Nimmagadda Satyanarayana Petitioner. v. Adusumilli Anjaneyulu And Another

JUDGMENT

A Small Cause Suit was brought on a promissory note dated 22nd August 1927 executed by the 1st defendant in favour of the 2nd defendant and endorsed by the latter to the plaintiff on 24th November 1927. The 1st defendant pleaded (i) that the note was not supported by consideration; (ii) that the plaintiff was not a holder in due course. The 2nd defendant said he had no notice of dishonour and hence the suit must be dismissed as against him. The lower Court found that the suit note was not supported by consideration, that the plaintiff was not a holder in due course and even if he were, he had notice of the defect in title of his transferor. The suit was therefore dismissed and this revision petition has been filed against the dismissal.

As regards the finding that the note itself is not supported by consideration, it had to be admitted for the petitioner that there is the evidence of the writer of the note, D. W. 2, who says that nothing was paid and that the real consideration was that the 2nd defendant was to get a sluice constructed and this sluice was not sanctioned. The lower Court has disbelieved the evidence of the 2nd defendant as D. W. 4 who says that he paid money under the note. There can be no doubt that the lower Court had evidence on which to reach this conclusion and it was rendered probable by several other circumstances such as the fact that 2nd defendant, although he was a money lender who lent out Rs. 30,000 and was paying income-tax, said he maintains no accounts and produced none, that the 1st defendant never borrowed money from him before, that the note was executed not in the village of 2nd defendant but in Kodur, the village of the 1st defendant and that its accounts Rs. 144, corroborates the version of the 1st defendant that a series of promissory notes were executed at the rate of Rs. 15 an acre by the ryots, the holding of the 1st defendant being 9 acres. But it is argued for the petitioner that the whole of the evidence is inadmissible under S. 92 of the Evidence Act. In this connection Sri Ram v. Sobha Ram Gopal Rat and Subramania Iyer v. Narayanaswami Iyer (2), were quoted. The former has been expressly dissented from in two later cases of the Allahabad High Court Sheo Prasad v. Gobind Prasad (3) and Bhogi Ram v. Kishori Lal (4). As regards the latter case, it is the decision of a single Judge of this Court and it would appear that he held on the facts proved that there was consideration but the agreement alleged was a postponement of repayment. I have looked at the English case quoted by him Moseley v. Hanford . The question extracted by the learned Judge “Where a promissory note, on the face of it, purported to be payable on demand, parol evidence is not admissible to show that at the time of making it it was agreed that it should not be payable till after the decease of the maker” relied on by the petitioner's Advocate is followed by this “That evidence was adduced not to show a want of consideration or that the consideration for the note was illegal, or that it was not delivered to the party to be made use of for his own benefit. The utmost extent to which it could go was an attempt to prove that the note was not payable, as on the face of it it imported to be.” So it is clear that consideration had been paid in that case. The decision in Ramjiban Serowgy v. Oghur Nath Chatterjee which has been followed in numerous cases in all Courts, for instance Panchapakesa Ayyar v. Ayyaswami Ayyar of this Court, shows that a plea that an oral arrangement that a contract is to come into effect only on the happening of a certain contingency is a legal plea falling under S. 92 proviso (3) and, as has been pointed out, the distinction between this and a postponement of repayment of money is clearly brought out by comparing illustration (b) with illustration (j). There is therefore no reason to interfere with this finding of fact.

Then the second finding of fact is as to whether there was consideration for the transfer. Here again the lower Court relied on the fact that the 2nd defendant does not produce his accounts and that the endorsement which was made soon after the execution of the note does not state the consideration was cash and reads in some respects as if it were a mere endorsement for collection. However, as the lower Court rightly says, even assuming it is cash considerations and that the plaintiff were holder in due course, if it is seen that he knew of the infirmity of the original document, the suit cannot be decreed. We have here the express evidence of the writer of the document on the point’ who says that the plaintiff was there at the time the document was drawn up, knew the real facts and asked him to write that the amount was needed for cultivation purposes. As I consider that the findings of the lower Court on these questions of fact are based on evidence, this is sufficient for the disposal of this revision petition. It may be that the Court had not legal evidence on which to hold that the consideration was for an; illegal or immoral purpose but that becomes immaterial. As far as the 2nd defendant is concerned, it is clear that no notice of dishonour was sent within a reasonable time. The evidence of the plaintiff is that he kept on demanding the amount from the 1st defendant and sent him a notice, Ex. II, dated 21st December, 1927. The plaintiff did not produce the reply to Ex. II nor does he state what its contents were. The lower Court under these circumstances was entitled to draw the conclusion that the 1st defendant must have refused to pay the amount under the note long before the date when the suit was filed on the 22nd August, 1930 (the last day of limitation). I see no reason to interfere in revision and the petition is dismissed with costs, two sets.

N. R. R.Petition dismissed.