1 app409.06.sxw ast/- IN THE HIGH COURT JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL SIDE JURISDICTION APPEAL NO.409 OF 2006 IN SUMMONS FOR JUDGEMENT NO.1203 OF 199 IN SUMMARY SUIT NO.3297 OF 1999 M/s. Kamal & Company. .. Appellant. V/s. Antwerpse Diamant Bank N.V. .. Respondent. --- Mr.D.D.Madon, Sr. Advocate i/b. Bipin Joshi for the Appellant. Mr.H. Toor with S.K.CHari i/b. M.V.Kini & Co. for the Respondent. --- CORAM: D.K.DESHMUKH AND V.R.KINGAONKAR,JJ. DATED: APRIL 15, 2010 P.C.: 1. By this Appeal, the Appellant challenges the order dated 3rd March, 2006 passed in Summons for Judgment No.1203/99. By that order the learned Single Judge has declined to grant leave to defend 2 app409.06.sxw holding that there is no defence available to the Defendant. As a consequence, the learned Judge passed money decree, as prayed. 2. The Suit is based on Bill of Exchange. One of the defences raised was that the document of Bill of Exchange is not admissible in evidence, as required stamp duty has not been paid. The learned Single Judge has held that the Bill of Exchange is a bill of exchange payable on demand and therefore, stamp duty is not payable. In the alternatively, the learned Single Judge also held that because of the Exemption Notification dated 1st August, 1999, the Bill of Exchange has been exempted from the payment of stamp duty. 3. We have heard learned Counsel for both the sides. The Bill of Exchange admittedly was payable on 14th July, 1997. Therefore, it was the defence of the Defendant that this is not a Bill of Exchange payable on demand. The term Bill of Exchange payable on demand is defined by Section 2(3) of the Indian 3 app409.06.sxw Stamp Act, 1899, which is reproduced below. 2.Definitions.-***** (1)******* (2)******* (3)Bill of exchange payable on demand.- Bill of exchange payable on demand includes- (a) an order for the payment of any sum of money by a bill of exchange or promissory note, or for the delivery of any bill of exchange or promissory note in satisfaction of any sum of money, or for 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; (b) an order for the payment of any sum of money weekly, monthly or at any other stated period; and (c) a letter of credit, that is to say, any instrument by which one person authorises another to give credit to the person in whose favour it is drawn. (emphasis supplied) 4. It is common ground that the relevant provision for deciding of this Appeal is Section 2(3)(b). To our mind, it is prima facie clear that when the Bill of Exchange is for payment of a sums of money at stated intervals, it will be treated as a Bill of 4 app409.06.sxw Exchange payable on demand. But if the Bill of exchange is payable on a particular date, then it will not amount to Bill of exchange payable on demand. The term at any other stated period found in Section 2(3)(b) will take its colour from what precedes it namely, payment of any sum of money weekly, monthly . In our opinion, there is substance in the defence raised on behalf of the Defendants, that when sums are payable at the stated or definite interval under a Bill of Exchange, then the Bill of Exchange will amount to Bill of Exchange payable on demand but when in a Bill of Exchange specific date is mentioned for payment, as in the present case it will not be a bill of exchange payable on demand. 5. The learned Single Judge has also relied on the Exemption Notification dated 1st August, 1999. In our opinion, there is substance in the submission of the learned Counsel appearing for the Defendant that if the Bill of Exchange, on which the Suit is based, is a Bill of Exchange payable on demand, then it is exempted from payment of stamp duty, therefore, 5 app409.06.sxw there is no question of Exemption Notification applying to it. Finding that the Bill of Exchange is exempted from payment of stamp duty because of the Exemption Notification dated 1st August, 1999 could have been recorded only after recording of finding that the Bill of Exchange on which the suit is based is not a Bill of Exchange payable on demand. These two findings are self-contradictory and therefore, cannot go together. 6. The learned Counsel appearing for the Plaintiff relying on the Judgment of the learned Single Judge of this Court in the case of Wolstenholme International Ltd. V/s. Twin Stars Industrial Corporation & ors.[2001(4) Bom.C.R.114] submitted that defence that document is not properly stamped is a technical defence and which the Defendant should not be permitted to take. In our opinion, the Defence may be technical in nature but goes to the root of the matter, because the entire suit is based on the Bill of Exchange and because of the provisions of Section 35 of the Stamp Act, if the document 6 app409.06.sxw chargeable with stamp duty and the duty is not paid, it is not admissible in evidence. In our opinion, the defence cannot be brushed aside. Taking overall view of the matter, in our opinion, as the defence raised by the Defendant is in relation to the admissibility in evidence of the document, which is the very basis of the suit, the Defendant is entitled to unconditional leave to defend the suit. As a result, the Appeal is succeeded and is disposed of in the following terms. (i)The order impugned dated 3rd March, 2006 challenged in Appeal is set aside. The Summons for Judgment No.1203 of 1999 is disposed of. (ii) The Defendant is granted unconditional leave to defend the suit. Written Statement to be filed within six weeks. (iii)Pursuant to the order passed by the Supreme Court, the Appellant has deposited an amount of Rs.50 Lakhs, which was permitted to be withdrawn by the Plaintiff 7 app409.06.sxw on furnishing bank guarantee. The Prothonotary and Senior Master shall permit the Appellant to withdraw that amount on expiry of period of eight weeks from today. (iv)Appeal disposed of. (D.K.DESHMUKH,J.) (V.R.KINGAONKAR,J.)