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Present : Lyall Grant J. and Maartensz A.J.KARUNARATNE t>. COMMISSIONER OF STAMPS.
119—D. G. (Inty.)
In the Matter of an Appeal under Section 32 of the Stamp Ordinance.
Stamp Ordinance^-Mortgage bond—Deed of release of property mortgaged—Property under twobonds—One instrument—Stamp duty—
Ordinance No. 22 of 1909, $. 6.
Where a person raised money on two bonds hypothecating a certainproperty, among others, as a primary mortgage in one bond and asecondary mortgage in the other and, where in consideration ‘ofcertain payments, the debtor obtained from the creditor a releaseof the property in question from both the mortgages,—
Held, that the deed of release should be stamped as one instru-ment and that it was not liable to duty under section 6 of theStamp Ordinance.
PPEAL from a decision of the Commissioner of Stamps. Thepoint for determination was whether a deed of release
granted by a creditor in respect of a property mortgaged under twobonds was liable to stamp duty as a double instrument undersection 6 of the Stamp Ordinance.
Crocs Dabrera, for appellant.—The deed of release affects oneland, which was mortgaged by two separate bonds to one creditor.A release by this creditor of this particular land, for a certain con-sideration cannot be said to be one affecting two different matters.It is really one and the same transaction. It does not comprise orrelate to several distinct matters.. The Stamp Ordinance providesfor a fixed duty on an instrument of release. It therefore contem-plates a single document. Counsel cited Wills v. Bridge,1 In reParasea Collieries Ltd.,2 Ex 'parte Hill and others,3 Alpe 3, and94 Halsbury 715.
Mervyn de Fonseka, G.G., for the Commissioner of. Stamps.—Parties are different. The mortgagors are not the same. Therelease is in respect of two different bonds and the consideration hasbeen so apportioned. The instrument is therefore a double one andunder section 6 of the Stamp Ordinance, No. 22 of 1909, duty shouldbe paid as on separate instruments. It is in no sense one and thesame transaction. The release of the land from the charge inrespect of one bond is quite a different matter to the release of thesame land from the charge on another bond. To permit a massingof different instruments in one deed on one duty would result in the
1 (1849) 4 Exchequer Reports 193.2 37 Calcutta $29.
3 8 Calcutta 254.
11J. N. B 11894 <10/51)
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Karunaratnev, Commie*timer ofStamp*
revenue being defrauded. Counsel cited Mulla's Stamp Act 170,Shabudin Mohamed v. Hirnak Rajnak, 1 and freeman v. Commissionerof Inland Revenue.2Groo$ Dabrera, in reply.
September 27, 1929. Lyall Grant J.—
This is an appeal frorn an adjudication by the Commissioner ofStamps on a question of stamp duty on a deed of release.
A deed or instrument of release falls to be stamped with a duty ofHs. 10. Item 26 of Schedule B, Stamp Ordinance, 1909.
The Commissioner has ruled that the deed in question is stamp-able as on two instruments of release.
The appellant's contention is that only one duty is payable.
The deed is in the following terms: —
D. M. Karunaratne,
Notary Public,Search dispensed.
Kochchikade.A 79 248—86/64.
Deed of release,
Know all men by these presents that I, Suna Pana Lena BamenChettiar of Kochchikade in Dunagaha pattu of the Alutkuru korale, dohereby declare that by the mortgage bond No. 31,286 dated September15, 1927, attested by Don Migel Karunaratne, Notary Public, WarnaKulasuriya Manual Fernando of Bolava in Kammal pattu of the Pitigalkorale and two others borrowed Rupees Two thousand Five hundred(Bs. 2,500) Ceylon currency out of funds of me and Suna Pana LenaSupramaniam Chettiar, and jointly and severally promised to pay thesaid amount with interest thereon as mentioned in the said deed to meand the said Suppramaniam ChfAtiar or to either of us on demand.
2. And. on mortgage bond No. 4,124 dated December 13, 1928, attestedby Sannugam Kadiravaloe Wijeratnam, Notary Public, the said WarnaKulasuriya Manual Fernando borrowed Bupees Four thousand Twohundred and Fifty (Bs. 4,250) Ceylon currency out of the funds of me) and Suna Lena Sabapathy Chettiar, and promised to pay the saidamount with interest thereon as mentioned in the said deed on demandto me and the said Sabapathy Chettiar or either of* us.
And whereas to secure the payment of the said principal sums andinterest the property mentioned, in the schedule hereto together withother properties were mortgaged and hypothecated as primary mort-gages by the said deed No. 31,288 and as secondary mortgage by thesaid deed No. 4,124.
And whereas the said Warna Kulasuriya Manual Fernando havingpaid me the said Suna Pana Lena Bamen Chettiar the sum of RupeesFive Hundred and Seventy-five and . Twenty-five Cents (Rs. 575.25)Ceylon currency, to wit: Rs. 46.75 being interest up to this date dueon the said deed No. 31,288, and Rs. 300 out of the principal amountthereof, and a further sum of Rs. 68.75 as and for interest due for threemonths from this day on balance principal due on the said deed, and afurther sum of Rs. 159.75 being interest for three months up to June 13,1929, on* the principal amount due on the said bond No. 4,124, amount-ing in all to Rs- 575.25 Ceylon currency, and requesting me to release
1 10 Bombay 47.2 8 Exchequer 101.
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from the said mortgage bond Nos. 31,288 and 41,121 the property1989
mentioned in the schedule hereunder written, I agreed thereto and
having accepted the said amount do hereby release the said properties
from the mortgage created by the said deeds.
And I for myself and for the other creditors in the said bonds and for Karunaratnemy and their heirs, executors,administrators, assignee,and lawfulv,Commit-
representatives do hereby promiseand bindmyself not todo any actturnerof
on the strength of the said mortgage bonds regarding the herebytampe
released properties or any part thereof.
And I do further declare that the lands remaining unreleased in thesaid mortgage bonds shall be in no way affected by this release.
The Schedule chose referred to.
The land called Pallamewatta,situate atThambarawilain Kammal
pattu of the Pitigal korale .in Chilaw District, North-Western Province,is bounded on the north by the fence separating the garden of Wan-selestu Fernando, Notary, and others, east by the fence separating thegarden of Nichulas Fernando, ez-Vidanarala, and others, on the southby Maha-oya, and on the west by the fence separating the garden ofDon Salvadore Perera Muppurala; containing in extent within theseboundaries about one acre and three roods. The undivided one-thirdshare of this land and of thebuildings,plantations, and all other
appurtenances belonging thereto.‘
In proof hereof I, the said Suna Pans Lena Bamen Chettiar, set myhand to three of the same tenor as these presents, at Kochchikade, onthis Twentieth day of April, 1929.
’ Sgd. S. P. L. Bamen Chetty.
This is the signature of the executant.
We, the hereto witnesses, do hereby declare that we are wellacquainted with the executant and know his full name, occupation, andresidence.
Sgd. P. B. A. Muttaiya.
Sgd. Suse Fernando.
(Signatures of the witnesses.)
Sgd. D.- M. Karunaratne,
Deed no'tarially executed.
It will be seen the appellant was a mortgagee on two mortgagebonds.
By the first of these Manuel Fernando and two others mortgagedcertain lands to him and another in consideration of a loan.
By the second, Manual Fernando mortgaged to the appellant andanother (not the same) creditor in respect of a second loan.
The deed of release frees a certain land which was mortgaged withothers under both these deeds in consideration of certain payments.
It is not disputed that so far as this land is concerned the. appellanthad power to grant release, and that the effect of the deed and itsonly effect is to release this land from any liability under thesemortgages, and that the consideration for this release is the paymentof certain sums to the appellant.
It is argued for the Commissioner of Stamps that the instrumentcomprises or relates to two distinct matters, viz., two loans and twomortgages, and is therefore under section 6 of the Stamp Ordinance
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Karunaratnev. Commis-sioner ofStamps
chargeable with the aggregate amount of duties with which separateinstruments, each comprising or relating to one of such matters, wouldbe chargeable.
The appellant argues that the matters are not distinct, that bothrelate to the debt due to the appellant and to the release of the landmentioned in the schedule to the deed.
The case is peculiar, and although a number of cases have beencited on both sides none of them seem closely analogous.
I think the true way to look at the matter is to ascertain the inten-tion of the parties. The party released, Manual Fernando obviously,for some purpose, desired to free this land from encumbrances.
The appellant was prepared to execute this release on payment ofa certain consideration.
There is nothing to show that if payment had been made of partof the consideration only he would have released one or other of themortgages, nor is there anything to show that such a transactionwould have been entered into by the mortgagor.
It is quite conceivable and seems in fact probable that the onlytransaction into which the parties would have entered was oneinvolving the out-and-out release of the land.
I do not think we should be justified in saying that there are heretwo separate transactions, and that, therefore, the deed refers todistinct matters.
There was in fact only one transaction, one complete release forone complete consideration, and I think the deed should be stampedas one instrument of release-
The appeal, is allowed. I declare the deed duly stamped, and theappellant will have his costs 01 the appeal. .
Maartensz A.J.—I agree.
KARUNARATNE v. COMMISSIONER OF STAMPS