1. That a conditional paymein sufficiently state, it is a payment if ???. The learned Sue suspension lasting on the allegations bill is not over dig the recitals in the note ??? that no action would lie on the original consideration, dismissed the suit, without taking evidence. On this point there is a marked conflict of judicial opinion it this Presidency, although the lower Court assumes that the law is clear and settled. Two recent decisions will serve to show how divergent the views taker by this Court on this question are. ??? 1934 Mad. 5031, the question ??? before Stone, J., in a case on the original side of the High Court. There a hundi for Rs. 10,000 addressed to the plaintiff's firm was handed by the plaintiff to defendant 1 who deeming it equivalent to cash, executed in favour of the plaintiff a promissory note for that sum. The question arose, was there a cause of action independent of the note? Stone, J., thus observes:

“Had the transaction in question stopped with the giving of the letter empowering defendant 1 to go to Madras and collect Rs. 10,000 it would not be arguable but that the plaintiff had a cause of action springing out of the contract of loan. What is there that makes the letter give by defendant 1 to the plaintiff and a promissory note to secure the re-payment of that loan a merger or a novation extinguishing the earlier contract and turning these two contracts into one, a contract contained in a promissory note? I cannot understand under what principle of law the first contract is to be regarded as extinguished.”

2. This is a very emphatic statement of the law as understood by that learned Judge. Just a few months after that decision, Varadachariar, J., delivering the judgment of the Bench consisting of himself and Burn, J., expressed himself quite definitely holding the opposite view. Says the learned Judge:

“The note as well as the loan were contemporaneous and there is really no question of a definite anterior liability apart from the note he must be permitted to prove the very term contained in the suit letter under the ageist of a;, original debt. To permit him to do so will be in the very teeth of Section 91 of the Evidence Act: ??? Mad. 232.”

3. The conflict, to which I have referred is thus brought out by these two judgments, both of recent date, and an examination of the authorities will show that throughout there have been two ??? ??? found ???. In ??? a ??? contract ??? having been ??? a promisee embodying those terms was later in the day. The note was ??? and the plaintiff was not to fall back upon the contract ad by the loan. A similar view in 1914 Mad. 6574. There ??? treated as having become he promissory note and as no lie on the unstamped note, ??? could not fall back upon in 1933 Mad. 715, Krishalai, J., held, following: 1914 (4), and several decisions by ???, that Section 91 of the Evidence Act, 1 the proof of the loan, on the that its terms were reduced to and embodied in the note which inadmissible.

learned Judge observes that ??? consideration for the note is in fact and in substance anterior in ??? its date, the lender could not be ??? to rely upon the original loan, ???, the Judges whose view finds ??? in Krishnan Pandalai, J's lent, seem to put the question some thus. Was there or was there not ??? transaction independent of, ??? to, the execution of the ??? note? If the answer be in the ??? a suit would lie on the ??? consideration. If in the ??? it would not. Turning now to the set of decisions, it was held in ??? 1126, that the existence of the ??? stamped promissory note did prevent the plaintiff from relying the original loan. The learned as observed:

??? cause of action ‘for money lent’ was ??? in itself before the giving of the note, and ??? request and the payment by ??? constitute the cause of action, can be independently of the note.”

4. 23 Mad. 5277, again, the plaintiff allowed to sue on the original debt, the endorsement of the note in his favour having been found invalid. 10 Mad. 943 was referred, to in the judgment, but scarcely any attempt was made to distinguish it. The facts of the next case, to which I shall refer, namely, 29 Mad. 1118, lend special significance to the judgment in that case. The plaintiffs there alleged that the defendant came to them on a certain morning and borrowed Rs. 400 promising to execute a promissory note for the amount in the evening, and that he accordingly came; in the evening and executed an unstamped promissory note, representing that no stamp was available. On those facts it was held that there was a completed contract independent of the note, which must be deemed to have been executed on account of the loan made previously. The facts of this case are indistinguishable from those in 10 Mad. 94, already cited, although two different and opposite conclusions were reached. In 10 Mad. 94 case also there was an oral promise made in the morning, which was followed by the note executed in the evening. The principles bearing on this point have been fully discussed in the judgment of Coutts-Trotter and K. Srinivasa Ayyangar, JJ., in 1917 Mad. 4609. Coutts-Trotter, J., declares:

“The giving of the security does not extinguish but merely suspends the cause of action on the original debt, which revives if the security be not discharged at maturity”,

and the learned Judge treats this proposition as fundamental and rudimentary Srinivasa Aiyangar, J., having held that the chit was inadmissible in evidence, goes on to say:

“If a bill or a note is given for a contemporaneous debt, there is a difference of opinion, bub the better opinion is that even in such a case the bill merely suspends the remedy, and does not operate as a discharge.”

5. The Italics are mine and this decision is valuable as it contains an exposition of the real character of negotiable instruments. In 1917 Mad. 10810, though the suit was not on an invalid note, the observations made in the judgment are extremely relevant. Abdur Rahim, J., says:

“The whole contention is that because the advance of money and the execution of the promissory note were simultaneous, a suit would lie only on the promissory note and not on the debt evidenced by it. There seems to be nothing in reason in support ??? such a distinction.”

6. I do not propose ??? to the observations of K. Srinevasa Aiyangai, J., made in the same sense. This case was Teferred to with approval by Oldfield and Krishnan, JJ., in a later case: see 1917 Mad. 20111. Pausing here for a moment, I must observe, that, far from the law being settled the other way for this Presidency, as seems to have been conceded by the learned Advocate-General in 1935 Mad. 23, there appears to be a preponderance of authority in favour of the view that although the execution of the note is simultaneous with the loan, the lender can fall back upon the original consideration. This is precisely what Wallace, J., has said in 1926 Mad. 114812, where the learned Judge, after examining numerous authorities, observes:

“Where a promissory note is taken for a contemporaneous debt, the balance of opinion is that the execution of the promissory note does not discharge the debt but only suspends the creditor's ordinary remedy during the currency of the promissory note.”

7. The other view seems, with all respect, to ignore the fundamental principle, that a negotiable instrument is but a conditional payment and does not supersede or destroy the original that springs up from the contract of loan. As regards Illus. (b), Section 91 of the Evidence Act, which says:

“If a contract is contained in a bill of exchange, the bill of exchange must be proved.”

8. It is difficult to conceive that an illustration to a section of the Evidence Act could have been intended to abrogate or annul the well settled rule of the English law, that a negotiable instrument operates only as a conditional discharge. Moreover, that illustration does not in fact lead to the view in support of which it is relied on. Its effect is no more than to exclude all proof other than the bill itself, when the matter to be proved is the contract embodied in that bill. That is one thing, but it is quite a different thing to say that the original debt is superseded by the bill, it being of the very essence of a negotiable instrument that it is ??? other word, is paid, ??? long as the ??? the bill has ??? parted ??? it becomes due and is ??? suspended right revives. In the case of an invalid note, not even a conditional payment, a “worthless piece of paper:” ??? Ad. 69613. The fallacy ??? ignoring this all-important a negotiable instrument. ??? of Sadasiva Ayyar, J., in 657, about the doctrine of law being inapplicable, fail, respect, to take note of the fac law of negotiable instrument part of the Indian legal syst effect then of S. 91, Evidence merely to provide that the ??? bodied in the bill shall be ??? the bill itself; but that does no or ??? that the bill has ??? or superseded the original for to hold that it does would a to holding that the rule of ??? overrides a well settled principle, ??? law.

9. That S. 91 does not stand in the of the lender falling back on the or loan, is explained in the judgment Jenkins, C.J, in 24 Bom. 36014 recent judgment of the Patna High 1928 Pat. 42615, takes the same I may, in this connexion usefully re the criticism of Mulla and Pratt ??? based upon S. 91. They out in their valuable ??? on Stamp Act, that the true answer to objection is that the note being a ??? able instrument, the law ??? it not as a contract but as ??? cash and that this has been looked in some Indian decisions, unnecessary to go so far, as, it opinion, it would be safer to ??? bill as a contract but not ??? effect of superseding the original. The further note of the learned ??? that the rule that a bill is regarded conditional payment, is confined ??? are is strict law negotiable instrtm emphasises the point under discus ??? Indian Stamp Act ??? 3 and 124). ??? Cal. 25616, where we a twofold ??? there is a completed for goods sold, and he cause of action is has been weakened by ??? which have ??? that case. In 23 ???17 C.J, ??? and in fact dissented it is not so stated and ??? allowed to sue on the ??? arising from the loan. ???, already cited ??? observing that the lower ??? a needlessly technical, to the judgment of ???, he goes on to add, “had ??? and intimate know ??? law.” In that case ??? having been inadmissible of a stamp, the lender was to sue on the original ???. The English cases, of which ??? 2218, is an instance, have referred to and relied on. I am that in some High Courts a ??? view has prevailed: (see, for i.e 1931 All. 18319, which departed from the earlier view prevalent in that Court), but ??? to the conclusion that the ??? rule based on true principle is ??? the loan is not ante ??? of, the bill ??? with it, the on the note turns out to been fall back upon the original express or implied, arising from. In the result, the lower Court's is set aside and it is directed to findings, after taking evidence, on ??? that arise in the case, within month from the receipt by it of this ???. Time for objections, if any, is week. The costs of the civil ??? petition are reserved.

P.R.S/K.S

10. Order accordingly.