Palaniappa Chetty – Appellant
Versus
Arunachellam Chetty – Respondent
1. The question in the appeal is whether the hundi, Exhibit B, for Rs. 1,000 was accepted by the plaintiff in part satisfaction of the amount due. The established rule is that a bill of exchange or hundi given for a debt operates only as a conditional discharge of the debt see Jambu Chetty v. Palaniappa Chettiar I.L.R. (1903) M. 526 although it might be proved that in any particular case it was taken unconditionally in satisfaction of a debt. In this case the hundi was drawn by the defendant on his uncle in favour of a third person to whom the plaintiff had to pay money. That person was under no obligation to present it for payment to the drawee nor is there any evidence that when the hundi was drawn he discharged the plaintiff from the liability to pay him his debt. It is extremely improbable that the plaintiff would unconditionally accept the hundi in part payment of the debt under these circumstances. No doubt the fact that payment of Rs. 1,000 was endorsed on the original pro-note executed by the defendants father to the plaintiff is in favor of the view that the hundi was accepted unconditionally. But it has been held that the execution of a formal receipt for the amou
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