Unstamped promissory note bars proof of loan debt; equitable and Section 70 claims fail when the whole contract is written.
An insufficiently stamped promissory note that embodies the entire loan transaction cannot be admitted to prove the debt, and the lender cannot bypass that statutory bar by relying on the original consideration where the contract is fully reduced to writing. Recovery on the underlying debt is available only if the note does not exhaust the whole agreement and the alternative character of the transaction is independently proved, such as where the note was merely collateral security or conditional payment. Equitable claims for money had and received, implied promise, unjust enrichment, or Section 70 of the Contract Act are likewise unavailable when they would require proof of the very transaction excluded from evidence.
Issues: (i) Whether a plaintiff can recover money advanced under a contemporaneous loan transaction when the promissory note evidencing it is inadmissible for want of proper stamp and whether the plaintiff can fall back on the original consideration; (ii) Whether, in such a case, the plaintiff can maintain a claim on the theories of money had and received or under Section 70 of the Contract Act.
Issue (i): Whether a plaintiff can recover money advanced under a contemporaneous loan transaction when the promissory note evidencing it is inadmissible for want of proper stamp and whether the plaintiff can fall back on the original consideration.
Analysis: Section 35 of the Stamp Act bars an insufficiently stamped promissory note from being admitted in evidence for any purpose, and Section 91 of the Evidence Act prevents proof of the terms of a contract by evidence other than the document itself where the whole contract has been reduced to writing. Where the promissory note embodies all the terms of the loan transaction and the loan and execution of the note form one integrated transaction, the plaintiff cannot prove the debt dehors the note. Recovery on the original consideration is possible only where the note does not embody all the terms of the contract and the true nature of the transaction can be proved, such as where the note is shown to have been taken as collateral security or as conditional payment.
Conclusion: The plaintiff cannot recover on the original consideration where the promissory note contains all the terms of the loan and is inadmissible for want of stamp; recovery is permissible only in cases where the note does not exhaust the contract and the alternative character of the transaction is proved.
Issue (ii): Whether, in such a case, the plaintiff can maintain a claim on the theories of money had and received or under Section 70 of the Contract Act.
Analysis: The equitable doctrines of money had and received, implied promise, quasi-contract, and unjust enrichment cannot be used to defeat the statutory bar created by Section 35 of the Stamp Act read with Section 91 of the Evidence Act. Section 70 of the Contract Act applies to benefits conferred otherwise than under an enforceable contract, but it cannot be invoked to recover money advanced under a promissory note where the claim necessarily depends on proving the very transaction that the statute excludes from evidence.
Conclusion: No claim lies under the theory of money had and received or under Section 70 of the Contract Act in such a case.
Final Conclusion: The controlling rule is that an unstamped or insufficiently stamped promissory note which embodies the entire loan contract cannot be bypassed by resort to equitable or quasi-contractual doctrines, though recovery on the original debt remains open where the note does not contain the whole contract and the alternative basis is proved.
Ratio Decidendi: Where a contemporaneous promissory note is unstamped or insufficiently stamped and the whole loan contract is embodied in it, Sections 35 of the Stamp Act and 91 of the Evidence Act exclude proof of the debt by other evidence and bar recourse to Section 70 of the Contract Act or quasi-contractual theories; only a separately provable original obligation not fully embodied in the instrument can be sued upon.
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