1. The plaintiff firm Dossabhai Hirchand brought this summary suit as endorsees to recover the amount of Rs. 4,000 due upon a cheque drawn by the first defendant firm Virchand Dalchharam in favour of the 2nd defendant firm Hargovan Jeychand on the Bank of India, Limited. The first defendant firm pleaded that the suit as framed would not lie as the cheque had the word 'bearer' struck out and there was no substitution of the word ''order,' and that, therefore, the cheque was not negotiable within the meaning of the Negotiable Instruments Act. The 2nd defendant firm did not obtain leave to defend, though one Parbhudas denied that he was a partner in the 2nd defendant firm. The plaintiff, thereupon, alleged a custom and usage of merchants whereby a cheque with the word 'bearer' struck out and without the word 'order' was regarded as an 'order' cheque and negotiable in Bombay. The 1st defendant firm replied that no such usage of merchants, even if proved, could be recognized as it would override the express provisions of the Negotiable Instruments Act.
2. Now, the alleged custom has been spoken to by a number of witnesses, and no reason has been shown to reject their statements. They were the Chief Accountants of the Bank of India and of the Central Bank; the Assistant Accountants of the Chartered Bank of India, Australia and China, of the National Bank of India, of the Mercantile Bank, of the Hong Kong and Shanghai Banking Corporation and of the international Bank; and no evidence has been forthcoming in rebuttal of their statements. It would appear clear, therefore, that the alleged usage does exist among merchants and bankers in Bombay. But it is equally clear that the custom and usage of regarding such a cheque as an 'order' cheque, if recognized, would be an extension of the definition of 'negotiable instrument' contained in Section 13 of the Negotiable Instruments Act, 1881. That definition would appear to have been framed upon the old law in .England as laid down by Tindal C. J. in the ease of Plimley v. Wentley (1535) 5 L.J.C.P. 51. It did not include the rule that an instrument 'which is expressed to be payable to a particular person and does not contain words prohibiting transfer or indicating an intention that it should not be transferable' should he deemed an instrument payable to 'order' aa prescribed by Clause (4) of Section 8 of the later Bills of Exchange Act, 1882, 45 & 46 Vic, Clause 61. But it has been laid down by indisputable authority that usages contrary to positive law will not be recognized by the Courts. Cockburn C. J. said:--'We must by no means be understood as saying that mercantile usage, however extensive, should be allowed to prevail if contrary to positive law...To give effect to a usage which involves a defiance or disregard of the law would be obviously contrary to a fundamental principle,' in the leading case of Goodwin v. Robarts (1875) L.R. 10 Ex. 337. The question, therefore, for decision here is whether the mercantile usage extending the definition of 'negotiable instrument' has involved a defiance or disregard of the provisions of the Indian Negotiable Instruments Act.
3. It has, in the first place, to he observed that the Act, according to the preamble, was passed not merely to amend the law but to define it in respect of cheques, bills of exchange and promissory notes. It was, therefore, prima facie intended to lay down the whole law regarding those three classes of negotiable instruments. It has, in the second place, to be observed that the saving clause in Section 1 saved only local usage relating to instruments in oriental languages such as Handies, and did not save general usage like Section 1 of the Indian Contract Act. It has thirdly to be observed that Section 13 made use of the word 'means' and not of the word 'includes,' and was, therefore, prima facie intended to be an exhaustive definition of those particular classes of negotiable instruments. And that is the view which was apparently taken by Farran J. when he referred to the saving clause in Section 1, and the definition in Section 13, at pages 699 and 697 of the case of Jetha Parkha v. Ramchandra Vithoba I.L.R. (1892) 10 Bom. 659. It has been suggested that nevertheless it would be permissible to extend the definition though perhaps not to restrict it. But it seems to me that when the definition declared that certain forms of cheques, bills of exchange and promissory notes were meant by the term 'negotiable instrument', it impliedly indicated that no other forms should be included among 'negotiable instruments' upon the principle 'expressio unius exclusio alterius' applicable generally to the interpretation of Statutes. It has been urged that extensions have been permitted as in the case of railway receipts by this Court upon the strength of the provisions of Section 137 of the Transfer of Property Act. But the provisions of that section do not seem to me to be any authority for extending the definition of cheques, bills of exchange and promissory notes specifically within the scope of the Negotiable Instruments Act. It seems to me to be merely authority for extending the incidents of negotiability to such other instruments like railway receipts as have been excluded by Section 137 from the operation of Chap. VIII of the Transfer of Property Act and as have not been made subject to the legislation of the Negotiable Instruments Act. It seems to me, therefore, that it is not open to me to give legal recognition to the usage proved in this particular case, as that would be in defiance and disregard of the express provisions of the Negotiable Instruments Act, 1881. If it should be desired by merchants and bankers that that particular usage should be legally recognized, then their proper course would be to apply for an amendment of the Indian Negotiable Instruments Act, 1881, so as to bring it into line with the later English Statute of 1882. Such an application, however, would have to be made not to this Court but to the Indian Legislature.
4. [His Lordship here dealt with the question whether Parbhudas was a partner in 2nd defendant firm and continued--]. There can, in my opinion, be no doubt upon this evidence that Parbhudas was a partner in defendant No. 2 firm. But the suit must fail against both the defendant firms, as it has been brought as a summary suit on the cheque already held not to be a negotiable instrument and not upon the original contract for the sale of the bales of yarn entered into with the 2nd defendant firm.
5. My findings on the issues must, therefore, be as follows:--Upon issue (1): Whether the cheque in suit was made payable to 2nd defendant or order as alleged in paragraph 2 of the plaint; and upon issue (2): Whether the cheque in suit was a negotiable instrument within the Negotiable Instruments Act.--That the cheque was not a negotiable instrument within the Negotiable Instruments Act. Upon issue (3): If not whether the suit as framed was maintainable.--In the negative. Upon issue (4): Whether plaintiffs would be entitled to recover any and if so what amount from the 1st defendant firm.--That they would be entitled to recover nothing from the 1st defendant firm. Upon issue (5): Whether Parbhudas Sulchand was a partner in the 2nd defendant firm. That he was a partner in the 2nd defendant firm. Upon issue (6): Whether by the custom and usage of merchants and bankers a cheque drawn like the cheque in suit has been regarded as a negotiable instrument in Bombay.--That such a cheque has been regarded as a negotiable instrument by merchants and bankers in Bombay. But upon issue (7): Whether having regard to the express provision of the Negotiable Instruments Act, the alleged custom and usage could be allowed to be proved, or, if proved, would render the cheque in suit negotiable within the meaning of the Act.--In the negative. And upon the general issue : that this suit must be dismissed against the 1st defendant firm with costs including costs reserved and that the Rs. 4,000 deposit be returned to the first defendant firm; that the suit be dismissed also against the 2nd defendant firm including Parbhudas but without costs.