Salimunnisa Begum vs Abdul Qayyam Ansari

Bilgrami, J.—This petition in revision u/s 12, Small Cause Courts Act is directed against a decision of the Chief Judge of the Small Cause Court, dated 19-7-1954, whereby he dismissed the suit of the revision Petitioner against the Respondent for recovery of Rs. 1500/- on a promissory note dated 3-6-1953 on the ground that the promissory note was insufficiently stamped and therefore inadmissible in evidence. The view that the learned Judge took was that the promissory note contained all the terms of the contract, that being inadmissible u/s 91, Evidence Act is a bar to the proof of the loan by oral evidence and therefore the suit must fail.

The learned advocate of the revision Petitioner relies on - Kunwar Bahadur v. Suraj Baksh AIR 1932 Oudh 235(FB)(A); - Maung Chit v. Roshan and Co. AIR 1934 Rang 389(B), which is also a Full Bench case; - Mahomed Akbar Khan v. Attar Singh AIR 1936 PC 171(C); - Sheo Nath Prasad Vs. Sarjoo Nonia and Another, , another Full'' Bench case; - Lakshmi Narain Vs. Mst. Aparna Devi, ; - Major Mistri Vs. Mt. Binda Debi, and also - Haj Shah Pasand v. Bachu Buchi Rajappa 35 D LR 368(G) a Full Bench case of this High Court, and argues that usually in a promissory note all the terms of the contract are not embodied unless there appears from the plaint or by the promissory note itself or by some evidence that the promissory note was not taken in discharge of the whole debt, it will ho deemed to be merely taken as a conditional security for payment of the loan and the suit on the original transaction of the loan can be maintained.

If the view of the Full Bench in AIR 1932 Oudh 235(A) is followed, it appears to me that there will hardly be a case in which the Plaintiff will not be allowed to fall back on the original transaction if the pronote is held to be inadmissible in evidence for some reason. This extreme view has been modified by the later decisions of the Allahabad High Court in Sheo Nath Prasad Vs. Sarjoo Nonia and Another, ; Major Mistri Vs. Mt. Binda Debi, and Lakshmi Narain Vs. Mst. Aparna Devi, cited above. In Sheo Nath Prasad Vs. Sarjoo Nonia and Another, all the previous cases have been reviewed. The conclusion at which their Lordships have arrived has been summed up thus on page 227 of the judgment of Dar J.:

In my opinion, the law on the subject may thus be stated. When a promissory note was given in consideration of a sum of money it is a question of fact in each case whether the sum of money was given as a loan or not as a loan. In the absence of all evidence, the presumption is that it was given by way of a loan and there is a further presumption that the promissory note was given in conditional payment of the loan.

If by reason of defect of stamp promissory note is held inadmissible in evidence it is open to the Plaintiff to prove the loan and all its terms and to recover the loan irrespective and independently of the promissory note by giving other evidence including that furnished by a contemporaneous receipt if there be any.

This case was followed in Lakshmi Narain Vs. Mst. Aparna Devi, The view their Lordships have expressed in that case is that usually in a promissory note all the necessary terms of the contract are not mentioned. When money is taken at the time of the execution of the promissory note it will be considered that it was given as an additional or a collateral security. A suit on a promissory note can only be dismissed if there is something positive to show that it was taken in full discharge of the debt.

In absence of any such material on record it will be denned that it was taken as a conditional security and if the promissory note, is inadmissible, the loan can be proved.

This view is not inconsistent with what has been held by a Full Bench of this High Court referred to above. The question of presumption was not discussed in that case, but the principle enunciated is the same.

The learned advocate of the Respondent on the other hand relics on - Nazir Khan and Another Vs. Ram Mohan Lal and Another and - Gundasmal Sing v. Ishar Das AIR 1921 Lah 217(I). The first of these rulings has been overruled by a Full Bench of the Allahabad High Court in Sheo Nath Prasad Vs. Sarjoo Nonia and Another, referred to above. Tim other case I am not prepared to follow in view of the judicial pronouncement to the contrary of the Full Bench of the Allahabad High Court and this High Court cited above.

In the result, this revision petition is allowed and the case is remanded to the Court below for taking evidence of the parties and deciding the case on merits according to law. Costs will abide the final result.