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ABEYESEKERE v. JAYATILEKE
NLR38V130
1936 Present :
Akbar and Koch JJ.
ABEYESEKERE v. JAYATILEKE
45-D. C. Negombo, 8,093.
Promissory note-Insufficiently
stampede-Right to recover the money lent- Lender not a professional money
lender-Ordinance No. 2 of 1918, ss. 8 and 10.
The failure to stamp duly a promissory note taken as security for a loan does
not affect the right of the lender to recover the money due where the lender is
not a person to whom the provisions of the Money Lending Ordinance apply.
APPEAL
from a judgment of the District Judge of
Negombo.
S. Subramaniam, for defendant, appellant.
L. A. Rajapakse, for plaintiff, respondent.
Cur. adv. vult.
June 17, 1936. KOCH J.-
This is an appeal from a holding of the original Court that, on the alternative
causes of action to recover two sums of Rs. 500 each that had been lent on
January 20 and February 19, 1927, respectively, with accrued interest, the
plaintiff is entitled to recover, although the said loans were sought to be
secured by two promissory notes bearing these dates and for these sums but which
were not duly stamped.
The learned District Judge has not given any reasons for so holding but it is
clear to us what those reasons should be.
There can be little doubt that under section 36 of the Stamp Ordinance, No. 22
of 1909, these promissory notes cannot be admitted in evidence for any purpose
whatsoever as they have not been duly stamped, nor can the irregularity be cured
by the payment of a penalty. The plaintiff in consequence has to depend upon
other proof in support of his claim. The plaintiff is not a money lender and the
provisions of Ordinance No. 2 of 1918 do not apply to him.
Mr. Subramaniam argued to us that as the result of the decision in Sockalingam
Chettiar v. Ramanayake [1 35 N. L. R. 33.] a Court is prevented from regarding
these transactions even as ordinary loans as the promissory notes which were
taken as securities for them not having been duly stamped, were received in
contravention of the terms of the Stamp Ordinance and thereby subjected the
parties responsible for this act to a criminal prosecution for an offence
against the Stamp law.
I fear very much that the judgments in Sockalingam Chettiar v. Ramanayake
(supra) have been sometimes misunderstood and a wider application has been
sought to be given to them than was ever intended. That decision was purely in
regard to a money lending transaction by an admitted money lender who thereby
brought himself under the provisions of Ordinance No. 2 of 1918. Section 10 of
that Ordinance insists on a money lender conforming to certain requirements when
he lends out money, and section 8 (1) requires him to record such loans in a
certain manner. If he takes promissory notes for these loans he has to obey the
directions in both these sections, but if he makes loans unaccompanied by such
securities he has at least to see that the terms of the latter section have not
been contravened. If he acts in breach of these requirements he commits a
criminal offence, and this being so, this Court held that not only cannot the
promissory notes be looked at but also that the transactions that have been
recorded by such notes cannot equally be regarded By acting in the way he did,
the money lender committed an illegal act which is inseparable from the
transaction on which he sued. The transaction being illegal, it should be
regarded as unclean in the eye of the law and no Court should therefore assist a
transgressor to recover on such a transaction, even if there be an admission by
the debtor of either the whole or a part of the debt.
In the case before us the
plaintiff, who is admittedly not a money lender, is seeking to recover two sums
he lent to the defendant. It is true he has taken as security two promissory
notes insufficiently stamped. For doing so he can be prosecuted for a breach of
the revenue law and he is also prevented from relying on the notes as evid
