Srinivasa Gounder vs Kannu Gounder

(1) This revision has been filed under the Provincial Small Cause Courts Act by the plaintiff whose suit as against the first defendant was dismissed

by the learned District Munsif of Tirupattur. The plaintiff filed the suit as the endorsee of a promissory note Ex. A-1 dated 27-7-1959, the

endorsement in his favour being by the second defendant, the original payee, by Ex. A-3 dated 3-5-1960. On 6-9-1961, both the plaintiff and the

second defendant, the original payee, issued a notice to the maker for the money due under the promissory note and to this the plaintiff got a reply

from the first defendant of payment and discharge of the promissory note on 7-6-1960, the payment being made to the plaintiff''s endorser, the

original payee and second defendant in the suit. The trial Court held that the assignment of the promissory note in favour of the plaintiff was true

and supported by consideration. However in regard to the plaintiff''s claim for a decree against both the defendants, that is the maker and the

original payee, the court held that the first defendant, the maker, could not be held responsible or liable for the suit amount. A decree has been

given only against the second defendant.

(2) The learned counsel, Sri T. R. Ramachandran, for the petitioner-plaintiff, contends that the lower court ought to have granted a decree in this

case against the first defendant also. It is pointed out that the first defendant had no right to pay the amount due under the promissory note to the

second defendant without the second defendant producing the promissory note for cancellation. It is submitted that this act of the first defendant is

negligence and he can plead no equity or justification for the payment in question. The learned counsel submitted that the fact that notice was issued

by the plaintiff later than the alleged discharge is neither here nor there, because it is the duty of the maker to call upon the payee to produce the

promissory note when making payment to him. In this connection the learned counsel drew my attention to two judgments of this court. In Alapati

Venkata Krishniah Vs. Vemuri Manikyarau, , Rajamannar J.(as he then was), the facts were the promisee under a promissory note payable on

demand, not payable at a particular place transferred the note for consideration to the plaintiff. After the transfer the promisor paid off the original

promisee, but instead of obtaining delivery of the note, or an indemnity against any further claim thereon, obtained merely a receipt. There was

neither a presentment of the note nor a notice of assignment within a reasonable time. In a suit on the note by the transferee impleading the

promisor and the transferor it was held by the learned Judge that according to S. 64 of the Negotiable Instruments Act, no presentment was

necessary in order to charge the maker, and there could be no rule of thumb to determine the reasonable time for giving notice of the assignment.

Further it was held that as there was clearly negligence on the part of the maker he cannot be allowed to plead absence of notice to the action by a

holder in due course. This decision answers the contention of the counsel for the respondent that the plaintiff ought to have, immediately after the

assignment, given notice to the first defendant.

(3) The other decision relied upon by the learned counsel for the petitioner is the Bench decision in Nunna Gopalan Vs. Vuppuluri

Lakshminarasamma, . The headnote there reads thus:

A maker of a promissory note payable on demand left the promissory note in the hands of the payee after making payment thereon. No demand

had been made on the promissory note. After receipt of such payment the payee indorsed the promissory note to another who had no knowledge

of the fact of payment. In a suit by the indorsee against the payee and the maker, the question arose as to whether a decree could be passed

against the maker also.

Held: that such a decree could be passed under the provisions of the Negotiable Instruments Act. The principle laid down in Lickbarrow v.

Mason, (1787) 2 Term Rep. 63 :100 E.R. 35, that whenever one of two innocent persons must suffer by the acts of a third he who has enabled

the third person to occasion the loss must sustain it, also applied.

(4) In the light of these decisions and in view of the conduct of the first defendant, there can be absolutely no doubt about the liability of the first

defendant also to the plaintiff''s claim. In the result, the revision succeeds. There will be a decree in the suit against the first defendant also with

costs one set only against both the defendants. The parties will bear their respective costs in this court. This revision is allowed accordingly.

(5) Revision allowed.