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PUNJAB & HARYANA HIGH COURT
G.L.Chopra and K.L.Gosain JJ.
F.Nanak Chand Ramkishan Das
Versus
Lal Chand Ganeshi Lal
Second Appeal No. 196 of 1950,
Decided On : JANUARY 8, 1958
NEGOTIABLE INSTRUMENTS ACT - NOTICE OF DISHONOUR - Hundi payable at sight - Notice of dishonour necessary - Drawer not liable in absence of notice - Sale of pledged goods - Pawnee not bound to sell within a particular time - No fresh notice of sale required if original notice sufficient.
Fact of the Case:
Plaintiffs filed a suit for recovery of Rs. 3,756/- from the defendants, alleging that the defendants had given a hundi for Rs. 5,894/4/- drawn on Messrs. Manohar Lal Ram Parshad, which was dishonoured by the drawee. The plaintiffs had obtained delivery of the goods covered by the railway receipt given as collateral security for the hundi and sold them, after giving credit for the amounts recovered, there remained an amount of Rs. 2.963/4/3 still due to the plaintiffs.
Finding of the Court:
1. A notice of dishonour was necessary in this case as the hundi had been presented for acceptance and had been dishonoured. 2. The notice of dishonour having not been given by the plaintiffs in reasonable time after the hundi had been dishonoured, the drawer is not liable and the suit against him must, therefore, be dismissed. 3. A pawnee may keep the goods as security for the debt due to him from the pawner, and although he has got the right to sell after notice to the pawner he is not bound to sell at any particular time. 4. The power of sale conferred on the pawnee is expressly for his benefit and he can exercise his discretion in favour of sale or otherwise.
Issues: 1. Whether a notice of dishonour was necessary in this case? 2. Whether the notice of dishonour was given by the plaintiffs in reasonable time after the hundi had been dishonoured? 3. Whether a pawnee is bound to sell the pledged goods within a particular time? 4. Whether a fresh notice of sale is required if the original notice is sufficient?
Ratio Decidendi: 1. A bill of exchange payable at sight may be, though not necessarily required by law, presented by the holder to the drawee for acceptance. If it is so presented, the holder must, if so required by the drawee, allow the drawee forty-eight hours (exclusive of public holidays) to consider whether he will accept it. If the drawee upon being required to accept the bill of exchange makes default in so acceptance, the bill shall be regarded as dishonoured by non-acceptance as contemplated by Section 91 of the Act. 2. Section 30 of the Negotiable Instruments Act, which deals with the liability of the drawer of a bill of exchange, is not to be read as subject to the provisions of Section 93, which deals with notice of dishonour. Section 30 is a general provision with respect to notice, and it applies to all cases of dishonour, whether by non-acceptance or by non-payment. 3. A pawnee is not bound to sell the pledged goods within a particular time. The power of sale conferred on the pawnee is expressly for his benefit and he can exercise his discretion in favour of sale or otherwise.
Final Decision: The appeal was dismissed and the cross-objections were also dismissed.
K.L.Gosain, J.
1. This second appeal is directed against the appellate decree of Shri Maharaj Kishore, District Judge, Hissar, confirming the decree of Shri P.K. Thukral, Sub-Judge 1st Class, Gur-gaon, by which the suit of the plaintin-appellants was dismissed on 18-5-1949.
2. Lal Chand and his sons Prabhu Dayal and Chuni Lal constituted a joint Hindu family and carried on their business under the name and style of Messrs. Lal Chand Prabhu Dayal at Hodel, Tehsil Palwal. On 30-5-1943 Prabhu Dayal acting as karta & manager Of the family gave a hundi to the plaintiff-firm Nanak Chand Bam Kishan Of Hodel for a sum of Rs. 5,894/4/- drawn on Messrs: Manohar Lal Ram Parshad of Hailey Mandl, Pataudi, and obtained from the plaintiffs a sum of Rs. 5,879/4/-, i.e., the amount covered by the hundi less commission at the rate of -/4/- per cent. As collateral security for the amount of the hundi the defendants also handed over to the plaintiffs one railway receipt under which 154 bags of matra and 50 bags of arhar had been booked. The hundi bore an endorsement on the back of it that the amount covered by the hundi may be paid on receipt of the railway receipt. The said hundi was presented to Messrs. Manohar Lal Ram Parshad through the Central Bank of India for acceptance and payment, but on 2-9-1943 the said firm dishonoured it. The plaintiffs received information regarding this fact on 8-9-1943 and obtained delivery of the goods covered by the railway receipt on 12-9-1943. On 1-10-1943 the plaintiffs sent a registered notice to the defendants informing them that the hundi had been dishonoured and that they had obtained delivery of the goods covered by the railway receipt and asking the defendants to pay the amount at once failing which the goods would be sold on the market rate and suit for deficiency would be filed against the defendants. The defendants replied to the said notice on 3-10-1943 disclaiming any interest in the goods and taking the plea that there had been an out and out sale of the goods covered by the railway receipt and that the defendants were no longer liable for any amount. The plaintiffs took a pretty long time in making sale of the good. Matra was sold on different dates from 14-2-1945 to 13-4-1945 and arhar was sold on 30-10-1946 and 1-11-1946. After giving credit of the amounts recovered by the sale of the goods there remained an amount of Rs. 2.963/4/3 still due to the plaintiffs. On 19-8-1956 the plaintiffs brought the present suit for the recovery of Rs. 3,756/-. In para 7 of the plaint they stated that the principal amount due to them was Rs. 2.963/4/3 and that the interest on the same calculated at 6 per cent. per annum came to Rs. 729/11/9/-. The plain-tiffs gave the total of the amounts as Rs. 3,756/-although by calculation it comes to Rs. 3.693-only. The plaint was based on the facts given above.
The defendants contested the suit and pleaded that the plaintiffs had in fact Purchased the goods mentioned in the railway receipt from the defendants and out of the price of the goods they had paid Rs. 5.427/7/6- while the balances of Rs. 451/12/6 was agreed to be paid within one week but was never paid. The defendants denied-to have received any valid notice of dishonour of the hundi and contended that the sale of goods made by the plaintiffs was against law and was not binding on the defendants. The defendants claimed an equitable set off for the aforesaid amount of Rs. 451/12/6 taut did not pay any court-fee on the said amount.
3. On the above pleadings the trial Court framed as many as thirteen issues. It was found by the trial Court that the huncli had been drawn after receipt of the full consideration mentioned in the huncli, that the transaction was not an out and out sale, that the goods were sold at the rate and in the manner alleged by the plaintiffs, that the railway receipt had been given to the plaintiffs by way of collateral security for the hundi, that the hundi had been dishonoured by Messrs
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