LAW FOR ALL

The Court below accepted the plea of the respondent and held that the document in question can be considered as an agreement and not as a bond, which does not require deficit stamp duty. - "Today i.e., 25.07.2007, I am executing the following deed of acceptance. For the purpose of construction of an apartment building in Kompally (Hyd), I have borrowed a sum of Rs.10,00,000/-. I am hereby executing this deed agreeing to share profits on 50-50 basis after deducting the amount towards interest at the rate of Rs.1.50. I have truly executed this document." The above extracted recitals would clearly show that the petitioner has not only acknowledged his borrowing the sum of Rs.10,00,000/- from the respondent but also undertook through the deed to share the profits after paying interest at the rate of Rs.1.50. This document is shown to be attested by three witnesses. On a careful consideration of the document in its entirety, I am of the opinion that the same cannot be treated as a mere agreement and it falls under the definition of bond in Section 2(5)(b) of the Indian Stamp Act, 1899 (for short 'the Act') which reads as under: "Section 2(5) "Bond": "Bond" includes - (a) .... (b) any instrument attested by a witness and not payable to order or bearer, whereby a person obliges himself to pay money to another; and (c) ...." As the petitioner allegedly obliged to pay money to the respondent, the instrument clearly falls under the definition of bond. The lower Court has, therefore, committed a serious jurisdictional error in totally misconstruing the instrument as an agreement not requiring additional stamp duty.