judgement:
Appeal No. 110 of 1976: Appeal by Special Leave from the Judgment and Order dated 28 11 75 of the Madhya Pradesh High Court in Second Appeal 495 of 1975.
(Mrs) Leila Seth, A. T. Patra and Praveen Kumar for the Appellants.
M. V. Goswami for Respondent No. 1.
G. section Chatterjee for Respondent No. 2.
The Judgment of the Court was delivered by UNTWALIA, J.
In this appeal by 'special leave the appellants and respondent No. 2 were the defendants in a suit filed by plaintiff respondent No. 1 for eviction And other reliefs in respect of the suit premises.
The suit was dismissed by the Trial Court but decreed by the 627 First Appellate Court.
The second appeal filed by the defendant in the High Court of Madhya Pradesh was dismissed.
The demised property is a shop situated at a place in the District of Hoshangabad.
It was let out by the father of the plaintiff to the husband of defendant No. 1 and the father of the other defendants in the year 1951 at a monthly rent of Rs. 50/ .
A Bhojnalaya was being run in the shop by the tenant.
The plaintiff 's father was running a sweetmeat shop in a rented premise the rent of which was Rs. 225/per month.
The plaintiff 's father died in 1970.
Sometime later the original tenant, the predecessor in interest of the defendants, also died.
He ' had paid rent upto September, 1972.
After the death of the original tenant, the defendants became the tenants of the suit shop.
The plaintiff served a notice on the defendants terminating the contractual tenancy w.e.f. 31 12 1972.
The suit for eviction was filed on 8 3 1973 claiming therein a decree for eviction chiefly on the ground of bona fide personal necessity of the plaintiff, for arrears of rent amounting to Rs. 150/ for October, November and December, 1972 and damages for the months of January and February, 1973 @ Rs. 225/per month as also future damages till the delivery of possession.
The Trial Court dismissed the suit holding that the plaintiff did not require the suit shop bona fide for his personal necessity.
On appeal by the plaintiff, the First Appellate Court by its judgment dated 11 8 1975 took a contrary view and held in favour of the plaintiff.
It decreed the suit for eviction, arrears of rent and also for past and future damages @ Rs. 125/ per month damages to be payable on and from 1 1 1973 until delivery of the vacant possession to the plaintiff.
The High Court has affirmed this decree.
Mrs. Leila Seth, learned counsel for the appellants advanced a very able and succinct argument and urged only the following three points (1) The business for which the accommodation was required by the plaintiff was not "his business" within the meaning of clause (f) of sub section (1) of Section 12, of The Madhya Pradesh Accommodation Control Act, 1961 here inafter referred to as the Act.
(2) That the rented shop in which the business of sweetmeat and Namkin was carried on should have been held to be an accommodation "of his own in his occupation" within the meaning of the second part of the clause (f).
(3) That no decree for damages could be awarded from the date of termination of.
the contractual tenancy.
It could be awarded only from the date when an eviction decree was passed.
In our judgment the first two points of the appellants have to be rejected but the third must succeed.
The plaintiff had clearly pleaded in paragraph 8 of his plaint that the sweetmeat shop which he was running in the rented premises was his business and he wanted to shift it to the accommodation in question.
The defendants did not deny the statement made in paragraph 8 of 628 the plaint rather in paragraph 6 of their written statement they admitted them to be correct.
In such a situation it was not open to them to take a stand at a very late stage of the litigation that the sweetmeat shop was the business of the joint family of the plaintiff the karta of which was his father and on his death it was the business not of the plaintiff alone but of his entire joint family.
The High Court has rightly rejected this point on this ground.
In Siddik Mahomed Shah vs Mt. Saran and others(1) it has been pointed out that where a claim has never been made in the defence presented no amount of evidence can be looked into upon a plea which was never put forward.
If it could be so even at the trial stage, undoubtedly, such a new question of fact could not be entertained at any appellate stage.
This decision has been followed by this Court in Bhagat Singh and others vs Jaswant Singh(2).
To the same effect is the view expressed in another decision of this Court in Bachan Singh vs Dhian Dass and others(3).
Hegde, J pointed out in paragraph 6 of the judgment that a contention involving determination of questions of fact ought not have been allowed to be raised for the first time in the second appeal in the High Court.
In this case we may add further that neither any issue was struck nor was any evidence adduced by the parties on this question.
The case proceeded to trial on the admitted footing that the business which the plaintiff wanted to 'shift to the suit shop was his business.
Apropos the second point it would be useful to point out that the Act replaced an earlier Act of 1955 entitled as The Madhya Pradesh Accommodation Control Act, 1955.
In a similar provision as contained in Section 4(h) of the 1955 Act, the expression used was that the landlord "is not in occupation of any other accommodation in the city or town for that purpose".
There is a clear departure in the 1961 Act where the phraseology is that the landlord "has no other reasonably suitable non residential accommodation of his own in his occupation in the cityor town concerned", in the second part of clause (f) of Section 12(1)A tenanted shop in mere occupation of the landlord filing a suit for eviction against his tenant was 'sufficient to deny him a decree on the ground of clause (h) of Section 4 of the 1955 Act.
But under the 1961 Act, mere occupation of another premises is not sufficient.
The premises must be his own, meaning.
thereby that they must be owned by or belong to the landlord and he must be in occupation of the same.
It is, therefore, plain that the tenanted shop in occupation of the plaintiff was not 'sufficient to deny him a decree for eviction against his tenant under section 12(1) (f) of the Act.
For appreciation of the third point urged for the appellant it would be again useful to refer to a few corresponding provisions of the two Acts.
In the 1955 Act, tenant was defined in clause (f) of Section 3 to mean "a person by whom rent is payable or but for a contract express or implied would be payable for any accommodation and includes any person occupying the accommodation as a sub tenant".
In the (1) [1930] Privy Council, 57 (1) (2) A.I.R. 1966 SC.
(3) A.I.R. 1974 S.C. 708.
629 1961 Act, however, the definition of tenant has been widened and Section 2(i) reads thus : "tenant" means a person by whom or on whose account or behalf the rent of any accommodation is, or, but, for a contract express or implied, would be payable for any accommodation and includes any person occupying the accommodation as a sub tenant and also, any person continuing in possession after the termination of his tenancy whether before or after the commencement of this Act; but shall not include any person against whom any order or decree for eviction has been made.
" On a plain reading of the definition aforesaid it is clear that a tenant even after the termination of his contractual tenancy does not become an unauthorised occupant of the accommodation but remains a tenant.
It has been pointed out by this Court in Damadilal and others vs Parashram and others(1) that such a tenant is conveniently called a statutory tenant.
Whether the expression aforesaid borrowed from the English Law is quite apposite or not, but, what is certain is that a person continuing in possession of the accommodation even after the termination of his contractual tenancy is,, a tenant within the meaning of the Act and on such termination his possession does not become wrongful, until and unless a decree for eviction is made.
If he con tinues to be in possession even after the passing of the decree, he does so as a wrongful occupant of the accommodation.
Mrs. Seth in support of her argument rightly pressed into service a few other provisions of the Act.
Section 13(1) giving protection against eviction on the ground of default in payment of rent provides therein that even after the institution of the suit if he clears off the amount of rent due within a period specified in the section and thereafter "continue to deposit or pay, month by month, by the 15th of each succeeding month a sum equivalent to the rent at that rate" calculated at the rate of rent at which he was paying earlier, no decree for eviction can be passed.
The conclusion is inevitable, therefore, that if a 'suit is filed on the ground of non payment of rent after termination of the contractual tenancy, the tenant still continues to be a tenant liable to pay rent not only for the past period but in future also.
In absence of a decree of eviction the person in occupation of the accommodation continues to be a tenant and is not liable to pay any damages as his occupation is not unauthorised or wrongful even after the termination of the contractual tenancy.
In Damadilal 's case (supra).
Gupta, J delivering the judgment of this Court has said at page 653 with reference to the definition of tenant in 'section 2(1) of the Act "The definition makes a person continuing in possession after the determination of his tenancy a tenant unless a decree or order for eviction has been made against him, thus putting him on par with a person whose contractual tenancy (1)[1976] Suppl.
S.C.R. 645.
630 stiff subsists.
The incidents of such tenancy and a contractual tenancy must therefore be the same unless any provision of the Act conveyed a contrary intention.
That under this Act such a tenant retains an interest in the premises, and not merely a personal right of occupation, will also appear from section 14 which contains provisions restricting the tenant 's power of subletting." In Kikabhai Abdul Hussain vs Kamlakar and others(1) a Bench of the Madhya Pradesh High Court seems to have opined even with reference to the 1961 Act that if a person continues to be in occupation after the termination of the contractual tenancy then on the passing of the decree for eviction he becomes a wrongful occupant of the accommodation since the date of termination.
It seems a theory akin to the theory of "relation back" has been applied in the sense that if no decree for eviction is passed then the person is not in unlawful occupation but on the passing of such a decree his possession becomes unlawful not from the date of the decree but such a decree makes his occupation unlawful from the date of the termination of the contractual tenancy.
Whatever could be said with reference to the provisions of 1955 Act it is clear to us that the law so enunciated by the High Court with reference to 1961 Act is not correct.
Mr. Goswami, appearing for the plaintiff respondent relied upon the decision of this Court in Ganga Dutt Murarka vs Kartik Chandra Das and others(2) In our opinion the said decision is of no help to the respondent.
The question for determination there was a different one.
With reference to the provisions of, the West Bengal Premises Rent Control Act the argument advanced before this Court was that if after the determination of the tenancy by , efflux of time or by a notice to quit the tenant continued in possession of the premises and the landlord accepted rent from him because no decree for eviction could be made in view of the subsequent Control Acts it was tantamount to holding over within the meaning of Section 116 of the Transfer of Property Act.
This argument was repelled.
Whether a new contractual tenancy would come into existence by acceptance of rent by the landlord in such a situation is a different matter.
But this case does not lay down that the occupation of the premises by the tenant whose tenancy has been terminated by efflux of time or by notice to quit becomes unauthorised or wrongful.
For the reason stated above it is manifest that the defendants remained in occupation 'of the accommodation on and from 1 1 1973 as a tenant, conveniently to be called statutory tenant, under the Act.
Their occupation was not unauthorised or wrongful until a decree for eviction was passed by the First Appellate Court on 11 8 75.
Their occupation became unauthorised or wrongful only from that date.
They are not therefore, liable to pay any damages or mesne profits for (1) (2) 631 the period commencing from 1 1 1973 and ending on 10 8 1975.
Decree for damages either in respect of the two months prior to the institution of the suit or for the subsequent period must therefore be set aside.
The defendant appellants will be liable to pay damages or mesne profits @ Rs. 125/ per month (the rate of damages could not be and was not challenged before us) from 11 8 1975 only, until the delivery of the vacant possession of the accommodation, In the result the appeal is allowed in part only to the extent stated above.
In the circumstances, we shall make no order as to costs in this Court.
S.R. Appeal allowed in part.

summary/full:
A shop where Bhojnalaya was being run by the appellants tenants was demised to their predecessors in interest for the said purpose by the father of plaintiff respondent No. 1 in the year 1951 on a monthly rent of Rs. 50/ .
The father of the plaintiff respondent No. 1 was running a sweetmeat shop in a rented premises, the rent of which was Rs. 225/ per mensem.
The plaintiff 's father died in 1970.
Some time later the original tenant also died.
He had paid rent up to September, 1972.
The plaintiff served a notice on the defendants terminating the contractual tenancy with effect from 31 12 1972 and filed a suit an 8 3 1973 for eviction on the ground of bona fide necessity of the plaintiff, for arrears of rent amounting to Rs. 150/ for October, November and December 1972 and damages for the months of January and February 1973 at Rs. 225/ per mensem as also future damages till the delivery of the possession.
The trial court dismissed the suit holding that the plaintiff did not require the sweet shop bona fide for his personal necessity, On appeal by the plaintiff, the first appellate court by its judgment dated 11 8 75, taking a contrary view, decreed the suit for eviction, arrears of rent anti also for past and future damages at Rs. 125/ per month to be payable on and from 1 1 1973 until delivery of the vacant possession to the plaintiff.
The High Court in second appeal affirmed the decree.
Allowing the appeal by special leave in part, the Court, HELD : (1) Where a claim has never been made in the defence presented, no amount of evidence can be looked into upon a plea which was never put forward.
If it could be so even at the trial stage, undoubtedly such a new question of fact could not be entertained at in appellate stage.
In this case, neither any issue was struck nor was any evidence adduced by the parties on the question.
The case Pr to trial on the admitted footing that the business which the plaintiff wanted to shift to the suit shop was his business.
In such a situation it was not open to the appellants to take a stand at a very late stage of the litigation that the sweetmeat shop was the business of the joint family of the plaintiff and, therefore, not the plaintiff 's business to come within the meaning If clause (f) of sub s 1 of section 12 of the Madhya Pradesh Accommodation Control Act, 1961.
[627H, 628A D] Siddik Mohommed Shah vs Mt. Saran and Ors. ; Bhagat Singh & Ors.
vs Jaswant Singh A.I.R. 1966 SC 1861 and Bachan Singh vs Dhian Dass & Ors.
AIR 1974 SC 708, applied.
(2)A tenanted shop in mere occupation of the landlord filing a suit for eviction against his tenant was sufficient to deny him a decree on the ground of clause(h) of section 4 of the Madhya Pradesh Accommodation Control Act 1955 where the expression used was that the landlord "is not in occupation of any other accommodation in the city or town for that purpose".
But, under the 626 1961 Act, mere occupation of another premises is not sufficient in view of the clear departure made by using the phraseology in the second part of cl.
(f) of section 12(1), "the landlord has no other reasonably suitable non residential accommodation of his own in his occupation in the city or town concerned".
The premises must be his own meaning thereby that they must be owned by or belong to the landlord and he must be in occupation of the same.
In the instant case, the tenanted shop in occupation of the plaintiff was not sufficient to deny him a decree for eviction against his tenant section 12(1) (f) of the Act.[628E F] (3)As per the widened definition of "tenant ' in section 2(1) of the Madhya Pradesh Accommodation Control Act, 1961, a tenant even after the termination of his contractual tenancy does not become an unauthorised occupant of the accommodation but remains a statutory tenant.
A person continuing in possession of the accommodation even after the termination of his contractual tenancy is a tenant within the meaning of the Act and on such termination his possession does not become wrongful until and unless a decree for eviction is made.
If he continues to be in possession even after the passing of the decree, he does so as a wrongful occupant of the accommodation.
[629 A D] Damadilal and others vs Parashram and others [1976] Supp.
SCR 645, referred to.
(4) If a suit is filed on the ground of non payment of rent after termination of the contractual tenancy, the tenant still continues to be tenant liable to pay rent not only for the past period, but in future also.
In absence of decree of eviction the person in occupation of the accommodation continues to be a tenant and is not liable to pay any damages as his occupation is not unauthorised or wrongful even after the termination of the contractual tenancy.
In the instant case (i) the defendants remained in occupation of the. accommodation on and from 1 1 1973 as a statutory tenant under the Act.
Their occupation was not unauthorised or wrongful until a decree for eviction was passed by the first appellate court on 11 8 1975.
Their occupation became unauthorised or wrongful only from that date.
They are liable to pay damages or mesne profits at Rs. 125/ per mensem from 11 8 1975 only until the delivery of the vacant possession of the accommodation.
They are not liable to pay any damages or mesne profits for the period commending from 1 1 1973 and ending 10 8 1975.
[629 E G, 630 G H, 631 A] Kikabhai Abdul Hussain vs Kamlakar and Ors.
[1974] M.P. Law Journal 485, over ruled.
Ganga Dutt Murarka vs Kartik Chandra Das & Ors. ; , distinguished.


judgement:
: Criminal Appeal No. 315 of 1974.
Appeal from the Judgment and Order dated 22 5 1974 of the Allahabad High Court in Contempt Case No. 43/73.
D. Mukherjea, R.N. Sharma, Umesh Chand, R.N. Trivedi, S.P. Pathak, Hari Nath Tilhari, S.R. Srivastava, M.N. Sharma and O.P. Lal for the Appellants.
Yogeshwar Prasad, (Miss) Rani Arora, S.K. Bagga and (Mrs.) section Bagga, for Respondent No. 1.
O.P. Rana for Respondents 2 and 3.
The Judgment of the Court was delivered by RAY, C.J.
This appeal is against the judgment and order dated 22 May 1974 of the High Court of Allahabad in Criminal Contempt Case No. 43 of 1973.
The High Court issued notices to five persons on the ground that they committed contempt of Court.
602 The two appellants before us are the President of the Avadh Bar Association and the Chairman, Action Committee of the Avadh Bar Association.
There were three charges against the appellants.
It is not necessary to refer in detail to the same.
The gist of the charge against the appellants was that they had met and resolved that the Chief Justice was acting in a most parti san manner under the influence of the Allahabad Bar.
The text of the resolution was this "The Action Committee is of the opinion that the Chief Justice is acting in the dis charge of administrative power under clause 14 of the U.P. High Court 's Amalgamation Order, 1948 in a most partisan manner under the influence of Allahabad Bar quite unbecoming of the office which he holds".
The High Court discharged the notices.
The High Court yet made certain observations; some of which are confusing, some of which are conflicting and some of which are vague.
If the High Court found that there was any contempt it should have punished the appellants.
The High Court however discharged the notices.
The High Court held that the Chairman of the Action Committee, described as contemner No. 2 was actively associ ated with the passing of the resolution which contained disparaging remarks about the Chief Justice and since he also issued that resolution for publication in newspapers, he is guilty of 'Criminal Contempt '.
The High Court held that since the resolution was passed under the presidentship of the first appellant described as contemner No. 1, he is as much guilty of having committed contempt as contemner No. 2 was.
The High Court further held that contemners Nos.
1 & 2 are guilty of contumacious conduct, and the High Court gave the ground that they were responsible for the passing of the resolution.
At another place the High Court used words showing that the conduct of the appellants individually was considered only "indiscreet" by it.
The High Court confused 'criminal contempt ' with 'contu macious conduct '.
The matter becomes clear when the High Court said "we do not propose to punish contemners Nos. 1 & 2 for the contumacious conduct of which we have adjudged them guilty though we express.
our disapproval of that conduct and hope that the indiscretion will not be repeated".
We are unable to find that the High Court found the contemners guilty of criminal contempt.
It is true that the High Court referred to the contumacious conduct of the appellants but the High Court did not wish to proceed against the appellants.
The High Court said on that aspect as follows: 603 "It is a matter of regret that the contem ners who are prominent members of the Avadh Bar, should have themselves embarked on the path of vilifying the Chief Justice of this Court and that we do not want to be over sensitive in the matter, keeping in mind the surrounding circumstances in which the contu macious act was committed by them.
and also keeping in view the fact that it was a single act of the Chief Justice for which the attack was made, we do not propose to punish contem ners for the contumacious conduct for which we have adjudged them guilty, though we express our strong.
disapproval of that conduct and hope that the indiscretion will not be repeat ed".
Counsel for the appellants did not justify the language of the resolution.
There is no gainsaying that the members of the Bar did not act with dignity in regard to the resolu tion.
The language used by them was unfortunate.
Counsel for the appellants rightly said that was not proper and it should not have been passed in that manner.
It is the duty of lawyers to protect the dignity and decorum of the judiciary.
If lawyers fail in their duty the faith of the people in the judiciary will be undermined to a large extent.
It is said that lawyers are the custodians of civilisation.
Lawyers have to discharge their duty with dignity, decorum and discipline.
In view of the fact that the notices were discharged, the appeal is disposed of with the foregoing observations.

dataset_name: IN-Abs

summary/full:
The appellant No. 1 is the President of the Oudh Bar and appellant No. 2 is the Chairman of Action Committee of the Oudh Bar Association.
They met and passed a Resolution that the Chief Justice of Allahabad High Court was acting in a most partisan manner under the influence of the Allahabad Bar and that it was unbecoming of the office which he holds.
The High Court issued notices for contempt, inter alia, to the appellants.
The High Court discharged the notices but made certain observations against the appellants.
HELD: 1.
If the High Court found that there was any contempt it should have punished the appellants.
The High Court confused criminal contempt with contumacious con duct.
This Court is unable to find that the High Court found contemners guilty of criminal contempt.
[602 D, G, H] 2.
There is no gainsaying that the members of the Bar did not act with dignity in regard to the resolution.
The language used by them was unfortunate.
It is the duty of lawyers to protect the dignity and decorum of the judici ary.
If lawyers fail in their duty the faith of the people in the judiciary would be undermined to a large extent.
It is said that lawyers are the custodian of civilization Lawyers have to discharge their duties with dignity, decorum and discipline.
[603 C D]


judgement:
Appeal No. 709 of 1975.
(Appeal by Special Leave from the Judgment and Order dt.
9 10 74 of the Madras High Court in Referred ease No. 4 of 1968) P. Ram Reddy, C. Ramakrishna and A. V.V. Nair, for the Appellant.
V.P. Raman, A.V. Rangam and Miss A. Subhashini, for the Respondent.
The Judgment of the Court was delivered by SHINGHAL J.
This appeal by special leave arises out of the decision of the Madras High Court dated October 9, 1974, on a reference by the Chief Controlling Revenue authority under section 57 of the Indian Stamp Act, 1899, hereinafter referred to as the Act.
The Board of Revenue, Madras, which was the Chief Controlling Revenue authority, initially stated the case raising the following questions for decision, (a) Whether the decision of the Board of Revenue that the instrument relating to the Deed of Trust and Mortgage would attract the levy of a Stamp Duty as laid down in Article 40(b) of Schedule I of the Indian Stamp Act mad that the debentures would be exempted from the levy of stamp duty is correct or not; and (b) Whether the claim of the Respondent herein that the stamp duty is payable on the debenture under Article 27(a) and on the Deed of Trust and Mortgage under Article 40(c) is tenable or not ? The High Court directed the Board of Revenue to refer three additional questions, but ultimately took the view that the additional questions did not really arise in the case.
It answered the first question in 567 favour of the Revenue and the second question against the Madras Refineries Limited, hereinafter referred to as the Company.
The Company feels aggrieved and has come up in appeal to this Court.
It will be enough to state those facts which bear on the controversy before us.
The Company was incorporated under the Indian , as a public limited company.
An agreement known as the Loan and Note Purchase Agreement was executed be tween the Company and the First National City Bank and six others on December 20, 1966, by which the Company agreed to authorise the creation and issuance of $14,880,000 (U.S.) principal amount of its 5% secured notes Series 'A ', and $ 7,440,300 (U.S.) principal amount of its 51/2 secured notes Series 'S ', 'and the sale of, or the borrowing to be evidenced by such Notes in accordance with the terms and provisions of the agreement.
The Notes were to be issued under and secured by a Deed of Trust and Mortgage between the Company and the First National City Bank.
It was a1so agreed that the Notes shall be secured and shall have the other terms and provisions provided in the agreement and shall be guaranteed by the President Of India pursuant to the terms of a "Guarantee Agreement", in the prescribed form.
We shall have occasion to refer to the relevant clauses of the Loan and Note Purchase Agreement, the Deed of Trust and Mortgage and the Guarantee Agreement as and when necessary.
The Deed of Trust and Mortgage and the Guarantee Agreement were executed between the President and the First National City Bank (as Trustee) on June 15, 1967.
In the meantime the Company made an application to the Collector under section 31 of the Act for opinion as to the stamp duty with which the Deed of Trust and Mortgage was.
chargeable, and the Collector referred the matter to the Board of Reve nue.
The Board decided on June 28, 1967 that the duty was chargeable on the Trust and Mortgage Deed under Article 40(b) of Schedule I to the Act.
The Company paid Rs. 37,66,500/ as stamp duty under protest, stating that it would move the Board for a reference of the controversy to the High Court.
The Trust and Mortgage Deed was registered on_Jane 30, 1967, and the 'A ' series debentures were issued the same day.
The Company applied to the Board of Revenue to state the case to the High Court. 'B ' series debentures were issued on June 28, 1968.
The case was stated on March 28, 1969 and was decided by the impugned decision of the High Court dated October 9, 1974.
It has been argued by Mr. Ram Reddy for the appellant Company that the Guarantee Agreement was the principal and primary security, and the Deed of Trust and Mortgage was a collateral or auxiliary security and that the stamp duty on the Deed of Trust and Mortgage was payable in accordance with article 40(c).
It has been urged that Guarantee Agree ment was exempt from duty under section 3 of the Stamp Act and the debentures were exempt under article 27.
The controversy centres round the question whether the Guarantee Agreement could be said to be principal or primary security ? 568 Mr. Ram Reddy has invited our attention to the following passage in Sergeant on Stamp Duties and Companies Capital Duty, sixth edition, page 6, "Leading and principal object.
With reference to the stamp duty upon instruments generally, it is a well settled rule of law that an instrument must be stamped for its leading and principal object, and the stamp covers everything accessory to that object.
In Limeer Asphalte Paving Co. vs 1.
R.C.C) it was stated "In order to determine whether any, and if any, what stamp duty is chargeable upon an instrument the legal rule is that the real and true meaning of the instrument is to be ascer tained; that the description of it given in the instrument itself by the parties is imma terial, even although they may have believed that its effect and operation was to create a security mentioned in the Stamp Act, and they so declare? ' This appears to be a correct statement of the law.
We have therefore to determine the real and true meaning of the Guarantee Agreement and to decide whether it could be said to be the principal and primary security.
The Loan and Note Purchase Agreement was executed on December 20, 1966, between the Company and the first National City Bank and others.
Under that agreement, the Company was to authorise the creation and issuance of secured notes, series A and B, referred to above, and the notes were to be "issued under and secured 'by the Deed of Trust and Mortgage between the Company and the first Nation al City Bank".
It was then stated in the Loan and Note Purchase Agreement as follows, "The Notes shall be dated, shall ma ture, shall bear interest, shall be payable, shall be secured and shall have such other terms and provisions as provided in the Mort gage and shall be guaranteed by the President of India Pursuant to the terms of a Guar antee Agreement (the "Guarantee Agree ment) in the form attached hereto as Exhib it 3.
" It would thus appear that it was the Deed of Trust and Mortgage which was the security for the loan, although the loan was also guaranteed by the President in terms of the Guarantee Agreement.
As has been stated, the Guarantee Agreement was made between the President of India and the first 'National City Bank.
It was clearly stated in that agreement that the First National City Bank executed it "As Trustee under a Deed of Trust and Mortgage dated as June 15, 1967.
" The Trust and Mortgage Deed was thus executed before (1) exhibit 211.
569 the execution of the Guarantee Agreement, even though both of them were executed on the same day, namely, June 15, 1967.
It is true that it has been stated in the Guarantee Agreement that the President of India, as the guarantor, unconditionally guaranteed "has primary obligor and not as surety merely, the due and punctual payment from time to time" of the principal as well as the interest etc.
stated in the agreement.
And it was for that purpose that the guarantor agreed to "endorse upon each of the Notes at or before the issue and delivery thereof by the Company its guaranty of the prompt payment of the principal interest and premium thereof and of the other indebtedness.
" It is also true that as stated in paragraph 10 of the Guarantee Agree ment, the obligations of the guarantor were "absolute and unconditional under any and all circumstances, and shall not be to any extent or in any way discharged, impaired or otherwise affected, except by performance thereof in accordance with the terms thereof.
" We have also noticed the further stipulation that "Each and every remedy of the Trustee shall, to the extent permitted by law, be cumulative and shall be in addition to any other remedy given hereunder or under the Mortgage or any of the other collateral or now or hereafter existing at law or in equity or by statute." Mr. Ram Reddy has relied heavily on these averments in the Guarantee Agreement, but they cannot detract from the basic fact that the Deed of Trust and Mortgage was executed first in point of time and was the principal or primary security for the loan according to the terms and conditions of the agreement between the parties.
It was that document which constituted the First National City Bank as the Trus tee, and enabled it to enter into the Guarantee Agreement with the President, and the President guaranteed the due performance of the obligations undertaken by the Company thereunder.
The Deed of Trust and Mortgage, which was executed between the Company and the First National City Bank as a national banking association incorporated and existing under the laws of United States of America, stated that as the Company was in the process of constructing a refinery for the refining of crude oil and deemed it necessary to borrow money from time to time to.
finance such construction and to issue its notes therefor and to "mortgage and charge its properties hereinafter described to secure the payment of such notes" it executed the Deed of Trust and Mortgage as security in accordance with the terms and conditions of Article 2 of the Deed of Trust and Mortgage to secure the due payment of the principal of and the premium, if any, and the interest on the Notes and of all other moneys for the time being and from time to time owing on the security of that Indenture and on the Notes and the performance by the Company of all of its obligations thereunder.
The Deed of Trust and Mortgage was therefore clearly the principal or the primary security and could not be said to be a "collat eral agreement".
The parties in fact clearly 570 stated in Article I, section 1.01 of the Deed of Trust and Mortgage as follows, "Collateral Agreements: The term "Collateral Agreements" shall mean the Guarantee Agreement and the Undertaking, hereinfater defined.
" It was therefore specifically agreed between the parties that the Deed of Trust and Mortgage was not a collateral agreement.
In all these facts and circumstances it is futile to contend that the Deed of Trust and Mortgage was not the principal or primary security.
As was stated in Article 9 of that document, that security became enforceable in case of any or more "events of default", and it cannot be said that merely because the Guarantee Agreement contained the stipu lation that the President, as the Guarantor, uncondition ally guaranteed .the due and punctual payment of principal and interest etc. "as primary obligor and not as surety merely" that agreement become the principal or the primary security.
It is the real and true meaning of the Deed of Trust and Mortgage and the Guarantee Agreement which has to be ascertained, and this leaves no room for doubt that the view taken by the High Court in this respect is correct and does not call for interference.
Mr. Ram Reddy relied on some decisions to support his argument that the Guarantee Agreement was the security for the loan and was the princi pal or the primary document, but those cases were decided on different facts and have no real bearing on the controversy before us.
The Guarantee Agreement was executed for and on behalf of the president by his Authorised Representative, and no stamp duty was chargeable for it by virtue of the proviso to section 3 of the Act.
That in fact appears to be the reason why counsel for the appellant strenously argued that we should hold it to be the principal instrument, for he has next argued that the case falls within the purview of sec tion 4 (1) of the Act and the "Principal instrument" only would be chargeable with the duty prescribed in Schedule I, and deed of any trust and mortgage would be chargeable with a duty of Rs. 4.50 p. instead of the duty prescribed for it in that Schedule.
We find however that there is no merit in this argument also.
Sub section (1) of section 4 of the Act reads as follows, "4.
Several instruments used in single transaction of sale, mortgage or settlement. (1) Where, in the case of any sale, mortgage or settlement several instru ments are employed for completing the transaction, the principal instrument only shall be chargeable with the duty prescribed in Schedule I, for the conveyance, mortgage or settlement, and each of the other instruments shall be chargeable with a duty of four rupees fifty naye paise instead of the duty (if any) prescribed for it in that Schedule.
" 571 It is nobody 's case that the Guarantee Agreement was an instrument of sale , for it did not transfer the ownership of anything in exchange for a price paid or promised or part paid and part promised.
It was also not an instrument of mortgage because it is no boly 's case that there was any transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan or an existing or a furture debt or the performance of an engagement which could give rise to a pecuniary liability.
The expression "settlement" has been defined in clause (24) of section 2 of the Act as follows : "Settlement" means any non testamentary disposition in writing, of movable or immova ble property made (a) in consideration of marriage, (b) for the purpose of distributing property of the settlor among his family or those for whom he desires to provide, or for the purpose of providing for some person dependent on him, or (c) for any religious or charitable purpose; and includes an agreement in writing to make such a disposition and where any such dispo sition bas not been made in writing, any instrument recording, whether by way of decla ration of trust or otherwise, the terms of any such disposition) .
" The term "disposition" has been defined in Strouds Judicial Dictionary as a devise "intended to comprehend a mode by which property can pass, whether by act of parties or by an act of the law" and "includes transfer and charge of proper ty".
As the Guarantee Agreement did not have any such effect, it did not constitute a "settlement" also.
That document was not therefore an instrument of sale, mortgage or settlement and did not fall within the purview of sub section (1) of section 4 of the Act.
It was the Deed of Trust and Mortgage which was a "Mortgage deed" within the meaning of clause (17) of sec tion 2 of the Act, and it was therefore clearly chargeable with stamp duty at the rate prescribed in article 40(b) of Schedule I to.
the Act.
We have examined the other argument of Mr. Ram Reddy that even if the Guarantee Agreement was not the principal instrument, within the meaning of sub section (1) of section 4 of the Act, we should hold that the debentures which were issued by the Company were the principal and primary securi ty, and that the Deed of Trust and Mortgage was the "other instrument" within the meaning of that sub section and was chargeable with a duty of Rs. 4.50 p. instead of the duty prescribed for it in the Schedule.
This argument is also futile for we find that the secured Notes (Series A and B) were issued under and were secured by the Deed of Trust and Mortgage.
As 572 such, the Notes were issued in consequence and .on the security of the Deed of Trust and Mortgage and there is no justification for the contention that the debentures were the principal instruments, and not the Deed of Trust and Mortgage.
As the High Court has rightly answered both the ques tions, we find no force in this appeal and it is dismissed with costs.
P.B.R. Appeal dismissed.

summary/full:
The appellant company executed .a
Loan and Note Purchase Agreement with a foreign bank.
Under that agreement the appellant was to authorise the creation and issuance of secured notes, Series A and B, and the Notes were to be issued under and secured by a Deed of Trust and Mortgage between the Company and the Bank.
The Deed of Trust and Mortgage stated that as the appellant was in the process of constructing a refinery for the refining of crude oil and deemed it necessary to borrow money from time to time to finance such construction and to issue its Notes therefor, and to mortgage and charge its properties to secure the payment of such Notes, it executed the Deed of Trust and Mortgage as Security in accordance with the terms and condi tions of Article 2 of the Deed of Trust and Mortgage to secure the due payment of the principal and the premium, if any, and the interest on the Notes, and of all other monies for the time being and from time to time owing on the security of the indenture and on the Notes and the perform ance by the Company of all of its obligations thereunder.
It was also agreed that the Notes shall be secured and shall have the other terms and conditions provided in the agree ment and shall be guaranteed by the President of India pursuant to the terms of the Guarantee Agreement.
The Guarantee Agreement state.
that the President of India, as the guarantor, unconditionally guaranteed as primary obligor and not as surety merely, the due and .punctual payment from time to time of the principal as well as interest stated m the Agreement.
The obligations of the guarantor were abso lute and unconditional under any and all circumstances and were not be to any extent or in any way discharged, impaired or otherwise affected, except by performance thereof in accordance with the terms thereof.
It was also provided that each and every remedy of the Trustee shall be cumula tive and shall be in addition to any other remedy given therein or under the mortgage or any of the other collateral or now or hereafter existing at law or in equity or by statute.
The Guarantee Agreement was executed on the same day as the Deed of Trust and Mortgage between the President of India and the foreign bank as a Trustee.
The High Court decided that stamp duty was chargeable on the Trust and Mortgage Deed under article 40(b) of Schedule I to the Act.
In appeal to this Court it was contended that it was the Guarantee Agreement which was the principal and primary security and that the Deed of Trust and Mortgage was a collateral or auxillary security and as such stamp duty was payable under article 40(c) and that the Guarantee Agreement was exempt from duty under section 3 and debentures under article 27.
Dismissing the Appeal, HELD: (1) It is the real and true meaning of the deed of Trust and Mortgage and the Guarantee Agreement which has to be ascertained irrespective of the description given by the parties.
[568 E] (2) The Trust and Mortgage Deed was executed before the execution of the Guarantee Agreement though both of them were executed on the same day.
It was the Deed of Trust and Mortgage which was the security for the 566 loan though the loan was also guaranteed by the President in terms of the Guarantee Agreement.
[568 G H] (3) The.
terms and conditions of the Guarantee Agreement cannot detract from the basic fact that the Deed of Trust and Mortgage was executed first in point of time and was the principal or the primary security for the loan.
The Deed of Trust and Mortgage was clearly the principal or the pri mary security and could not be said to be a collateral agreement.
[569 H] (4) The Deed of Trust clearly stated that the terms "Collateral Agreements" shall mean the Guarantee Agreement and the Undertaking.
[570 A B] (5) The Guarantee Agreement was not an instrument of sale, mortgage or settlement and did not fall within the purview of section 4(1) of the Act.
[571 E.F] (6) There is no justification for the contention that the debentures were the principal instruments and not the Deed of Trust and Mortgage.
The secured notes were issued under and secured by the Deed of Trust and Mortgage.
The notes were issued in consequence of and on the security of the Deed of Trust and Mortgage.
[571 H, 572 A]