S.N.S. Satheppa Chettiar by Authorised Agent, Chidambara Velan vs K. Muthusami Pillai

This is an appeal against an order of remand by the lower Appellate Court in a promissory note suit. The plaintiff sued the defendant in the

District Munsif''s Court on an on-demand promissory note for Rs. 700. The defendant admitted execution and the receipt of the money, but

pleaded that the promissory-note was taken by the plaintiff as a sort of guarantee that the plaintiff would not resile from his bargain to empower the

defendant to manage his lands and get possession of them for him by criminal proceedings that the plaintiff promised to pay him Rs. (sic) a month

for his services and a bonus of Rs. 500 if the criminal proceedings turned out successful, that he thus got the Rs. 700 as a sort of advance of his

pay and bonus which were going to fall due to him, and that this advance was to be discharged as and when that pay and bonus became due and

that the plaintiff agreed to this course being adopted; the defendant further pleaded that pay to the extent of Rs. 200 and more and the bonus of

Rs. 500 had actually fallen due to him before the date of suit and that, therefore, the promissory-note had been fully discharged.

The District Munsif held that the defendant could not put forward the above agreement in defence in a promissory-note suit as such an

agreement contravened the provisions of Section 92 of the Indian Evidence Act. The lower Appellate Court held that the agreement could be

proved and remanded the suit for evidence, and against this order the present appeal is filed.

Neither of the lower Courts has, we think, quite clearly understood the nature of the case. The defendant''s written statement is not as clear as it

might be but we think that his plea really amounts to a contention that the promissory-note sum was paid to him as an advance of pay and bonus,

that advance to be paid off as and when that pay and bonus fell due. Now, if this is a plea that the promissory-note was not payable on demand

and was not enforceable until the pay and bonus became due, i.e., was not enforceable until it was discharged and was, therefore, never really

enforceable at all, that would be a plea of a condition in defeasance of the on-demand contract and the District Munsif''s view would be perfectly

correct. But it is not that and the defendant himself admits so much. His plea is rather an admission that if the plaintiff chooses to sue before the pay

and bonus were due then he cannot resist the demand but if the plaintiff chooses to delay his suit until the. pay and bonus had fallen due, then the

promissory-note is in fact discharged because the plaintiff agreed to allow that pay and bonus to be credited towards the promissory-note debt.

That that was the case between the parties from the first, is clear from the fact that the first issue in the case was whether the discharge pleaded is

true, the defence being treated not as plea of non-enforceability of the note, but as a plea of discharge, and it was until another District Munsif took

up the case that the third issue was framed, namely, whether the written statement discloses any valid defence. Now, as the plaintiff has on the

defendant''s case deferred his suit until the pay and bonus were due from him to the defendant, we can see no bar u/s 92 of the Indian Evidence

Act against the proof of this agreement. It is not in any sense an alteration of the original terms of the contract. It is for the purposes of the present

defence a mere agreement as to the method of payment proveable and enforceable when a state of affairs is reached where it does not conflict

with the on-demand condition in the promissory-note. The note is still and has always been payable on-demand; but when in answer to the

demand the defendant is in a position to say that he has already discharged the note according to the method agreed upon between the plaintiff and

himself, there can be no bar u/s 92 to prevent proof of that agreement.

In this view, no question of legal or equitable set off will arise. If it is proved that there was an agreement that the note should be discharged in

that way, then the note is either discharged or it is not, and the correct issue for decision in the case is Issue-I--whether the discharge pleaded is

true?

The defendant has also put forward a plea of general set off against the plaintiff that the plaintiff owed him various sums of money amounting to

much more than the promissory-note amount and that, therefore, the promissory-note amount is not owing. But he did not in the first Court pay

any fee on the amount claimed by him as a set off and the District Munsif, therefore, refused to entertain that plea. The defendant did not appeal on

that ground and he never urged that ground before the lower Appellate Court. We are not prepared, therefore, to allow him to take the point here

in appeal, nor need we deal also with the further ground put forward by him that this promissory note was merely an item in a series of running

accounts that being a point which he also never put forward before the lower Appellate Court. We are here concerned only with the question

whether the lower Appellate Court''s order of remand is a proper one. We are of opinion for the reasons given above that it was and that the suit

after remand should be dealt with by the first Court on the lines that we have indicated above. We, therefore, dismiss this appeal with costs.