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Present: Dalton and Lyall Grant JJ.
ABDUL CADER *. RAWTHER.338—D. C. Kandy, 34,304.
Stamp Ordinance—Promissory note made and stamped in India—
Action in Ceylon—Production of note—Civil Procedure Codct s.
60—Ordinance No, 22 of l909t s, 4 (6).
Where the endorsee of a promissory note, made aud endorsedin India and duly stamped in India, sued the maker in Ceylon,—
Heldi that the promissory note does not require to be stamped inCeylon before it is sued upon.
A demand for payment does not amount to a presentment forpayment within the meaning of section 4 (6) of the Stamp Ordinance.
The production of a document with the plaint does not amountto an admission of the document in. evidence within the meaning ofsection 37 of the Stamp Ordinance.
HIS was an action brought by the plaintiff to recover from
A the defendant a sum of Rs. 500 due on a promissory notemade by the defendant in India in favour of one Idroos Lebbeand endorsed by the latter to plaintiff in India. The plaintiffand the defendant are resident in Ceylon. The defendantpleaded that the note, although made out of Ceylon, requires tobe stamped in Ceylon. The learned District Judge upheld thecontention and dismissed the plaintiff’s action.
N, E. Weerasooria, for plaintiff, appellant.—The Court hasaccepted the note in question with the plaint. Once a plaint isaccepted a party to the action cannot object to it on the groundof insufficiency of stamping (Jayawickrama v. Amarasooriya1). Thenote" has thus been admitted in evidence. It is too'late now toseek to reject the note on the ground that it is not duly stamped.Section 37 supports this view. Further, the circumstances in thecase make it clear that the note in question does not answer to thedescription of promissory notes chargeable with duty under section4 (5) of Ordinance No. 22 of 1909.
Navaratnam, for defendant, respondent.—The mere productionof an instrument with a plaint cannot give it any evidentiaryvalue. Before a Court can treat an instrument as evidence ofanything at all, formal proof of the document is necessary. Sections17 and 42 of the Ordinance, which prescribe a time limit and themode of stamping instruments executed out of the Colony7, expresslyexclude bills of exchange, cheques, and promissory notes. Section
M1914) 17 N. L. R. 114.
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18, however, throws on " the first holder in Ceylon of any bill ofexchange, cheque or promissory note drawn or made out of Ceylon ”the ducy of stamping a negotiable instrument. The plaintiffbeing the first holder in Ceylon of a note, made in India, has .failedto comply with the requirements of section 18. Although thenote does not appear to have been negotiated in Ceylon, yet pay-ment can be claimed only on presentment of the note; thereforethe note answers to the description of instruments chargeablewith duty.
Weerasooria, in reply.—Action is against maker. Presentmentis unnecessary. It is necessary only to make indorser liable.Chalmers Bills of Exchange Act (6th ed.), section 45, at page 145.Here there has been only a demand for payment. A demand forpayment is not presentment within the meaning of section 4 of theStamp Ordinance. Presentment for payment means presentmentaccording to mercantile usage. (Alpe Law of Stamp Duties, 11th,ed., pp. 82, 83; Griffin v. Weatherby and Henshaw.’)
January 26, 1928. Dalton J.—
The plaintiff (appellant) sued the defendant to recover the sumof Rs. 500 alleged to be due on a promissory note made by thedefendant in India in favour of one Idroos Rawther. The notewas endorsed by Idroos Rather to plaintiff and he alleges he isnow the holder in due course. The endorsement is an open endorse-ment and is said to have been made in India. The plaintiff anddefendant are now said to live in Kandy. Defendant pleaded, sofar as this appeal is concerned, that the note, although made outof Ceylon, had not been properly stamped in Ceylon in accordancewith the provisions of Ordinance No. 22 of 1909, and therefore plaintiffcould not maintain this action. It appears to have been admittedthat the note had been duly stamped in India in conformity withthe law there, but it is agreed it has not been stamped in Ceylon.Two questions arise for decision on this appeal. It was first ofall argued that the note had in fact been accepted or admitted inevidence by the learned Judge because it was produced in Courtwhen the plaint was presented as required by law (section 50,Civil Procedure Code), and the learned Judge had accepted theplaint and allowed summons to issue. . By section 37 of the StampOrdinance such admission could not later be questioned on theground that the document had not been duly stamped, but thata penalty only could be imposed as provided by that section. Icannot agree that the production of a document to the Court underthe provisions of section 50 is either the “ tendering ” of evidenceto the Court within the meaning of the word “ tender ” as used insectiqn 37 or an admission of evidence by the Court on the hearing
»[1868) L. R. 3 Q. B. D. 753.
Abdul Coderv. Rawther
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Abdul Coderv. Rawther
of the action. It is merely the production at the filing of theplaint of evidence upon which plaintiff proposes to rely when thecase comes on for trial, just as the list of documents required bysection 51 is a list of what he proposes to rely upon as evidence insupport of his case. That evidence he will tender to the Courtin due course at the trial and the question of its admission willthen be considered. A document produced under the provisionsOf section 50 to be filed and filed with the plaint is no more a docu-ment tendered in evidence than is a plaint that has been filed andaccepted, and a plaint clearly does not answer to that descriptionof document (and see opinion of Pereira J. in Jayawickrama v.Amarasooriya1). It has been suggested that evidence may begot in by some process of filing, in which process apparently theCourt plays no part and of which the other 6ide has no notice,but such a method of leading or producing evidence is unknownto me. The note in question has not been admitted in evidence,and therefore section 37 has no application.
It was next argued that the note did not require to be stampedin Ceylon, and the trial Judge was wrong in holding that it fellwithinthe instruments mentionedin section4 ofthe Stamps
Thelearned Judge unfortunatelydoes notgiveany reasons
for his conclusion, nor does he say within which of the casesmentioned the note falls. The material parts of the section areas follows: —
the following instruments and documents shall be
chargeable with duty of the amount indicated ….
(«)(/>) Every bill of exchange, cheque, or promissory note
drawn or made outof Ceylonandaccepted or
paid, or presented for acceptance or payment, orendorsed, transferred, or otherwise negotiated inCeylon ….
– Mr. Navaratnam, for the defendant, agrees that if the note doesnot fall within 4 (b) it is not chargeable with stamp duty. Heurges, however, that the note is so chargeable as having beenpresented for payment in Ceylon. He also stated he was preparedto argue that it had also been 14 otherwise negotiated " in Ceylon,but later admitted he could not sustain this argument.
The document is undoubtedly a promissory note made in India,and it is also stated to have been endorsed in India. I can findnothing on the record to show where it was endorsed, but the casewas presented in the lower Court and in this Court on the footing
111914) 17 N. L. R. 174.
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that it had been endorsed in India. The plaintiff und defendantboth now live in Ceylon and so the former is suing on it here. Underthe Bills of Exchange Act presentment of the note for paymentis only necessary to render the indorser liable on the note. Nopresentment was therefore necessary in this case, and there hasbeen in fact no presentment within the meaning of that Act. Itwas argued, however, that any demand for payment is a present-ment for payment within .the meaning of section 4 of the StampsOrdinance. That section makes use of the same phraseology assection 35 of the Stamp Act, 1891 (54 & 55 Viet. c. 39). Anearlier Act (17 & 19 Viet. c. 83) in section 5 uses the same termsand has been the subject of legal decision. In Griffin v. Weatherbyand Henshaiv1 the Court had to consider whether a bill, drawn inthe Isle of Man and so for revenue purposes a foreign bill, wasrequired to be stamped in Englandi as having been ” presentedfor payment, indorsed, transferred, or otherwise negotiated inthe United Kingdom.** Blackburn J. pointed out that none ofthese things had happened yet. He continued to say that *' present-ment for. payment must mean presentment according to mercantileusage; the document itself must be present, though not the holder.No doubt there has been ample notice and demand of payment,but there has been no presentment.*’ Lush J. says that “ present-ment for payment” must mean such a presentment as would besufficient to charge indorsers or other persons collaterally liableon the bill, and the document itself must be presented so as toenable the person presenting to give it up if paid. This is anauthority directly contrary to the argument addressed to us as tothe meaning of the term ” presentment for payment ” in section 4.It must, in my opinion, be held that the document has not beenpresented for payment. It has not been ” otherwise negotiated,”for on the same authority ” negotiating ” can only mean doingsomething that can only be done with a negotiable instru-ment, and no such act haa been shown to have been done inCeylon.
It appears, therefore, that none of the things for which section 4
provides have yet been done in Ceylon, and therefore the instru-ment is not yet liable to any stamp duty here. Mohamado v.Manangady2 does not help the respondent.
It was suggested that this was an attempt to get paymeut ofthe bill, but even so it has not yet been “ paid,” and if judgmentbe obtained it would still have to be decided whether the debt dueon the note had not disappeared in the judgment and whetherthere could under such circumstances be any payment of the noteso as to bring it within section 4 (6).
1 (7868) L. J?. 3 Q. B. D. 753.2 9 S. C. C. 193.
Abdul Cadetv. Rawther
Temp os* J1.
''Abdul (Taderv. frdwther
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I have therefore come to the conclusion that the learned Judgewas wrong in holding that the note was liable to stamp duty underthe provisions of section 4. The decree entered must, therefore,be set aside and the case sent back to be heard.
IiYALn Grant J.—
have arrived at the same conclusion.
Decree set aside and case sent back.