Sir Thomas Fredrick Dawson Miller, Kt., C.J.

1. In this case both the plaintiff and the defendants have preferred appeals numbered respectively 28 and 30 of 1918 from the judgment and decrees, of the Subordinate Judge of Purulia, dated the 27th September 1917.

2. The suit out of which the appeals arise was instituted on the 6th March 1917 by the plaintiff as lessor against the defendants as lessees of 32 bighas of coal laud, situate in Mouza Jharia, claiming royalty and commission on coal raised from the land in question for the years 1911 to 1916. The lease under which the plaintiff claims is dated the 14th December 1906. The land is demised for a term of 992 years in consideration of a sum of Rs. 1,920 Salami, subject to certain conditions as to payment of royalty and commission. By the terms of the lease it is provided that the lessees shall be bound to pay commission at the rate of 5 annas per ton on all sorts of coal, including dust, which shall be raised from the mine and despatched by rail or sold or otherwise disposed of at the month of the pit. The commission is payable by four quarterly installments during the year and arrears bear interest at 1 per cent per mensem. There is also a provision for a minimum royalty of Rs. 960 per annum payable by the lessees even if the commission at 5 annas per ton falls short of that amount. The document was stamped with a revenue stamp of Rs. 40 of which Rs. 20 is payable in respect of the Salami and the balance for the estimated amount of the average yearly commission, which on a stamp of that value would be Rs. 2,000. The plaintiff was unable to give particulars of the actual quantity of coal raised from the mine during the six years in question but he valued his claim at Rs. 39,000, an amount which on the evidence turned out to be excessive. His case was that, by the terms of the lease, he was entitled to commission on all coal raised from the mine whether despatched by rail or sold at the pit's mouth or whether appropriated by the lessees for their own purposes in connection with the working of the mine.

3. The defendants contended that they were not liable under the terms of the lease for commission on the coal used by them for furnaces of the boilers and for other purposes connected with the working of the mine but only for Bach coal as was raised and actually despatched by rail or sold or otherwise transferred locally. They further contended that as the stamp on the lease was Rs. 20 only in respect of commission the plaintiff was precluded by section 26 of the Stamp Act from claiming any commission beyond that which was proportionate to the amount of the stamp and could not, core the defeat by payment of a penalty under section 35 of the Act in each a case.

4. It should be mentioned that the plaintiff had previously fined the same defendants for commission in respect of coal used by them for their own purposes during the years 1908 to 1911. For those years commission had been paid on the coal despatched by rail or sold locally but the plaintiff claimed in addition commission on the coal consumed by the lessees themselves for the purposes mentioned. That case had been tried by the learned Subordinate Judge before whom the present case came and had been decided by him a few months earlier dismissing the plaintiff's claim for such commission and he decided the same issue in the present case in the same manner holding that the plaintiff was entitled to commission only on the coal despatched by rail or sold locally; and, assessing the commission for the years in question in the present case upon the coal actually sold, he gave the plaintiff a decree for Rs. 10,622-5-9. If the plaintiff's contention is right that he is entitled to commission on all coal raised, it is admitted that the amount awarded should be increased by Rs. 3,320.

5. With regard to the defendants contention that the plaintiff is not entitled to claim any commission beyond that proportionate to the value of the stamp the learned Judge decided that, under section 35 of the Stamp Act the plaintiff was entitled, upon paying the deficit duty and penalty, amounting in all to Rs. 1,980, to enforce his contract to the full amount of the commission payable under the lease. If, on the other hand, the defendants' contention is right, the plaintiff would only be entitled to commission at the rate of Rs. 2,000 per annum which for the six years in question amounts to Rs. 12,000 instead of Rs. 20,622-5-9.

6. In Appeal No. 28 of 1918 the plaintiff is the appellant and contends that the learned Judge was wrong in refusing to award him commission upon the coal used by the defendants. In the previous suit in which a similar claim was made for the years 1908 to 1911 and dismissed by the learned Judge an appeal numbered 187 of 1917 was preferred to this Court by the plaintiff against that decision. In that appeal the plaintiff and defendants were the same parties and the question for determination was the same question and arose under the same lease. It was heard before this Bench a few days ago and was decided against the plaintiff-appellant. It is unnecessary to repeat again our reasons for arriving at that conclusion. The question is one of the interpretation of the terms of the lease and we decided that do commission was payable by the lessees on coal consumed at the colliery by them for the purposes of the colliery. The plaintiff's appeal is accordingly dismissed with costs.

7. Id Appeal No. 30 of 1918 the defendants are the appellants and contend that the learned Judge was not justified, in view of the provisions of section 26 of the Stamp Act, in awarding the plaintiff any commission in excess of an amount proportionate to the value of the stamp viz., Rs. 2,000 per annum.

8. Section 26 provides,--"Where the amount or value of the subject-matter of any instrument chargeable with ad valorem duty cannot be ascertained at the date of its execution or first execution nothing shall be claimable under snob instrument mere than the highest amount or value for which, if stated in an instrument of the same description, the stamp actually used would, at the date of such execution, have been sufficient". There is a proviso to that section relating to the case of a lease of a mine in which royalty or a share of the produce is received as the rent or part of the rent and it is provided in the case of such a lease, granted by any person other than the Secretary of State in Council, that it shall be sufficient to have estimated such royalty or value of such share for the purpose of stamp duty at Rs. 20,000 a year and in such a case the whole amount of such royalty or share shall be claimable under such lease. The duty payable upon leases is contained in Article 35 of Schedule I of the Act. Clause (c) of that Article is applicable to the present case, i.e., where the lease is granted for a fine or premium or for money advanced in addition to rent reserved. In such a case the duty is the same as on a conveyance for a consideration equal to the amount or value of such fine or premium or advance as set forth in the lease in addition to the duty which would have been payable on such lease if no fine or premium or advance had been paid or delivered, A conveyance for a consideration of Rs. 1,920 would require a Rs. 20 stamp and in addition where the lease, as in the present case, purports to be for a term in excess of three years under Article 35(iii) a further duty is payable equal to that of a conveyance for a consideration equal to the amount or value of the average annual tent reserved. A further Rs. 20 was paid in respect to the average annual value which, in the case of a conveyance, would represent a consideration of Rs. 2,000. It would appear, therefore, that under section 26 of the Stamp Act nothing is claimable under the instrument in question beyond the amount or value for which the stamp is sufficient. The duty payable in the case of a lease where a rent or royalty is reserved is undoubtedly an ad valorem duty. In the case of a mining lease, however, where the royalty must necessarily be a matter of uncertainty the parties must estimate what they consider to be the average annual value. They may estimate it at any amount they please, but in order to protest the revenue section 26 provides that nothing shall be claimable in such a case beyond the highest amount or value for which the stamp is sufficient subject, however, to the proviso that if a stamp is paid commensurate with an annual value of Rs. 20,000 (which in the case of a lease would be a Rs. 200 stamp) then the whole amount shall be claimable whether it exceeds Rs. 20,000 or not. The lessor, therefore, has the option of choosing his own stamp duty in such a case and if he wished to protect himself from the limitation of the section he should take care to see that the stamp paid is sufficient to cover the maximum amount which be may be likely to become entitled to by way of royalty under the lease. If be deliberately chooses to pay a duty of less than Rs. 200 (the maximum amount) he must always run the risk of being debarred from exercising his claim against the lessee for the fall amount of royalty payable under the instrument, and, in the face of the express provisions of the section, he has nobody but himself to blame for such a contingency.

9. The plaintiff contends, however, that under section 35 of the Act the Court had power, as the Subordinate Judge held, to enable him to enforce his claim for the full amount recoverable under the instrument, by exacting the penalty therein mentioned. That section provides that,--"No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having bylaw or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped". But the proviso to that section, upon which the plaintiff relies, enacts that any such instrument, with certain exceptions not material to the present case, shall be admitted in evidence on payment of the duty with which the same is chargeable, or, in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of 10 times the amount of the duty or deficiency.

10. The learned Counsel for the defendants contends that the proviso is not applicable to the present case. His argument is, that it cannot be said that the instrument was not admissible in evidence or could not be acted upon unless registered or authenticated by any public officer. It was a perfectly valid instrument for all purposes subject to the limitation contained in section 26, a limitation which must be deemed to have been accepted by the lessor by his own deliberate act and at his own option, and the law does not require that the instrument in question shall bear a stamp of any greater value than that which it actually bears and hence it cannot be said that the instrument is not duly stamped according to law. Section 35, he argues, only applies to those instruments which are either unstamped or not duly stamped and has no application to the present case. The stamp was an optional stamp and the lessor must abide by his option.

11. I confess that I was impressed by this argument put forward by Mr. Hasan Imam on behalf of the defendants. In support of it be referred to the case of Syed Keramut Ali v. Moonshee Abdool Wahab 17 W.R. 131. That was a case under the Stamp Act of 1860. It was a suit brought by the mutwalee of the Hooghly Imambara against the treasurer of that endowment and his sureties for a sum of Rs. 17,280 alleged to have been misappropriated by the treasurer. The security-bond was executed on an optional stamp of Rs. 8. It was held that no larger sum could he recovered under section 14 of the Act of 1860 upon a bond executed upon an optional stamp than that optional stamp covered (in that case Rs. 1,000) and that no am count of penalty could make up the deficiency in the stamp. The predecessor of the Subordinate Judge in the first instance had permitted the plaintiff to pay the penalty, but on protest made on the part of the sureties the judgment of the Court was reserved on that point, viz., whether the plaintiff could recover more than the amount covered by the stamp. The Subordinate Judge, on perusal of the 13th and 14th sections of Act XXXVI of 1860, held it to be illegal for a Civil Court to pass an order for the recovery of a sum in excess of the amount which may be received on the strength of a document engrossed upon an optional stamp. He considered that clause 6 of section 13 of that Act provided that when documents are engrossed upon insufficiently stamped or on unstamped paper the sum paid as penalty, is to make up the deficiency in stamp but that there was no provision to the effect that the deficiency should be made up by the exaction of a penalty in the case of a document engrossed upon an optional stamp. On appeal to the High Court the decision of the Subordinate Judge was affirmed. Section 14 of the Act of 1860 provided that "No larger sum shall be recovered in any Court of Justice by reason of any deed, instrument, or writing for which an optional stamp is indicated to be proper by the said schedule, than the largest sum for which, if specially stated in a deed, instrument or writing of the same denomination, the stamp actually used under the option so given would be of sufficient value. And no such deed, instrument or writing shall be held by any Court of Justice to be valid in respect to any sum of money larger than that for which the stamp on the said deed instrument or writing would be sufficient." But section 13 of the Act then in force, which enabled the Court to admit the instrument on payment of a penalty, referred to documents executed on insufficient or unstamped paper from accident, ignorance, inadvertence, mistake or other unavoidable cause. The High Court considered that as the document was neither unstamped or insufficiently stamped from accident, ignorance, inadvertence, mistake or other unavoidable cause it was not covered by the provisions of section 13 and that no larger sum could be recovered by reason of section 14 than was commensurate with the optional stamp on the document. It is further to be noticed that in that case no actual figure was mentioned in the bond as the amount for which the sureties would be liable, the only indication of the limit of the liability being the stamp. That case can hardly be regarded as an authority on the interpretation of section 35 of the present Act which differs materially from section 13 of the Act of 1860. Under the present Act, the Court has power to cure the defect in an insufficiently stamped document whether the insufficiency is due to mere inadvertence or accident or not, and if it can be held that the provisions of section 26 are subject to the Court's power of interference under section 35 it would not matter that the value of the stamp was the result of mature deliberation.

12. On the other hand, the plaintiff relied upon later decisions which incline towards the view that a deficiency in the value of the stamp can be cured by payment of a penalty even where the value is optional. In 1881 the case of Collector of Tanjore v. Ramasamier 3 M. 342 : 1 Ind. Dec. (N.S.) 793 was decided under the Stamp Act of 1869. The instrument in question was an ijara lease, the rent reserved being a portion of the produce, the value of which varied from year to year. The document was stamped as a lease with a Rs. 4 stamp which was the proper stamp for a value of Rs. 800. For the first year Rs. 824 had been paid by the defendant. The plaintiff sued to recover rent for a subsequent period and it was objected that he was not entitled to recover more than the amount covered by the stamp. As the price of grain had risen his claim exceeded Rs. 800 per annum. The Subordinate Judge considered that the plaintiff could not recover more than the amount recovered for the first year and dismissed his suit for the balance. Under the provisions of the Act then in force the stamp had to be calculated upon the estimated value of the first year's rent and not as at present upon the average annual value. On appeal to the High Court it was decided that as the Act then in force directed the parties to have regard to the rent reserved in the first year as determining the proper stamp duty the penalty for an insufficient estimate should attach only to the obligation for that year and that sufficient effect would be given to section 26 of the Act of 1879 by holding that in the first year of the term no more could be recovered than the amount on which the stamp duty was computed, but that in any subsequent year the amount recoverable was to be determined by the terms of the instruments. It was not necessary, therefore, to determine whether the deficiency could be cured by payment of a penalty. The basis of the decision, however, cannot apply in the present case where the royalty must be calculated not on the amount payable in the first year but on the average annual value.

13. In 1886 in Mulji Bechar v. Jetha Jeshankar 10 B. 239 : 5 Ind. Dec. (N.S.) 547, the Chief Justice and two other Judges of the Bombay High Court, on a reference by the Subordinate Judge under section 49 of the Stamp Act of 1879, decided that a document written on a stamp of one anna was good under clause 2 of section 12, Regulation XVIII of 1827, but that the plaintiff could not obtain on it a judgment for a sum or value beyond what was covered by the stamp. They held, however, that there was nothing to prevent the Court from allowing him to obtain judgment for a larger sum by paying an additional stamp duty and penalty.

14. In 1906 in the case of Nathu Gangaram v. Bansrai Morarji 9 Bom. L.R. 122 it was stated by Russell, J., that the effect of section 35 of the Stamp Act of 1899 was that, when any instrument, not being one of those excepted in sub-section (a), is tendered in Court, the Court is to accept it and shall admit it as evidence on payment of the duty; and the person tendering it is entitled to compel the Court to accept the instrument if the duty and penalty are paid, there being nothing in the section which prevents an instrument which is not absolutely rejected or which comes within the exception from being admitted on payment of penalty. That was a case in which it was held that an ad valorem stamp duty was necessary for the instrument in question which was an assignment of a chose in-action the value of which could not presumably be definitely ascertained. No objection, however, appears to have been taken that section 2d was a bar to the operation of section 35.

15. One other case may be referred to which was relied on by the learned Subordinate Judge in support of the decision at which he arrived, namely, the case of Gomez v. Young 12 W.R.A.O.J.C. 1 : 2 B.L.R.O.C.J. 165 : 1 Ind. Dec. (N.S.) 1004, decided in 1869. The immediate question for determination was whether a promissory note sufficiently stamped to cover the principal sum due but not the interest was admissible in evidence. Phear, J., decided that it was not and rejected it. On appeal Sir Barnes Peacock, C.J. took a contrary view with which MePherson, J. agreed. In the course of his judgment the learned Chief Justice is reported to have said--I should be very sorry to see justice defeated by holding that a man is to lose 'his whole claim by making a mistake as to the construction to be put upon the Indian Act, when the construction put upon it is in accordance with the construction which has been put upon similar words in the English Statute. The greatest injustice might be caused if we were to hold that the plaintiff should lose his whole claim simply because he made such a mistake," The decision is not a direct authority upon the question under consideration, but, I venture to think, it correctly expresses the attitude which the Courts should endeavour to adopt in dealing with the Stamp Act in its effect upon the contractual obligations created between the parties. Section 27 requires the consideration and other facts affecting the chargeability of any instrument to be set forth therein. In dealing with a similar provision in the English Statute, "No case that I know", said Lindley, L.J. "can be cited to show that that part of the Act is otherwise than direct cry or that a mis-stated consideration would invalidate a deed". Powell v. London & Provincial Bank (1893) 2 Ch. D. 555 : 62 L.J. Ch. 795 : 2 R. 482 : 69 L.T. 421 : 41 W.R. 545. The object of the Stamp Act is not to alter the terms of the bargain between the parties but to protest the revenue by excluding proof of the bargain by an instrument unduly stamped. By denying the benefit of section 35 in the case of mining leases requiring an ad valorem stamp when the value can only be estimated the revenue would gain nothing. In fact it would suffer loss. The only person benefited would be the lessee who would escape a part of the obligation which by his contract be under took to bear. Section 35 provides the means by which, in the case of the estimate proving deficient, the revenue can be amply protected and the terms of the bargain can be proved and given effect to. I can find nothing in the words of section 35 which necessarily excludes its operation from cases covered by section i.e. It would be a strange result, which the Legislature could hardly have intended, if an instrument bearing no stamp and, therefore not admissible in evidence under section 35, could he validated by payment of a penalty under the proviso of that section whereas a similar instrument bearing a stamp and, therefore, admissible and enforceable to a limited extent could in no case be fully enforced even by paying the penalty , or admitted in evidence for the purpose of proving the full extent of the contract entered into between the parties. The argument that the instrument in the present case is duly stamped within the meaning of section 35 and, therefore, not entitled to the benefit of the proviso appears to me to be fallacious. One must look at the existing circumstances to see whether the stamp is sufficient. It is true that, as long as the royalty does not exceed the estimated amount upon which the stamp is computed, no objection can be taken to the instrument on the ground of deficiency in the stamp, but once the estimate is exceeded the instrument becomes insufficiently stamped for the only purpose, for which it cap be put in evidence, that is for the purpose of proving and enforcing, the terms of the bargain between the parties. It becomes just as much unduly stamped in the altered circumstances as if the lease had been one for a fixed rent written on a stamp inadequate for the expressed amount. I am of opinion that the decision of the learned Subordinate Judge was right and that this appeal should be dismissed with costs.

B.K. Mullick, J.

16. I agree that the Subordinate Judge was right in applying section 35 to the lease in question. In that section the words "no instrument chargeable with duty shall be admitted in evidence for any purpose" mean 'shall be admitted in evidence for any purpose for which a stamp is necessary", and so it has been held that, although a document is inadmissible for the purpose of proving a claim, it may, be admissible for a collateral purpose, that is a purpose foreign and not subordinate to the purpose for which the document was executed. Unlike the Evidence Act the Stamp Act does not base its rules on theories of relevancy or of public policy. It is purely fiscal and insists that certain documents shall pay a contribution to the state according to the purpose for which they were executed. In regard to certain documents which create a right to money it prescribes that unless the stamp is proportionate to the valuation of the claim the document shall be inadmissible in evidence and where the intention of the parties is that the valuation shall be unlimited it enacts by section 26 that the claimant will be entitled to realise a sum proportionate to the stamp-fee paid, subject to certain exceptions in the case of royalties on coal. It follows that, wherever the claim exceeds the amount proportionate to the stamp, the document is not duly stamped for the purpose for which it was executed.

17. In regard to the lease under consideration, the object of the parties was clearly to create, an unlimited liability and, therefore, the ad valorem fee of Rs. 20 was not the proper fee. Section 35 of the Act, therefore, was rightly called in aid by the Sub-ordinate Judge and I agree that the Appeal must fail.