Stamp duty on bills of exchange and conditional leave to defend were applied to preserve the summary suit.

Bills of exchange were examined under the Indian Stamp Act, 1899, and the Court treated them as instruments governed by the Act's special stamping scheme, so adjudication and later payment of duty did not automatically remove the admissibility objection in the same manner as other instruments. It also distinguished the Stamp Act meaning of a bill payable on demand from the Negotiable Instruments Act and held that the collection terms did not change the character of the instrument. In the summary suit, the defendants raised no substantial triable issue on the transaction, receipt of goods, part payment, or balance liability, so only conditional leave to defend was warranted. Leave was granted on deposit terms, failing which further orders could follow.

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Issues: (i) Whether the bills of exchange were liable to stamp duty and whether the subsequent adjudication and payment of duty cured the objection to admissibility; (ii) whether the defendants were entitled to unconditional leave to defend or only conditional leave to defend in the summary suit.

Issue (i): Whether the bills of exchange were liable to stamp duty and whether the subsequent adjudication and payment of duty cured the objection to admissibility

Analysis: The objection based on stamp duty was examined with reference to the scheme of the Indian Stamp Act, 1899, including the provisions dealing with impounding, admissibility, and certification after payment of duty. The statutory scheme was held to treat bills of exchange as a special category for which the ordinary power to admit an instrument on payment of duty and penalty does not operate in the same manner as for other instruments. The Court also distinguished the meaning of a bill of exchange payable on demand under the Stamp Act from the meaning under the Negotiable Instruments Act, and noted that the first two bills were payable at sight while the third was linked to the estimated time of arrival of goods. The change in collection terms did not alter the nature of the instrument itself, and the fiscal character of the Stamp Act required the instrument, not the transaction, to be considered.

Conclusion: The stamp-duty objection was not accepted as a complete answer to the suit, and the defendants' reliance on it did not defeat the claim outright.

Issue (ii): Whether the defendants were entitled to unconditional leave to defend or only conditional leave to defend in the summary suit

Analysis: The pleadings disclosed no real traverse of the underlying transaction, receipt of goods, part payment, or liability to pay the balance. The defences raised were found to be substantially technical, and the principles governing summary suits and leave to defend justified protection of the plaintiff while still allowing the defence to proceed. In those circumstances, the Court applied the settled principle that where the defence appears weak or illusory, leave may be granted only on terms, including deposit of the claimed amount or part thereof into Court.

Conclusion: Leave to defend was granted only on condition of depositing the equivalent of Pound Sterling 77,940 within the stipulated time, failing which the plaintiff was at liberty to seek further orders.

Final Conclusion: The summons for judgment was disposed of by granting conditional leave to defend, thereby preserving the suit subject to deposit of the specified amount and subsequent procedural steps.

Ratio Decidendi: In a summary suit, where the defence is substantially technical and does not raise a substantial triable issue, the Court may grant leave to defend only on strict terms to protect the plaintiff while allowing the defence to proceed.

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