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Madubai Francis Damel Vs. Vadilal Kashidas - Court Judgment

LegalCrystal Citation
SubjectBanking
CourtMumbai
Decided On
Case NumberSecond Appeal No. 97 of 1937
Judge
Reported inAIR1939Bom147; (1939)41BOMLR219
AppellantMadubai Francis Damel
RespondentVadilal Kashidas
DispositionAppeal dismissed
Excerpt:
negotiable instruments act (xxvi of 1881), sections 8 and 9 - promissory note passed in favour of joint hindu family firm-partition among members constituting firm-subsequent suit to recover amount of promissory note-suit by all members of firm when promissory note passed-maintainability of suit.;where a promissory note is passed to a joint hindu family firm, a suit on the note can be brought by all the individual members who comprised that firm at the time when the note was passed.;a promissory note was passed in favour of a joint hindu family firm. subsequently there was a partition, among the members constituting the firm and the promissory note fell to the share of two members. in a suit by these two members to recover the amount of the promissory note the remaining members of the..........was passed there was a partition among the members constituting that joint family firm and the suit note fell to the share of plaintiffs nos. 1 and 2. originally the suit was brought by these two plaintiffs and the other members of the firm were made defendants along with the heirs of the deceased francis. subsequently, however, an application was given and it was granted to transpose the remaining members of the family, who had been impleaded as defendants, as plaintiffs, with the result that all persons constituting the joint family firm of kashidas ambaidas were shown as plaintiffs. the principal contention of the defendants was that the plaintiffs had no right to sue on the promissory note. that contention has been negatived by both the lower courts and an administration decree.....
Judgment:

Divatia, J.

1. This is an appeal by some of the defendants against a decree in an administration suit in favour of the plaintiffs. The suit was for the administration of the estate of one deceased Francis Pascol Damal. The principal property which the plaintiffs asked the Court to administer was a debt owed by the deceased to the shop of Kashidas Ambaidas under a promissory note of Rs. 2,401 passed by the deceased Francis on September 18, 1931. This shop of Kashidas Ambaidas was a joint family business and after the promissory note was passed there was a partition among the members constituting that joint family firm and the suit note fell to the share of plaintiffs Nos. 1 and 2. Originally the suit was brought by these two plaintiffs and the other members of the firm were made defendants along with the heirs of the deceased Francis. Subsequently, however, an application was given and it was granted to transpose the remaining members of the family, who had been impleaded as defendants, as plaintiffs, with the result that all persons constituting the joint family firm of Kashidas Ambaidas were shown as plaintiffs. The principal contention of the defendants was that the plaintiffs had no right to sue on the promissory note. That contention has been negatived by both the lower Courts and an administration decree has been passed in favour of all the plaintiffs in which the whole account between the parties including the promissory note is ordered to be taken under the Dekkhan Agriculturists' Relief Act.

2. In this appeal it is contended on behalf of the appellants that the plaintiffs as individual members of the joint family firm had no right to bring this administration suit and therein ask for the recovery of the amount of the promissory note. Their case is that although the suit is in form an administration suit, in substance it is a suit on the promissory note and that such a suit could be brought only by the person to whom the promissory note was passed ; that the note was passed to the firm of Sha Kashidas Ambaidas and not to the plaintiffs individually, and that the shop being the holder of the promissory note and there being no endorsement on the note in favour of the plaintiffs, the suit as brought by the plaintiffs and not by the firm was not maintainable. A number of authorities have been cited on both sides, but none of them touches the exact point to be decided in this appeal. It has been held, for instance, in Harkishore Barna v. Gura Mia Chaudhuri I.L.R. (1930) Cal. 752 and other cases, that it is the holder of a promissory note who alone is entitled to maintain a suit on the note and that a true owner, who is not' a holder, cannot maintain a suit on the note, even though the holder is admittedly his benamidar and is made a party to the suit. It has also been held by our Court in Kamalakant v. Madhavji (1934) 37 Bom. L.R. 405 that where a promissory note was passed in favour of a deceased Hindu, his son could not sue to recover its amount in a dual capacity, namely, as the sole surviving coparcener of a joint and undivided Hindu family of which he and his father were members, or, in the alternative, as the sole heir and legal representative of his father. That proposition has been approved in a later case, viz., Shantaram v. Shantaram : AIR1938Bom451 , where it is further held that although coparceners as such could not sue on the note, they could recover on it as legal representatives of the deceased manager on production of a succession certificate, and that on the strength of the certificate they could file a suit to enforce the note.

3. All these decisions, however, are not of direct assistance in the disposal of this appeal. In the present case we have not the case of a coparcener filing a suit on a note passed to another coparcener, but the note is passed to the joint family firm, and the suit is brought by all the members constituting that firm at the time when it was passed. If, therefore, the plaintiffs can be said to be the holders of the note or holders in due course under Sections 8 and 9 of the Negotiable Instruments Act, they would certainly be entitled to bring this suit, and the principal question, therefore, is whether the plaintiffs fall within these two definitions. Now, Section 8 of the Act, which defines the term 'holder of a promissory note', applies to any person entitled in his own name to the possession thereof and to receive or recover the amount due thereon from the parties thereto. Section 9 says that the term 'holder in due course' means any person who for consideration becomes the possessor of a promissory note, or the payee or indorsee thereof. Now, the joint Hindu family firm to which the promissory note is passed is not an ordinary partnership arising out of a contract and is not governed by Order XXX of the Civil Procedure Code. It has, no doubt, certain incidents of an ordinary partnership, but in certain material respects it differs from such partnership. A joint family firm goes generally by a family name and that is a compendious name which includes all members of the family firm. Such a firm, therefore, means the individuals who constitute the firm, and in my opinion, apart from the individuals composing that firm it has no separate legal entity. Even if the firm were an ordinary firm and not a joint Hindu family firm, it would be open to all the partners constituting that firm to bring a suit on a promissory note passed to that firm. In an old case, Pease v. Hirst (1829) 10 B. & C., there are certain observations which show that where a promissory note is passed to a firm or company, a suit could be brought by the individual partners composing that firm at the time when the note was passed. It was contended in that case that the action which was brought by the four surviving individuals who constituted that company to which the note was given, had no right to bring a suit on it, but it was held that the action was rightly brought in the names of the members composing the firm to which the note was given. It is conceded-and rightly conceded on behalf of the appellants-that if the note had been endorsed in the name of the plaintiffs, they could have brought the present suit, but then the question is, who would have endorsed the note? The note being passed to the joint family firm, either the manager or all the members could have endorsed it in favour of the members constituting the firm, and therefore, the endorsers and the endorsees would be the same. It may be that the endorsement could be made by the firm, but that does not necessarily mean that the persons who composed the firm had no right to the promissory note. They and they alone were interested in the promissory note and they were the holders thereof. I do not see any difficulty, therefore, in coming to the conclusion that the plaintiffs, who constitute the firm, were holders thereof, and that the lower Court was right in holding that they had the right to bring this administration suit asking for the relief of accounts including the promissory note.

4. The decree of the lower appellate Court is, therefore, confirmed and the appeal is dismissed with costs.


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