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1984 Supreme(AP) 158

Andhra Pradesh High Court
Judges : V.RAMASWAMI
B.Venkataiah - Appellant
Versus
V.Venkata Ramana Reddy - Respondent
S.A.No. 1080/80
Decided On : 04-13-84
Advocates Appeared :
Mr. P. Pratap Reddy, Mr. K. Pratap Reddy

Headnote:STAMP ACT, Sec. 35 and Evidence Act, Sec. 91 - Borrowing of amount and execution of insufficiently stamped promissory note forming integral part of the same transaction - Suit for recovery Of amount on the basis of original cause of action - Liable to be dismissed.

       HELD : In this case, the plaintiff and his witnesses admitted in the cross-examination that the contract was executed at the same time and place and all the terms of the contract were reduced into writing in the promissory note. Even if it is assumed that the amount was taken in the first instance and all the terms of the contract therefore were reduced into writing later in the evening there was an accord and satisfaction of the debt and the liability to pay springs only on the promissory note. Since it was insufficiently stamped, the promissory note now became inadmissible and the terms thereof cannot be proved by adduction of oral evidence as being barred under Sec. 91 of the Evidence Act. Hence the right to lay the suit on the basis on the original cause of action falls to the ground and the suit was rightly dismissed by the Lower Appellate Court.

       S.A. Dismissed.

       

V. RAMASWAMI, J.

( 1 ) THE plaintiff is the appellant. The suit was instituted for the recovery of Rs. 9,150/ -. The trial Court decreed the suit and in appeal the decree was reversed and the suit was dismissed. Thus, the Second Appeal.

( 2 ) THE case of the appellant is that the respondent borrowed a sum of Rs. 9,150/- on Jan. 1, 1973 in the morning, and as a collateral security, he executed a promissory note in the evening and also passed on the receipt - Ex A1 - on the same date. In spite of the demand, the respondent did not pay the amount. Thus, he was constrained to lay the suit. In the written statement filed by the respondent, it is pleaded that the appellant is a professional money-lender and he is not possessed of the licence required under the Hyderabad Money-Lenders Act. He also pleaded that the promissory note is an integral part of the original cause of action and the suit is not based on the original cause of action. Since the promissory note is inadmissible in evidence, the suit is not maintainable. The trial Court upheld the plea of the appellant that the original cause of action arose in the morning independent of the promissory note and relying upon that fact it negatived the contention of the respondent that the appellant is a professional money lender, and decreed the suit. In the appeal filed by the Respondent, it was found by the appellate Court that the appellant did not expressly plead in the plaint that all the terms of the contract of loan were not incorporated in the pronote. He admitted that the suit transaction is an integral part of the contract. Therefore, since the promissory note is inadmissible in evidence, the suit is not maintainable. In that view, it dismissed the suit.

( 3 ) IN this Appeal, Shri P. Pratap Reddy, the learned Counsel for the appellant, strenuously contended that the view of the appellate Court is clearly in error in view of the decision of Kuppuswami, J. (as he then was) in L. Sardbasiva Rao v. T. Balakotiah, AIR 1973 Andh Pra 342 (FB), and in support thereof, he relied upon paras 76 to 79. The respondent s counsel, on the other hand, contended that whether the cause of action is based on the original contract or whether it is based on the pronote, is a finding of fact and the appellate Court considered the entire evidence and recorded the finding that the original cause of action and the promissory note are integral parts of one and the same contract and, therefore, since the promissory note is inadmissible in evidence, the suit is not maintainable and this finding is based on evidence on record and it does not call for interference in this appeal.

( 4 ) THE question, therefore, that arises for adjudication in this appeal is whether the suit is based on original cause of action or on the promissory note. In para 4 of the plaint, the appellant has stated that the respondent being in need of money, received a sum of Rs. 9,150/- on 7-1-1973, and as a collateral security, he executed a note on the same date and at the same place in favour of the appellant promising to pay the principal amount and interest thereon at 6%. The respondent also passed the receipt for the said amount in favour of the appellant on the same day and place. A reading of the para 4 of the plaint would clearly indicate that the borrowing and the execution of the promissory note are integral parts of the same transaction. Admittedly the promissory note is insufficiently stamped. Therefore, by operation of S. 35 of the Stamp Act, it is inadmissible. The question, therefore, is whether the appellant can rely upon the original cause of action of the borrowing. In this regard, a Full Bench of this Court has considered the position of law in L. Sambasiva Rao v. T. Balakotiah, AIR 1973 Andh Pra 342. Therein Obul Reddi, J. , (as he then was) speaking on behalf of the majority, held thus (as culled out in head note.)"a plaintiff can lay an action for recovery of the amount advanced by him basing on the original cau




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