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Kamalakant Gopalji Vs. Madhavji Vaghji - Court Judgment

LegalCrystal Citation
SubjectFamily
CourtMumbai
Decided On
Reported inAIR1935Bom343; 158Ind.Cas.145
AppellantKamalakant Gopalji
RespondentMadhavji Vaghji
Excerpt:
.....instrument need not only be transferred by an assignment like other chosos in action, as their transfer is also governed by the specific provisions of the negotiable instruments act. it was also pointed out that if a testator bequeathed the amount due under a promissory-note to a legatee, the legatee could not maintain an action on the promissory-note in his own name, even if the executor had obtained probate according to the law, unless the 'executor had endorsed it in his favour......and the son were joint in food and worship, but there is no presumption that they held joint family property. it is for the plaintiff to show that the family possessed some joint or ancestral property from which the presumption could be drawn that all the property possessed by the family was joint family property. there were three brothers, purshottam, bamji and narainji, who were the sons of rbji. ramji had three sons, gopalji, 'vallabhdas and shivji. plaintiff was six or seven years old when his grandfather ramji died. he could not state whether eamji left any particular ancestral property except that according to his information and belief there was some ancestral property at kamatipura and madanpura. he however frankly admitted that he had no documents to prove his statement,.....
Judgment:

B.J. Wadia, J.

1. The plaintiff has filed this suit to recover from the defendant two sums of Rs. 52,747-8-0 and Rs. 8,158-9-0 under two promissory notes dated 29th July 1929, which were passed by the defendant in favour of the plaintiff's father Gopalji Ramji. Gopalji Ramji died intestate at Bombay on or about 3rd June 1931. Plaintiff is his only son, and claims the two sums 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. Plaintiff has not obtained representation to the estate of his father, and at the commencement of the hearing his counsel said that he claimed only as a coparcener. It is clear that the two claims cannot be joined together under the terms of Order 2, Rule 5, Civil P.C. It makes no difference that the second claim is in the alternative to the first: see Whitworth Darbishir (1893) 68 L.T. 216. Plaintiff's father and the defendant did business in partnership as colour merchants. The partnership was dissolved some time between 1922 and 1924, and on making up the accounts-moneys were found due for which the. defendant passed the two promissory notes in suit in favour of the plaintiff's-father. The promissory notes were renewed from time to time, the last, renewal being on 29th July 1929.

2. The suit was filed on 9th September 1932, and on the face of it the claim is time-barred. Plaintiff however relies on the absence of the defendant from British India in 1932 to save the bar of limitation. Defendant also contends that the plaintiff cannot maintain this suit on the promissory notes as a surviving coparcener, assuming that he was one, as the promissory notes are payable to Gopalji Ramji or order. The plaintiff, it was contended, is not a holder who can give a valid and proper discharge to the defendant. In his written statement the defendant alleges that he is not aware that plaintiff is the only son and heir or legal representative of his-father, and that even if he is, he cannot' file this suit without obtaining representation to his father's estate. There was however nothing to prevent the plaintiff from filing the suit as the sole heir of his father if he was so minded, and all that has been held in Raichand v. Jivraj 33 Bom. L.R. 1372 is that the Court cannot pass a decree-until he had obtained such representation. That question however does not now arise, as the plaintiff claims the two amounts of the promissory notes as the solo surviving coparcener.

3. I will deal with the latter contention first. Defendant denies that the plaintiff and his father Gopalji were members of a joint and undivided Hindu family. Plaintiff is the only son of Gopalji by a predeceased wife. Gopalji also left a widow, his second wife, and a daughter by her. They all lived together until Gopalji.'s death. Presumably the father and the son were joint in food and worship, but there is no presumption that they held joint family property. It is for the plaintiff to show that the family possessed some joint or ancestral property from which the presumption could be drawn that all the property possessed by the family was joint family property. There were three brothers, Purshottam, Bamji and Narainji, who were the sons of Rbji. Ramji had three sons, Gopalji, 'Vallabhdas and Shivji. Plaintiff was six or seven years old when his grandfather Ramji died. He could not state whether Eamji left any particular ancestral property except that according to his information and belief there was some ancestral property at Kamatipura and Madanpura. He however frankly admitted that he had no documents to prove his statement, but he was supported by his uncle Shivji Ramji, who would certainly be in a better position by reason of his age to know the real state of affairs. Shivji also frankly stated that the condition of the family was poor, but Gopalji got some ancestral property from Ramji when he separated, and whatever was left came to him. According to him Gopalji also speculated, earned money, and did business in partnership with the defendant. Both ho and the plaintiff stated that there never was any partition or separation between father and son. This is all the evidence, and I must say that it might have been a little fuller in detail. But 1 think the Court can still draw the inference from these statements which have not been disproved that the plaintiff and his father were members of a joint and undivided Hindu family, i.e., joint in food, worship and estate.

4. The important question still remains, whether the plaintiff can sue to recover the amounts on the promissory notes in his right as a coparcener. Defendant's counsel contended that he could not, as the property in the promissory notes which are negotiable instruments vested in the holder, and the plaintiff could not be said to be the holder of those instruments. On the other hand plaintiff's counsel argued that the property in the promissory notes was transferred to the plaintiff by operation of the law by which the parties to the instruments-were governed. Wherever there is a promissory note, the suit is prima facie based upon it, unless there are circumstances to indicate that it is based on a cause of action independent of the promissory notes. Here it is conceded that the suit is principally and solely based on the promissory notes, and not on the debt which formed the consideration for them.

5. The real contract between the parties to a negotiable instrument is one which appears on the face of the instrument. The promissory notes are payable to Gopalji Ramji or order, and Gopalji was therefore the holder of the notes. A holder is defined in Section 8, Negotiable Instruments Act, as the person entitled in his own name to the possession thereof and to receive or recover the amountdue thereon from the party liable. Section 32 of the Act makes it obligatory on the maker of a promissory note to pay the amount thereof according to the apparent tenor of the instrument, i.e. primarily to the holder, and under Section 78 of the Act payment must be made to the holder in, order to discharge the maker. The question, therefore, is whether the plaintiff can claim the two amounts of the promissory-notes in his own right. It was-held in Harkishore Barna v. Gura Mia 58 Cal. 752 that no one could maintain a suit on a promissory-note except the holder thereof. In an earlier case, Brojo Lal Saha Banikya v. Budh. Nath Pyarilal & Co. 55 Cal. 551 it was held that it was not the holder who alone could sue on a promissory-note, but whoever was the true owner of the, note could also sue. That judgment was dissented from in the later decision in Harkishore Barna v. Gura Mia 58 Cal. 752 which I have already referred to, and it is there pointed out that the earlier suit was based not only on the promissory-note but also on the consideration for the same. It has been stated in Subba Narayana Vathiyar v. Ramaswami Aiyar (1906) 30 Mad 88 that the words 'in his own name,' appearing in Section 8 of the Act were inserted by the legislature to prevent anyone from claiming to be the holder of an instrument on the ground that the ostensible holder was merely a benamidar for the true holder.

6. A holder of an instrument is entitled to recover if he is either the payee named in the instrument or the endorsee thereof; if the instrument is payable to a person or bearer, the person to whom it is delivered can recover. An assignee of a promissory-note can sue in his own name: see Muthar Sahib v. Kadir Sahib (1905) 28 Mad 644 though usually the assignor is joined as a co-plaintiff with the assignee for the sake of caution. Under Section 130, T.P. Act, an assignee of a chose in action can sue in his own name. Under Section 137 of that Act negotiable instruments are exempted from the operation of the sections of the Chapter of the Transfer of Property Act dealing with transfers of chose in action, because such assignments are regulated by the Negotiable Instruments 'Act. The usual mode of transfer of a negotiable' instrument is by endorsement or by delivery. At the same time negotiable instruments are also chose in action, and as such may be transferred by assignment. All that the ex-emption in Section 137 means is that a negotiable instrument need not only be transferred by an assignment like other chosos in action, as their transfer is also governed by the specific provisions of the Negotiable Instruments Act. The only difference between a transfer by endorsement and a transfer by assignment of a negotiable instrument is that under an assignment the assignee acquires only the right, title and interest of the assignor, whereas the endorsee may have all the rights and advantages of a holder in due course. In any event, She assignment must be in writing and duly executed before the assignee of a chose in action can sue upon it.

7. Can the plaintiff be said to be a holder of the promissory-notes as a coparcener? Ho could only be a holder if he was entitled in his own name to the possession of the promissory-notes and could give a valid discharge to the maker, namely the defendant. Plaintiff is not the payee under the promissory-notes. Plaintiff is not the endorsee nor the assignee thereof. He cannot negotiate the promissory-notes. They are drawn in favour of Gopalji individually, or order, and the property vested in him. Plaintiff's counsel, however, contended that the property passed to the plaintiff by operation of law, but no authority directly bearing on the point has been cited in Court. It has been held that a person whose name appears in a promissory-note as the signatory thereto is alone liable on the note: see Sadasuk Janki Das v. Kishan Pershad 46 I.A. 33.

8. It was argued by counsel for the defendant that conversely the person whose name appeared as the holder on the instrument alone could sue on it; the assignee also could sue, if the assignment was in writing and duly executed. In Vithalrao v. Vithalrao Bom L.R. 151 it was held that the members of a joint and undivided Hindu family were not liable in a suit on a promissory note signed by one of them as manager, though a suit could lie to recover the debt as against all the members of the family. The distinction there drawn is between a suit on the promissory-note and a suit on the debt. The manager who signed it is certainly liable on the promissory-note, but the other members who did not sign the note could be sued only for the debt. A suit, therefore, on a promissory not must be filed against the executing party only, and the other coparceners cannot be joined in the suit although the loan might be binding on the estate. If, however, the loan and the promissory-note are simultaneous and constitute one transaction, then there is no separate cause of action on the debt. In Sharanbasappa v. Rachappa 1933 35 Bom L.R. 68 it was held that a promissory-note signed by one partner in his own name, and not in the name of the firm, was binding on that partner alone. In an earlier decision of the Appeal Court in Sitaram v. Chimandas 30 Bom L.R. 1300 it was held that in an action on a promissory-note the signatory whose name appeared on it would not show that he was an agent for an undisclosed principal. Recently the Privy Council has held in Pichappa v. Chokalingam 36 Bom L.R. 976 (P.C.) that the fact of a manager of a joint family becoming a partner with a stranger does not ipso facto make the other members of the family partners along with him.

9. The trend of all these decisions seems to be to restrict the liability under a promissory-note to the person whose name appears on the face of the instrument. Conversely, it was argued that the meaning of the word holder' should not be so enlarged as to include in that designation persons other than those who are primarily entitled to sue. It was also pointed out that if a testator bequeathed the amount due under a promissory-note to a legatee, the legatee could not maintain an action on the promissory-note in his own name, even if the executor had obtained probate according to the law, unless the 'executor had endorsed it in his favour. A coparcener also who becomes entitled by survivorship to the joint family property of the family to which he belonged cannot sue on a negotiable instrument payable to the deceased or order, for he cannot give a valid and proper discharge to the maker, by reason merely of the operation of the law. It cannot be assumed that because the beneficial inter-jest has survived to him, the legal title must follow suit: see Bank of Bombay v. Ambalal Sarabhai (1900) 24 Bom. 350.

10. The analogy of the Official Assignee 'suing on a promissory-note passed in favour of an insolvent is not correct, because under the statute the property of the insolvent vests in the Official Assignee, and he represents the estate of the insolvent and holds it for the benefit of the creditors generally. A legal representative of a deceased person can sue as a representative, as he is by the very terms of the definition of a legal representative in Section 2 (11), Civil P.C., a person who in law represents the estate of the deceased person. The coparcener does not represent the estate of the deceased member of the joint family. He gets the property by survivorship in his own right, and not as a representative of the deceased.

11. I might mention here that plaintiff's counsel said in his closing address that, if necessary, he would apply even now for a succession certificate, and that the Court might adjourn the suit before' finally passing a decree in his favour. This would, alter the cause of action. The plaintiff is before me as a coparcener suing in his own right. The plaint is filed in his name personally and not as a representative. He rests his title, and has rested it throughout the hearing, on his position as coparcener in law, and I do not think I can now allow him to rest it on a succession certificate as an heir and legal representative. If he is a coparcener, he cannot be entitled to a decree merely on obtaining representation at this stage, because it would have the effect of turning a suit by him personally into a suit by him as the representative of his father, which position his counsel abandoned at the commencement of the hearing. Counsel referred to the practice prevailing in the Prothonotary's office to grant succession certificates even to coparceners. That is sometimes done at the instance of the coparcener himself, after giving due notice to all other interested parties, if he has to give a discharge which would be considered valid by the debtor. For the reasons I have discussed before I hold that the plaintiff cannot maintain this suit on his title as a coparcener and I therefore dismissed it with costs. (The rest of the judgment is not material to this report).


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