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Nathoobhai Dullabbhai Seth Vs. Himatlal Vastachand Dalal - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtMumbai
Decided On
Case NumberO.C.J. Suit No. 2165 of 1921
Judge
Reported inAIR1921Bom336; (1921)23BOMLR1231
AppellantNathoobhai Dullabbhai Seth
RespondentHimatlal Vastachand Dalal
DispositionSuit dismissed
Excerpt:
.....the plaintiff could not recover the money. - - the words 'on demand' and the words 'at my convenience' can very well stand together and both taken together would mean 'as soon as it is convenient to me or immediately it is convenient to me'.the plaintiff's counsel further contended that if the words 'at my convenience' are not to be rejected then the writing is a promissory note payable within a reasonable time. a promissory note payable when the maker is in good circum stances has been held to be invalid as a promissory note; and the plaintiff having failed to prove the defendant's ability to pay, the pro-1 raise did not operate, and the plaintiff could not recover. it was for the plaintiff to show that the defendant was able to pay or that it was convenient for the defendant to..........see section 19 of the negotiable instruments act. the limitation period in respect of a promissory note payable on demand is three years from the date of the note. the words 'on demand' in a promissory note are always read not as postponing the date of payment but as meaning that the money payable is payable at once, and no demand is necessary before suit :see bam chunder ghosaul v. juggutmonmohiney dabee i.l.r (1878) cal. 283 the words 'on demand' really are unnecessary in a promissory note. the words 'at my convenience,' therefore, in my opinion,] cannot be rejected and some meaning must be assigned to them. the words 'on demand' and the words 'at my convenience' can very well stand together and both taken together would mean 'as soon as it is convenient to me or immediately it is.....
Judgment:

Kanga, J.

1. This is an action brought by the plaintiff to recover a sum of Rs. 5,000 on an alleged promissory note, dated 4th June 1918.

2. The defence is that the writing, dated 4th June 1918, is not a promissory note and that there was no consideration for the said writing even if it was a promissory note.

3. The said writing is in the following terms:-

Rs. 5,000' Bombay, 4th Jnne 1918.I promise to pay on demand at my convenience) Nathoobhai Dullabhjee Sheth the sum of rupees five thousand only for value received in cash at interest at the rate of six per cent, per annum.

4. At the hearing on the application of the plaintiff's counsel the plaintiff was allowed to amend the plaint and plead in the alternative, that the writing dated 4th June 1918 was an agreement whereby the defendant agreed to pay Rs. 5,000 to the plaintiff. It is clear from the evidence in the case that whether the writing be regarded as a promissory note or as an agreement, the same is without consideration and the plaintiff cannot recover from the defendant the amount claimed. [His Lordship after discussing the evidence proceeded.-]

5. In this view of the case it is unnecessary to decide the other issues raised in the suit. But I think it advisable to express my opinion on the other points argued before me. It was argued by the defendant's counsel that the writing dated 4th June 1918 was not a promissory note because the words 'on dtwianri at my convenience' indicated that there was not an unconditional under taking by the defendant. Mr. Lalji for the plaintiff has contended that the words 'at my convenience1' are wholly inconsistent with the words 'on demand' and therefore should be rejected as repugnant. But a promissory note in which no time for payment is specified is payable on demand : see Section 19 of the Negotiable Instruments Act. The limitation period in respect of a promissory note payable on demand is three years from the date of the note. The words 'on demand' in a promissory note are always read not as postponing the date of payment but as meaning that the money payable is payable at once, and no demand is necessary before suit :see Bam Chunder Ghosaul v. Juggutmonmohiney Dabee I.L.R (1878) Cal. 283 The words 'on demand' really are unnecessary in a promissory note. The words 'at my convenience,' therefore, in my opinion,] cannot be rejected and some meaning must be assigned to them. The words 'on demand' and the words 'at my convenience' can very well stand together and both taken together would mean 'as soon as it is convenient to me or immediately it is convenient to me'. The plaintiff's counsel further contended that if the words 'at my convenience' are not to be rejected then the writing is a promissory note payable within a reasonable time. The defendant in his evidence says that he told the plaintiff that the transactions between the parties were by way of wager and so the plaintiff agreed to take Rs. 5,000 and agreed; to receive payment at the defendant's convenience. The defendant's counsel stated that the defendant does not pay because it is not convenient for him to do so. Under Section 4 of the Negotiable Ins truments Act, a promissory note is an instrument in writing containing an unconditional undertaking. According to Section 5 'a promise...to pay is not 'conditional' within the meaning of this section and Section 4 by reason of the time for payment of the amount or any instalment thereof being expressed to be on the lapse of a certain period after the occurrence of a specified event which, according to the ordinary expectation of mankind, is certain to happen, although the time of its happening may be uncertain. A promissory note payable when the maker is in good circum stances has been held to be invalid as a promissory note; see Ex parte Tootell (1798) 4 Ves. Jun. 372.

Certainty (says Mr. Justice Asbhurst in Carlos v. Faneourt (1794) 6 T.R. 482 Is a great object in commercial .instruments; and unless they carry their own validity on the face of them, they ace not negotiable; on that ground bills of exchange, which are only payable on a contingency, are not negotiable, because it does not appear on the fore of them whether or not they will ever be paid.

6. From the word used in this writing, viz., 'at my convenience'1 it does not appear on the face of the writing whether the same will ever be paid. The words, in my opinion, do import a condition and therefore there is no unconditional Undertaking to pay and the writing is not a promissory note.

7. If, as was contended on behalf of the plaintiff, the writing is a promissory note payable within a reasonable time then the writing-is not duly stamped and no decree can be passed on it whether the writing is proved or admitted. Under Section 35 of the Indian Stamp Act the Court cannot give effect to the writing if the writing is a promissory note payable within a reasonable time: see Chenhasapa v. Lalcahman Rarnchandra. I.L.R (1893) Bom. 369.

8. Then it was contended by Mr. Lalji that the writing, if it was not a promissory note, was an agreement, and reliance was placed by him on Chasemore v. Turner (1875) L.R. 10 Q.B. 500. The plaintiff in that case sued on a promissory note. The defendant pleaded the Statute of Limitations. The plaintiff contended that the suit was not barred and relied upon a promise to pay by the defendant contained in a letter which was in these terms:

The old account between us which has been standing over so long baa not escaped our memory, and as soon as we can get our affairs arranged we will see you are paid; perhaps, in the meantime, you will let your clerk send me an account of how it stands.

9. Mr. Justice Blackburn, afterwards Lord Blackburn, and Mr. Justice Archibald, Mellor J. dissenting, were of opinion that the promise contained in the letter might be only conditional and was not sufficient (without evidence to explain it) to' take the case out of the Statute of Limitations. On appeal, Cleasby, 'Pollock and Amphlet BB., and Grove and Denman JJ. were of opinion that the promise contained in the letter was an absolute promise and was sufficient to take the case out of the Statute of Limitations, Lord Coleridge, C.J. being of a contrary opinion. The learned Judges of the Court of Appeal, who did not agree with the view of Mr. Justice Blackburn, reversed the decision of the Court of first instance on the ground that the arrangement of the defendant's affair was a matter of certainty, and Mr. Justice Denman observed that the words were analogous to the words 'as soon as the settling day is over', or as soon as some day which the parties are in the habit of resorting to for the purpose of settling their affairs or arranging their affairs is passed.'

10. The high authorities of Mr. Justice Blackburn and Lord Coleridge, C.J. militate against the view the plaintiff's counsel in this case has put forward for the Court's acceptance. Mr. Taraporevala for the defendant has contended that even if Exh A be looked upon as containing an agreement, it contains a conditional agreement and that has not been fulfilled Mr Taraporeval has relied on the case of Watson v. Yates. I.L.R (1887) Bom. 580. In that case the defendant, the debt due to the plaintiff had become barred by limitation, wrote to the plaintiff a letter in the following terms: 'I bear the matter in mind, and will do my utmost to repay this money as soon as I- possibly can. It was held by the trial Judge and by the Court of Appeal, that the promise by the defendant was only a conditional promise, viz., to pay when he was able; and the plaintiff having failed to prove the defendant's ability to pay, the pro-1 raise did not operate, and the plaintiff could not recover. Chasemore v. Turner (1875) L.R. 10 Q, B 500. was cited in that case. Sir Charles Sargent cites the observations of Lord Coleridge, C.J. at p. 505 of the report in Chdsemore's case. The words in the letter of the defendant in the case of Watson v. Yates are somewhat similar to the words used in this case in Exh. A. The defendant in this case was to pay when it was convenient to him to pay and that would be when he was able to pay. It was for the plaintiff to show that the defendant was able to pay or that it was convenient for the defendant to pay and the plaintiff has failed to show that fact. The condition, therefore, under which the agreement was intended to operate has not been shown to have been fulfilled and the plaintiff cannot recover the money. If-the moneys due to the firm of Abhechand, Govindji by the' defendant are lost, it would be, in my opinion, due to the disputes amongst the partners and the plaintiff and his partner have to thank themselves for the result.

11. The result is that the suit will be dismissed with costs.


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