Insufficiently stamped pronote cannot be relied on despite admitted execution, but an independent debt claim may still proceed.
An insufficiently stamped pronote cannot be admitted in evidence or acted upon merely because its execution is admitted; Section 58 of the Evidence Act dispenses only with formal proof and does not override the statutory bar under Section 35 of the Stamp Act. The pronote was therefore inadmissible and no relief could be founded on it. However, where the pleadings and surrounding transaction disclosed an independent underlying loan or debt, the plaintiff could still pursue that original cause of action even after exclusion of the pronote. The suit, though not triable by the High Court, remained pending for transfer to the competent subordinate court for trial on the alternative claim.
Issues: (i) Whether an insufficiently stamped pronote could be acted upon or relied on merely because its execution was admitted; (ii) Whether, after rejection of relief on the pronote, the plaintiff could still proceed on the original debt and the suit be transferred to a competent subordinate court.
Issue (i): Whether an insufficiently stamped pronote could be acted upon or relied on merely because its execution was admitted.
Analysis: Section 35 of the Indian Stamp Act bars an instrument not duly stamped from being admitted in evidence or acted upon. Section 58 of the Indian Evidence Act dispenses only with formal proof of execution; it does not override the statutory bar created by the Stamp Act. Admission of execution does not by itself validate an insufficiently stamped document. The bar is displaced only where the document has already been admitted in evidence without objection and Section 36 of the Stamp Act operates.
Conclusion: The pronote was inadmissible and no relief could be granted on its basis. This was against the respondent and in favour of the appellant.
Issue (ii): Whether, after rejection of relief on the pronote, the plaintiff could still proceed on the original debt and the suit be transferred to a competent subordinate court.
Analysis: The pleadings and surrounding circumstances showed an independent loan transaction under a hire purchase agreement, and the pronote was treated as collateral to that transaction. Even if the pronote was excluded, relief could be claimed on the original debt on proof of the underlying agreement. The suit, as framed, was initially within the ambit of Order XXXVII of the Code of Civil Procedure, 1908, and remained a legally pending proceeding for transfer under Section 24 of the Code of Civil Procedure, 1908 when it was found not triable by the High Court.
Conclusion: The alternative case on the original debt was accepted and the suit was transferred to the Sub Judge for trial. This was partly in favour of the respondent but the overall appeal succeeded only to the extent of transfer.
Final Conclusion: The pronote could not be relied upon because of the statutory stamp bar, but the plaintiff was left to pursue the original debt before the competent subordinate court, so the appeal succeeded only in part and the matter was sent down for trial.
Ratio Decidendi: Admission of execution does not override the prohibition against acting upon an insufficiently stamped instrument, though a separate original cause of action may still be pursued where the pleadings and transaction disclose an independent underlying debt.
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