1. This is a plaintiff's appeal against the dismissal of O.S. No. 27 of 1949 on the file of the Subordinate Judge of Tiruchirappalli and the facts and circumstances which have given rise to this appeal are as follows:
2. The plaintiff and the second defendant are two of the children of one Arunachala Pillai, a substantial and wealthy businessman owning properties in Tiruchirappalli district and carrying on business on a large scale in Ceylon. He had two other children, namely, a daughter named Sitalakshmi Ammal who is elder to the plaintiff and Thangavalu who is younger than the second defendant. The plaintiff's husband, who is examined as P.W. 3, in comparison with the affluence of Arunachala is somewhat indigent in circumstances, and it is the case of both the parties that he was living in his ancestral house in Chinnak-kadai Street, Tiruchirappalli, where his avocation was to help Arunachala in the management of his business by purchasing goods and sending them to Ceylon where Arunachala as already stated was trading. It is also in evidence that P.W. 3 was handling the moneys of Arunachala which were left in his hands for the purpose of trade. We have also the undisputed fact that the other daughter Sitalakshmi Ammal was in fairly affluent circumstances, in any event, richer than the plaintiff. The second defendant is younger in age to the plaintiff and during the time he was pursuing his studies in a college in Tiruchirappalli was residing with the plaintiff and her husband in the same manner as the younger brother Thangavelu did later on.
3. The plaintiff's case is that her father intended to make a gift of Rs. 15,000 to her and directed P.W. 3 to lend that amount out of the moneys in his hands to the first defendant who also was a trader in Ceylon and was the owner of estates there. At the time of the suit it was admitted that the second defendant and Krishnaswami Reddiar, the first defendant were partners in business in Ceylon. The promissory note Exhibit B-1 produced in Court by the first defendant during the course of the trial, dated 6th February, 1946, was executed in favour of the plaintiff for a consideration of Rs. 15,000. It was executed in the house of the plaintiff wherefrom money was also paid as consideration. There is no dispute that cash was not paid to the first defendant in consideration of the execution of the promissory note. It is also admitted that the promissory note continued to remain in the possession of the plaintiff till 30th March, 1947, when she handed it over to the second defendant who was proceeding to Ceylon for the purpose, according to the plaintiff, of collecting the money from the first defendant. The plaintiff, however, alleges that since nothing was done for about two years, a lawyer's notices Exhibits A-1 and A-3 to the first and second defendants respectively were sent on 10th January; 1949, setting out the fact that the money due under the promissory note had not been paid. Not having received a reply or payment in response to that notice, the suit was filed on 4th February, 1949, for the principal and interest due under the note.
4. The case put forward on behalf of both the defendants was that the plaintiff was a benamidar and had no beneficial interest in the moneys lent and therefore, the suit was not maintainable. It was also alleged that as the first defendant collected the amount due from the second defendant the suit should be dismissed. On the side of the plaintiff, three witnesses were examined of whom the plaintiff was P.W. 1, her husband was P.W. 3 and one Palaniyandi Pillai who was present at the time of execution of Exhibit B-1 was P.W. 2. On the side of the defendants both of them were examined as D.Ws. 1 and 2 respectively and the mother of the plaintiff and 2nd defendant as D.W. 3. The learned Subordinate Judge after a survey of the circumstances and probabilities of the case came to the conclusion that the plaintiff had no beneficial interest in the money and therefore dismissed the suit.
5. The decision in the appeal would depend to a large extent on our appreciation of the oral evidence that though it has been held by Courts of the highest authority that in such cases an appellate Court should not ordinarily differ from the Court of first instance which had the advantage of seeing the witnesses, in the present case, circumstances are such that we are compelled to differ from the Subordinate Judge and come to the conclusion that the plaintiff is entitled to succeed. It is not as if our decision depends solely on the credibility of the witnesses but there are clinching circumstances which in our opinion would lead us to the conclusion that the oral evidence by itself should not be the deciding factor.
6. We may state in this connection that though the promissory note was dated 6th February, 1946, Arunachala lived for more than a year thereafter having breathed his last only on 9th February, 1947, in Ceylon. It is also admitted that during the time Arunachala lived, he did not do anything by overt act or implicit deed to show that the property in Exhibit B-1 was his own and that he had no intention of making a gift of the money to the plaintiff on the day when Exhibit B-1 came to be executed. When Arunachala got himself divided from his sons in 1943, the inference is probable in the circumstances that he wanted to have full disposing power over the properties which he got for his own share estimated by the parties to be valued at about 4 to 5 lakhs of rupees. In these circumstances there is nothing improbable in the case of a father who was very affectionate towards his younger daughter giving a sum of Rs. 15,000 which to him was a paltry sum especially in view of the fact that the daughter was not in very affluent circumstances. Arunachala was also not in very good health as is seen from the evidence and he had to undergo medical treatment also. Exhibit A-5 is a letter, dated 13th March, 1946, written by Arunachala from his village to P.W. 3 which indicates that he was very anxious about the health of the plaintiff and direction was given to the son-in-law to look after the plaintiff with great care and consideration and also that she should not be made to do any domestic work at all. We have no reason to feel that at the time Exhibit B-1 was executed, the plaintiff was very affectionate towards her father and the question as to whether there was a gift has to be viewed in that background.
7. As has been held by this Court in Subba Narayana Vathiyar v. Ramaswami Aiyar (1906) 16 M.L.J. 508 : I.L.R. 30 Mad. 88 (F.B.) it is not open to the promissor of a note to contend that someone other than the payee on the face of a pronote is the real owner of the note. The Full Bench in Venkatarama Reddiar v. Valli Akkal (1934) 68 M.L.J. 81 : I.L.R. 58 Mad 693 88. (F.B.) has interpreted the decision in the way that even though it is not competent for the promissor to raise the contention, as between a beneficial owner under the note and the ostensible payee, the question as to who is entitled to the moneys can be gone into. The principle enunciated in Subba Narayana Vathiyar v. Ramaswami Aiyar (1906) 16 M.L.J. 508 : I.L.R. 30 Mad; has been followed in Harikishore Barna v. Gura Mia Chandhuri (1930) I.L.R. 58 Cal. 752 and therefore if the second defendant had not been impleaded as a party to the suit we would have held that the first defendant is precluded from contending that the plaintiff is not the owner of the money in question. But the plaint as framed is for reliefs against both the defendants, against the first defendant as the executant of Exhibit B-1, and against the second defendant on the ground that a decree should be passed against him in case he has collected the money due under the note from the first defendant. In fact the alternative case put forward by the plaintiff was that the note was handed over to the second defendant for the purpose of collection We, therefore, do not wish to rest our decision on the question of law alone but shall decide the dispute on the merits.
8. We have been taken through the oral evidence in great detail and it seems to us that there is absolutely no reason why P.W. 1 ought to be disbelieved. A reading of her evidence shows that this lady has deposed in a frank, candid and straightforward manner and the strenuous cross-examination to which she has been put to has not in any way shaken the gist of her evidence in examination-in-chief and we are of opinion that as against the evidence of D.W. 2, the plaintiff's has to be preferred. With regard to the evidence of the husband P.W. 3, though there may be one ar two circumstances militating against his veracity, on the whole since it corroborates that of P.W 1, we are prepared to accept his testimony as well. There is no reason why P.W. 2 ought to be disbelieved. In these circumstances, we place reliance upon the oral evidence on the side of the plaintiff. It may be said that P W. 1 and P.W. 3 are interested witnesses. But the same has to be said against D.Ws. 1 and 2 as well. Therefore, interestedness both on the side of the plaintiff and that of the defendant cancels each other and the question has to be viewed in the light of probabilities.
9. Mr. S. Ramachandra Iyer for the plaintiff has put forward a large number of points to show that the case of the plaintiff is far more preferable and probable than that put forward on the defendants' side.
10. Firstly, the learned Counsel argues that in view of the fact that Arunachala was a fairly rich man worth about 4 or 5 lakhs of rupees and had got divided from his sons, one of whom was a minor and the other had just emerged from minority, there is no reason to believe that he wanted his entire estate to devolve upon his sons alone, he being at that time not in very good health. It is a matter of speculation as to why he got divided unless he wanted to have complete control and dominion over his share. He had come back from Ceylon for treatment at the time Exhibit B-1 came to be executed and was very affectionate towards the plaintiff and used to go to the plaintiff's house occasionally and stay there for a day or two. It is also clear that he had confidence and liking for P.W. 3 for otherwise he would not have allowed P.W. 3 to handle large sums of money and help him in the business. Moreover P.W. 3 was not in a well-to-do circumstance and that is certainly a reason why the plaintiff should be given something. In fact the other daughter was married to a fairly rich man and did not have the same difficulty as the plaintiff had. All these are circumstances which would show that there was a motive for Arunachala to make a gift of Rs. 15,000 in favour of the plaintiffs
11. It is then urged that unless a gift was intended in favour of the plaintiff, there was no reason for Arunachala not to have the document in his own name because he was a person doing business on a large scale getting documents executed in his own name and so on. It is admitted that he had no serious trouble with creditors and there was no reason why he should secrete any money by means of a benami transaction. D.W. 1 the first defendant himself does not know why Arunachala wanted the promissory note to be taken in the name of his daughter. As a matter of practice in this country, the principle of not applying the doctrine of advancement has been in vogue for nearly a century. At the time their Lordships held that there was no presumption of advancement in India, the conditions were very different from what is obtaining nowadays. There is no reason to think that in 1946 a father with large sums of money in his hands when he took a promissory note in the name of his daughter who was not sufficiently well-to-do did not intend to make a gift of that money to the daughter. There is also this circumstance' that the plaintiff was not given any stridhanam as such at the time of the marriage though the account books show that the marriage expenses were on a fairly lavish' scale. All these circumstances lead one to the conclusion that there is no reason why we should depart from the ordinary tenor of the document and we therefore hold that the gift was intended.
12. A very important circumstance on which the learned Counsel for the appellant relied was that at the time D.W. 3 the mother of the plaintiff and the second defendant applied for a probate of a will executed by Arunachala in a Ceylon Court, this was not included as an asset. D.W. 2 deposed that the same was included. Evidently this is a falsehood as is seen from the application for probate which has been admitted as additional evidence in appeal. The explanation which Mr. Gopalaswami Ayyangar now puts forward is that as the money under the promissory note was collected on 20th May, 1947, as is seen from the cheque which also has been admitted as additional evidence, the promissory note had got discharged and that was the reason why it was not included. But this explanation does not stand scrutiny for a moment for if that is so, D.W. 2 himself would have put forward that. We are of opinion that the second defendant imagining that it would not be possible for the plaintiff to know the real circumstances, put forward a false case, when interrogated in Court as to whether this was included as an asset in the probate proceedings. The fact of non-inclusion to some degree at least, shows that at that time the promissory note amount was not treated as an asset of Arunachala.
13. A further circumstance on which reliance is placed is that until 30th March, 1947, when the second defendant departed for Ceylon after performing the funeral ceremonies of his father who as already stated died on 9th February, 1947, the custody of the promissory note was with the plaintiff. If as a matter of fact there was no intention to make a gift of the amount why Arunachala allowed the promissory note to remain in the hands of the plaintiff has not been explained especially when the debtor was a resident of Ceylon. It might be said that Arunachala allowed the son-in-law to take the promissory note in the name of his wife but that is not a reason why for nearly a year, he did not ask for the custody of the note.
14. A further circumstance which leads to the conclusion of the gift is that when in March, 1947, the second defendant settled all accounts with P.W. 3 and paid him Rs. 1,900 in full settlement of the amounts due as the agent of Arunachala and got the custody of the promissory note no endorsement has been made on the promissory note. If as a matter of fact, the property in the note belonged to Arunachala and the plaintiff was only an ostensible payee, there is no reason why an endorsement was not made on Exhibit B-1. This circumstance coupled with the fact that neither the first nor the second defendant sent a reply to Exhibit A-1 and A-3 would lead us to the inference that at least at that time there was no idea of claiming property in the note as belonging to Arunachala's estate.
15. A further fact to be considered is that Arunachala had made gifts of moneys to his wife and that being the case there is no reason why he should not make some such gifts to the daughter also. The first defendant in his deposition said that why he entered the name of the plaintiff as the payee is because he got a slip and entered the name of the plaintiff as a payee. If that is so, how it is that he repaid the money to the second defendant has not been explained. We think that the first defendant knew fully well from the very inception that the money was intended as a gift to the plaintiff.
16. On Exhibit B-1, there is an endorsement of payment of Rs. 900 being the interest due for one year. The first defendant admits that this endorsement was made in May, 1947, in Ceylon though the endorsement on its face purports to have been made on 6th February, 1947, three days before Arunachala died. We have no reason whatever to think that this endorsement is anything other an antedated one. It was certainly made by the first defendant at the request of the second defendant to make it appear that the second defendant is entitled to the money on the note. To show that this endorsement is ante-dated, there is an additional circumstance and that is that no entry about the payment of Rs. 900 is seen anywhere in the account books of the first defendant. Both the first and second defendants being partners and doing business on a large scale ordinarily conduct their transactions by issuing cheques. No cheque seems to have been issued for this Rs. 900. All these circumstances lead only to one conclusion and that is that the endorsement is an after-thought. If we look at the payment made on 20th May, it is seen that the amount of Rs. 15,250 does not represent the exact amount due on that date. On 6th February, 1947, if the payment of Rs. 900 is true, the entire interest uptil then is wiped off. Thereafter for 31/2 months the interest due on Rs. 15,000 at 6 per cent per annum is something more than Rs. 250. Such being the case there is some justification for the suggestion of Mr. Ramachandra Iyer that the cheque now produced does not really represent the payment towards the money due under this promissory note but advantage has been taken of some other transaction between the parties to make it appear that this payment is towards the promissory note.
17. As against these points tending to show the fact of a gift, Mr. Gopalaswami Ayyangar for the second defendant stresses certain aspects and we shall now deal with them.
18. Learned Counsel points out that once it is admitted that the consideration emanated from the father, there is nothing in the case to show a contemporaneous conduct on the part of Arunachala justifying the inference that there was a gift. In our opinion the fact that Arunachala kept quiescent for nearly a year till he died is itself a circumstance from which it can be gathered that he intended it as a gift.
19. It is further urged that if as a matter of fact a gift was intended, then there was nothing to prevent a mention of it in the promissory note itself or in some document to support the gift and since there is nothing to that effect we should come to the conclusion that the property in the note still remained with Arunachala. As we have already stated, the absence of a contemporaneous record does not militate against the gift.
20. Then it is urged that entries in Exhibits B-5 and B-6, which show that Arunachala considered this debt as his property militate against the theory of the gift. P.W. 3 debits the money in the account sent to Arunachala to Krishnaswami Reddi the first defendant and that entry does not show that any kind of gift was intended. In Exhibit B-6, it is also a credit given to Krishnaswami Reddiar without any reference to the lady. In the ledger page of the plaintiff this money does not find a place when similar gifts are noted there as belonging to her. From these circumstances, the learned Counsel argues that there was no gift. We do not think that these are sufficiently clinching circumstances which would out weigh the various points outlined by us to show that there was a gift.
21. We have to remark that though the plaintiff gave the custody of the promissory note to the second defendant in March 1947, there is no documentary evidence to show that she made any enquiries of it from the second defendant or that she asked him as to what has become of the money till the lawyer's notice Exhibit A-3, in March, 1949. This indifference on the side of the plaintiff bespeaks an idea that she had no property in the note, so argues the counsel for the respondent. There is something to be said for this argument. But the plaintiff's case is that the second defendant being an affectionate younger brother whom she trusted implicitly there was no reason why she should have thought that the second defendant would realise the money and not pay it to her by putting forward a false excuse She also says that one of the letters received from the second defendant was torn by her child and therefore she could not produce it.. We, see no reason why we should disbelieve her.
22. It is then argued that neither in the notice nor in the plaint is there any mention of a stridhanam gift to her; but the answer to this is that the entire tenor of the plaint and the notice is that the money belongs to the plaintiff. The learned Counsel explains away the absence of a reply to Exhibits A-1 and A-3 by stating that notices were, dated 10th January, 1949 and the plaint was filed on 4th February, 1949, within about 25 days and that since the defendants were in Ceylon, after the receipt of the notice there was no sufficient time to consult legal advisers and send a reply. It seems to us that this explanation is not an acceptable one.
23. We have given earnest consideration to the facts of this case especially since we are differing from the learned Subordinate Judge on a question of fact. In our opinion Arunachala intended that the sum of Rs. 15,000 consideration for Exhibit B-1, was a gift to plaintiff and therefore, she alone is entitled to get the money on that.
24. The plaintiff's case was that the promissory note was handed over to the second defendant for the purpose of collection and if it is proved that the second defendant had collected the money from the first defendant, then a decree against the first defendant cannot be passed. The cheque which has been exhibited as additional evidence as well as the case put forward by both the first and second defendants show that the money has been paid over to the second defendant. Such being the case we do not think that the first defendant's estate should now be made liable for that sum.
25. The appeal is, therefore, allowed and the plaintiff will be given a decree as prayed for, for the principal and interest and with costs throughout against the second defendant. As against the first defendant, the suit is dismissed but without costs.