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1871 Supreme(Cal) 52

CALCUTTA HIGH COURT
Somarimull - Appellant
Versus
Bhairo Das Johury - Respondent
Decided On : 31-03-1871

Headnote:

Notice of Dishonor - Bill of Exchange - [Indian Contract Act, 1872, Section 123] - The court held that the defendant was liable on the bill of exchange as the endorsee, even though the plaintiff had not given formal notice of dishonor to the defendant on the day the bill matured. The court reasoned that the defendant had consented to delay payment until the following day, and that the plaintiff had given notice of dishonor on that day. The court also held that the plaintiff was entitled to recover the amount of the bill from the defendant, as the defendant had not provided evidence of any custom requiring a specific form or time for notice of dishonor.

Fact of the Case:

The plaintiff, as endorsee, sued the defendant, his immediate endorser, on a bill of exchange for Rs. 2,500. The bill was drawn by Narayan Sing and Co. and accepted by Charles Nephew and Co. The bill matured on a Saturday, and the plaintiff's jemadar presented it to Charles Nephew and Co. for payment. The acceptors gave the jemadar a cheque, but the bank was closed. The jemadar informed the defendant, who was also an endorsee, about the situation. The defendant assured the jemadar that payment would be made on Monday. The plaintiff's gomasta, however, was not satisfied and demanded payment from the defendant. The defendant claimed that he would only pay if the hundi was presented to him on that day, but the court found this claim to be untrue.

Finding of the Court:

The court found that the defendant had consented to delay payment until Monday, and that the plaintiff had given notice of dishonor on that day. The court also found that the cheque given by the acceptors was a conditional payment, and that the liability on the original bill revived when the cheque was dishonored. The court further found that the defendant had not provided evidence of any custom requiring a specific form or time for notice of dishonor.

Issues: Whether the defendant was liable on the bill of exchange despite the plaintiff's failure to give formal notice of dishonor on the day the bill matured. Whether the cheque given by the acceptors operated as a payment of the bill. Whether the plaintiff was required to present the hundi to the defendant on the day it matured.

Ratio Decidendi: The court held that the defendant's consent to delay payment until Monday negated the need for formal notice of dishonor on the day the bill matured. The court also held that the cheque was a conditional payment, and that the liability on the original bill revived when the cheque was dishonored. The court further held that the defendant's failure to provide evidence of any custom requiring a specific form or time for notice of dishonor meant that the plaintiff's notice on Monday was sufficient.

Final Decision: The court ruled in favor of the plaintiff, granting a decree with costs.

JUDGMENT

Paul, J. - The plaintiff sues as endorsee his immediate endorser, the defendant, on a bill for Rs. 2,500 drawn by Narayan Sing and Co., and accepted by Charles Nephew and Co. There was an endorsement from Narayan Sing and Co. to the defendant prior to that of the defendant to the plaintiff. The facts of the case are few, but not wholly free from doubt. The bill became due on the 3rd December 1870 which was a Saturday. On that day the plaintiff, who was the then holder (having discounted the bill), sent his jemadar, Narayan Sing, to Charles Nephew and Co. to receive payment. The jemadar arrived during business hours, but it appears the bill was taken by Mr. Alcock, and a cheque given him about the time the banks usually close on a Saturday. Having received the cheque and given a receipt, he went and found the bank closed. The defendant admits he was similarly treated, and saw the plaintiff's jemadar at the Calcutta Bank. The bank being closed, the jemadar went back to Charles Nephew and Co., and represented that the cheque had not been paid, and demanded cash. He was not paid the cash, but was advised to go away, and it was stated that the cheque would be honored on Monday. He went away apparently satisfied, but the plaintiff's gomasta appears not to have been so satisfied, and sent him to the defendant to inform him that the hundi had not been paid, as the cheque could not be cashed, and required the defendant as his immediate endorsee to pay the amount of the hundi. There were two interviews on Saturday with Indu Mull. As to what took place at these interviews is differently stated by Indu Mull and the plaintiff's jemadar, Narayan Sing. I think the account given by the latter is the more truthful, though both the parties have exaggerated their case, Indu Mull having the greater motive for exaggeration. Narayan Sing says, Indu Mull said, do not fret yourself, you will get your money on Monday; if you do not, I am personally liable." Indoo Mull says he said, Produce the hundi, I will pay you at once; if you do not produce it now, I won't pay you tomorrow." I do not believe Indu Mull, or that the notion of repudiating his liability if the hundi were not presented to him on that day, occurred to him then. He was also the endorsee of a hundi for Rs. 7,000 which he had left with Messrs. Charles Nephew and Co., and had taken a cheque; and though he now says he took the cheque in full satisfaction, it is clear that that notion did not enter his mind then, as on Monday he gave notice to his immediate endorsee, and he admitted he did it to make the immediate endorsee liable. There is another circumstance which confirms Narayan Sing; he said Indu Mull told him he had a cheque for Rs. 7,000 not paid. Both were companions in misfortune, and one of them would hardly repudiate a hundi for Rs. 2,500, which repudiation affected his own hundi for Rs. 7,000. But Narayan Sing is not only less interested than Indu Mull, but when I consider that the latter individual has deliberately made a false statement, I must necessarily hold his credit impaired. I now proceed to show in what respect he has done so. Indu Mull said he never told Narayan Sing about the cheque for Rs. 7,000, and added he might have been told by some one; afterwards he said he met Narayan Sing at the bank. I do not believe Indu Mull acted as jemadar and went to the Calcutta Bank to receive payment of his hundi for Rs. 7,000. I believe Indu Mull told Narayan Sing that he had a hundi for Rs. 7,000, and I consider the former told a most deliberate falsehood as to a material fact, which goes to corroborate the plaintiff's story that both parties had made up their minds to wait till Monday. I have no doubt that Indu Mull gave Narayan Sing the assurance that he would be paid on Monday, and asked him to wait till then, but I do not believe he said anything as to the defendant's liability. I believe that Narayan Sing was petulant and querulous, and was only appeased by Indu Mull'

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