and Others o. The Goodwill Marine
Acadamy (Private) Ltd. (Edussuriya, J. (P/CA)
There was a duly cast on the Plaintiff Respondent to see that theBond was duly stamped and valid. S.24 is not applicable.
Application for leave to Appeal.
Fhizer Musthapa for 2nd Defendant Petitioner.
S. Mudalige for Plaintiff Respondent.
Cur. adv. vult.
April 28, 2000EDUSSURIYA, J. (P/CA)
The Plaintiff-Respondent Instituted action against the 1stand 3rd Defendant-Respondents and the 2nd Defendant-Petitioner to recover a sum of Rs. 600,000/- jointly and orseverally.
The cause of action pleaded against the 1st Defendant-Respondent was Based on the Agreement marked XI (P1A),whilst the cause of action pleaded against the 2nd Defendant-Petitioner and the 3rd Defendant-Respondent was based on theSurely Bond X2 (P1B).
The Agreement XI called upon the 1st Defendant-Petitionerto execute a surety bond along with two other sureties approvedby the Plaintiff-Respondent to ensure the due performance ofthe terms and conditions. The 1st Defendant-Respondent, the2nd Defendant-Petitioner and the 3rd Defendant-Respondententered into the surety bond X2.
When the Plaintiff-Respondent sought to mark in evidencethe bond X2, objection was taken on the basis that the bondX2 was not duly stamped in accordance with the provisions ofthe Stamp Duty Act No. 43 of 1982.
After written submissions relating to the said objection weretendered, the Additional District Judge had overuled the saidobjection on three grounds, namely, (1) that the deficiency instamp duty could be furnished under the proviso to Section 33
Sri Lanka Law Reports
 2 Sri LJi.
(1) and the bond marked in evidence thereafter (2) that underSection 5 (5) of the Stamp Duty Act the bond was exempt fromStamp Duty in as much as the Agreement XI was stamped and(3) that bond had been filed as a part and parcel of the Plaintand as such the Plaintiff is entitled to mark it in evidence.
Under the regulations made by the Minister of Finance underSection 69 of the Stamp Duty Act No. 43 of 1982 and publishedin the Government Gazette Extraordinary No. 1000/17 of 5thNovember 1997 where the bond is for a sum in excess of Rs.100,000/- the stamp duty leviable is, Rs. 200/- on the first Rs.100,000/- together with Rs. 20/- for every Rs. 1000/- in excessof Rs. 100,000/-.
Thus, on the bond X2 which is for a sum of Rs. 600,000/-the stamp duty leviable aggregates to Rs. 10,200/-.
Under the proviso to Section 33 (1) such an under stampedbond may be admitted in evidence upon payment of the properduty or the amount required to make up the same and a penaltynot exceeding three times the proper duty. This had not beendone at the time the document was sought to be marked inevidence when the objection was taken. Hence the objectionmust necessarily be upheld.
On the other question of the applicability of Section 5 (5) itis seen that the Agreement XI itself bears only a Rs. 10/- stampand thus it does not cover the advalorem stamp duty in respectof a sum of Rs. 600,000/- mentioned in the bond X2. Further,neither the 2nd Defendant-Petitioner, nor the 3rd Defendant-Respondent were parties to the Agreement XI. Hence, the bondX2 is not exempt from stamp duty.
As far as the third ground is concerned, the mere fact thatX2 was filed with the Plaint does not mean that it can beadmitted in evidence. Thus, the objection of the Petitioner’scounsel to the admissibility of the bond X in evidence must be
Wickremaslnghe and Others v. The Goodwill Marine
Acadarrui (Private) Ltd. (Bdussuriya, J. (P/CA)
upheld as X2 was not duly stamped at the time it was sought tobe marked in evidence.
It was contended on behalf of the Plaintiff-Respondent thatin terms of Section 24 of the Stamp Duty Act No. 43 of 1982 thepersons executing the bond are liable to pay the stamp dutyand thus the Petitioner is estopped from taking the objectionthat the bond X2 is not duly stamped. This contention is nottenable for the reason that it was the duty of the Plaintiff-Respondent to see that the bond was duly stamped and valid.
For the above mentioned reasons, we set aside the order ofthe Additional District Judge dated 8th July 1999.
This appeal is allowed with costs fixed at Rs. 3150/-.UDALAGAMA, J. – I agree.
WICKREMASINGHE AND ANOTHERS v. THE GOODWILL MARINE ACADAMY (PVT) LTD