Civil Procedure Code, 1908 - Section 60(1)(i) Proviso - Attachment - Properties liable - Attachment of salary for a period of twenty-four months - Exempt from attachment for a gap of twelve months - Salary not liable again after time gap of twelve months for the execution of the same decree.

 Bapu Gadgil vs Smt. Rama on 20 June, 2002

Equivalent citations: I (2003) DMC 770

Author: N Dabholkar

Bench: N Dabholkar

JUDGMENT N.V. Dabholkar, J.

1. Heard Advocates S/Shri Kasliwal and Dixit for respective parties. Being an issue regarding interpretation of Section 60(l)(i) of the Code of Civil Procedure and more particularly proviso to said sub-section, Advocates S/Shri S.C. Bora and R.R. Mantri have also voluntarily rendered assistance, as amicus curiae, in trying to interpret the said provision.

2. The revision petition arises because on 19.6.1994, the Court of Civil Judge, Junior Division, Bhusawal in Regular Darkhast No. 47/1990 ordered attachment from salary of judgment-debtor/revision petitioner at the rate of Rs. 1,000/- per month.

3. Majority of the facts in the matter are undisputed. The parties are husband and wife and husband is Government servant. Wife obtained a decree for recovery of an amount of Rs. 24,999/- against the husband in Regular Civil Suit No. 263/ 1989. Admittedly, this was a decree of payment in lieu of Stridhan items and not a decree for maintenance. Regular Darkhast No. 47/1990 filed by wife for recovery of this amount and in August, 1990, the Executing Court ordered attachment Under Order 21 Rule 48 of the Code of Civil Procedure read with Section 60(l)(i) for attachment at the rate of Rs. 500/- per month from the salary payable to the husband. The amount was accordingly deposited with the Executing Court from January, 1991, and continuously for a period of twenty four months.

In September, 1991, wife filed application for directing enhanced deduction at the rate of Rs. 2,000/- per month. That application is yet undecided. Husband filed an application Exhibit 38 and prayed that after deduction for twenty four months, his salary is totally exempt from any further deduction by virtue of provision to Section 60(l)(i) of the Code of Civil Procedure. The Court has also not issued such a declaration pursuant to request in application Exhibit 38.

4. In the year 1994, wife filed application Exhibit 44 and prayed for further attachment of the salary of the petitioner. The Executing Court, according to revision petitioner, without calling say of the judgment-debtor, passed the impugned orders on 19.6.1994 directing deduction and attachment at the rate of Rs. 1,000/- per month from the salary of judgment-debtor.

5. Section 60 of the Code of Civil Procedure deals with the property liable to attachment and sale in execution of decree and proviso to said section gives particulars, which are not liable to such attachment for sale. The provision with which we are concerned is being reproduced hereinbelow for ready reference.

"...... provided that the following particulars shall not be liable to such attachment or sale, viz.

(a) to (h)..........

(i) salary to the extent of the first four hundred rupees and two-thirds of the remainder in execution of any decree other than a decree for maintenance:

Provided that where any part of such portion of salary as is liable to attachment has been under attachment, whether continuously or intermittently, for a total period of twenty four months, such portion shall be exempt from attachment until the expiry of a further period of twelve months, and where such attachment has been made in execution of one and the same decree, shall, after the attachment has continued for a total period of twenty four months, be finally exempt from attachment in execution of that decree."

6. According to Advocate Mr. Kasliwal, the proviso exempts the part of such portion of the salary, as is liable for attachment, from attachment, once the said attachment was effected for a total period of twenty four months, whether continuously or intermittently. So far as execution in one and the same decree is concerned, the exemption is total and after deduction from salary for twenty four months, the creditor cannot deduct any further amount from the salary of Government servant in satisfaction of same decree, although otherwise liable to attachment. Even if some other creditor is to execute different decree obtained by him against the same judgment-debtor, he will have to wait for the time gap of twelve months before starting execution of his decree by attachment of portion of salary liable for such attachment.

7. As against this, Advocate Mr. Dixit states that, if the latter half of proviso is to be read as putting a ceiling for attachment of salary for one and the same decree only for twenty four months, then the central clause "such portion shall be exempt from attachment until the expiry of a further period of twelve months" would become redundant. According to Mr. Dixit, therefore, attachment of portion of salary for the purpose of execution of one and the same decree is permissible for a total period of forty eight months, with a gap of twelve months between two successive spans of twenty four months and, therefore, the impugned order, according to Mr. Dixit, calls for no interference.

8. So far as present execution proceeding is concerned, there is no dispute that part of the portion of the salary, which was liable for attachment, has been under attachment for a period of twenty four months. The only question is whether the same decree-holder wife can again attach it for a further period of twenty four months because previous attachment has been more than twelve months ago.

9. In order to arrive at correct interpretation of the provision, we have repeatedly read the proviso and it is felt that it should be considered in three parts. First part being the portion proceeding the clause "such portion shall be exempt from attachment until the expiry of a further period of twelve months" relied upon by Advocate Mr. Dixit. The clause relied upon by Advocate Mr. Dixit should be second portion and remainder part of the proviso should be the third.

On reading the first portion, it can be seen that the salary portion liable for attachment, can be attached either continuously or intermittently for a maximum period of twenty four months and not beyond that. Once such an attachment has continued for a period of twenty four months, the salary portion itself is exempt from attachment. Consequently, the judgment-debtor would enjoy the exemption against every creditor and decree-holder till expiry of further period of twelve months. The object of exemption appears to enable the judgment-debtor public officer or Government servant and others to maintain themselves and their families in a suitable manner.

Second portion, which clause according to Mr. Dixit becomes redundant if the proviso is interpreted to mean that attachment can be only for twenty four calender months and no more, speaks only regarding exemption from attachment of the salary portion liable to attachment. The clause by itself is silent about the number of decrees, the number of creditors/decree-holders.

10. Before proceeding to consider the third portion of the proviso, it must be pointed out that the phrase "a total period of twenty four months" occurs twice in the said proviso, once in the first part and once in the third part of the proviso, as carved for the purpose of convenient consideration. The third clause begins with the phrase "where such attachment has been made" and the word "such" has relation with the phrase "whether continuously or intermittently" in the first part of the proviso. The words "of one and the same decree" and "that decree" appearing in the middle and concluding part of third portion of the proviso, are important in considering the interpretation of the proviso.

The first part of the proviso, as already stated earlier, declares the salary portion totally exempt from liability to attachment and this exemption, by virtue of second part, is total, for a period of twelve months. The third portion speaks about the extent of exemption, so far as one and the same decree is concerned and it appears that when the attachment, as indicated in the first portion i.e. whether continuously or intermittently, has continued for a period of twenty four months, for the purpose of execution of one and the same decree, the salary portion liable for attachment is finally exempt from attachment so far as that decree is concerned. The latter clause takes away the protection accorded to the salary portion liable to attachment, which is total for a period of twelve months, so far as attachment for the purpose of execution of any other decree for which it was not so attached earlier for a period of twenty four months, whether continuously or intermittently. Consequently, after a time gap of twelve months, the salary portion liable to attachment can be attached by the same creditor, but only for execution of another decree than the one for which it was already attached for a period of twenty four months, or it may be liable for attachment by another creditor for execution of another decree.

If interpretation, as tried to be attributed by Advocate Mr. Dixit, is to be accepted, the third part of the proviso would have read "after the attachment has continued for a total period of forty eight months" instead of "twenty four months".

11. Thus, it is evident that on reading proviso in its totality, it appears that salary portion liable to attachment in execution of a decree is attachable for a period of twenty four months continuously or intermittently; in execution of one and the same decree. For a gap of twelve months, such salary portion is totally exempt from attachment by anybody and even for execution of different decree. The salary portion would again be liable for attachment after time gap of twelve months, but for the purpose of execution of a different decree and not one and the same decree for the purpose of execution of which it was already attached for a period of twenty four months earlier.

12. In the light of interpretation of the proviso as above, the impugned order dated 19.6.1994, which is second attachment of the salary portion after the same having been already attached for a period of twenty four months in the past, will have to be quashed and set aside as illegal.

13. The revision petition is allowed. The impugned order is quashed and set aside. It is clarified that the decree-holder, by virtue of this order, will not be debarred from executing the decree by other permissible modes.

Rule made absolute accordingly.

A promissory note executed using impressed stamp paper or adhesive stamps are equally valid and admissible in evidence, provided that they are stamped with requisite value.

 Andhra High Court

Gurana Asirinaidu vs Lenka Suryanarayana on 31 December, 2004

Equivalent citations: 2005 (1) ALD 713, 2005 (1) ALT 659

Author: S A Reddy

Bench: S A Reddy

ORDER S. Ananda Reddy, J.

1. This revision petition is at the instance of the plaintiff. He filed the suit - OS No. 30 of 1998 on the file of the Principal Junior Civil Judge, Vizianagaram for recovery of a sum of No. 9,500/- stating that the respondents/defendant borrowed the said amount and executed a promissory note agreeing to repay the said amount on demand with interest at the rate of 24% per annum, but failed to pay the same. When the petitioner/plaintiff sought to mark the suit pro-note, the respondent/ defendant objected for the same on the ground that it was not properly stamped, and therefore, it is not admissible in evidence. Admittedly, the suit document was executed on a non-judicial stamp paper worth No. 5-00. The learned Junior Civil Judge accepted the objection raised by the defendant and held that the plaintiff is not entitled to mark the disputed document as an exhibit on his behalf. Hence, the present revision by the plaintiff.

2. The contention of the petitioner/ plaintiff is that the Court below has committed an error in not properly considering the relevant provisions and appreciating the contention of the petitioner and in refusing to mark the disputed document.

3. On the other hand, the Counsel for the respondent/defendant supported the impugned order and relied upon a judgment of this Court in Dinne Erranna v. Modappa, (1963) II An.WR 198, which was referred to and relied upon by the Court below.

4. Heard the learned Counsel for the petitioner and the learned Counsel for the respondent and considered the material on record.

5. Before considering the nature of the disputed document, it would be appropriate to refer to the relevant provisions of the Indian Stamp Act (hereinafter referred to as 'the Act') and the rules made thereudner:-

Section 2(22) defines 'promissory note' means a promissory note, as defined by the Negotiable Instruments Act, 1881. It also includes a note promising the payment of any sum of money out of any particular fund, which may or may not be available, or upon any condition or contingency, which may or may not be performed or happen.

As per Section 2(11) of the Act 'duly stamped', as applied to an instrument, means that the instrument bears an adhesive or impressed stamp of not less than the proper amount, and that such stamp has been affixed or used in accordance with the law for the time being in force in India.

As per Section 2(13) 'impressed stamp' includes - (a) labels affixed and impressed by the proper officer; and (b) stamps embossed or engraved on stamped paper.

Section 10 deals with the mode of payment of duties, except as otherwise expressly provided in this Act, all duties with which any instruments are chargeable shall be paid, and such payment shall be indicated on such instruments, by means of stamps.

Section 11 of the Act deals with the use of adhesive stamps. The following instruments may be stamped with adhesive stamps, namely:

(a) instruments chargeable with a duty not exceeding ten naye paise except parts of bills of exchange payable otherwise than on demand and drawn in sets;

(b) bills of exchange and promissory notes drawn or made out of India;

(c) entry as an advocate, vakil or attorney on the roll of a High Court;

(d) notarial acts; and

(e) transfers by endorsement of shares in any incorporated company or other body corporate.

Section 35 deals with 'instruments not duly stamped inadmissible in evidence, etc. However, in certain cases though they were initially insufficiently stamped, they are admissible in evidence subject to the payment of deficit stamp duty as well as the penalty payable. But however, under the proviso, the following documents are excepted, such as instrument chargeable with duty not exceeding 10 naye paise only, a bill of exchange, or a promissory note.

6. Similarly, Rule 3 of the Indian Stamp Rules, 1925 gives the description of stamps. As per the said rule, all duties with which any instrument is chargeable shall be paid and such payment shall be indicated on such instrument by means of stamps issued by the Government for the purpose of the Act, and a stamp, which by any word or words on the face of it is appropriated to any particular kind of instrument, shall not be used for an instrument of any other kind. The said rule also makes it clear that there are two kinds of stamps, indicating the payment of duty with which the instruments are chargeable, namely (i) impressed stamps, and (ii) adhesive stamps.

Rule 5 provides how a promissory note is to be executed, according to which a promissory note or a bill of exchange shall, except as provided by Section 11 or by Rules 13 and 17, be written on paper on which a stamp of the proper value, with or without the word 'hundi' has been engraved or embossed.

Rule 13 refers to the use of adhesive stamps on certain instruments. This rule enumerates the instruments, which may be stamped with adhesive stamps, namely (i) bill of exchange payable otherwise than on demand, and drawn in sets, when the amount of duty does not exceed 10 naye paise for each part of the set. (The other part of the rule is hot relevant).

Rule 17 provides for the use of special adhesive stamps when the documents, like bill of exchange, cheques and promissory notes drawn or made out of India with stamps bearing the word 'foreign bill'.

Rule 18 provides that when an instrument bears a stamp of proper amount but on improper description, the Collector may, on payment of the requisite duty, certify by an endorsement that it is duly stamped.

Similarly, Article 49 of the Schedule to the Act provides how a promissory note is to be stamped i.e., value of the stamp.

7. The contention of the plaintiff is that the provisions of Section 11 refer the word 'may', which gives the option to use adhesive stamps as referred to therein. Further, the term duly stamped did not put any restrictions as to the type of stamps to be used with reterence to any particular type of instrument. Therefore, a promissory note, executed on an impressed stamp of not less than the proper amount of stamp duty payable, should be considered as a valid document/promissory note. Therefore, the view expressed by the Trial Court is not in accordance with law. The learned Junior Civil Judge referred to and relied upon a judgment of this Court in Dinne Erranna v. Modappa (supra). In that case a learned Single Judge of this Court was considering the validity of a document as promissory note in terms of the provisions of Sections 35 and 37 of the Act. In that case, the disputed document, which is stated to be a promissory note, was not duly stamped. But, however, it was certified to be duly stamped by the Collector, and claimed by the plaintiff that it is a valid document. The claim of the plaintiff was that even though the document was not properly stomped, but as it was certified by the Collector having been duly stamped, it is admissible in evidence. Though the said claim was accepted by the learned District Munsif, but was reversed by this Court, observing that:

"Proviso (a) to Section 35 expressly forbids the Collector to validate an unstamped promissory note, and therefore, the order of the Collector validating such an instrument cannot have any legal effect."

But in that case, the claim of the plaintiff was that the document was validated under Section 37 of the Act, which empowers the State Government to make the rules providing that where an instrument bears a stamp of sufficient amount but of improper description, it may, on payment of the duty with which the same is chargeable, be certified to be duly stamped, and any instrument so certified shall then be deemed to have been duly stamped as from the date of its execution. But such validation, as found by the learned Single Judge of this Court, shall not be applicable to the documents specified, under the proviso to Section 35, which includes promissory note.

8. This issue was also considered by a learned Judge of this Court in P. Krishna Murthy and others v. Munilal, 1978 LS 40 (AP). In that case, the defendants raised objections as to the admissibility of the promissory notes on the ground that they were not properly stamped. The suit promissory notes for No. 5,000/- each were stamped with three adhesive stamps of 10 paise each. The learned Single Judge referring to the provisions of Section 11 of the Act held that there is no prohibition contained in Section 11 that adhesive stamps shall not be used in any instruments other than those mentioned in Clauses (a) to (e) of Section 11. This Court also referred to the words 'may be stamped' contained in Section 11, which indicates the permissive character of the stamps to be used in execution of the promissory notes. This Court, thus, upheld the view of the lower Court.

9. This issue was also considered by a learned Single Judge of the Madras High Court in P. Moorthy v. A.R. Kothandaraman, . In that case, the promissory note in question was executed on an impressed stamp paper of the value of No. 1-50 paise. Though the defendant disputed the validity of the promissory note and admissibility of the said document on the ground that it was not duly stamped, the Small Causes Court rejected the said objection. But, however, the said finding was reversed by the new Trial Bench of the Court of Small Causes, which was assailed in the revision before the Madras High Court. The learned Single Judge, after referring to the provisions of Sections 10 and 11 of the Act, as well as the relevant rules, held that a promissory note can be stamped either with adhesive stamps or engrossed on a stamp paper of the proper value.

10. In G. Hanumanthapa v. S. Bala Rangaiah, , a learned Single Judge of the Karnataka High Court had also an occasion to consider this issue as to the proper stamp duty payable on the promissory notes. The learned Judge though held that a promissory note not executed on duly stamped paper is inadmissible in evidence, but, however, noted that a pro-note written on impressed stamp paper of requisite value must be held as duly stamped.

11. In view of the above position of the rules as well as the decisions referred, to, there is no prohibition as to the execution of a promissory note on an impressed stamp paper. What is required for a valid promissory note is that it should be stamped properly, as provided under the Act and the Rules. Section 10 of the Act refers the mode of duties to be paid. As per this provision, except as otherwise expressly provided in the Act, all duties with which any instrument chargeable shall be payable and such payment shall be indicated on such instruments by means of stamps. Further, as already referred to Section 11, where the word 'may' used, is indicative of the choice for the executant of the document. A promissory note executed using impressed stamp paper or adhesive stamps are equally valid and admissible in evidence, provided that they are stamped with requisite value.

12. In view of the above, as the disputed document is admittedly executed on an impressed stamp paper of the value of No. 5-00, which is more than the requisite value, it should be treated as a valid document executed with the requisite stamp duty, as provided under the Act and the Rules.

13. Therefore, the impugned order is set aside, and the matter is restored to the file of the lower Court with a direction to receive the disputed document and mark the same as an exhibit on behalf of the plaintiff and proceed with the suit in accordance with law.

14. Accordingly, the revision petition is allowed. No costs