A benamidar cannot sue on a negotiable instrument without impleading the beneficiary, and if the plaintiff initially takes the stand that he is the real creditor but later claims to be merely a benamidar, the defendant may be prejudiced and the suit may be dismissed.

Tek Chand, J.

1. This is plaintiffs appeal from the judgment and decree of Subordinate Judge First Class who dismissed his suit which was for the recovery of Rs. 27,250 inclusive of interest, on the basis of a pronote for Rs. 25,000 dated 13th of May, 1949. There are three defendants in this case. Defendant No. 1 is the partnership firm Amin Chand Mohan Lal and defendant Nos. 2 and 3 are the two partners Mohan Lal Sayal, and Amin Chand Puri. According to the plaint, Moha Lal defendant No. 2 had executed a pronote (P/A) for Rs. 25,000 in favour of the plaintiff at Amritsar on 13th of May, 1949, for cash received, and agreed to pay the amount on demand with interest at 3 per cent per annum. It was stated that the amount had not been paid despite repeated demands. On this basis it was prayed that a decree for Rs. 27,250 be passed in plaintiffs favour against the defendants with costs and future interest. The suit was filed on the last day of limitation.

2. Amin Chand defendant No. 3 who is the principal contesting respondent before us, in his written statement, denied the above allegations and also raised a preliminary objection that the Court at Amritsar had no jurisdiction, as the alleged pronote was not executed at Amritsar. On merits, defendant No. 3 stated, that the pronote was never executed as alleged and even if execution was proved, he did not admit that defendant No. 2 had any authority to borrow any loan or execute any pronote on behalf of the firm, as under the terms of partnership, neither of the partners had any authority to raise a loan or execute a pronote. It was also pleaded that no cash was ever advanced by way of loan to the defendant and the partnership firm had been dissolved on 5th of May, 1950, and at the time of taking of the accounts there was no entry in the account books of the firm relating to the transaction in question.

3. It was then said, that the transaction was bogus and entered into without any consideration and with an ulterior object, and that further inquiries made by defendant No. 3 had revealed the following information. The defendant-firm used to supply to the military at Jullundur Cantonment certain articles on the basis of tender contracts entered into with "C. R. I. A. S. C.," Jullundur Cantonment. These initials stand for Commander Royal Indian Army Supply Corps. In that office P.W. 1 Sampuran Singh was a clerk who was known to wield a good deal of influence in the matter of securing contracts for the tenders, because of his friendship with the immediate officers concerned. Defendant Mohan Lal was on friendly terms with Sampuran Singh and the pronote appeared to have been executed by Mohan Lal in the name of the plaintiff as a benamidar as the plaintiff was stated to be a relative of Sampuran Singh. The plaintiff had no means to pay the sum of Rs. 25,000. He had not advanced any sum and the partnership did not stand in need of borrowing any amount. The pronote was written in order to enable Sampuran Singh to make an illegal gain for himself. In the alternative, it was also averred that Mohan Lal defendant might have executed the pronote without consideration after the dissolution of their firm in order to wreak vengeance on defendant No. 3. The partnership never stood in need of any loan. The firm, it was alleged, had been dissolved since 5th of May, 1950, and a deed of dissolution had bee executed.

4. Defendant No. 2 Mohan Lal also traversed the averments in the plaint. He added that in January, 1949, Sampuran Singh had assured him that he would help him in securing military contracts for the supply of potatoes and fruit at Ambala and onions at Jullundur, but Sampuran Singh had demanded a sum of Rs. 25,000 for securing the contracts. As the firm was not possessed of sufficient cash, Sampuran Singh got a pronote executed at Jullundur in favour of the plaintiff who was said to be his relative, for the illegal purpose of securing the contracts. At the time of the execution of th