The central legal point established in the judgment is the application of Section 78 of the Negotiable Instruments Act and the principle of undisclosed principal in the context of a promissory note.

Pakenham Walsh, J.

1. In this case the plaintiff sued on a promissory note executed by the first defendant in favour of the second defendant. The plaintiffs claim was that the promissory note was executed in favour of the second defendant benami for herself. The trial Court dismissed the suit as not maintainable, and against this order of dismissal the present Revision Petition has been filed.

2. No direct authority of this Court has been quoted to me but there is an obiter remark of a Full Bench in Subba Narayana Vathiar v. Ramaswami Aiyar I.L.R. (1906) Mad. 88 : 16 M.L.J. 508 which supports the view of the learned District Munsif. That was a suit in which the payee sued the maker of the note who pleaded that the note had been executed in plaintiffs favour only benami for one K and that it had been discharged by payment to the person really interested. It was held by the Bench that evidence to this effect could not be adduced by the defendant. That case is of course different from the present which comes directly under Section 78 of the Negotiable Instruments Act. The learned Judges in Subba Narayana Vathiyar v. Ramaswami Aiyar I.L.R.(1906)Mad. 88 : 16 M.L.J. 508 however, proceeded to remark. We cannot find any English case in which an undisclosed principal has attempted to sue on a negotiable instrument, and we think that the decisions clearly established that an undisclosed principal could not be sued.

3. The petitioner relies on a case reported in Brojo Lai Saha Banikya v. Budh Naih Pyarilal and Co. I.L.R. (1927) Cal. 551, but unfortunately the remarks there are equally obiter. In that case one P.L. who was the holder of a promissory note sued thereon in the name of his firm and it was held that the names of the four persons who were partners of that firm might be taken to have been specifically stated in the plaint and all of them might be considered to have joined as plaintiffs, and that there was no objection to the suit merely because the plaintiff had joined the other partners with him. Ghose, J. at page 559 observes:

This is sufficient for the purpose of deciding the case. But I think it is right that I should express my opinion with regard to the point which has been dealt with by the Subordinate Judge, as the question has been very elaborately argued by the learned Advocates on both sides.

4. Turning to page 555 we find that the point dealt with by the learned Judge was whether the true owner of the money can also maintain the suit and he answered it in the affirmative. Ghose, J. then proceeds to consider this question and disagrees with the view taken in Subba Narayana Vathiyar v. Ramaswami Aiyar I.L.R. (1906) Mad. 88 : 16 M.L.J. 508 . But it may be noted that he does not go further than this position which he states at page 562:

I have already stated it will do no harm to anybody, if the real owner is held to be entitled to sue if he is capable of giving a good discharge to the debtor from the holder of the instrument. In the present case, the holder of the instrument, Puarilal Das, has given evidence that the money belongs to all the members of the firm, and it has been found that the defendant was aware of it. He was willing to give a discharge to the defendant.

5. In the case before me it is admitted that the plaintiff is not capable of giving a discharge to the first defendant the maker of the promissory note but the argument is that she could give a discharge by bringing the payee into Court along with the first defendant and getting an order from the Court. So that even the obiter remarks in Brojo Lai Saha Banikya v. Budh Nath Pyarilal anf Co. I.L.R.(1927) Cal. 551 do not go as far as the present petitioner requires the Court to proceed.

6. There is one case of a single Judge in Saruj Singh v. Deosaran Singh AIR1930Pat313 which does go to this length. The only difference between that case and the present is that in that case the payee whose name appeared in the promissory note admitted the plaintiffs claim