E. Sundram Chetty and Another vs B. Damodaram Chetty and Another

Ramesam, J.—This appeal arises out of a suit on a promissory note. The defendants are the son-in-law and wife of one Errappa Chetty and

their plea was and is that the note was not executed for cash or other equivalent consideration but was executed only as a security to cover the

advances to be made by the payees, B. Kuppu-swamy Chetty and sons to Errapa Chetty, and that they are liable only to such sums as may be

found due on taking accounts between the payee firm and Errappa Chetty. ""The City Civil Judge without taking the evidence tendered by the

defendants, decreed the suit. The exact legal ground on which he refused to take evidence is not clear. At one place he remarks that the suit note is

a negotiable instrument. The plaintiffs being the trustees in bankruptcy of the payee firm are not holders in due course. Again he says: ""I do not see

how I could direct the taking of accounts between him (i. e., Errappa Chetty) and the plaintiffs."" I do not see what the difficulty is. In para. 4, he

suggests that the defence is extraordinary I do not think so. It is a common thing for a borrower from a banker giving a promissory note to cover

over drawings from the banker by himself or by another. The circumstances relating to the payment of Rs. 500 (five hundred) can be considered

only after the defendants adduce all their evidence including that relating to the payment.

Before me, the learned Vakil for the respondents, Mr. A. Srinivasa Iyengar contended that the plea is not admissible u/s 92, Indian Evidence

Act. I do not agree. Cases deciding that it is not open to one of two or more joint makers of a note to plead that he is only a surety have no

bearing on this, for here, the plea is no that the defendants are mere sureties, for they admit their liability on the taking of the accounts but plead

want of consideration.

In Subbayyar and Another Vs. The Firm of K.M. Subbarayalua Iyer and son, Madura, by managing partner K.M.S.R. Kuppuswami Iyer, the

consideration was admitted but the respondents pleaded an agreement by which, if the mills excused, the plaintiffs should excuse the defendants.

This is different from a plea of want of consideration. So also, in Vishnu Ramchandra Joshi v. Ganesh Krishna 63 Ind. Cas. 673 : 45 B.K 1155 :

23 Bom. L.R. 488 the consideration was admitted but the plea was that the plaintiff agreed not to present the note until he paid off some

encumbrances. In Sri Ram V. Sobha Ram 57 Ind. Cas. 513 : 44 A.L.J. 315 : AIR (1922) (A.) 213 : 4 U.P.L.R. (A.) 153 the note was for sums

due on accounts and stated that the accounts had been looked into. The plea was that the accounts should be re-opened. Here also the note was

for an existing (and not a future) consideration such as an advance to be made. In Hill v. Wilson (1873) 8 Ch. 888 : 42 L.J. Ch. 817 : 29 L.T. 238

: 21 W.R. 757 it was found that, though the father-in-law wished to make a gift, the son-in-law insisted on a loan. The loan was admitted but the

plea was that only interest should be paid during the lifetime of the payee. This was rightly held inadmissible. In Kishomal Kirpomal v. Vishindas

Sakhramdas 9 Ind. Cas. 299 there was no defence to the note itself but the suit was objected to on the ground that it is an item of dealing between

the parties who were partners and the whole partnership account should be taken. This has no resemblance to the defence before me.

I think the defendants'' plea is legally open to them. The onus is on them and their evidence will have to be taken. I reverse the judgment and

decree of the Court below and remand the suit for disposal according to law.

Costs to abide the result. Court-fee paid by appellants will be refunded.