Abdur Rahim, J. — The suit which we are dealing with in this appeal was instituted with respect to a hundi drawn by the 1st defendant, the appellant, on S. R. M. S. Ramanathan Chetty in Rangoon in favour of the 2nd defendant who assigned it to the third defendant and the 3rd defendant assigned it to the 4th defendant's father who assigned it to the plaintiff. Several defences were raised but we need not deal with all of them. We wish to deal with the questions of fact whether there was presentment of the hundi and in due time, whether there was dishonour and notice of dishonour, if any given to the drawer as required by law. The question whether the hundi was discharged by payment has also been argued before us. The learned Advocate-General has also raised a rather interesting question of law based on the provisions of Sects. 61 and 74 of the Negotiable Instruments Act read with Sects. 91, 92, 93 and 94. The case cannot be said to have been tried as satisfactorily as it might have been; but we have to come to a conclusion upon the evidence on record. The whole evidence regarding presentment and dishonor and the alleged discharge is of a very unsatisfactory kind. No witness from the firm of the drawer was examined in support of the case of the plaintiff as to presentment and no explanation is forthcoming for this omission. Nor has there been any attempt to produce the books of that firm which, it is likely, would have contained some record as to the fact of presentment of this bill if it was actually presented as is spoken to by P. W. 2. The bill is alleged to have been sent at the request of the 4th defendant's father by a firm in Madura, called V. E. R. M. Firm for collection. One of the men from that firm, the son of the proprietor, was examined as plaintiff's witness 5. He says that he received a letter saying that the bill had been presented for payment and that it was dishonoured. But no attempt was made to produce that letter nor has any book of account or anything in writing been produced in support of the plaintiff's allegation. It was quite easy for the plaintiff to produce absolutely conclusive evidence on this point. It was argued by the learned Advocate-General that we ought to accept the evidence given by the plaintiff even though it is not the best evidence available, and such as it is, is unsatisfactory, because the probabilities of the case, he contends, show that the allegation of the plaintiff are true. But the transaction to say the least, was of a very peculiar character. We do not find any proper explanation for the fact that although the bill was presented sometime in May or June 1913, if the evidence of the plaintiff is to be accepted on that point, it was noted on only in 1915 and no action was taken on the bill for two years. Then there is really no evidence that any notice of dishonor was given to the 1st defendant within a reasonable time after such dishonor. The plaintiff says that before instituting the suit, that is sometime in 1915, he asked the 1st defendant for payment and that he promised to pay. That seems to me to be an absolute untruth. The defence of the 1st defendant is that the bill had been long ago discharged. It is inconceivable that, if the plaintiff made a demand upon him, he should have promised to pay. The learned Advocate-General has not really relied on the noting such as there is on, this bill for the purpose of drawing any presumption of presentment and dishonour. It is a most peculiar entry by the Notary Public of Rangoon. All that it contains is noted for nonpayment. It does not give the date of dishonour as required by Sect. 99 of the Nagotiable Instruments Act. Then there is no certificate of protest within the meaning of Sects. 100 and 101 of the Act. It is only where there is a proper protest that Sect. 119 would apply requiring the court to presume the fact of dishonour.
As regards the question of discharge, it is one of the pleas of the 1st defendant. Of course the onus lies upon him to prove it. His allegation is that this bill was drawn in order to pay the price of some diamonds which he bought from the 2nd defendant. He says that at his instance the 3rd defendant pledged these diamonds as well as some of his own jewels with one Puduvayal firm, and that the 3rd defendant retained this hundi as a sort of security although afterwards he (1st defendant) paid off the Puduvayal firm and redeemed the jewel by raising the money from one Thanappa Chetty. This Thanappa Chetty has not been examined although he was present in court being brought up under warrant. Nor is there any receipt to show payment either to the 2nd defendant or to the Puduvayal firm. While I am not prepared to say that the entire story of the defence in this connection is unfounded since there is no explanation, forthcoming as to why no action was taken nearly two years after the alleged dishonour, at the same time the onus being on the 1st defendant to prove this plea, it cannot be said that the evidence such as it is has made it out. However the 1st defendant seems to be entitled to succeed on the other points which I have dealt with.
Then the learned Advocate-General drew our attention to the unhappy wording of Sects. 91 to 94 of the Negotiable Instruments Act. Sect. 91 defines dishonour by non-acceptance. Sect. 92 defines dishonour by non-payment and says ‘A promissory note, bill of exchange, or cheque, is said to be dishonoured by non-payment when the maker of the note, acceptor of the bill or drawee of the cheque makes default in payment upon being duly required to pay the same.’ Sect. 93 provides for notice being given in case of dishonour by non-acceptance or non-payment.
The learned Advocate-General's argument is that these sections cannot apply to the present case inasmuch as this is not a bill payable after sight or after a fixed date and therefore there can be no question here of acceptance or non-payment. Sect. 92 only deals it is said, with the default of the acceptor of the bill and not the default of the drawee in cases where the bill does not require to be accepted. But the effect of this argument if sound pushed to its logical conclusion must be that there was no dishonour at all in this case and the suit must on that account fail because the effect of Sect. 30 of the Act is that the drawer of a bill of exchange is bound to compensate the holder only in case of dishonour by the drawee or acceptor. We were referred to Sect. 37 as also defining the liability of the drawer. That section only says that the drawer of a bill of exchange until acceptance is liable as principal debtor. But if the argument of the Advocate-General is right, there could be no question of acceptance in this case and Sect. 39 would have no application.
Apart from that I do not think that the legislature intended to lay down that in the case of a bill payable at sight or on demand, there can be no dishonour by non-payment. In fact such a position seems to me to be, so untenable that the court would not be justified in imputing any such intention to the legislature, if it could be helped. As is well known, the Negotiable Instruments Act, was based on the principles of English Law. The drafting of some of these sections seems to be rather loose, especially as regards the collocation of certain important phrases. For instance Sect. 93, paragraph 2 is to this effect. ‘Nothing in this section renders it necessary to give notice to the maker of the dishonoured promissory note or the drawee or acceptor of the dishonoured bill of exchange or cheque. Now if we were to proceed on the line of interpretation suggested by the learned Advocate-General then we will have to apply the word acceptor to cheques, while in the case of cheques there would hardly have been any question of acceptance within the contemplation of the legislature. Similar wording occurs in other sections as well. For instance, Sect. 99 says “when a promissory note or a bill of exchange has been dishonoured by non-acceptance or non-payment the holder may cause such dishonour to be noted by a notary public upon the instrument”. Surely the legislature could not have intended non-acceptance to be applicable to promissory notes and not to bills of exchange, although that will be the result of the order in which the words are allocated. I think the difficulty suggested by the arguments on behalf of the respondent, may be met at least in two ways. Sect. 30 lays down that a drawee is liable to compensate the holder in case of dishonour provided due notice of dishonour has been given as provided by the Act. Then Sect. 93 says that in case of non-acceptance or non-payment of a promissory note, bill of exchange or cheque, the holder must give a notice that the instrument has been dishonoured. I take it that what the legislature meant was that notice of dishonour should be given either of non-acceptance or non-payment, whichever may be the case in the transaction in question. Then Sect. 94 lays down that such notice must be given within a reasonable time after dishonour. Sect. 93 indicates the parties to whom notice is to be given in cases where there is a succession of indorsers. But Sect. 30 is specifically applicable to the case of a drawer, and that read with Sect. 94 would be sufficient so far as the liability of the drawer is concerned to show that notice of dishonour is to be given in a reasonable time.
But it seems to me to be quite reasonable on the other hand to go further and say that Sects. 91, 92 and 93 were intended to be applicable to a bill payable on demand. It is quite true that the law does not require that in case of such bills there should be a presentment for acceptance. But if the drawee of a bill payable on demand refused to accept it, its practical effect is refusal to pay and become dishonour by non-payment. That is to say there is nothing in law which precludes a bill payable on demand being presented for acceptance although that may not be necessary. The word ‘acceptance’ is not defined but ‘acceptor’ is. The drawee becomes the acceptor when he has signed his assent upon the bill. The English Statute, Bills of Exchange Act, defines acceptance as the signification by the drawee of his assent to the order of the drawer. That is clearly what is implied in the definition of the word acceptor in the Negotiable Instruments Act; and I do not see why it should not apply as much to a bill payable on demand as to a bill payable after sight or on a fixed date. Sect. 18 of the English Act says that a bill may be accepted when it is overdue. That would apply as well to a bill payable after sight. Sect. 30 of the same act corroborates this interpretation. It says that in the case of a bill payable after sight presentment for acceptance is necessary in order to fix the maturity of the instrument, but in no other case is presentment for acceptance necessary in order to render liable any party to the bill. That implies that there may be presentment for acceptance of a bill payable on demand although it is not required by the law. The Negotiable Instruments Act does not expressly lay down that bills payable on demand or bills other than those payable after sight need riot be presented for payment. But this undoubtedly followed from Sects. 61 and 64 which describe the bills that are required to be presented for payment or acceptance.
I am fortified in my interpretation of the Act with respect to this matter by a decision of the Bombay High Court Rant Ravji Jambhekar v. Pralhaddas Subkarn(1). That was a case of a bill payable after a fixed date, but it was presented for acceptance before the expiry of that date although the Negotiable Instruments Act does not contemplate such presentments. The drawee refused to accept the bill and it was never presented for payment afterwards. It was held that there was a good cause of action and the learned Judges observe at pp. 141 and 142 that although the law does not require presentment for acceptance of a bill payable after a fixed date before such date has arrived yet under the English law it was not only allowable but was strongly advisable to do so, and that the Negotiable Instruments Act made no alteration in that respect. They point out that presentment for acceptance must always and in every case precede presentment for payment, and that the drawer of a bill contracts that whenever a bill is duly presented, it will, subject to the provisions of Sect. 63, be accepted. Then they say, that when it is dishonoured by non-acceptance as well as when it is dishonoured by non-payment, the provisions of Chapter VIII (in which Sects. 91 to 94 occur) come into play. They point out, ‘It is true that there is no explicit declaration of the law upon this subject, as in Sect. 43 of the English Act. But the whole scope and tenor of Chapter VIII of the Indian Act appear to contemplate the same result as is there declared to follow from non-acceptance; I may also refer to a ruling of the Calcutta High Court in Jeetun Lall v. Sheo Churn(2), which was before the passing of the Negotiable Instruments Act. It shows that the provisions of the Negotiable Instruments Act are really based on the principles of the English Common Law relating to mercantile instruments, and there can be no doubt whether as pointed out there, the law, has always been both in England and in India that there must be dishonour and notice of dishonour given within reasonable time, in order to sustain an action against the drawee or any other holder of the bill.
The appeal of the 1st defendant must therefore be allowed and the decree of the Subordinate Judge as against him will be set aside and the suit against him dismissed with costs here and in the court below.
Oldfleld, J.—I agree with my learned brother's decision on the questions of fact and of law.
As regards the latter I wish to add only that the law of Negotiable Instruments is, as it has been described cosmopolitan; and in the present case, where we have no special considerations arising with reference to the circumstances of Indian business, we are justified in endeavouring to read the statute, if it is possible to do so, conformably to the provisions of the English Law, which follows the general commercial law of the rest of the world. There is no dispute that under the English Law the argument of the learned Advocate-General would be absolutely unsustainable, and a reference to the Bills of Exchange Act is sufficient to show that. In those circumstances it is our duty to scrutinise the language used in the Negotiable Instruments Act most carefully and I am glad to be able to hold that the refusal to pay referred to in Sect. 92 includes the refusal to accept such as is contemplated in Sect. 91 which is a possible though not an invariable or obligatory preliminary to payment being demanded at all. That is shortly the ground, on which I agree with my learned brother.
K. V. S.Appeal allowed.