Substance over nomenclature governs stamp duty: a security bond styled deed was treated as a mortgage deed, not a surety bond.

Stamp duty classification depends on the substance of the instrument, not its title. A document styled as a "Security Bond cum Mortgage Deed" was held to be a mortgage deed because its recitals showed transfer of immovable property and creation of a charge to secure obligations and repayment, bringing it within the definition of mortgage deed under the Stamp Act. Article 57 did not apply because a security bond under that provision requires a surety arrangement in the sense of a contract of guarantee involving a surety, principal debtor and creditor; here, the company executed the instrument through its director and no separate surety existed. The document was therefore chargeable under Article 40, not Article 57.

---

---

Issues: Whether the instrument styled as a "Security Bond cum Mortgage Deed" or "Security Bond or Mortgage Deed" was chargeable to stamp duty under Article 40 of Schedule 1-B of the Indian Stamp Act, 1899, or under Article 57 of Schedule 1-B of the Indian Stamp Act, 1899.

Analysis: The decisive test for stamp duty classification is the substance of the instrument and not its nomenclature. The operative recitals showed that the appellant/company transferred specified immovable property and created a charge over it to secure performance of obligations and repayment liability. That answer satisfied the statutory definition of a mortgage-deed under Section 2(17) of the Indian Stamp Act, 1899. Article 57 applies to a security bond or mortgage-deed executed for due execution of office, accounting for money or property received by virtue of office, or executed by a surety to secure due performance of a contract. The concept of surety has to be understood in the sense of a contract of guarantee under Section 126 of the Indian Contract Act, 1872, which requires a tripartite arrangement involving a surety, principal debtor and creditor. Here, no distinct surety existed apart from the principal debtor, and the instrument was executed by the company itself through its director. In such circumstances, Article 57 did not apply.

Conclusion: The instrument was correctly treated as a mortgage deed chargeable under Article 40 of Schedule 1-B of the Indian Stamp Act, 1899, and not as a security bond under Article 57. The challenge to the demand for deficit stamp duty failed.

---