The holder of a promissory note alone is entitled to maintain a suit for the recovery of the amount due thereon, and a true owner who is not a holder cannot maintain a suit on the promissory note, even though the holder is admittedly his benamidar and is made a party to the suit.

Ramaswami, J.

1. In the suit out of which this appeal arsse the plaintiffs claimed a sum of Rs. 2459 and odd from defendant 1 being the amount proportionate to his liability under a handnote. It was alleged that plaintiff 2, defendant 1 and Chandrika Prasad father of defendant 3 executed the handnote in favour of defendant 4, benamidar for plaintiff l who actually advanced the amount for which the handnote was executed. The handnote was executed on 30th magh 1342, after which there was separation in the joint family. Plaintiff 2 and the proforma defendant 3 paid off their respective share of the debt and the present suit is brought for the share due from defendant l on the handnote. The main ground of defence was that the handnote was not genuine, that no consideration passed and that the suit was not maintainable. The learned Subordinate Judge accepted the plaintiffs case and decreed the suit. This decree has been affirmed by the learned District Judge.

2. The first question to be determined in this appeal is whether the plaintiff who is not the holder of the promissory note can maintain a suit for the recovery of the amount due thereon even though the holder is admittedly the benamidar and is impleaded in the suit.

3. The answer to the question depends upon the construction of Sections 8 and 78, Negotiable Instruments Act.

4. Section 78 enacts that subject to the provisions of Section 82 (c), which do not apply in the present case,

"payment of the amount due as a promissory note, must in order to discharge the maker be made to the holder."

The section is imperative and in my opinion precludes the maker when sued upon the instrument from pleading discharge by payment to anyone but "the holder. Section 8 defines the "holder" as

"any parson entitled in his own name to the possession of the handnote and to receive or recover the amount due thereon from the parties thereto."

The use of the phrase "entitled in his name" is significant, and it is obvious that no one can claim the rights of a holder under the Act on the ground that the ostensible holder is a mere name lender. In this contest reference should be made to Sec.27 which provides that

"Every person capable of binding himself or of being bound, as mentioned in Sec.36, may so bind himself or be bound by a duly authorised agent acting in his name. A general authority to transact business and to receive and discharge debts does not confer upon an agent the power of accepting or indorsing bills of exchange so as to bind his principal. An authority to draw bills of exchange does not of itself import an authority to indorse."

5. Sec.32 is also important.

"In the absence of a contract to the contrary, the maker of a promissory note as the acceptor before maturity of a bill of exchange are bound to pay the amount thereof at maturity according to the apparent tenor of the note or acceptance respectively, and the acceptor of a bill of exchange at or after maturity ia bound to pay the amount thereof to the holder on demand. In default of such payment as aforesaid, such maker or acceptor is bound to compensate any party to the note or bill for any loss or damage sustained by him and caused by such default."

Upon a proper construction of these sections it is manifest that the maker of a promissory note can obtain the discharge of a debt by payment to the holder alone and be none else. It makes no difference whether the holder is a benamidar or is a true owner. To say that payment to any one except the holder of the handnote will (not?) discharge the debt is tantamount to saying that no one can recover the debt from the maker of the promissory note except the person in whose favour it is made or who is a holder thereof. By the use of the words "apparent tenor" Sec.32 makes it clear that payment in order to be a valid payment must be made to the person whose name appears on the face of the bill or note as entitled to demand payment.

6. In this context it is important to state tha