020-NLR-NLR-V-72-ELUVATHEEVU-NORTH-CO-OPERATIVE-CREDIT-SOCIETY-Appellant-and-M.-NALLANINGAM-Ch.pdf
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Eluvaitheevu North Co-operative Credit Society v. Nallalingam
1969Present: Wijayatilake, J.ELUVAITHEEVU NORTH CO-OPERATIVE CREDIT SOCIETY,Appellant,, and M. NALLALINGAM (Chief Clerk, Court of Requests.Kaj’ts), Respondent6’. C. 04/67—C. JR. Kay Is, S70S
Registered co-operative society—Dispute touching its business—Reference to arbitrator—Arbitrator's award and other proceedings—Exemption from stamp duties—Co-operative Societies Ordinance {Cap. 121), ss. 33, 53 (!)—Co-operative SocietiesRules of 1050, Rule 3S—Stamp Ordinance {Cap. 247), ss. 2, 4, 8 (1), 8 {2),30 {1), 41, 53, Exemption F (2) at p. 755.
"Where, after a dispute between a registered co operative society and some ofits mombers is referred to an arbitrator, tho awnrd of tho arbitrator is mode aRulo of Court in accordance with Rulo 3S (13) of tho Co-operative SocietiesRules of 1950, tho award and tho othor proceedings are “ instruments ” withintho meaning of section 33 of the Co-operative Societies Ordinance and, therefore,are not liable to stamp duty.
W1JaYAT1LAKi2, J.—Eluvailhccvu Iforth Co-operative Credit Society '93
v. Nallalingam
.A.PPBAL from an order of the Court of Requests, Kayts.
5. Sharvananda, with P. Thuraiajppah, for the appellant.
K.M. M. B. Kulatunga, Crown Counsel, for the respondent.
February 7, 1969. Wijayatilake, J.—
The Appellant Society has been registered under the Co-operativeSocieties Ordinance, Chapter 124. as amended by Act No. 21 of 1949.The business of the said Society includes granting of loans to its members.Two members of this Society namely T. Krishnapillai and K. Sivalingamhad stood surety to V. Vadivelu, another member, who had obtained aloan of Rs. 200 at 10 per cent, interest from this Society. They had failedto repay this loan and the Committee of the Society had in accordancewith Section 53 (1) of the Co-operative Societies Ordinance and theRules framed thereunder referred the dispute to the Assistant Commis-sioner of Co-operative Development for decision; who had in turnreferred the matter to A. Tharmarajah for arbitration in pursuance ofthe powers conferred on him under Section 2 (2) of the said Ordinanceread with Order of the Minister appearing in Government GazetteNo. 10,115 of 30th June, 1953. The Arbitrator having inquired into thedispute in accordance with Rule 38 (1) of the Co-operative SocietiesRules had made his Award as required by Rule 38 (9) and ordered thethree members referred to above to pay the Society the sum ofRs. 246-50 and interest. There was no appeal from this Award. The said .Society by its representative C. Thambo—Executor of Awards filed apetition before the Commissioner of Requests, Kayts, praying for anOrder Nisi to the effect that the said Award be enforced in the samemanner as a Decree of Court in accordance with Rule 38 (13) of theCo-operative Societies Rules of 1950 and the Civil Procedure Code.The Award was accordingly made a Rule of Court and Order Nisi wasissued against the three respondents. Order Nisi was served only on
T.Krishnapillai, the 2nd respondent and he had stated in Court thathe had no cause to show why writ should not issue against him. At thisstage the learned Commissioner had observed that the Award and theother proceedings had not been stamped and he had directed the ChiefClerk, to report on the amount of deficiency of Stamp Duty. The ChiefClerk had filed his report shewing the deficiencies as follows :
Cur. adv. vult.
Application for execution of WritNotice
Award
Petition
Letter of Appointment
Re. 1 ’00Re. 1-00Re. 1 -00Re. 1 -00Re. 1 *00
Rs. 5*00
§4WTJAVATILAKB, <L—Etuvaitheevu Earth Co-operative Credit Society
v Kallalingam
The Society has raised objections and the learned Commissioner afterInquiry had ruled that all those documents are liable to Stamp Dutyas reported bjr the Chief Clerk. The present Appeal is from this order.
iIr. Sharvananda, learned Counsel for the appellant submits thatthe appellant being a registered Society Section 33 of the Co-operativeSocieties Ordinance exempts it from stamp duty. Section 33 providesas follows :
“ Every registered societ}' shall be exempt from —
(а)the Stamp duty with which, under any law for the time being in
force, instruments executed by or on behalf of a registeredsociety, or b}T an officer, or member, and relating to the businessof such society, or any class of such instruments are respectivelychargeable ; or
(б)any fee payable under the law of registration for the time being
in force.”
He submits that the word ‘ instrument ’ in this Ordinance includes theword * document He has referred to the word * documents ’ in Section 2of the Stamp Ordinance Chapter 247 to show that this word is synonymouswith the word * instruments ’ and it docs not have a connotationdistinct from it. He submits that it is clear that it is mere surplusage.Sections 4 and 8 (1) and (2) too have been referred to in support of thissubmission.
Mr. Kulatunga, learned Crown Counsel, submits that the documentsreferred to arc not ‘ instruments ’ within the meaning of this section andthat they are not executed by or on behalf of the Appellant sooicty. Hehas dealt with the procedure relating to an Award of Court being made adecree of Court and he submits that the documents occurring in thiscontext are clearly not ‘ instruments 5 executed by or on behalf of theSociety. He relies on the Divisional Bench cases of Pinikahana KahaduicaCo-operative Society Lid. v. IJeralh 1 and Kancly Co-operative Urban Bankv. Senanayake2 and Sections 01, 224 and 225 .of the Civil ProcedureCode and Rule 3S of the Co-Operative Societies Rules 1950 Chapter 124,and exemption F (2) appearing at page 755 of the Stamp Ordinance.He submits, that, any exemption should be expressly stated and he hasdrawn my attention to the Land Acquisition Ordinance (Chapter 460)and . also the Requisitioning of Land Ordinance (Chapter 462) andResumption of Crown Land Ordinance (Chapter 455). He has also referredme to Sections 39 (1), 41 and 43 of the Stamp Ordinance and to the Casesof Fernando v. Pieris 3 and Don Cornells Appaliamy v. Kiribanda J.
a [1937) 39 N. L. R. 52G.
4 (1938) 12 C. L. H 1GG.
1 (19-57) 59 N. L. R. 145.s (1937) 39 N. h. R. 352.
Ha meed v. Inspector oj Police, Crimes
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Mi*. Sharvananda has further submitted that a registered Co-operativeSociety is virtually a body founded and fostered by the Governmentand therefore it would be contrary to the objects of both the Co-operativeSocieties Ordinance and the Stamp Ordinance to make these documentsliable to duty.
In my opinion a statute such as the Stamp Ordinance should bostrictly construed. It is a well settled rule of law that all charges upontho subject must be imposed by clear and unambiguous language,becauso in somo degree they operate as penalties. Tho subject is not tobe taxed unless tho language of tho Statute cloarly imposes tho obliga-tion. Vide Maxwell on Interpretation of Statutes—11th cd. p. 278.The words of a statute, when there is a doubt about their meaning, areto bo understood in the sense in which they best harmonise with thosubject of tho Enactment and the Object the legislature has in view.Vide—Maxwell page 51. In my view the word ‘instruments ’ in Section 33of tho Co-operative Societies Ordinance is wide enough to cover theworcL*: documents ’. An instrument' is a “fbrmld-document-especially of alegal character. In the instant case the documents in question havecome into being in pursuance of a dispute which had arisen between thosociety and somo of its members and the procedure adopted is recognisedby our Law. In tho ^circumstances it would be highly artificial andhyper – technical to hold that these documents are not instrumentsas contemplated in Section 33 and that they have not been executedon behalf of the appellant societ3r.
I would accordingly set aside the order of the learned Commissionerand hold that nono of these documents are liablo to Stamp Dutjn Thopetitioner had made the Chief Clerk of the Court of Requests, Kayts,respondent to this Appeal. In the circumstances I make no order as tocosts.
Order set aside.