Ram Labhaya, J.
1. This appeal arises out of a suit for the recovery of a sum of Rs. 1,200. The suit was decreed in the trial Court. The learned Additional Subordinate Judge reversed the decree of the Court below and dismissed the suit. The plaintiff has come to this Court on second appeal.
2. In the trial Court, the plaintiff's case was that the husband of defendant 4 who was the father of defendants 1 to 3 borrowed Rs. 1,200 in cash from him on 27-8-1943 and executed a hand-note for it. He agreed to pay interest at the rate of 1 per cent, per mensem on the amount borrowed. On 12 9-1943, plaintiff demanded the repayment of the loan and he got a cheque dated 12-9-1943 for the amount from his borrower, who being dead is now represented by the four defendants. The cheque was duly presented in Bank on 12-9-1943 but it was dishonoured. The plaintiff alleged that he informed Jogendra Dutta, deceased, about its dishonour, but he did not pay the money but was just putting him off. He died in 1945. The suit was therefore, instituted against his legal representatives.
3. The suit was resisted. It was pleaded that no money was borrowed by Jogendra Dutta, deceased, on 27-8-1943. The execution of the hand-note was also denied. As regards the cheque, the defence raised was that it had been fraudulently obtained by the plaintiff on 27-8-1943 for wrongful gain.' The allegation about the notice of dishonour was also denied. It was further pleaded that Jogendra Dutta, deceased, was insane from 1942 and therefore the bandnote and the cheque did not create any enforceable liability. The learned Munsiff found that the execation of the cheque had not been denied and that the evidence adduced by the defendants did not establish that he was insane or of unsound mind during the
period commencing from 27-8-1943 and ending on 12-9-1943. He also found, relying on plaintiff's evidence, that the sum of Rs. 1,200 had been borrowed.
4. The learned Additional Subordinate Judge
found that Jogendra Dutta, deceased, was proved
to have been insane on the relevant dates. He
also held that it had not been established that
the cheque was drawn by the deceased. In his
view the khata entry was not the basis of the
plaintiff's suit. On the question of the alleged
notice of dishonour, he found against the plaintiff
and held that in the absence of notice of dishonour
the suit was not maintainable.
5. The learned counsel for plaintiff-appellant has conceded that the plaintiff could not recover the amount claimed on the basis of the handnote as it was not adequately stamped. He further conceded that in these circumstances the claim could not rest on khata entry either. He based his claim entirely on the cheque which was subsequently dishonoured. Mr. Boy for the respondents admits that there was no clear denial in the written statement of the fact that the cheque had been drawn by Jogendra Dutta, deceased and also agrees that the plea raised about the cheque necessarily implies the admission that the cheque was drawn by him. The plea was that the cheque had been obtained by fraud in August 1943. There was in these circumstances, no issue on the point as to whether the cheque was drawn by the deceased or not. Evidence bearing on this question, therefore, could not have been considered. There was really no controversy on this point. The statement made by the son of the deceased at the evidence stage that the cheque did not bear the signature of his father was apparently an after-thought and should not have been considered at all. It did not relate to any issue.
6. Under Section 118, Negotiable Instruments Act, it is to be presumed that the cheque was for consideration. It would be for the defendants to rebut the statutory presumption arising under Section 118, Negotiable Instruments Act. Defendant 4 in her statement deposed that she was not aware whether any money had been borrowed by her husband. This statement shows that he was not even prepared to deny consideration. There is no proof of the absence of consideration. On the other hand, plaintiff deposed to the advance. His accountant, who was working with him, has also supported him. This testimony remained unrebutted. It follows that the plaintiff could recover the amount advanced on the basis of the dishonoured cheque unless it is found that by reason of his failure to give notice of dishonour the suit is not maintain, able or that no liability was created by reason of the deceased being insane on the date he gave this cheque.
7. On the question of notice of the cheque having been dishonoured, the learned Counsel for
the appellant has relied on Clause (c) of Section 98, Negotiable Instruments Act, which provides that 'No notice of dishonour is necessary when the party charged could not suffer damage for want of notice'. It is not disputed that on the date the cheque was presented, the deceased had no funds in the Bank, The reason for dishonour was that his account had been closed. In these circumstances it would appear that no question of any damage to the defendants would arise. Mr. Boy has not been able to suggest how, in the circumstances of the case, the deceased or his representatives could suffer any damage by reason of absence of notice assuming that no notice was given. In these circumstances the suit could not fail for want of notice. The omission cannot be fatal to the suit.
8. The only question that now remains to be determined is whether the deceased was insane on the relevant dates as alleged by the defendants. Under Section 12, Contract Act, a person is said to be of sound mind for the purpose of making a contract if, at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon his interests. The defendants, therefore, had to establish that at the time the cheque was issued the deceased was incapable of understanding it and of forming a rational judgment as to its effect upon his interests. (After discussing the evidence the judgment proceeded:)
The question whether a person is of unsound mind at the time of execution of a document is a question of fact; but this question does not depend merely upon the belief or disbelief of witnesses before the Court. It would depend on inferences to be drawn from the evidence: (vide Tilok Chand Charan Das v. Mahandu, A.I.R. 1933 Lah. 458). (After discussing the evidence the judgment proceeded:)
For all practical purposes, there is no evidence on which it could be held that the deceased was incapable of understanding the effect of his acts on his interests as required by Section 12, Contract Act,
9. In Kanhaiyalal v. Harsingh Laxman, A.i.r. 1944 Nag. 232, Pollock J., observed that it is doubtful whether it could be held that any person was by reason of unsoundness of mind incapable of entering into a contract in the absence of any medical evidence. I share his doubts and feel that it would be extremely hazardous to do so. In this case, apparently, the best evidence has not been produced and the finding of the learned Additional Subordinate Judge rests on a misapprehension of the legal position arising in the case as also of the evidence adduced. He has not taken into consideration the requirement of Section 12, Contract Act. He has misread the medical evidence. The inference drawn is also not justified. They finding, therefore, cannot be sustained.
10. Mr. Boy has urged that the case be remanded for further inquiry. He thought there was possibility of the defendants being able to produce
better evidence. This may be correct, but I would not be justified in ordering a remand when it is not disclosed why any evidence that may now be made available was not produced at the time of the trial. Defendants cannot be allowed now to fill up gaps. No case for remand has been made out.
11. For reasons given above, the appeal is allowed. The order of the learned Additional Subordinate Judge is reversed and plaintiff's claim for the sum of RS. 1200 is decreed but parties shall bear their own costs throughout in the peculiar circumstances of the case.