Natesan vs Sri Balamurugan Finance and Others

R. Banumathi, J.—These revisions are directed against the order of District Munsif, Rasipuram dismissing the petitions filed under Order 6,

Rule 17, C.P.C., seeking to amend the Plaint on the basis of original Cause of Action. The Plaintiff in all the suits is the Revision Petitioner, Since

common points for determination are involved in these revisions, all four revisions were taken up together for disposal.

D-1 is the Finance and other Defendants are the partners of the respective Finance. Case of the Plaintiff is that D-1-Finance had approached

the Plaintiff for a loan of Rs.5000, On being requested, the Plaintiff had paid Rs.5000 to D-l finance, for which D-1-Finance had executed suit

Promissory Notes. D-1-Finance has made two payments and made endorsements on the reverse of the suit Promissory Note. In spite of repeated

demands, since balance amount was not paid, the Plaintiff has filed the suit for recovery of the balance amount with interest due.

The first Defendant has filed the Written Statement contending that the suit pro-note is inadmissible in law and the suit is liable to be dismissed

in-limine. Because of the non-cooperation and misunderstanding among the partners, business of the firm was stopped even in the year 1989 itself.

The Defendants have denied the endorsements contending that the endorsements are forged ones. The suit is also barred by limitation.

The Plaintiff has filed the amendment applications to amend the suit on original cause of action. According to the Plaintiff, the suit has been filed

on original cause of action. Though the suit has been filed on the basis of Promissory Note, the Plaintiff sought to amend the plaint to be based on

the original cause of action.

Resisting the applications, the Defendants have filed the counter statement contending that the suit was filed on the Promissory Note and the

Plaintiff has no right to amend the suit on the basis of original cause of action, which entirely alters the nature of the suit. The suit Promissory Notes

had not been executed for the independent loan and hence the Plaint cannot be allowed to be amended. The Plaintiff has not advanced any

alternative case in the Plaint on the basis of the instrument and on the basis of the consideration. In the absence of such pleadings, amendment

sought for should not be allowed.

Upon consideration of the contentions of both parties, the learned District Munsif found that the proposed amendment to amend the suit on the

basis of the original cause of action would change the nature of the suit. In support of its finding, the trial Court referred to Natarajswamy Vs.

Gnenambal Abraham, . Referring to the cause of action, the learned District Munsif pointed out the cause of action refers to the execution of the

Suit Promissory Note at the time of deposit of the amount of Rs.5000 and that lending and execution of the Suit Promissory Note are integral part

of the same transaction and that the Plaint cannot be amended to change the basis of the suit on the original cause of action.

Aggrieved over the dismissal of the applications, the Plaintiff has preferred these revisions. Particulars relating to the revisions and the value of

the Adhesive Stamp fixed thereon is as noted under:

S. No. Parties Name IA. No. Promissory Note Value of

Adhesive stamp

C.R.P. No. Natesan IA. No. Rs.5000 dated Re.0.20paise

3934/01 Vs. 407/2001 24.08.1989

Sri Balamurugan

Finance and partners

C.R.P. No. Rajamanickam I.A. No. Rs.5000 dated Re.0.20paise

3939/2001 Vs. 406/2001 24.08.1989

1 .Sri.Balamurugan

Finance and partners

C.R.P.No. Rajamanickam I.A. No. Rs.7500 dated Re.0.20paise

38/2002 Vs. 405/2001 24.08.1989

Sri.Valli Finance

and partners

C.R.P. No. Natesan I.A. No. Rs.7500 dated Re.0.20paise

40/2002 Vs. 404/2001 24.08.1989

Sri.Valli Finance

and partners

The learned counsel for the Revision Petitioners/ Plaintiffs contended that incorporating of original cause of action would not in any way alter the

nature of the suit. Drawing the attention of the Court to the applications, the learned counsel has submitted that the Plaintiff has referred to the

original cause of action and that there is no justifiable reason to decline the amendment. The learned counsel has further referred to the decision

reported in Natarajswamy Vs. Gnenambal Abraham, , wherein the proposed amendment on the basis of the original cause of action was sought

for in the appellate stage, which was declined and the said decision cannot be applied to the case in hand where the amendment has been sought

for in the Trial Court, before the commencement of trial. In support of his contention, the learned counsel has relied upon Chandra Sekhar Misra

Vs. Gobinda Chandra Das, .

Countering the arguments, the learned counsel for the Respondents/ Defendants has submitted that the definite averments in the Plaint would

clearly show that the suit has been based on the suit Promissory Note. It is further contended that when no alternative case or original cause of

action has been adopted, the Trial Court rightly declined the amendment. It is the further contention that in the absence of averments on the basis of

original cause of action, no amendment could be allowed.

Upon consideration of the contentions of both parties, impugned order and the other materials on record, the following points arise for

consideration:

(i) Whether the lending of money and execution of Promissory Note, formed a single transaction or not ?

(ii) Whether the amendment to change the suit on the original cause of action could be allowed ?

(iii) Whether the impugned order declining the amendment suffers from any serious error, warranting interference ?

Admittedly, the suit has been filed for recovery of money on Promissory Notes. Case of the Plaintiff is that on being requested by D-1-

Finance, he has lent Rs.5000, for which the Suit Promissory Notes have been executed. As noted earlier, Twenty Paise Adhesive Stamp is affixed

on the Promissory Notes. Article 49 of the Indian Stamp Act deals with Stamp duty on Promissory Notes.

Article 49: Promissory Notes.-

(a) when payable on demand--

(i) when the amount or value does not

exceed Rs.250

(ii) when the amount or value exceed

Rs.250 but does not exceeds Rs. 1000 - Fifteen Paise

(iii) in any other case - Twenty-five paise

Instead of Twenty-five Paise, all the Promissory Notes are insufficiently stamped by affixing only Twenty Paise Stamp. The pro-note with

insufficient stamp is inadmissible in evidence.

u/s 35 of the Indian Stamp Act, insufficiently stamped instrument cannot be received in evidence for any purpose. Section 35 of the Indian

Stamp Act provides as follows:

No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to

receive evidence; it shall be acted upon registered, or authenticated by any such person or by any public officer, unless such instrument is only

stamped; provided that any such instrument not being an instrument chargeable with a duty not exceeding ten nayapaisa only, or bill of exchange or

Promissory Note shall subject to all Just exceptions be admitted in evidence on payment of the duty with''which the same is chargeable....

Section 35 prohibits not only receiving the document in evidence but also acting upon that document which is insufficiently stamped. Thus when a

pro note is insufficiently stamped, it is inadmissible in evidence for any purpose.

Even in the Written Statement, the Defendants have pointed out that the Suit Promissory Notes is inadmissible for not being sufficiently

stamped. There is no conflict of authority that the Promissory Note being insufficiently stamped is inadmissible in evidence. This necessitates an

examination of the provisions of Section 91 of the Evidence Act which lays down when the terms of a contract, or of a grant, or of any other

disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the

form of a document, no evidence shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter,

except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions

hereinbefore contained. Illustration (b) appended to the Section is - If a contract is contained in a bill of exchange, the bill of exchange must be

proved.

In such legal position, the question arises whether the Plaintiff could seek for the amendment to base his claim on the original cause of action.

The learned counsel for the Revision Petitioners/Plaintiffs has submitted that the suit is based on the original cause of action and that amendment

has to be allowed. In the light of the contention, it is to be seen whether the plaint, as framed originally, discloses cause of action on the original

debt. There can hardly be any doubt that the Plaintiff can lay the suit for recovery of the amount advanced being on the original cause of action.

When the pro-note becomes inadmissible in evidence, by virtue of Section 35 of the Stamp Act and Section 91 of the Indian Evidence Act,

provided there is allegation in the Plaint, lending of money and execution of the Promissory Note are two different transactions. In other words, the

averments ought to have been incorporated in the plaint that the Promissory Note is only a security for the advancement of the loan. What is to be

seen is whether the lending of money and execution of Promissory Note formed a single transaction or not. Only when it is alleged that both are

separate transaction, the amendment of Plaint in a suit on Promissory Note to include the prayer for relief based on original cause of action is

permissible.

By a careful reading of the plaint averments, it is clear that lending of money and execution of Promissory Note are integral part of the same

transaction. Paragraph No. 4 of the Plaint reads:

The above averments in paragraph No. 4 of the plaint clearly shows that lending of execution of Promissory Note formed part of a single

transaction. This is further affirmed in the cause of action in paragraph No. 12, which reads:

Thus the lending and execution of Promissory Notes are integral part of the same transaction. There is no separate and independent existence of

the original cause of action. Since the plaint does not refer to the original cause of action, amendment cannot be allowed.

When the Pro-note becomes inadmissible in evidence, u/s 35 of the Indian Stamp Act, since it has been insufficiently stamped and the terms

thereof cannot be proved by adducing oral evidence (which is barred u/s 91 of the Indian Evidence Act), the Petitioner cannot seek to thwart the

same by seeking to insert the prayer for amendment on the basis of original cause of action. When the Promissory Note is inadmissible due to

insufficiency of stamps and when the suit is based on the Promissory Note, the inadmissibility of document cannot be circumvented by allowing the

Plaintiff to amend the Plaint to enable him to make his claim on the basis of original debt. Amendment was rightly declined by the Trial Court.

In the impugned order, the learned District Munsif has referred to Natarajswamy Vs. Gnenambal Abraham, . In the said decision, amendment

to insert the prayer to make a claim on the original cause of action was sought to be made in the First Appellate Stage which was allowed by the

First Appellate Court. Reversing that order, the High Court has held that the debt is not apart from the pro-note and hence the amendment cannot

be allowed. The learned counsel for the Revision Petitioners sought to make a distinction that in the said case, amendment was sought for in the

First Appellate stage and that those principles cannot be applied to the case in hand, where the amendment has been sought for in the Trial Court

itself. This contention does not merit acceptance. It is not the stage in which the amendment was sought for that counts. But the test is to see

whether lending of money and execution of Promissory Note form part of single transaction or different transactions. The learned District Munsif

has rightly referred to Natarajswamy Vs. Gnenambal Abraham, and no valid objection could be raised on that score.

The learned counsel for the Revision Petitioners/Plaintiffs contended that if the proposed amendment is not allowed, the Plaintiff would be

deprived of money and that great prejudice would be caused to the Plaintiffs. When the admissibility of the documents on the ground of

insufficiency of stamp is in question, no indulgence could be shown by allowing the amendment. Such amendment could be allowed only when the

loan and execution of Promissory Note are independent and there is sufficient averments in the Plaint and the suit is based on the original debt. In

the instant case, even though lending of money and the execution of Promissory Note form part of the same transaction, even assuming that there is

acknowledgment of debt by way of endorsement, the proposed amendment cannot be ordered.

Suit pro-notes have been executed for the money lent to D-1- Finance. The amount lent and the execution of Promissory Notes form part of

the same transaction. Under such facts and circumstances, amendment of the Plaint to base the suit on the original cause of action has been rightly

disallowed. There is no justifiable ground to interfere with the impugned order. This revision has no merits and is bound to fail.

For the foregoing reasons, the order passed in I.A.No.407/2001 in O.S. No. 107/1998, LA. No. 406/2001 in O.S. No.96/1998, I.A. No.

405/2001 in O.S. No. 94/1998 and LA. No. 404/2001 in O.S. No. 93/1998 on the file of the District Munsif Court, Rasipuram are confirmed

and the Revision Petitions are dismissed. Consequently, C.M.P. Nos. 21273, 21296/2001 and C.M.P. Nos. 385, 413/2002 are dismissed. In the

circumstances of the case, there is no order as to costs.