Allahbad High Court
D.S.MATHUR
Alopi Prasad and Sons Pvt. Ltd. - Appellant
Versus
Harish Chandra - Respondent
Decided On : 09/22/1972
Jurisdiction - Assignment of Document - Presumption under Negotiable Instruments Act
Fact of the Case:
The case involved a revision under Section 115 C. P. C. by the defendants against the order of the Civil Judge of Aligarh, holding that the suit instituted by the plaintiffs was maintainable at Aligarh due to the endorsement of the pronote executed by the defendants in favor of the plaintiffs at Aligarh.
Finding of the Court:
The court found that the jurisdiction of the Court, i.e., the maintainability of the suit, is governed by Sec. 20 (c) of the Code of Civil Procedure, and that the initial jurisdiction of the Court depends upon the pleadings in the plaint. An assignee of a document has to prove the assignment in a civil suit, and in respect of negotiable instruments, certain presumptions detailed in Section 118 of the Negotiable Instruments Act can be drawn.
Issues: The issues revolved around the maintainability of the suit at Aligarh, the assignment of the document, and the presumptions under the Negotiable Instruments Act.
Ratio Decidendi: The court emphasized that the jurisdiction of the Court depends upon the pleadings in the plaint, and in a civil suit, an assignee of a document has to prove the assignment. Additionally, the court highlighted the presumptions detailed in Section 118 of the Negotiable Instruments Act, particularly the burden of proof in cases where the holder of a negotiable instrument is a holder in due course.
Final Decision: The revision was allowed, and the order of the Civil Judge, Aligarh, was set aside. The matter was remanded for reconsideration after recording additional evidence, if any.
2. The jurisdiction of the Court, that is, the maintainability of the suit, is governed by Sec. 20 (c) of the Code of Civil Procedure which lays down that a suit can be instituted in a court where the cause of action, wholly or in part, has arisen. What is meant by "cause of action" has not been defined in the Code but it has been a subject of numerous decisions and the meaning of this expression can now be said to be beyond controversy. "Cause of action" is the bundle of facts which a party must prove before he can obtain a decree in his favour. For determination of "cause of action" one need not consider the evidence which a party or the parties may adduce in the case; one should consider the material facts which must be pleaded and proved in the case and not any ancillary point which may arise. See Baroda Oil Cakes Traders v. Parshottam Narayandas Bagulia, AIR 1954 Bom 491. What are the material points in issue depend to a large extent, upon the pleadings contained in the plaint. At occasions it may become necessary to look into the pleas raised by the defendant. The initial jurisdiction of the Court depends upon the pleadings in the plaint, though if on consideration of the written statement it appears that the Court has no jurisdiction to entertain the suit, the plaint can be returned for presentation to a proper Court and in suitable circumstances the suit can also be dismissed.
3. An assignee of a document has, in a civil suit, to prove the assignment also, and consequently in absence of a provision to the contrary in any Special Act, the suit can be instituted at the place where the assignment was made in view of the fact that assignment forms part of "cause of action."
4. In respect of negotiable instruments certain presumptions detailed in Section 118 of the Negotiable Instruments Act can be drawn. Clause (g) of this section lays down that unless proved to the contrary it can be presumed that the holder of a negotiable instrument is a holder in due course : provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker etc. thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him. The presumption contemplated by clause (g) is thus not applicable where there was transfer of possession or the negotiable instrument was obtained by means of an offence or fraud or the consideration thereof was unlawful.
In such cases the burden of proof lies upon the holder to show that he is the holder in due course. In other cases, the burden of proof lies upon the defendant meaning thereby that it is not necessary for the plaintiff to lead evidence and to' prove that he is the holder in due course.
5. When it is not necessary for the holder to prove that he is the holder in due course of the negotiable instrument, it is not one of the points which he must establish before he can be granted a decree, and therefore, it cannot constitute "cause of action."
6. On the basis of the material on record it cannot be said that the plaintiffs had obtained possession by means of an offence or fraud or that the consideration thereof is unlawful. No final opinion is being expressed on this point so that the parties may not be handicapped during the subsequent stages of t
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