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  • Order VI, Rule 16. C. P. C. He referred to the provisions of Sec. 82 of the Negotiable Instruments Act (No. XXVI of 1881) (for short, 'the Act'); Sivagurnatha
  • provisions of Order VI. Rule 1C and Order VIII, Rule 7, C. P, C.,
  • 26, 27 and 28 of the Negotiable Instruments Act of 1881,
  • SECTION 78 NEGOTIABLE INSTRUMENTS ACT
  • Civil P. C, Rule 16 of Order 6
  • Rule 7 of Order 8, Civil P. C.,
  • NEGOTIABLE INSTRUMENTS ACT
  • Order VIII, Rule 9, C. P. C.
  • Order VI. Rule 16, C.P.C.
  • Section 82(c)
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  • Order VI, Rule 16. C. P. C. He referred to the provisions of Sec. 82 of the Negotiable Instruments Act (No. XXVI of 1881) (for short, 'the Act'); Sivagurnatha
  • provisions of Order VI. Rule 1C and Order VIII, Rule 7, C. P, C.,
  • 26, 27 and 28 of the Negotiable Instruments Act of 1881,
  • SECTION 78 NEGOTIABLE INSTRUMENTS ACT
  • Civil P. C, Rule 16 of Order 6
  • Rule 7 of Order 8, Civil P. C.,
  • NEGOTIABLE INSTRUMENTS ACT
  • Order VIII, Rule 9, C. P. C.
  • Order VI. Rule 16, C.P.C.
  • Section 82(c)
Smart Summary

Factual and Procedural Background

The present matter is a defendant's revision against the order dated January 15, 1977 of the Civil Judge, Udaipur. The Civil Judge's order struck out paragraph 3 of the written statement and paragraph 2 of the additional pleas filed by the defendant. The trial court had dismissed the plaintiff's application under Order VIII, Rule 9, C.P.C., but allowed the plaintiff's application under Order VI, Rule 16, C.P.C.; the plaintiff did not challenge the dismissal under Order VIII, Rule 9. The defendant (petitioner) challenged only the part of the Civil Judge's order that allowed the Order VI, Rule 16 application.

Substantive background: The plaintiff sued for Rs. 6,000 based on a promissory note dated March 13, 1963. The defendant denied executing the promissory note after borrowing Rs. 3,000. In paragraph 3 of his written statement the defendant alleged that the plaintiff was a "benamidar" (a benami name-holder) and that the plaintiff's father had carried on money-lending business in the names of family members; the defendant contended that because the plaintiff was a benamidar and had not taken a money-lending licence, the suit was not maintainable. In paragraph 2 of the additional pleas the defendant asserted past money dealings with the plaintiff's father, asserted that he had requested accounts by registered letter dated January 2, 1974 (to which there was no reply), and averred that neither principal nor interest was due from him or any family member.

Procedurally, the plaintiff filed an application under Order VI, Rule 16, C.P.C. on August 7, 1976 seeking to strike out the challenged paragraphs; the defendant filed a reply on September 4, 1976. The Civil Judge allowed the plaintiff's Order VI, Rule 16 application on January 15, 1977, holding that incorporation of the challenged paragraphs would "prejudice, embarrass and delay the trial of the suit." The defendant filed the present revision against that part of the order. The revising court heard counsel for both sides and examined the pleadings and the law.

Legal Issues Presented

  1. Whether the learned Civil Judge committed jurisdictional error or material irregularity in allowing the plaintiff's application under Order VI, Rule 16, C.P.C. to strike out paragraph 3 of the written statement and paragraph 2 of the additional pleas.
  2. Whether a plea of a benami transaction or reliance on an undisclosed principal is permissible or cognizable as a defence in a suit founded on a negotiable instrument (promissory note).
  3. Whether the defendant can raise a plea of discharge under Section 82 of the Negotiable Instruments Act (in particular Section 82(c)) or otherwise rely on alleged surrounding circumstances to avoid liability on the promissory note when the instrument stands in the plaintiff's name.

Arguments of the Parties

Petitioner's (defendant's) Arguments

  • The learned Civil Judge acted illegally or with material irregularity in ordering deletion of paragraph 3 and paragraph 2 because the conditions for striking out under Order VI, Rule 16 were not satisfied.
  • The substance of the challenged paragraphs is that the suit is not maintainable for want of a money-lending licence and that the defendant is not liable for the suit money for reasons stated in those paragraphs; these are legitimate defences which the defendant should be permitted to raise.
  • Reliance was placed on Raghu Nath v. Radha Kishan (AIR 1929 Lah 634) and Bhagirath v. Gulab Kanwar (AIR 1956 Raj 174) to support the defendant's position (as argued by his counsel).

Non-petitioner's (plaintiff's) Arguments

  • The order of the Civil Judge striking out the challenged paragraphs should be upheld. The plaintiff relied on Section 82 of the Negotiable Instruments Act and on authorities (including Sivagurunatha v. Padmavathi, AIR 1941 Mad 417 (Full Bench); Rishabkumar Mohanlal v. Motilal Kastur-Chand, AIR 1949 Nag 21; Hiralal v. Ratan Lal, 1967 Raj LW 383) to show that benami defences or evidence of surrounding circumstances are not admissible to defeat liability on a negotiable instrument that stands in the plaintiff's name.
  • The plaintiff also pressed that the revising court should follow the principle indicated in Maitrayee Banerjee v. Prabir Kumar (AIR 1982 SC 17) that the Civil Judge did not commit any jurisdictional error in allowing the Order VI, Rule 16 application.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Sivagurunatha v. Padmavathi, AIR 1941 Mad 417 (Full Bench) The Court cannot look into surrounding circumstances to decide whether the maker of a promissory note executed it as agent or representative; it is the instrument alone which must be looked at (in context of Section 82). The revising court relied on this holding to support the proposition that the negotiable instrument itself determines liability and that extraneous benami/agency evidence is not admissible to avoid liability under Section 82.
Rishabkumar Mohanlal v. Motilal Kastur-Chand, AIR 1949 Nag 21 Strangers to a negotiable instrument (including undisclosed principals) have no position in law; persons named in an instrument are clothed with rights and parties cannot show the named person was not the principal. The court applied this principle to hold that a benami plea is not recognized in suits based on negotiable instruments and cannot be used to avoid liability on a note that stands in the plaintiff's name.
Firm Sadasuk Janki Das v. Sir Kishen Pershad, AIR 1918 PC 146 Outside evidence to show a person was principal is inadmissible unless the principal's name is disclosed in the instrument in such a way that his name is the real name of the person liable on the instrument. The revising court cited this authority to reinforce the rule that undisclosed principal/benami arguments are not permissible to defeat obligations on negotiable instruments.
Hiralal v. Ratan Lal, 1967 Raj LW 383 Negotiable instruments possess negotiability as their primary characteristic; benami transactions are not recognized in relation to negotiable instruments. The court used this observation to support the conclusion that the defendant's benami plea is not tenable in an action on a promissory note.
Abdul Rahim v. Md. Azimuddin, AIR 1965 Pat 156 Explains the expression "order which may tend to prejudice, embarrass or delay the fair trial"; inconsistent defences based on contradictory facts, though sometimes permitted, may be struck out under Order VI, Rule 16 when they would embarrass or delay trial. The revising court applied these principles to conclude that the defendant's inconsistent stand (denying execution of the note while also pleading benami/other defences) could properly be struck out as embarrassing and prejudicial to a fair trial.
S. K. K. Trust v. Kesri Dal Mill, AIR 1976 Madh Pra 54 Where an allegation cannot offer a defence and, if not struck out, would unnecessarily delay the suit, it must be struck out (relying on English authority Davy v. Carretl). The court cited this decision in support of the proposition that non-defensive or irrelevant allegations which impede trial may be struck out under Order VI, Rule 16.
Raghu Nath v. Radha Kishan, AIR 1929 Lah 634 Payment to an endorsee's agent received by him in his capacity as agent is a good discharge of hundies (principle on payment to agent as discharge). The revising court considered this authority but held it inapplicable on the facts because no foundation was laid in the defendant's pleading that there was an endorsement or that any payment was made to the plaintiff's father in his capacity as agent; therefore the decision was not relevant.
Bhagirath v. Gulab Kanwar, AIR 1956 Raj 174 Considered Sections 3 and 78 of the Negotiable Instruments Act; indicated Section 78 must be read so that payment acting as a full discharge must be made to the holder as provided in Section 82(c) where applicable. The revising court treated this decision as distinguishable on the facts of the present case and used its analysis to emphasize that discharge under the Act is governed by the statutory provisions (not by extraneous benami contentions).
Brojo Lal Shah v. Budh Nath, AIR 1928 Cal 148 Authority concerning who may institute suit on negotiable instruments and related questions about holder/beneficiary rights (cited in Bhagirath). Referenced by the court as part of the legal landscape considered in Bhagirath; the revising court noted Bhagirath's reliance on this and distinguished Bhagirath on the present facts.
Berdan v. Greenwood, (1878) 3 Ex. D 251 English authority recognising the privilege to plead inconsistent defences. Cited in Abdul Rahim's exposition of the law; used indirectly to explain that while inconsistent pleas may be pleaded, they may nevertheless be struck out when they embarrass or delay trial.
Davy v. Carretl, (1877) 7 Ch D 473 English authority relied upon in S. K. K. Trust for the proposition that allegations which do not offer a defence should be struck out. Used as a supporting authority for the principle that irrelevant or non-defensive allegations may be struck out to prevent delay.
Maitrayee Banerjee v. Prabir Kumar, AIR 1982 SC 17 Invoked by plaintiff's counsel to contend that no jurisdictional error was committed by the Civil Judge in allowing an Order VI, Rule 16 application. The revising court noted counsel's reliance on this Supreme Court decision as supporting the proposition that interference was not warranted; the revising court ultimately concluded there was no jurisdictional error.

Court's Reasoning and Analysis

The revising court proceeded by reference to the Negotiable Instruments Act and to the authorities construing that Act and procedural rules about striking out pleadings.

Key legal points the court relied upon:

  • Section 82 of the Negotiable Instruments Act sets out circumstances in which a maker, acceptor or indorser is discharged from liability on a negotiable instrument. The court quoted Section 82 in full and emphasized its statutory effect.
  • Authorities (notably the Madras Full Bench in Sivagurunatha and the Nagpur decision in Rishabkumar) establish that, for negotiable instruments, the instrument itself governs rights and liabilities and courts should not admit surrounding circumstances or outside evidence to show that the person named was merely an agent or benamidar. The court reiterated that benami transactions are not recognised in relation to negotiable instruments.
  • The defendant's pleadings presented two inconsistent positions: (a) an express denial of execution of the promissory note in favour of the plaintiff; and (b) a claim that the plaintiff is a benamidar and that transactions were in the plaintiff's father's name or family names. The court characterized these as contradictory factual stands.
  • Applying procedural doctrine developed under Order VI, Rule 16, C.P.C. (and the explanatory jurisprudence such as Abdul Rahim and S. K. K. Trust), the court considered whether the contested paragraphs would "prejudice, embarrass or delay the fair trial." The cited authorities explain that while inconsistent defences can sometimes be pleaded, where inconsistent or irrelevant allegations would embarrass or delay trial, the court may strike them out.
  • On the facts, because: (i) the promissory note stands in the plaintiff's name and Section 82/other provisions limit the defendant's ability to rely on extraneous benami or undisclosed-principal evidence; and (ii) the defendant simultaneously denied execution and asserted benami/other collateral defences, the contested paragraphs were capable of prejudicing, embarrassing and delaying trial.
  • The revising court also examined the precedents relied upon by the defendant (Raghu Nath and Bhagirath) and found them distinguishable: Raghu Nath concerned payment to an endorsee's agent as discharge (but the defendant had not pleaded endorsement or such a payment), and Bhagirath's analysis of Sections 3 and 78 did not assist the defendant on these facts.

Conclusion of the analysis: the combination of statutory provisions governing negotiable instruments (e.g., Section 82) and the settled procedural law permitting striking out of pleadings that will embarrass or delay trial justified the Civil Judge's exercise of discretion in allowing the Order VI, Rule 16 application. The revising court found no jurisdictional error or material irregularity in the impugned order.

Holding and Implications

Holding:

The revising court declined to interfere with the impugned order dated January 15, 1977; the Civil Judge's order allowing the plaintiff's application under Order VI, Rule 16, C.P.C. (striking out paragraph 3 of the written statement and paragraph 2 of the additional pleas) was upheld.

Implications:

  • Direct effect on the parties: Paragraph 3 of the written statement and paragraph 2 of the additional pleas (which pleaded benami-related matters and related denials) were properly struck out by the trial court and remain struck out; the defendant cannot rely on those specific pleaded defences in the trial unless otherwise permitted by law or further order.
  • Broader legal implications: The opinion rests on established provisions of the Negotiable Instruments Act and settled procedural authorities concerning striking out pleadings. The court distinguished the precedents cited by the defendant on the facts of the case and did not purport to overrule or expand existing law; the decision upholds the principle that benami or undisclosed-principal contentions generally are not admissible to defeat liability on negotiable instruments that stand in the named holder's name, and that pleadings which would embarrass or delay trial may be struck out under Order VI, Rule 16.
  • The opinion does not announce a new legal doctrine beyond the application of the cited statutes and authorities to the facts before the court; its effect is confined to upholding the trial court's exercise of discretion in striking out the specified pleadings.

    Dal Chand v. Satish Chandra

    1. This is a defendant's revision against the order dated Jan. 15, 1977 of the Civil Judge, Udaipur, by which the learned Civil Judge has ordered for striking out para 3 and para 2 of the additional pleas of the written statement It may be stated that the learned Civil Judge dismissed the plaintiff-non-petitioner's application under Order VIII, Rule 9, C. P. C. and allowed the application under Order VI, Rule 16. C.P.C. The plaintiff has not challenged the order dismissing his application under Order VIII, Rule 9, C. P. C. The defendant has challenged that part of the order dated Jan. 15, 1977, by which the application of the plaintiff under Order VI, Rule 16, C. P. C. was allowed.

    2. The plaintiff-non-petitioner instituted a suit for Rs. 6,000/- against the defendant-petitioner on the basis of a promissory note dated Mar. 13. 1963. The defendant contested the suit denying the execution of the pronote after borrowing Rs. 3,000/-. In para 3 of the written statement, the defendant raised a plea that the plaintiff is 'Be-namidar' and that his (plaintiff's) father Madanlai used to do money lending business in the name of the members of his family. It was also stated in para 3 that as the plaintiff was 'Benamidar' and as he had not taken the money lending licence, he cannot institute the suit.

    In para 2 of the additional pleas, it was stated that defendant had several money dealings with the plaintiff's father and that by a registered letter. which was sent to him (plaintiff's father) on Jan. 2, 1974, he asked for the accounts of the past dealings, to which he did not reply. It was also averred in para 2 of the additional pleas that neither any amount by way of principal or interest is due from him nor from any member of his family. On behalf of the plaintiff, an application under Order VI, Rule 16, C. P. C. was filed on Aug. 7, 1976 for striking out para 3 and para 2 of the additional pleas of the written statement. This application was resisted on behalf of the defendant by filing a reply dated Sept. 4, 1976. The learned Civil Judge, by the impugned order, allowed the application under Order VI, Rule 16, C, P. C. filed by the plaintiff and ordered that para 3 and para 2 of the additional pleas of the written statement may be struck out on the ground that incorporation of para 3 and para 2 of the additional pleas of the written statement will prejudice, embarrass and delay the trial of the suit. To quote the learned Civil Judge : (Matter being in Hindi omitted. -- Ed.) The defendant has filed this revision questioning the order dated Jan. 15, 1977 of the learned Civil Judge, by which he allowed the plaintiff's application under Order VI. Rule 16, C. P. C. as aforesaid.

    3. I have heard Mr. D. S. Shishodia, learned counsel for the petitioner and Mr. Rule L. Maheshwari for the non-petitioner and have carefully perused the plaint and the written statement.

    4. The contention of the learned counsel for the petitioner is that the learned Civil Judge has exercised his jurisdiction illegally or at any rate with material irregularity when he ordered for deletion of para 3 and para 2 of the additional pleas of the written statement, for, conditions under Order VI, Rule 16, C. P. C. are not satisfied. He submitted that the sum and substance of the pleas raised in para 3 and para 2 of the additional pleas is that the suit is not maintainable for want of money lending licence and that the defendant is not liable for the suit money for the reasons mentioned therein. Reliance was placed on Raghu Nath v. Radha Kishan, AIR 1929 Lah 634 and Bhagirath v. Gulab Kanwar, AIR 1'956 Raj 174.

    5. Mr. Rule L. Maheshwari, learned counsel for the non-petitioner supported the order of the learned Civil Judge allowing the application under Order VI, Rule 16. C. P. C. He referred to the provisions of Sec. 82 of the Negotiable Instruments Act (No. XXVI of 1881) (for short, 'the Act'); Sivagurnatha v. Pad-mavathi, AIR 1941 Mad 417 (FB); Ri-shabkumar Mohanlal v. Motilal Kastur-Chand, AIR 1949 Nag 21 and Hiralal v. Ratan Lal. 1967 Raj LW 383. He also pressed for my consideration, on the basis of the decision reported in Maitra-yee Banerjee v. Prabir Kumar, AIR 1982 SC 17 that no jurisdictional error was committed by the learned Civil Judge in allowing the application under Order VI, Rule 16, C. P. C. and. therefore, it should not be interfered with.

    6. Section 82 of the Act deals with discharge from liability on negotiable instruments. It is as under :

    "82. The maker, acceptor or indorser respectively of a negotiable instrument is discharged from liability thereon-

    (a) to a holder thereof who cancels such acceptor's or indorser's name with intent to discharge him, and to all par--

    ties claiming under such holder;

    (b) to a holder thereof who otherwise discharges such maker, acceptor or indorser, and to all parties deriving title under such holder after notice of such discharge;

    (c) to all parties thereto, if the instrument is payable to bearer, or has been indorsed in blank, and such maker, acceptor or indorser makes payment in due course of the amount due thereon." It was held by the Full Bench of the Madras High Court in Sivagurunath's case (AIR 1941 Mad 417) that the Court cannot look into the surrounding circumstances when deciding whether the maker of a promissory note has executed it as the agent or the representative of another and that it is the instrument alone which has to be looked at.

    7. Section 8 of the Act came up for consideration in Rishabkumar's case (AIR 1949 Nag 21), wherein. Hidayat-ullah, J., as he then was, observed as under:--

    "In our opinion the true position is

    -that a stranger to a negotiable instrument -- be he the undisclosed principal of the drawer or the payee -- has, in himself, no position in the eye of law, even though the person named in the instrument be his benamidar. The entire scheme of the Negotiable Instruments Act is to clothe the persons named in the instrument with rights and it is not open to the parties to an instrument (and more: so strangers) to show that a person named therein is not the principal but another not so named'' (Underlining is mine).

    8. It was observed in Firm Sadasuk Janki Das v. Sir Kishen Pershad, AIR 1918 PC 146 as follows:

    "The statement, to which reference has been made, which appears on p. 99 of Messrs. Iyengar and Adiga's book on negotiable instruments, that "outside evidence is inadmissible on any person as a principal party unless his -- the principal party's -- name is in some way disclosed in the instrument itself," is not in itself an adequate statement of the law. It is not sufficient that the principal's name should "in some way'' Be disclosed, it must be disclosed in such a way that on any fair interpretation of the instrument his name is the real name of the person liable upon the bills.

    Their Lordships' attention was directed to Sections. 26, 27 and 28 of the Negotiable Instruments Act of 1881, and the terms of these sections were contracted with the corresponding provisions of the English statute. It is unnecessary in this connection to decide whether their effect is identical. It is sufficient to say that these sections contain nothing inconsistent with the principles already enunciated and nothing to support the contention, which is contrary to all established rules, that in an action on a bill of exchange or promissory note against a person whose name properly appears as party to the instrument, it is open either by way of claim or defence to show that the signatory was in reality acting for an undisclosed principal."

    While dealing with Sections 27, 37 and 118 of the Act, Bhandari, J., as he then was, in Hiralal's case (1967 Raj LW 383) observed as under;--

    "A negotiable instrument possesses certain characteristics, the primary characteristic being that it is negotiable."

    It is, therefore, clear that in a suit based on negotiable instrument, it is not open to either side to show that they acted benami through others. Benami transactions are not recognised in connection with negotiable instruments.

    9. The defendant has denied the execution of the pronote in favour of the plaintiff In para 2 of the plaint, the plaintiff has specifically stated that after borrowing Rs. 3,000/- and agreeing to pay interest at the rate of 1% per mensem, the defendant signed pronote on Mar. 13, 1963 in favour of the plaintiff. The defendant in reply to para 2 of the plaint has contended that para 2 of the plaint is wrong. The relevant part of para 2 is as under:-- (Matter being in Hindi omitted. -- Ed.) The promissory note stands in the nam of the plaintiff. In view of Section 82(c) of the Act the defendent cannot raise the plea, which he has raised in para 2 of the additional pleas of the written statement regarding discharge. In para 3 of the written statement, the defendant has raised a plea of benami transaction which is not recognised under the Act.

    10. The expression "order which may tend to prejudice, embarrass or delay the fair trial" came up for examination in Abdui Rahim v Md. Azimuddin, AIR 1965 Pat 156 in a case relating to in--consistent defences on contradictory facts. While considering the provisions of Order VI. Rule 1C and Order VIII, Rule 7, C. P, C., it was observed by H. Maha-patra, J., with whom A. B. N. Sinha, J. agreed, as under (at p. 158):--

    "It is true, inconsistent pleas on different grounds of defence can be pleaded Rule 7 of Order 8, Civil P. C., allows that. As early as in 1878 the case of Berdan v. Greenwood, (1878) 3 Ex. D 251 recognised such privilege in defence. The power has been given to the Court under the Civil P. C, Rule 16 of Order 6 to strike out any matter in a pleading that may tend to embarrass a fair trial of the suit. There is a certain amount of peril for the party who takes absolutely inconsistent pleas grounded on different and contradictory facts, and while leading evidence in support of them he will have to blow hot and cold in the same breath which is bound to shake confidence in the truth of his allegations. For such reasons, inconsistent defences that will depend upon contradictory facts are not generally permitted. If a defendant challenges a plaintiff's title to the suit premises he cannot at the same time plead that his tenancy has not been terminated according to law."
    The question whether a pleading is embarrassing is, in each case, a question for the court to decide in view of the facts and circumstances of a particular case. A claim or defence which a party is not entitled to make use of or a pleading which contains irrelevant allegations is embarrassing.

    11. Shiv Dayal, J.. as he then was, in S. K. K. Trust v. Kesri Dal Mill, AIR 1976 Madh Pra 54 relying on Davy v. Carretl, (1877) 7 Ch D 473, held that where any allegation cannot offer a defence to the action and which if not struck out would unnecessarily delay the suit, it must be struck out.

    12. In view of the inconsistent stand on contradictory facts taken by the defendant that he has not executed the pronote in favour of the plaintiff and that defence of benami transaction cannot be taken in respect of the pronote on the basis of which, the suit has been instituted and following the principles laid down in Abdul Rahim's case (AIR 1965 Pat 156) and S. K. K. Trust's case, I am of opinion that the learned Civil Judge has not committed any jurisdic-tional error when he allowed the plaintiffs' application under Order VI. Rule 16, C.P.C. striking out para 3 and para 2 of the additional pleas of the written statement.

    13. Now, I may say a few words about two decisions relied on by the learned counsel for the petitioner.

    14. It was held in Raghu Nath's case (AIR 1929 Lah 634) that payment made to the endorsee's agent and received by him in his capacity as an agent is good discharge of the hundies. No foundation whatsoever has been laid down in the written statement by the defendant that there was any endorsement by the plaintiff and that any payment was made by the defendant to the plaintiff's father in his capacity as agent of the plaintiff. It may be recalled that the case of the defendant is that he did not execute the pronote in favour of the plaintiff on the basis of which the suit was instituted against him and that the plaintiff was merely a 'benamidar' The decision in Raghu Nath's case has no relevance.

    15. Sections 3 and 78 of the Act were considered in Bhagirath's case (AIR I95fi Raj 174). It was held therein that Sections 8 and 78 or the Scheme of the Act do not preclude anybody except the holder of the promissory note or bill of exchange or cheque from filing a suit based thereon and that what Section 78 really appears to lay down is that a payment, in order to act as a full discharge of the instrument, must be made to the holder as provided in Section 82(c) where its application arises. It was observed as under (at p. 177):--

    "We are, therefore, of opinion that Section 78 should not be construed to mean that the right to institute a suit on the basis of an instrument specified in the section vests merely in the holder and no other person whatever. We, therefore, agree, with respect, with the view taken in Brojo Lal Shah v. Budh Nath. (AIR 1928 Cal 148) and similar other cases in so far as it accords with what we have stated above."
    It was further observed:--

    "At the same time, it has to be remembered that although a beneficiary or a true owner may bring such a suit, it is the holder who can give a discharge to the maker according to Section 78, Negotiable Instruments Act, and consequently the debtor would be entitled to insist that before he can be called upon to pay to the true owner, the latter must secure to him a lawful discharge from the holder."
    This decision is distinguishable on facts.

    16. No case for interference with the order dated Jan. 15, 1977 allowing the plaintiff's application under Order VI, Rule 16, C.P.C. is made out.

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    Comments

    Dal Chand v. Satish Chandra
    (Feb 1, 1982)