Bapna (Actg.) C.J.—This is a second appeal by the defendant in a suit for recovery of money.

2. The respondent, Keshava Deo, instituted a suit in the Court of Civil Judge, Jaipur City, against Bhanwarlal and Gangaram for the recovery of Rs 200l/-as principal and Rs. 40/- as interest, on the allegation defendant No. 1 Bhanwarlal had borrowed Rs.2001/- from the plaintiff on 16th February, 1949, and had executed a pro note for the same, but he failed to pay the amount when called upon to do so. The suit was instituted on 18th April, 1949. Defendant No. 2 was impleaded as being also liable on the pro-note, as defendant No. 1 was alleged to have borrowed the amount on behalf of himself and defendant No. 2.

3. Bhanwarlal did not participate in the trial but defendant No. 2 Gangaram denied all the allegations in the plaint, and raised an objection that the pronote was not admissible in evidence owing to insufficiency of stamp.

4. On 6th January, 1951, the plaintiff filed an application for permission to amend his plaint so as to convert his suit as on the original cause of action of the loan. The Civil Judge dismissed the application and dismissed the suit on the ground that the pro-note being inadmissible, the plaintiff could not be permitted to prove the loan.

5. The plaintiff filed an appeal, and the learned Additional District Judge, Jaipur, by order of 4th April, 1952, allowed the appeal, set aside the Judgment and the decree of the lower court, and remanded the case after permitting amendment of the plaint so as to convert it into a claim on the original consideration of the advance of loan. The defendant has come in appeal.

6. The question whether, when a pronote is inadmissible in evidence, the plaintiff can be permitted to base his claim on the original cause of action, has been the subject controversy among the various High Courts. The cases can be broadly divided into two classes:—

(1) Where the pronote is executed in respect of an anterior claim; and

(2) Where the loan is contemporaneous with the execution of the pronote.

In respect of the first class of cases, the law is now settled that if a pronote is not admissible in evidence,the plaintiff can be permuted to fall back on the original cause of action, provided it is within limitation. In respect if the second class of cases, the consensus of opinion is that if the advance of loan is followed by the execution of a pronote, the latter is only a security for the due payment of the loan, and only purports to postpone the remedy till the maturity of the pronote, and while the terms of the pronote, which is inadmissible in evidence, may not be proved, the fact of the loan can be relied upon to support the claim. We now proceed to examine some of the leading cases in this behalf.

7. The earliest case, which has been frequently referred to in later decisions, is Sheikh Akbar vs. Sheikh Khan (I). Garth, C. J., enunciated two propositions: (1) "when a cause of action for money is once complete in itself, whether for goods sold, or for money lent, or for any other claim, and debtor then gives a bill or note to the creditor for payment of the money at a future time, the creditor, if the bill or note is not paid at maturity, may always, as a rule, sue for the original consideration, provided that he has not endorsed or lost or parted with the bill or note, under such circumstances as to make the debtor liable upon it to some third person. In such cases the bill or note is said to be taken by the creditor on account of the debt, and if it is not paid at maturity, the creditor may disregard the bill or note and sue for the original consideration". (2) "But when the original cause of action is the bill or the note itself and does not exist independently of it, as for instance, when, in consideration of A as depositing money with B,B contracts by a promissory note to repay it with interest at six months date, here there is no cause of action for money lent, or otherwise than upon the note itse

Click Here to Read the rest of this document