Rongali Pothuraju and Others vs Kolli Appala Naidu

Chandrasekhara Ayyar, J.—One of the questions raised in this second appeal preferred by defendants 2 to 5 is whether an indorsee for

collection of a promissory note can be given relief against the joint family properties of the sons of the maker also. Both the lower Courts followed

the decision of Patanjali Sastri J. in Govindaswami Achari v. Kandaswami Achari AIR 1942 Mad. 742 where it was held that where an

indorsement was for collection and the in-dorsee occupies the position of an agent of the payee the sons could be made liable in the suit as on the

original debt. This decision is in apparent conflict with the Bench decision of Pandrang Row and Abdur Rahman JJ. in Viraraghavalu Naidu v.

Rajalingam AIR 1939 Mad. 846 which was also a case of a suit by an indorsee for collection and in which it was held by the learned Judges that

the plaintiff was not entitled under such an indorsement of the promissory note to sue the non-executant coparceners. Patanjali Sastri J. referred to

this case in his judgment and distinguished it on the ground that there the indorsement was of the ""ordinary kind,"" which are no doubt the words

used by the Bench. It is however clear that what they meant to convey by stating that the indorsement before them was of the ordinary kind was

that it was not so worded as to transfer the debt itself as will be apparent from this quotation:

In the present case the indorsement is of the ordinary kind; it is not so worded as to transfer the debt itself nor has any stamp duty been paid on the

indorsement.

These remarks follow the quotation from the Full Bench decision in Maruthamuthu Naicker v. Kadir Badsha Rowther AIR 1938 Mad. 377

where reference is made to the indorsement being so worded as to transfer the debt as well and the stamp law being complied with. The answer

by the Pull Bench to the reference was couched in these words:

The indorsee of a promissory note executed by the managing member of a joint Hindu family is limited to his remedy on the note, unless the

indorsement is so worded as to transfer the debt as well and the stamp law is complied with, and therefore, in the case of an ordinary indorsement

the indorsee cannot sue the non-executant coparceners on the ground of their liability under the Hindu law.

It is thus obvious that the ordinary indorsement referred to was not an indorsement of the promissory note for value as distinguished from an

indorsement for collection, but an indorsement of the note as distinguished from an assignment of the debt itself. There appears to be no ground,

therefore, for holding that the Bench decision in Viraraghavalu Naidu v. Rajalingam AIR 1939 Mad. 846 did not apply to a case of a suit by an

indorsee for collection.

It is however pointed out by Mr. Kasturi Seshagiri Rao that in this case defendants 2 to i who were impleaded originally as sons of defendant 1

liable for the amount due under the promissory note were recorded as legal representatives of the father on his death pen-dente lite and that

defendant 5 was also brought on record as another legal representative and that in their capacity as legal representatives, the sons as well as the

widow will be liable. This position of a decree being passed against them as legal representatives of the deceased defendant 1 for the amount due

under the promissory note is unassailable. In place of the decree passed by the lower Courts will be substituted a decree for the same amount with

interest at the same rate till date of payment, payable out of any assets or property of defendant l in the hands of the said legal representatives.

Each party will bear their own costs here and in the Court below. The order as to costs in the first Court will stand. Leave refused.