If No Fixed Amount Is Mentioned In Instrument, It Cannot Be Read As 'Bond', But Only As ‘Agreement’: Karnataka HC
The Karnataka High Court held that if no fixed amount is mentioned in instrument, it cannot be read as a bond, but only as an ‘agreement’.
The bench of Justice Ravi V. Hosmani relied on Hamdard Dawakhana (Wakf) Delhi reported in AIR 1968 Del 1 and observed, “…in case liability to pay a certain amount was fixed under instrument, it may be read as a bond. If same was required to be determined by Court, then it would have to be considered as an agreement.”
Advocate Santosh B. Rawoot appeared for the Appellant and Advocate Shrikant T. Patil appeared for the Respondent.
Brief Facts-
The petitioner filed a suit for recovery of amount. Said suit claim is based on an instrument between parties. As per the instrument, the plaintiff had offered to file an appeal bearing expenses of filing an appeal and writ petition before this Court for securing enhanced amount, refund of TDS and site value and the defendant had agreed to pay 40% of the same in case the plaintiff secured it to the defendant. Admittedly in case, there was no enhancement, then the defendant would not be liable to pay anything.
An objection was raised by the defendant about the instrument being improperly stamped and the trial Court passed the impugned order treating it as a bond and assessing stamp duty.
On behalf of Petitioner, it was submitted that the agreement could not be treated as a bond as there was no stipulation of total benefits receivable, except for the stipulation of percentage of benefits since benefits were contingent 40% payable to the plaintiff was also contingent.
It was further submitted that by confusing the Court fee payable on suit reliefs with conditions in the agreement, the trial Court misled itself into holding the same as a ‘bond’.
The Court noted that the trial Court while passing the impugned order misconstrued the Court fee payable on suit as stamp duty payable on the instrument. According to the Court, as there was no fixed amount mentioned in the instrument, it cannot be read as a bond, but only as an ‘agreement’.
The Court allowed the Writ Petition.
Cause Title: Veeranna v. Nandkumar (Neutral Citation: 2024:KHC-D:5389)
Appearance:
Appellant: Adv. Santosh B. Rawoot
Respondent: Adv. Shrikant S. Patil, Adv. Rohit T. Patil
