1962 (1) TMI 84 - HC - Indian Laws

Court validates written instrument transferring debt, distinguishing assignment from pay order. Plaintiff granted decree for debt recovery.

The Court found that the endorsement on the bill by Rohmetra and Co. Ltd. constituted a valid instrument of transfer in writing, meeting the requirements ... - Issues:- Whether the endorsement on the bill by Rohmetra and Co. Ltd. amounts to an instrument of transfer in writing.- Whether the instrument impounded by the Collector under the Indian Stamp Act is admissible in evidence.Analysis:1. The main issue in this case revolves around whether the endorsement on the bill by Rohmetra and Co. Ltd. constitutes a valid instrument of transfer in writing. The Court analyzed the endorsement, which directed the payment of the bill to the plaintiff and was accepted by the debtor, Kays Construction Co. The Court found that the endorsement, coupled with subsequent correspondence and acceptance by the debtor, clearly indicated the intention to assign the debt to the plaintiff. This assignment was deemed sufficient under Section 130 of the Transfer of Property Act, as it met the requirements of a written instrument signed by the creditor.2. Another significant issue addressed in the judgment pertains to the admissibility of the instrument impounded by the Collector under the Indian Stamp Act. The Collector had collected the proper stamp duty on the instrument, endorsing a certificate stating compliance with Section 40(1)(b) of the Indian Stamp Act. The Court held that the instrument, bearing the Collector's certificate, was admissible in evidence under Section 42 of the Indian Stamp Act. The argument that the endorsement was merely an acknowledgment of debt, chargeable with a lower stamp duty, was rejected by the Court, emphasizing that the endorsement constituted a valid assignment of the debt.3. The Court distinguished a pay order from an assignment, highlighting that the intention to assign the debt was evident from the language and circumstances surrounding the endorsement. Referring to a previous case, the Court emphasized the difference in wording between a revocable pay order and an irrevocable assignment. The Court concluded that the endorsement in the present case unequivocally directed the debtor to pay the amount to the plaintiff, establishing a valid assignment of the debt.4. Ultimately, the Court allowed the appeal, setting aside the trial judge's decision and granting a decree in favor of the plaintiff for the recovery of the debt from the defendant, Kays Construction Co. The Court awarded the principal sum due, along with interim interest and costs, affirming the validity of the assignment and the admissibility of the instrument under the Indian Stamp Act.