Brijbhusan Pande and Others vs Ramjanam Kuer

Dhavle, J.—This is an application u/s 25, Provincial Small Cause Courts Act, by the defendants in a suit for the recovery of Rs. 100, principal and interest, on the basis of a hand note said to have been executed in favour of the plaintiff, by petitioner 2, as karta of joint family of the petitioners, for family necessity. The only petitioner who contested the suit was petitioner 2, who contended that he had executed the note not in favour of the plaintiff but in favour of one Godhan Singh whom he had paid off, the note however being missing at the time of the payment and afterwards coming somehow or other into the possession of an enemy Ramsubhag Dubey, a friend of the plaintiff opposite party. The learned Munsif framed the first point for decision as follows:

Is the defence story regarding the hand-note correct and whether the plaintiff is entitled to a decree for the amount claimed?

He came to the conclusion that the entire defence theory was false, and he then proceeded to observe that the plaintiff had satisfactorily proved that he had advanced the loan in question to the defendant and got the hand-note from him. He therefore decreed the suit. The learned advocate for the petitioners points out that the hand-note in suit, Ex. 1, does not mention the name of the payee at all, and he has urged that no decree can be passed on such an instrument; u/s 20, Negotiable Instruments Act, it was open to the payee to fill in the blank instrument, but unless he did so, he is not entitled to obtain any decree, M.P.P.L. Firm v. Kirwan Gyan 17 Ind.Cas. 915.

He has also urged that the hand-note which did not contain the name of the payee could have been filled in by the holder and was thus a promissory-note payable to bearer. Promissory-notes payable to bearer on demand, unless drawn on bankers, shroffs or agents are however prohibited by Section 25, Paper Currency Act (10 of 1903), and no suits can be maintained on them: Chidambaram Chettiar v. Ayyasami Thevan [1917] 40 Mad. 585 and Nachimuthu Chetty v. Andiappa Pillai 42 Ind.Cas. 706. The learned advocate has further urged that the presumptions u/s 118, Negotiable Instruments Act, that every negotiable instrument was made or drawn for consideration and that the holder of a negotiable instrument is a holder in due course do not arise in the case of a promissory-note which is not a negotiable instrument within the definition in Section 4 of the Act, and that therefore in this case the onus was on the plaintiff to prove that he had made an advance to the defendant and that the hand-note was executed in his favour: Barketullah v. Muhammad, Hayat Ali Khan AIR 1925 Lah. 272.

These contentions are not resisted by the learned advocate for the opposite party though I may perhaps incidentally observe that there is reason to doubt whether the definition of "holder" in Section 8, Negotiable Instruments Act, covers "bearer" but has urged that the lower Court has decreed the suit upon a consideration of all the evidence and has found that the plaintiff has satisfactorily proved that he advanced the loan in question and got the hand-note from the defendant; and he has further urged that the plaintiff was entitled to succeed on the loan itself, if for technical reasons he was not entitled to succeed on the hand-note.

The ruling in Dhaneshwar Sahu Vs. Ramrup Gir and Others, , which has been cited by the learned advocate, supports the contention that the hand-note failing the plaintiff was entitled to sue on the loan itself. It cannot however be said, in the present case that the plaintiff sued on the loan and not on the hand-note alone. It is also clear that the lower Court placed the onus on the defendant in the same manner as if Section 118, Negotiable Instruments Act, had applied in the circumstances of the case. It is impossible to say what the result would have been if the lower Court had been asked to approach the matter from the point of view that is now urged before me, namely, that the plaintiff was suing not upon the hand-note but upon the loan. Nor can the matter be approached from that point of view without an amendment of the plaint which may or may not now be open to the plaintiff. The loan was small, namely, Rs. 60 only, but in view of the illegalities and difficulties pointed out on behalf of the petitioners, to say nothing of the vexed question of the liability of the joint family it is impossible to let the decree below stand. Mr. P.P. Verma as amicus curiae has placed me under obligation by referring to Sheonandan Pandey v. Ramdhan Pandey Civ. Rev. No. 55 of 1930 disposed of by Kulwant Sahay, J., on 17th December 1930, in which that learned Judge found that the lower Court had misplaced the onus in a suit on a hand-note and accordingly remanded the case for a fresh hearing after placing the onus of proof upon the right party.

I set the decree of the lower Court aside and direct that the case be retried after proper opportunity given to the plaintiff to amend his plaint if he so desires and satisfies the lower Court that an amendment ought now to be allowed. Costs so far will be borne by the plaintiffs opposite party, hearing fee one gold mohur.