Subramania Iyer vs Narayanaswami Iyer

Odgers, J.—This is a suit on a promissory note executed by the defendant in favour of the plaintiff on the 13th February 1921 for Rs. 3,000

being the price of the plaintiff''s house and some building materials with interest at 10 annas per cent. per annum. The plaint alleges that the

defendant took possession of the house but refused to fulfil his obligation on the note. The question argued before me is that the defendant should

be allowed to give evidence of an oral condition which would obviate or suspend the obligation evidenced by the promissory note. It is argued

before me that the putting of the defendant into possession of this house was a condition precedent to the arising of an obligation under the note. It

is thus extremely important to find out, if it is possible to do so, from the very prolix written statement put in by the defendant, what exactly his

position was at the earliest possible moment in the case. In para. 5 of his written statement he says ""As the plaintiff did not find it convenient to

deliver possession of the said house to the defendant, the plaintiff told the defendant that he would purchase the house of one Razagopala Iyer and

go and reside there and that thereafter he would deliver possession of his own house and the building materials to the defendant and then receive

the said sale amount of Rs. 3,000 in cash and that till then he would not enforce the said note""; and again in the same paragraph ""the suit pro-note

was executed and delivered to the plaintiff subject to the condition precedent, that as a condition precedent to payment of the said sale amount,

etc., he should deliver possession etc.,"". At the end of the same paragraph: ""The suit promissory note was executed on the understanding and in the

belief that the plaintiff should not claim the amount under the suit note before he put the defendant in possession of the said house, tricks, etc.,

Again in para. 9: ""The plaintiff has not delivered possession as per Contract as a condition precedent to the suit promissory note coming into

operation"". Paragraph 10: ""The plaintiffs suit is pre-mature"". Then that is explained in para. 11: ""Though the plaintiff was well aware of the fact of

the defendant''s preparedness to make such payment, yet without putting the defendant in possession of any such thing, the suit has been filed, etc"".

It seems to me that on best consideration one can give to this somewhat rambling written statement that the agreement set up was that the

promissory note should not be enforced until possession was delivered. Both the lower Courts have come to the conclusion that the defendant is

not in law entitled to give evidence of any such oral agreement. The question is, are they right? Section 92, proviso 3 of the Indian Evidence Act

would apply if what is sought to be established is a condition precedent to the attaching of any obligation under the promissory note. Reference has

been made to Ramjibun Serowgy v. Aghore Nath Chatterjee 25 C. 401 : 2 C.W.N. 188 : 13 Ind. Dec. 266, where it is distinctly laid down,

though by a Single Judge, that an oral agreement purporting to provide that the promise to pay on demand in a promissory note, though absolute in

its terms, was not to be enforceable by suit till the happening of a particular event, i.e., that the legal obligation to perform the promise was to be

postponed, is not such an agreement as falls within the proviso 3 to Section 92 of the Evidence Act and in Vishnu Ramchandra v. Ganesh Krishna

63 Ind. Cas. 673 : 45 B. 1155 : 23 Bom. L.R. 488 the learned Judges held that an oral agreement whereby plaintiff is said to have agreed that he

would not present the note till certain events have happened cannot be brought within the terms of the proviso. Much stress had been laid on

Ahmed Saheb Bapu Saheb Kafre v. Ubhaiya Harsi 87 Ind. Cas. 37 : 25 Bom. L.R. 867 : A.I.R (1924).)44 not reported in the authorised series.

There the question is raised as to whether the promissory note was given by way of indemnity for a contingent liability and there ""seems to be some

doubt on the pleadings as to whether that was what the defendant had raised. But assuming it was so, the learned Judges came to the conclusion

that the defendant was entitled to establish his plea under proviso 3. The learned Judges in that case seem to have been in some doubt as to

whether the evidence should be admitted. But I think having regard to the cases in Ramjibun Serowgy v. Oghore Nath Chatterjee 25 C. 401 : 2

C.W.N. 188 : 13 Ind. Dec. (N.S.) 266 and Vishnu Ramchandra v. Ganesh Krishna 63 Ind. Cas. 673 : 45 B. 1155 : 23 Bom. L.R. 488, there is

no doubt in my mind that the law does not allow oral evidence to be given of such an agreement u/s 92, proviso 3 of the Evidence Act. The English

Law is to the same effect, as can be seen in Moseley v. Hanford (1830) 10 B. & C. 729 : 8 L.J.K.B. 261 : 109 E.R. 621, Rawson v. Walker

(1815) 1 Stark. 361 and Woodbridge v. Spooner (1819) 3 B. & Ald. 233 : 106 E.R. 617 : 1 Chitty 661 : 22 R.R. 365. In the latter case, the law

is thus expressed; ""where a promissory note, on the face of it, purported to be payable on demand, parol evidence is not admissible to show that

at the time of making it, it was agreed that it should not be payable till after the decease of the maker"". It is further remarkable that in this case on

the grounds of appeal to the lower Appellate Court, the defendant having failed in the first Court, no suggestion of this plea under proviso 3

appears. The only definite ground that is raised is ground No. 11 as to failure of consideration. It is further difficult to see that the ground has been

specifically raised in the grounds of appeal to this Court, though there is a general ground u/s 92. The sale-deed which bears the same date as the

promissory note further recites that the plaintiff has delivered possession of the house to the defendant. On all these grounds I am of opinion that

the judgment of the lower Appellate Court must be upheld and that the defendant is not entitled in law to give oral evidence of this condition by

which he says it was agreed to postpone the enforcement of the promissory note. The second appeal must be dismissed with costs.