SAJIDA ABBAS ZAIDI Versus ARSHAD ALI JAFRI

1. This is an application under Order 37, Rule 3, C.P.C. for leave to defend. The plaintiff has filed a suit for recovery of loan of Rs. 1,40,000 alleging that she had advanced the same to the Defendant in instalments. The Defendant acknowledged the same on a Rs.10 non‑judicial Stamp‑paper on or about 8‑4 1988 and promised to return the same within three months. Additionally he executed a pronote of Rs. 1,40,000 on the same date. The Defendant did not return the amount after three months and even upto this date. Hence this suit.

2. Mr. Qamar Mohammad Khan, who appeared for the Defendants, has contended that the amount is alleged to have been paid in instalments in February and March, 1988, while the pronote and the acknowledgement deed are said to have been executed on 6‑4‑1988, and therefore, these were without consideration.

3. I cannot agree with this contention. It is not necessary that the consideration for a Pronote or any other document should be paid on the same date on which the pronote or the document is executed. Even a consideration paid earlier in time is a good consideration. It was then contended by Mr. Qamar Mohammad Khan that there was an understanding between the parties that the amount of loan would be returned within three months according to the plaint and therefore, it was a conditional Pronote, hence it cannot be treated as a pronote. This contention also does not appear to be sound. It is nowhere written in the pronote that the amount promised therein would be paid within three months. The mere fact that there was an oral understanding between the parties g to return the amount within three months, would not take away the unconditional effect of the pronote.

4. The next contention of the defendant's counsel was that the stamps on the pronote were not sufficient. It was pointed out that the pronote and its receipts, which are printed on the same leaf, have been stamped on the back of the leaf in such a way that the stamps of Rs.5 are on the back of the Pronote portion of the leaf and stamps of Rs.10 are on the receipt portion of the leaf, hence it would appear that there are only Rs.5 stamps on the pronote. This contention also is not correct. When the pronote and the receipt of the pronote are on the same leaf, the mere fact that some of the stamps are on the portion which falls on the back of the printed receipt, would not lead the Court to treat those stamps as on a paper other than that of the pronote. Hence the pronote is C sufficiently stamped. It was also contended that the stamps were not properly cancelled, and therefore, it is to be treated as if the pronote was not duly stamped. In this connection it would be useful to reproduce Section 12 of the Stamp Act which reads as under:‑

5. "12. Cancellation of adhesive stamps .‑

(1) (a) Whoever affixes any adhesive stamps to any instrument chargeable with duty which has been executed by any person shall, when affixing such stamp, cancel the same so that it cannot be used again; and

(b) Whoever executes any instrument on any paper bearing an adhesive stamp shall, at the time of execution, unless such stamp has been already cancelled in manner aforesaid cancel the same so that it cannot be used again.

(2) Any instrument bearing an adhesive stamp which has not been cancelled so that it cannot be used again, shall, so far as such stamp is concerned, be deemed to be unstamped.

(3) The person required by subsection (1) to cancel an adhesive stamp may cancel it by writing on or across the stamp his name or initials or the name or initials of his firm with the true date of his so writing, or in any other effectual manner."

6. The plain reading of subsection (3) of section 12 of The Stamp Act would show that the adhesive stamps are tube cancelled by writing on or across the stamp his name or initials and the date by the executant and or in any other effectual manner. From the perusal of section 12 (3) of the Stamp Act it is clear that writing his name or putting his initial by the executant is not the only mode of cancellation of the stamp. Adhesive stamps can also be cancelled in other ways. The object of cancellation of adhesive stamps is to prevent the same stamp from being used again. The cancellation is required for the purposes of preventing fraud. It has been held in P L D 1978 Kar. 425 (Habib Bank Ltd. v. Raza Sons & Co.) that if an adhesive stamp is affixed on a document and it is cancelled by drawing a line across it, it cannot be used again unless it is removed from the document, which may not be possible without in some measure causing some visible damage to the stamp itself. Such a cancellation is effective because this section does not contemplate that a person required to cancel such a stamp must do so in such a manner that it may become impossible for a criminal‑minded person to .use such stamp again in any circumstances whatsoever. Similar finding was given in a ruling which is reported in I.L.R. 1942 Kar. 56 (Motiram Nathomal v. Mangharam Tirathdas) which was relied upon by Naimuddin, J. in the above noted case of Habib Bank Ltd. v. Raza Sons & Co. It was a D.B. case wherein the stamp on the pronote did not bear the name or initial of the vxecutant, but it merely bore the figure "28/2". In (1919) 5 Sind Law Reports 34 (Pessumal Reloomal v. Gaganmal Harumal) it has been held that "drawing of two lines crossing each other, across the face of a stamp is an effectual cancellation". In A I R 1931 Allahabad 57 it has been held that "Writing of name of executant on his behalf and under his direction by scribe on adhesive stamp is sufficient compliance with section 12, if the person executing the docnn,ent is illiterate".

7. In the present case the adhesive stamps of Rs.15 which are applied on the back of the leaf on which the pronote and its receipts are written, are cancelled by rubber stamp bearing word "Attested". This rubber stamp appears to be the same which is affixed by the Notary Public, who attested the pronote. It appears that either the executant, the Notarv Public or somebody else had affixed these rubber stamps on the adhesive stamp at the executant's instance. In any case all the stamps appear to have been effectually cancelled by this rubber stamp in such a manner that anybody would at once find out that these stamps have been used and would not use them again.

8. I am, therefore, of the clear view that under these circumstances these stamps are to be treated as having been properly cancelled, and therefore, section 12 of the Stamp Act would not come in the way of the plaintiff.

9. It was finally contended by Mr. Qamar Mohammad Khan that the defendant has denied to have executed the pronote or acknowledgment and to have received the loan. Hence he should be given leave to defend the suit unconditionally.

10. I have seen the pronote, receipt of the pronote and the acknowledgment minutely. Not only that these documents purport to bear the signature of the defendant, but the entire body of the acknowledgment and all the blanks of the pronote and receipt appear to be scribed by the Defendant himself in English. His denial of the execution or the receipt of consideration, therefore, appears to be illusory and raised by him as a sham defence.

11. I am, therefore, of the clear view that the defendant is not entitled for leave to defend the suit. Hence I dismiss C.MA. No.8063/1989.

12. The application for leave to defend having been dismissed, the plaintiff is entitled to a decree outright. I, therefore, decree the plaintiff's suit for the sum of (Rs.1,40,000. Rupees. one lac forty thousand). Mr. Hameed Ahmad Ayaz Advocate for the Plaintiff gives up the claim of interest. Costs of the suit shall, however, be borne by the Defendant.

13. M.BA./S‑544/K Suit decreed.