Jagannatha Reddiar vs Lakshmana Reddiar

Ramesam, J.—This Revision petition arises out of a suit on a negotiable promissory-note (dated 24th December 1915) payable on demand

by the endorser of the note against the maker (first defendant) and the endorser (2nd defendant). The Subordinate Judge gave a decree against

both the defendants.

The second defendant tiled this petition. In his written statement, he raised the question of limitation. The second point for determination stated

by the Subordinate Judge is whether the second defendant is liable. I presume that it was intended to include the question of limitation also, though

the Subordinate Judge has not discussed it.

3.The liability of the second defendant arises out of the endorsement and not on the note. The cause of action against him cannot arise earlier than

the endorsement (dated 19th March 1918). A payment of one Rupee by the first defendant was endorsed on it and signed by the first defendant

on 20th December 1918. This saves limitation as against persons liable on the note and has nothing to do with persons liable on the endorsement.

The suit is filed on 20th December 1921. If the cause of action arises before 20th December 1918, the suit is barred by limitation.

The extent and nature of the liability of the endorser of a note payable on demand is not governed by Section 35 of the Negotiable Instruments

Act. We have to deal with the case of a note payable on demand which has been negotiated by indorsement before it is overdue and has been

dishonoured. Sivaramakrishna Pattar v. Moideen Musaliar 8 Ind. Cas. 428 : 19 M.L.J. 5098 : 6 M.L.T. 237 : 19 M.L.J. 509 According to

Section 86 of the Bills of Exchange Act Where a note payable on demand has been endorsed, it must be presented for payment within a

reasonable time of the endorsement. If it is not presented, the endorser is discharged. The law in India must be, by analogy, (1) to the same effect

or (2) subject to a contract to the contrary or ( 3) the indorser is not liable at all. Taking the most lenient view in favour of the plaintiff, in this case,

the note can be regarded as presented for payment only on 20th December 1918 when one Rupee was paid by the first defendant and not earlier.

It cannot be said that it was presented within a reasonable time after the endorsement. I do not think it should be in the option of the indorsee by

waiting for an unreasonable length of time to postpone the cause of action as he likes. Notice of dishonour is also necessary as a condition

precedent to the liability of the second defendant, (Section 93) and it also ought to be sent within a reasonable time (see Section 94 and Sections

105 and 106 of the Negotiable Instruments Act). It is admitted that the notice of the dishonour was given to the second defendant only just before

suit. The plaintiff cannot be i;i a better position than if he presented the note for payment within a reasonable time alter indorsement and gave notice

of dishonour within a reasonable time after dishonour.

I find the suit is barred by limitation as against the second defendant and I doubt if he is liable at all. The Revision Petition is allowed and the suit

is dismissed with costs throughout against the second defendant. The decree against the first defendant will stand.