HIGH COURT OF CALCUTTA
G. K. Mitter
C. C. SINHA - Appellant
Versus
BIDHU BHUSAN DE - Respondent
Suit 3761 Of 1952
Decided On : AUGUST 31, 1954
NEGOTIABLE INSTRUMENTS ACT - SECTION 5 - Hundi - Definition - Acceptance - Liability of Acceptor - Promissory Note - Distinction - Construction of Document.
Fact of the Case:
Plaintiff sued Defendant 1 and Defendant 2 on a document described as a Hundi for Rs. 3,300. Defendant 1 denied accepting the Hundi and contended that the instrument was not a bill of exchange. Defendant 2 did not appear.
Finding of the Court:
The document was not a bill of exchange within the meaning of Section 5 of the Negotiable Instruments Act, as it did not contain an unconditional order to pay a certain sum of money to a certain person or to the order of a certain person. The acceptance of Defendant 1 did not make the document a bill of exchange, as there was no direction to Defendant 1 to pay the money.
Issues: 1. Whether the document in suit was a Hundi? 2. Whether Defendant 1 accepted the Hundi and was bound by it? 3. Whether the Hundi was presented to Defendant 1 and dishonored by non-payment?
Ratio Decidendi: 1. A bill of exchange, as defined in Section 5 of the Negotiable Instruments Act, requires an unconditional order to pay a certain sum of money to a certain person or to the order of a certain person. The document in suit did not contain such an order, and therefore was not a bill of exchange. 2. Acceptance of a bill of exchange requires a direction to the acceptor to pay the money. In the present case, there was no such direction to Defendant 1, and therefore his acceptance did not make the document a bill of exchange. 3. The document could be construed as a promissory note, as it contained an unconditional promise to pay a certain sum of money to a certain person or to the order of a certain person. However, the suit was framed as an action on a bill of exchange, and therefore could not succeed.
Final Decision: The suit was dismissed, but no order was made as to costs.
( 1 ) THIS is a suit for the recovery of Rs. 3316/8/- against two defendants on the basis of a document described in the plaint as a Hundi dated 13-2-1952 for a sum of Rs. 3,300. 00.
( 2 ) IT is alleged in the plaint that the Hundi was drawn by Biswanath Nath, defendant 2, and accepted by defendant 1 Bidliu Bhusan De at the plaintiff's place of residence at Calcutta within, the jurisdiction of this Court. It is further alleged that the Hundi was duly presented to defendant 1 for payment on maturity but was dishonoured by nonpayment and notice thereof was duly given.
( 3 ) DEFENDANT 2 did not enter appearance in this suit. Defendant 1 put in his written statement on 1-9-1053. The suit having been filed under the provisions of Order 37, Civil P. C. an application was made for leave to defend. Such leave was given to defendant 1 but not to defendant 2 and the suit was decreed ex parte as against him. By his written statement defendant 1 denies that he accepted the Hundi as alleged in the plaint or at all. He further states that the instrument was not a Hundi and that he was never under any liability under the said Hundi nor was it ever presented for payment. It is also contended that the document was not a bill of exchange within the meaning of Section 5, Negotiable Instruments Act and that the plaintiff has no cause of action as against defendant 1.
( 4 ) THE document is made out on an embossed paper with Hundi stamp of ten annas on it and reads as follows:"rs. 3,300/- 10as. Sixty days after date without grace I promise to pay to Mr. C. C. Sinha of No. 35a, Simla Street, Calcutta-6 or order the sum of Rupees three thousand and three hundred (Rs. 3300/-) only for value received in cash at Calcutta. Accepted. Bidhu Bhushan De Biswanath Nath of 2/a Camac St. , of 35 Tangra Road suits No. 4 Calcutta 15 cal. 13/2/1952 13/2/1952. "
( 5 ) IT appears that the word 'order' in the body of the instrument was put in later and the word which formerly stood in its place was the word bearer".
( 6 ) THE following issues were settled for determination:1. Is the document in a suit a Hundi? Did defendant 1 De accept the said Hundi? Is he bound thereby? 2. Was the Hundi presented to defendant 1? Was it dishonoured by non-payment? 3. To what relief, if any, is the plaintiff entitled?
( 7 ) THE plaintiff, went into the witness box first and he stated that there had been monetary transactions between him and the defendants and that he had lent out Rs. 3,300. 00 to the defendant Nath. In answer to Q. 5 he said "mr. Nath approached me along with Mr. De for a loan of Rs. 3,300. 00 and they made out a hundi for the said amount. " Witness then proved the document in suit. He said that it was drawn at his house, 35a Simla Street in his presence and that the acceptor Mr. De also signed it in his presence. Witness stated that sixty days after the date of the document i. e. , on 13/4/1952, he had gone to the defendant De's place at 2/a Camac Street and asked him to honour it. According to the witness, the defendant De did not give him a direct answer as to whether he would onour the document or not but on the next day when the plaintiff called on him again, he was told that the defendant was not going to pay the amount mentioned in the document. The plaintiff then went to the other defendant Nath but he also refused to pay. An attempt Was made to prove a copy of a letter served on the defendant De through the plaintiff's solicitor but ultimately no such document was proved. The witness was asked in cross-examination as to who wrote out the word "accepted", which appeared over the signature of Bidhu Bhusan De and his answer was that he could not say in whose handwriting the word was written. In answer to the next question, i. e. , question 52, he said that he remembered having seen, Bidhu Bhusan De, the defendant putting his signature but he could not be sure as to who had written the word 'accepted'. With regard to the crossing out pf the
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