The execution of an insufficiently stamped promissory note does not bar a suit on the original consideration of the loan transaction, if the promissory note was not taken in absolute discharge of the loan or as an accord of full satisfaction of the loan transaction.

JUDGMENT - Gadgil B.C., J.: - Defendant No. 1 in Civil Suit No. 229 of 1964 of the file of the Civil Judge, Junior Division, Gondia, has preferred this second appeal against the decree for money passed in that suit. The said decree has been confirmed by the Assistant Judge, Bhandara, in Civil Appeal No. 54

of 1966.

2. Defendant No.1 had been carrying on business at Gondia in the name of “Tijulal Radhakisan”. The plaintiffs case, in brief, is that defendant No.2 was the Munim i. e. the manager of defendant No.1 and he was managing the business of defendant No.1 at Gondia. In his capacity as such manager. he, on 1-12-1961, took Rs. 2500 for and on behalf of defendant No.1 as a hand loan and agreed to pay interest at 9 per cent per annum. Thereafter it is stated in the plaint that defendant No.2 had executed a receipt which is on record as Ex. 31. The plaintiff demanded the amount from the defendants. He sent a notice(Ex. 34) to defendant No.1 on 28-7-1964 calling upon him to pay the amount. Defendant No.1 gave a reply on 3.8-1964 contending that he had no transaction with the plaintiff. The plaintiff thereafter sent notice(Ex. 32) dated 8-8-1964 to defendant No.2 informing him that defendant No. 1 had disowned the transaction. Defendant No.2 sent a reply dated 14-8-1964 that the transaction had been entered for and on behalf of defendant No.1 and as such defendant No.2 could not be liable. After this correspondence, the plaintiff filed the suit under appeal to recover the principal amount of Rs. 25.00 together with the interest of RS. 618.75 from defendant No.1. The suit was based on the original consideration and not on the receipt.

3. Defendant No.2 by his written statement(Ex. 15) contended that

he was one of the Munims or the managers of defendant No.1 at Gondia.

As far as the suit transaction was concerned, be alleged that the plaintiff had previously made a deposit with defendant No. ] of Rs. 2500 and that it was renewed from time to time. According to him, the receipt(Ex. 31) was a renewal and nothing more. The written statement of defendant No.1 is at Ex. 14. He contended that defendant No.2 had no authority to incur any

loan. According to him, no such loan was incurred as he was neither informed nor his consent or approval was taken by defendant No.2.

4. On these pleadings, the learned Civil Judge heard the suit. He accepted the plaintiffs version that defendant No.2 was an agent of defendant No.1 and in that capacity he was entitled to take loan for the principal i. e. defendant No.2. A finding was also recorded that on 1-12-1961 defendant No.2 did borrow Rs. 2500 for and on behalf of defendant No.1 and executed the receipt(Ex. 31). There were certain averments that the transaction was covered by the Bombay Moneyleaders Act and that the suit would be bad as the plaintiff did not possess a licence under that Act. This aspect, however, is not relevant at this stage. It was urged before the trial Court that the receipt(Ex. 31) would be a pronote and that it would not be admissible in evidence for insufficiency of stamp. This contention was accepted. Defendant No.1 had urged that the suit on the original consideration of a loan would not be tenable as the promissory note had wiped off the previous loan transaction. The learned Civil Judge held that this would not be the position. Thus, a decree was passed and that decree had been confirmed in appeal.

5. At the time of the arguments of this appeal, Me. Mehadia for the

appellant wanted to re-agitate the question as to whether defendant No.2

was authorised to take loan for and on behalf of defendant No.1 and whether

the amount of Rs. 2500 was actually so taken by defendant No.2. There are, however, questions of fact. The two Courts below, after appreciating the evidence led by the parties in that respect, reached to a conclusion in favour of the plaintiff. I was taken through the relevant evidence and I am satisfied that the finding:” are based upon good and cogent evidence. Hence the a

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