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1978 Supreme(Mad) 382

IN THE HIGH COURT OF JUDICATURE AT MADRAS
V. Sethuraman, J.
M/s. M. M. Abbas Brothers and others …..Appellant(s)
Versus
Seth Chethandas Fathechand and another …..Respondent(s)
Appeal No. 746 of 1974.
Decided On : 21 June 1978

Advocates:
S. Gopalaratnam and P. N. Venugopalan, for Appellants.
N. Srivatsamani and R. Krishnaswami, for Respondents.

Other partners of the firm if can be held liable.

Headnote:Negotiable Instruments Act, 1881-Sections 26 and 27-Suit on promissory note executed by partner of the firm-Other partners of the firm if can be held liable.

       

JUDGMENT.- Defendants 2 to 4 in O. S. No. 2882 of 1971 in the City Civil Court at Madras are the appellants. The plaintiff filed the suit for recovery of Rs. 17,500 due under three promissory notes, two of which for Rs. 4,000 each, were executed on 11th January, 1969, and the third for Rs. 3,500 on 24th January, 1959. The promissory notes carried interest at 24 per cent per annum. They were executed by one Mallik on behalf of the first defendant. One Moshin Bhai has signed the promissory note as a joint executant and according to the plaintiff he was a partner in the second defendant-firm and had executed the three promissory notes only as such partner so that the second defendant firm, and the partners thereof, defendants 3 and 4, are jointly and severally liable for the debt.

2. The first defendant is a proprietary concern of one Khatija Bee. She filed a written statement stating that the plaintiff had advanced only Rs 7,000 in each, that a sum of Rs. 6,000 had been paid back and that only he balance of Rs. 1,000 was due on the promissory notes. The rate of interest viz., 24 per cent per annum shown in the promissory motes was said to be usurious and illegal.

3. Defendants 2 to 4 filed a common written statement for themselves. They did not admit the signature to be that of Moshin Bhai. He was said to have been ill and for about 2 or "3 years prior to his death, his memory was alleged to have failed. According to them, there was no need for any borrowal and no Amount had been brought into the firm’s Account on the relevant dates. They, therefore, contended that the promissory notes were not supported by consideration.

The following issues were framed:-

(1) Whether the pronotes are not fully supported by consideration ?

(2) What are the amounts actually advanced?

(3) Did the second defendant execute the pronote along with the first defendant ?

(4) Are not the defendants liable to pay the suit claim?

(5) To what relief?

The additional issue which was numbered as Issue No. 6 ran as follows:

(6) Are the suit promissory notes validly executed by the first defendant ?

4. The learned trial Judge held on issue No. 1 that the promissory notes were fully supported by consideration. On issue No. 3 it was held that the second defendant represented by Moshin Bhai, who was the partner, executed the promissory notes along with the first defendant represented by Mallik. On Issue No. 4 he held that the amounts due under the promissory notes would have to be paid by defendants 1 to 4 and on issue No. 5 that the plaintiff would be entitled to Rs. 11,500 being the principal advanced with interest at 12 per cent per annum as against defendants 1 to 4. On issue No. 6 the finding was that the validity of the promissory notes and their execution had not been contested in the written statement and that no evidence had been let in to substantiate the case, of absence of liability. The result was that there was a decree in favour of the plaintiff for Rs. 11500 with interest at 12 per cent per annum with proportionate costs. The first defendant has not filed any appeal and defendants 2 to 4 raised two points viz., whether there is proof that the three promissory notes are supported by consideration and that the signature of Moshin Bhai binds them. I shall first examine the question whether the promissory notes are supported by consideration.

5. On this point, as mentioned earlier, the first defendant had categorically accepted the execution of the promissory notes, while as regards the payment of consideration, it was stated that only Rs. 7,000 had been paid in cash as against Rs. 11,500 appearing on theface of the three promissory notes. The execution of the promissory notes on behalf of the first defendant is thus a matter of admission. As regards the second defendant it was stated that the signature is not that of Moshin Bhai. If the appellants had any doubt as regards the tame, one would have expected them to have replied to Exhibit A-4, which is the copy of

































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