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Judgment
Munro, J.—The suit was on a promissory-note, execution of which was admitted by the appellant who, however, contended that he
received no consideration for it. The Subordinate Judge on appeal held that on the appellant''s own admission the plaintiff was entitled to a decree.
Now what the appellant admitted is contained in paragraph 3 of his written statement. He there says that the plaintiff and one Narayana Iyer a
Police Inspector had money dealings, that they were unwilling"" that any written documents should pass between them because of the official
position of Narayana Iyer, and that at the request of both of them he executed the suit note as a mere name-lender. The Subordinate Judge on this
observed that the first defendant was liable because, although the consideration did not pass to him, it did pass to his friend. Now the definition of
consideration is to be found in Section 2(d) of the Indian Contract Act and that definition shows that consideration means an act, abstinence or
promise made by the promisee or some other person at the desire of the promisor. The appellant does not admit that the promisee did anything, at
his request and on his mere admission it cannot be held that so far as he is concerned, there was consideration for the note. I would, therefore,
reverse the decree of the Subordinate Judge and remand the appeal for disposal on the merits. Costs will abide the result.
Abdur Rabim, J.
To a suit on a promissory-note the defendant-appellant''s answer was that he executed the note as a ''mere name-lender'' for a friend of his to
whom the plaintiff, the payee mentioned in the note, advanced a certain sum of money and that the defendant so executed the promissory-note at
the request made to him by his friend and the plaintiff. The Subordinate Judge held that this was no defence at all and the learned pleader for the
respondent has cited Subba Narayana Vathiyar v. Ramasami Iyer 1 M.L.J. 377 in support of the judgment of the lower appellate Court. In that
case, however, the only point decided was that in a suit instituted on a negotiable instrument by a payee named therein or the indorsee, it is not
open to the defendant to plead that such a payee or indorsee was mere benamidar and the learned Judges based their ruling on Sections 8 and 78
of the Negotiable Instruments Act which in their opinion merely embody the law-merchant governing Negotiable Instruments as enunciated in
certain English decisions. Bat Sections 8 and 78 have no application to the present question nor have we been referred) to any English authority in
support of the respondent''s contention. On the other hand Section 43 of the Act in so many words permits the defendant to resist the suit on the
ground that the note was made without consideration. It is true that the sum mentioned in the note was paid by the plaintiff to a friend of the
defendant but as pointed out by the learned Vakil for the defendant who is the appellant before us, there is no admission in the written statement,
that the money was advanced at the request of the defendant. That being so, it could not be said that there was consideration for the promissory-
note so far as the defendant is concerned and that is made clear by the definition of consideration as given in Section 2 of the Indian Contract Act.
Justice obviously requires that a plea like this if made out should prevail and no rights of any transferee for consideration being involved, it does not
seem to me that any principle of law-merchant relating to Negotiable Instruments requires that such a plea should be barred. It also appears to me
that it is open to the defendant to show that he signed the promissory-note as a mere ''name-lender'' which, I take it, means that it was agreed that
he was not to be sued upon it. But this point has not been raised before us by the learned Vakil for the appellant and it is, therefore, not necessary
to express a decided opinion upon it.
I agree in the order proposed by my learned brother.