Deferred-payment hundi is payable otherwise than on demand and attracts stamp duty under the Stamp Act.

A hundi that postpones payment for 180 days after execution is not payable on demand because a demand instrument must be immediately payable without postponement. The Indian Stamp Act scheme, including Article 13 of Schedule I, treats bills of exchange payable otherwise than on demand as chargeable according to the deferred period, and a document is not taken outside that scheme merely because it is not drafted in the exact language of the sub-clauses. The instrument was therefore payable otherwise than on demand and was insufficiently stamped. The trial court's order was set aside and the revision petition succeeded.

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Issues: Whether a hundi stipulating payment 180 days after the date of execution is payable on demand or otherwise than on demand, and consequently whether it attracts stamp duty under the Indian Stamp Act, 1899.

Analysis: A document payable on demand is one that is payable immediately and without postponement. Where the instrument itself postpones payment for a specified period, it cannot be treated as payable on demand. The definitions in the Indian Stamp Act, 1899 and the scheme of Article 13 of Schedule I show that bills of exchange payable otherwise than on demand are chargeable depending on the period of deferment. The reasoning that a hundi becomes payable on demand merely because it is not framed in the exact language of the sub-clauses was rejected as inconsistent with the statutory scheme. The document in question expressly postponed payment for 180 days and was therefore not payable immediately on execution.

Conclusion: The hundi was payable otherwise than on demand and was insufficiently stamped. The preliminary issue was answered in favour of the petitioner.

Final Conclusion: The order of the trial court was set aside and the revision petition succeeded.

Ratio Decidendi: An instrument that postpones payment for a specified period after execution is payable otherwise than on demand and falls within the stamp provisions applicable to deferred-payment bills of exchange.

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