A valid discharge for a promissory note can only be given by the payee or the holder thereof, as per Section 78 of the Negotiable Instruments Act.

Kunhi Raman, J.

1. The plaintiff is the petitioner. He claimed to be the beneficial owner of the amount for which a promissory note was executed by the second defendant in favour of the first defendant. The trial Court has disbelieved the plaintiffs case against the first defendant. The finding of the trial Court is recorded in these terms:

I find disbelieving the evidence on behalf of plaintiff that the arrangement set up by plaintiff with reference to the suit pronote, Ex. B is not true, that first defendant had nothing to do with it, that she was not a trustee in respect thereof, and that she cannot be in any manner made liable for the amount due on the pronote Ex. B.

2. This finding so far as the first defendant is concerned cannot be seriously questioned, seeing that it is a finding of fact which is based upon the evidence placed before the trial Court....

3. At the trial, the plaintiff wanted a decree against the second defendant on this promissory note. The trial Court has held following certain decisions of this High Court that in view of the provisions of Section 78 of the Negotiable Instruments Act, since the plaintiff was neither the payee nor the holder of the promissory note in question, a decree could not be passed in plaintiffs favour and against the maker of the promissory note. This finding of the trial Court is attacked by the learned Advocate for the plaintiff-petitioner. He relies upon the decisions reported in Surajman Prasad Misra v. Sadanand Misra I.L.R (1932) 11 Pat. 616, Sewa Ram v. Hoti Lal I.L.R (1930) 53 All. 5, Brojo Lal Saha Banikya v. Budh Nath Pyarilal and Co. I.L.R (1927) 55 Cal. 551 and argues that, although a valid discharge in respect of a promissory note can be given only by the payee or the holder thereof, yet when the maker of the note, the holder of the note and the person who alleges that he is beneficially entitled to the amount of the note are all before Court, there is nothing wrong in the Court deciding the question of benami raised by the parties and passing a decree in favour of the beneficial owner, if it is satisfied that his version is really true. It is not possible for me to accept these contentions in view of the observations contained in the Full Bench decision of this High Court reported in Subba Narayana Vathiar v. Ramaswami Aiyar (1906)16MLJ508 and the decision reported in Chinna Kuzhandai v. Kushandai Veeraswami (1934) 68 M.L.J. 713 : A.I.R. 1935 Mad. 312 This High Court has consistently taken the view that Section 78 of the Negotiable Instruments Act should be strictly construed and that a valid discharge can be given only by the payee of a promissory note or the holder thereof, there being no such thing for this purpose as a benami promissory note taken in the name of one person but really meant for the benefit of another. In these circumstances especially in view of the frame of the suit I am not satisfied that the decision of the trial Court is wrong. The Civil Revision Petition is accordingly dismissed with costs, one set.