Maddali Tirumala Ananta Venkata Veeraraghavaswami vs Srimat Kilambi Mangamma and Another

Kunhi Raman, J.—The plaintiff is the petitioner. He claimed to be the beneficial owner of the amount for which a promissory note was

executed by the second defendant in favour of the first defendant. The trial Court has disbelieved the plaintiff''s case against the first defendant. The

finding of the trial Court is recorded in these terms:

I find disbelieving the evidence on behalf of plaintiff that the arrangement set up by plaintiff with reference to the suit pronote, Ex. B is not true, that

first defendant had nothing to do with it, that she was not a trustee in respect thereof, and that she cannot be in any manner made liable for the

amount due on the pronote Ex. B.

This finding so far as the first defendant is concerned cannot be seriously questioned, seeing that it is a finding of fact which is based upon the

evidence placed before the trial Court....

At the trial, the plaintiff wanted a decree against the second defendant on this promissory note. The trial Court has held following certain

decisions of this High Court that in view of the provisions of Section 78 of the Negotiable Instruments Act, since the plaintiff was neither the payee

nor the holder of the promissory note in question, a decree could not be passed in plaintiff''s favour and against the maker of the promissory note.

This finding of the trial Court is attacked by the learned Advocate for the plaintiff-petitioner. He relies upon the decisions reported in Surajman

Prasad Misra v. Sadanand Misra I.L.R (1932) 11 Pat. 616, Sewa Ram v. Hoti Lal I.L.R (1930) 53 All. 5, Brojo Lal Saha Banikya v. Budh Nath

Pyarilal and Co. I.L.R (1927) 55 Cal. 551 and argues that, although a valid discharge in respect of a promissory note can be given only by the

payee or the holder thereof, yet when the maker of the note, the holder of the note and the person who alleges that he is beneficially entitled to the

amount of the note are all before Court, there is nothing wrong in the Court deciding the question of benami raised by the parties and passing a

decree in favour of the beneficial owner, if it is satisfied that his version is really true. It is not possible for me to accept these contentions in view of

the observations contained in the Full Bench decision of this High Court reported in Subba Narayana Vathiyar and Others Vs. K. Ramasami

Aiyar, and the decision reported in Chinna Kuzhandai v. Kushandai Veeraswami (1934) 68 M.L.J. 713 : AIR 1935 Mad. 312 This High Court

has consistently taken the view that Section 78 of the Negotiable Instruments Act should be strictly construed and that a valid discharge can be

given only by the payee of a promissory note or the holder thereof, there being no such thing for this purpose as a benami promissory note taken in

the name of one person but really meant for the benefit of another. In these circumstances especially in view of the frame of the suit I am not

satisfied that the decision of the trial Court is wrong. The Civil Revision Petition is accordingly dismissed with costs, one set.