Kainikkara Abdurahiman vs Aalukkal Yunus
2021 Latest Caselaw 17111 Ker

Citation : 2021 Latest Caselaw 17111 Ker
Judgement Date : 13 August, 2021

Kerala High Court

Kainikkara Abdurahiman vs Aalukkal Yunus on 13 August, 2021

         IN THE HIGH COURT OF KERALA AT ERNAKULAM
                          PRESENT
             THE HONOURABLE MR.JUSTICE V.G.ARUN
 FRIDAY, THE 13TH DAY OF AUGUST 2021 / 22ND SRAVANA, 1943
                   OP(C) NO. 1398 OF 2018
        OS 183/2013 OF SUB COURT, TIRUR, MALAPPURAM
PETITIONER/S:

         KAINIKKARA ABDURAHIMAN
         AGED 40 YEARS
         BY ADVS.
         SRI.R.T.PRADEEP
         SMT.M.BINDUDAS


RESPONDENT/S:

         AALUKKAL YUNUS
         BY ADVS.
         SRI.JAMSHEED HAFIZ
         SMT.T.S.SREEKUTTY


THIS OP (CIVIL) HAVING COME UP FOR ADMISSION ON

06.07.2021, THE COURT ON 13.08.2021 DELIVERED THE

FOLLOWING:
 O.P.(C)      No. 1398 of 2018
                                      2



                                JUDGMENT

Dated this the 13th day of August, 2021

The short question arising for consideration

in this original petition is whether Ext.P1 is a

bond or an agreement.

2. The petitioner filed O.S.No.183 of 2013

before the Sub Court, Tirur for realisation of an

amount of Rs.11,20,000/-, from the respondent,

based on Ext.P1 document and a cheque dated

20.03.2013. In his written statement, the

defendant/respondent contended that Ext.P1 is a

bond and being insufficiently stamped, the

document is liable to be impounded. Before

commencement of trial, the court below considered

the question as to the nature of the document. The

petitioner contended that Ext.P1 is an agreement

in terms of Article 5(C) of the Schedule attached

to the Kerala Stamp Act, 1959 and hence, the stamp O.P.(C) No. 1398 of 2018

duty payable is only Rs.50. The respondent, on the

other hand, contended that the document is a bond

as defined under Section 2(a) of the Kerala Stamp

Act. By Ext.P4 order, the document is held to be a

bond. Hence, the original petition.

3. Learned Counsel for the petitioner

referred to Ext.P1 and contended that the terms

and the wordings in Ext.P1 clearly reveals that it

is intended to be an agreement. It is submitted

that the parties themselves have termed Ext.P1 as

'an agreement' and the acknowledgement therein is

of a pre-existing liability. Reliance is placed on

the decision in Sreedharan v. Gopi [2003 KHC 420]

to contend that a document acknowledging an

antecedent obligation or a pre-existing liability

cannot be a bond.

4. Learned Counsel for the respondent also

referred to Ext.P1 extensively to contend that the

document is a bond. Attention is also drawn to the O.P.(C) No. 1398 of 2018

averment in the plaint to contend that even

according to the petitioner, the document is not

executed in acknowledgement of any pre-existing

liability.

5. To resolve the question involved, it is

necessary to carefully analysis the contents of

Ext.P1 document. The English translation of the

relevant portion of Ext.P1 reads as under;

The first party has borrowed an amount of

Rs.8,20,000/- from the second party for the

purpose of expansion of his business. The above

amount received by the first party from the second

party shall be repaid within two months. In case

of default by the first party in repaying the

amount to the second party, the first party and

his properties will be liable and the second party

will be at liberty to initiate legal proceedings

against the first party.

Even though the prates have termed the document as O.P.(C) No. 1398 of 2018

an agreement, the wording of the document indicate

otherwise. It is evident that the document was

not executed in acknowledgement of any pre-

existing liability and on the other hand, the

obligation for repayment is created under the

document itself. Further, as noticed by the court

below, the document is signed only by the borrower

and attested by two witnesses.

6. In Sreedharan, the document was executed

undertaking to pay the amount borrowed from the

plaintiff earlier. In the said factual background

this Court held the document therein to be an

agreement. The contextually relevant portion of

the judgment is extracted hereunder:

"3. I have perused the document.

Essential ingredient which distinguishes a bond and an agreement is that in the case of bond if the implication was a pre-existing one it would not partake the character of a bond. Document which evidences acknowledgement of an antecedent obligation or a pre-existing liability it would not normally become a bond. Agreement is defined in the Indian Contract O.P.(C) No. 1398 of 2018

Act, 1872 to mean every promise and every set of promises, forming the consideration for each other. Essential features for construing a document as a bond is that it must create an obligation to pay and no such obligation can be inferred from a mere acknowledgement of borrowers. An implied obligation cannot convert acknowledgement into bond. Real test to decide whether it is a bond or agreement is to find out after reading the document as a whole, whether an obligation is created by the document itself or whether it is merely an acknowledgement of a pre-existing liability. If there is merely an acknowledgement of a pre-existing liability which could have been enforced apart from the document itself, then the matter stands on a different footing. As far as the present case is concerned, the proper character of agreement is distinct from a bond. When the document is read as a whole it would reveal that it acknowledges pre- existing liability. In such circumstances, I am of the view court below is not justified in directing the petitioner to pay deficit stamp duty the document being an agreement."

The essential difference between a bond and an

agreement is that, in the case of bond, a person

obliges himself to do an act mentioned therein and

the instrument itself expressly creates the

obligation, whereas an agreement is nothing but an

union, collection, copulation and conjunction of O.P.(C) No. 1398 of 2018

two or more minds in anything done or to be done.

Inasmuch as, there is no reference in any pre-

existing liability and the obligation to repay is

created under the document itself, the court below

was fully justified in holding Ext.P1 to be a

bond.