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HIGH COURT OF CALCUTTA
Harries, Banerjee
DUNGARMULL KISSENLAL - Appellant
Versus
SAMBHU CHARAN PANDEY - Respondent
A. F. O. D. 107 Of 1950
Decided On : FEBRUARY 13, 1951
NEGOTIABLE INSTRUMENTS ACT, 1881 - SECTIONS 46, 69, 70, 76, 92 - PROMISSORY NOTE - CONSIDERATION - ORAL AGREEMENT - HOLDER IN DUE COURSE - PRESENTMENT - SPECIFIED PLACE - PART PAYMENT.
Fact of the Case:
The plaintiff brought a suit for recovery of Rs. 2057-8-0 being principal and interest due under a promissory note made by defendant 2 in favor of defendant 1 and endorsed by the latter in favor of the plaintiff. The suit was filed under Order 37, Civil P. C. Defendant 1 took no steps to defend the suit but defendant 2 applied for and obtained leave to defend the suit. The main issue before the court was whether defendant 2 as the maker of the note was liable to the plaintiff to whom the note had been endorsed by defendant 1, the promisee.
Finding of the Court:
1. The promissory note was executed for consideration and the plaintiff gave consideration for the endorsement of the note in his favor. 2. The oral agreement alleged by defendant 2 merely postponed the time for payment and did not affect the immediate liability which arose on execution of the note. 3. The plaintiff was a holder in due course as he had no notice of the alleged agreement and had given consideration for the note. 4. The note was not payable at a specified place and therefore presentment was not necessary.
Issues: 1. Whether the promissory note was executed for consideration? 2. Whether the plaintiff gave consideration for the endorsement of the note in his favor? 3. Whether the oral agreement alleged by defendant 2 affected the immediate liability which arose on execution of the note? 4. Whether the plaintiff was a holder in due course? 5. Whether the note was payable at a specified place and therefore presentment was necessary?
Ratio Decidendi: 1. The court held that the promissory note was executed for consideration as it was given in consideration of services rendered by defendant 1 to defendant 2 and the firm of which defendant 2 was a partner. 2. The court held that the plaintiff gave consideration for the endorsement of the note in his favor as he paid Rs. 2000 to defendant 1 for the note. 3. The court held that the oral agreement alleged by defendant 2 merely postponed the time for payment and did not affect the immediate liability which arose on execution of the note. The court relied on the case of Ramjibun Serowgy v. Oghore Nath, 25 Cal. 401: (2 C. W. N. 188) and Rowland Ady v. Administrator General of Burma, A. I. R. (25) 1938 P. C. 198 : (32 S. L. R. 810) to hold that an oral agreement which has the effect of varying the terms of a written contract is inadmissible in evidence. 4. The court held that the plaintiff was a holder in due course as he had no notice of the alleged agreement and had given consideration for the note. The court relied on the case of Vishnu Ramchandra v. Ganesh Krishna, I. L. R. 45 Bom. 1155 : (A. I. R. (8) 1921 Bom. 449) to hold that an agreement rendering liability conditional on the happening of an event is binding between the parties to the note and any holder of the instrument other than a holder in due course. 5. The court held that the note was not payable at a specified place and therefore presentment was not necessary. The court held that the city of Calcutta cannot be regarded as a specified place within the meaning of Section 69 of the Negotiable Instruments Act, 1881.
Final Decision: The appeal was allowed. The decree of the lower court was set aside and the plaintiff's suit was decreed for the amount claimed with costs.
( 1 ) THIS is an appeal from a judgment and decree of Bose J. sitting on the Original Side, dated 6-4-1950, by which he dismissed a suit for the recovery of money said to be due under a promissory note.
( 2 ) THE plaintiff brought the suit giving rise to this appeal for the recovery of Rs. 2057-8-0 being principal and interest due under a promissory note made by defedant 2 in favour of defedant 1 and endorsed by the latter in favour of the plaintiff The suit was filed under Order 37, Civil P. C. , on 8-7-1946. defedant 1 took no steps to defend the suit but defedant 2 applied for and obtained leave to defend the suit and the only matter before Bose J. was as to whether defedant 2 as the maker of the note was liable to the plaintiff to whom the note had been endorsed by defedant 1, the promisee.
( 3 ) IN the plaint the plaintiff was described as a firm registered under the Partnership Act and as such was entitled to bring the suit in the name of the firm. In the plaint it is pleaded that defedant 2 executed the promissory note in favour of defedant 1 the note being said to be for Rs. 2,000 payable on demand and bearing interest at the rate of six per cent per annum. According to the plaint the note which was executed on 7-1-1946, was endorsed by the promisee defedant 1 in favour of the plaintiff for valuable consideration on 2-4-1946. On 28-5-1946 it is said that the plaintiff demanded payment from defedant 2 but the latter refused to pay and notice of dishonour was duly given. The amount due was said to be Rupees 2057-8-0, being Rs. 2,000 principal and Rs. 57-8-0 interest. The claim was therefore made against both the defts. for this sum.
( 4 ) IN the written statement filed by defedant 2 the latter did not admit that the plaintiff was a registered firm and further denied that there was any consideration for the making or for the endorsement of the note. It was further pleaded that the plaintiff was not a holder in due course and that the promissory note was made on the condition that the amount thereof would only be payable to the promisee out of moneys if any received by the maker as his share of the profits of a firm known as B. Mukherjee and Co. in which the maker and others were interested and which was then being wound up and the accounts of which were being taken. It was pleaded that the accounts of that partnership firm had not been taken and therefore liability under the note had not yet arisen. The suit was therefore premature. It was pleaded that the plaintiff was aware of the terms and conditions upon which this promissory note was executed and in the alternative of the fact that there was no consideration for the making of the promissory note. There was a denial that the plaintiff gave any consideration for the endorsement of the promissory note in his favour. It was stated that the endorsement if any was obtained by the plaintiff fraudulently and in collusion with the promisee with intent to cause injury to the maker thereof namely defedant 2. Want of presentment was not pleaded but it was pleaded that the plaint disclosed no cause of action. It was later contended that presentation was necessary and as it was not pleaded in the plaint the latter document disclosed on (no?) cause of action.
( 5 ) THE following issues were framed by the learned Judge: (1) Is the plaintiff firm a registered firm? (2) Was there consideration for the making or endorsement of the promissory note in suit ? (3) Was the promissory note made on the terms and conditions as alleged in para. 4 of the written statement and had the plaintiff notice thereof? Can such terms and conditions be proved or are they admissible in evidence ? (4) Is the plaintiff a holder in due course of the Promissory Note ? (5) Does the plaint disclose any cause of action in the absence of pleadings as to presentment of the promissory note to the defedant 2 ? (6) To what reliefs, if any, is the plaintiff entitled ?
( 6 ) THE learned Judge was sati
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