What is the extent of liability of instruments to stamp duty where several instruments are executed in a single transaction? Explain with any one illustration.

Section 4 of Indian Stamp Act, 1899 provides that, where in the case of any sale, mortgage or settlement, several instruments are employed for completing the transaction- (i) Only the principal amount shall be chargeable with the duty prescribed for the conveyance, mortgage or settlement (ii) Each of the other instrument shall be chargeable with a duty of one rupee (instead of the duty if any prescribed for the other instruments) Illustrations (i) A executed a conveyance of immovable property. On the same deed his nephew (undivided in status) endorsed his consent to the sale, as such consent was considered to be necessary. It was held that the conveyance was the principal instrument. The consent was chargeable with only one rupee (ILR 13 Bom 281). (ii) Subsequent to a sale of immovable property, two declarations were executed reciting that the sale was subject to an equitable mortgage created by the vendor. These declarations were held to be chargeable, together with the sale deed, as having completed the conveyance (Somaiya Organics Ltd. v. Chief Controlling Revenue Authority, AIR 1972 All 252). (iii) Brother A executed in favour of brother B a gift of all his property. By another deed, brother B made provision for the living expenses of brother A and hypothecating in favour of brother A a part of the property included in the above mentioned gift deed, in order to secure the payment of the living expenses. It was held that the two documents were part of the same transaction. They amounted to a settlement and Section 4 applied (Maharaj Someshar Dutt, ILR 37 All 264). (iv) B conveyed the whole of his property to three persons who undertook to provide for him and to perform his obsequies. By another document, the three donees agreed to provide for B. This was mentioned in the deed executed by A also. It was held that the two documents had to be construed as part of the same act; the first was liable to duty as a conveyance while the second was liable to a duty of ₹1 only (Dadobav. Krishna, ILR 7 Bom. 34). (v) A company executed, first a deed of trust and mortgage stating that the company was to issue notes for raising loans secured by the sale deed. It was held as under: (1) The deed was principal or primary security (and not a collateral security). It was chargeable as mortgage under Article 14. (2) The notes issued subsequently were debentures and not principal instruments (Madras Refinery Ltd. v. Chief Controlling Revenue Authority, Madras, AIR 1977 SC 500).