Bond classification under the Stamp Act upheld where the instrument itself creates a binding repayment obligation at fixed dates.

An instrument that, on its true construction, creates an immediate and enforceable obligation to repay a specified loan in fixed instalments on fixed dates is a bond under the Indian Stamp Act, 1899. The court held that the definition of "bond" is broad and covers such instruments where the document itself creates the payment obligation, rather than merely acknowledging a pre-existing liability or providing for unascertained damages. Once classified as a bond, the document was chargeable under the applicable charging entry for bonds not otherwise provided for, and the Collector's duty assessment was upheld.

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Issues: (i) Whether the agreement dated 6-6-1973 was a bond within the meaning of Section 2(5)(a) of the Indian Stamp Act, 1899; (ii) whether duty was correctly assessed under Article 15 of Schedule 1-A to the Indian Stamp Act, 1899.

Issue (i): Whether the agreement dated 6-6-1973 was a bond within the meaning of Section 2(5)(a) of the Indian Stamp Act, 1899.

Analysis: The document, read as a whole, created an immediate and enforceable obligation on the borrower to repay the loan in specified instalments on fixed dates. The legislative history of the definition of "bond" showed that the term was not exhaustive, and the statutory scheme treated bonds in a broad sense. The decisive consideration was that the instrument itself created the obligation to pay a specified sum, rather than merely acknowledging a pre-existing liability or stipulating unascertained damages for breach.

Conclusion: The document was a bond within the meaning of Section 2(5)(a) of the Indian Stamp Act, 1899.

Issue (ii): Whether duty was correctly assessed under Article 15 of Schedule 1-A to the Indian Stamp Act, 1899.

Analysis: Once the instrument was held to be a bond, it fell within the charging entry applicable to bonds not otherwise provided for. The stamp duty assessed by the Collector was therefore supported by the statutory classification of the document.

Conclusion: The assessment of duty of Rs. 18,000.10 P. under Article 15 of Schedule 1-A to the Indian Stamp Act, 1899 was justified.

Final Conclusion: The reference was answered against the company, and the Collector's classification and duty assessment were upheld.

Ratio Decidendi: An instrument which, on its true construction, itself creates a binding obligation to repay a specified sum at fixed dates is a bond under the Indian Stamp Act, 1899, and is chargeable accordingly.

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