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Raghunath Bhandary Vs. Seetharama Punja - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKarnataka High Court
Decided On
Case NumberCivil Revn. Petn. No. 1782 of 1970
Judge
Reported inAIR1972Kant344; AIR1972Mys344
ActsCode of Civil Procedure (CPC), 1908 - Sections 115 and 118; Negotiable Instrument Act, 1881 - Sections 4 and 13; Stamp Act, 1899 - Sections 2(22), 35 and 36
AppellantRaghunath Bhandary
RespondentSeetharama Punja
Appellant AdvocateP. Ganapathy Bhat, Adv.
Respondent AdvocateP. Viswanatha Shetty, Adv.
DispositionPetition Dismissed
Excerpt:
.....is bound to pass reasonable order. if not, interference by high court and supreme court is permissible. - these are all satisfied in the present case. 1,000/- to be paid on demand, for value received'.this illustration clearly shows that a promissory, note need not contain a term 'payable either to the order of or to bearer'.6. in vejraj pannalal v. if the promissory note is not a negotiable instrument, the person to whom it is delivered or purported to be endorsed and delivered may not be entitled, in his own name, to the possession of the promissory note and to receive or recover the amount due thereon from the parties thereto but that cannot deprive the instrument of its character of a promissory note and the payee can certainly sue on the promissory note'.8. in kadorilal v......not be transferable'.(the other explanations are not necessary for the purpose). a promissory note payable either to the order of or to bearer is a negotiable instrument and if it is not payable to the order of or to the bearer it may not be a negotiable instrument but it does not cease to be a promissory note. it may be that the benefit of the presumption available under section 118 of the n. i, act may not be obtainable to a promissory note which is not a negotiable instrument, but a promissory note does not cease to be as such merely because of want of negotiability.5. illustration (b) to section 4 of the n. i. act reads thus:'(b) i acknowledge myself to be indebted to b in rs. 1,000/- to be paid on demand, for value received'. this illustration clearly shows that a promissory,.....
Judgment:
ORDER

Datar, J.

1. Defendant in O. S. No. 93

of 1969, pending in the Court of the Munsiff of Buntwal. S. K. is the petitioner in this revision petition. The suit is filed by the plaintiff for the recovery of amount due under a document executed by the defendant in favour of the plaintiff. A controversy arose as to whether the document was a promissory note or a bond as denned under the Stamp Act. The case of the plaintiff is that it is a promissory note and that of the defendant is that it is a bond. The trial Court on a consideration of the relevant circumstances held that the document was a promissory note and being duly stamped as such, ordered that it should be marked as exhibit. It is the correctness of this order that is challenged in this revision petition.

2. The learned Counsel appearing for the respondent raised a preliminary objection that this revision petition should not be entertained as the decision given by the Court below is only regarding the admissibility of a document in evidence. The Court below in the present case has decided the question arising under the Stamp Act and when such a question is decided it has to be settled without delay in revision and cannot be kept for adjudication at a late stage. In Javer Chand v. Pukhrai Surana, : [1962]2SCR333 it has been laid down as follows:

'Where a question as to the admissibility of a document is raised on the ground that it has not been stamped or has not been properly stamped, the party challenging the admissibility of the document has to be alert to see that the document is not admitted in evidence by the Court. The Court has to judicially determine the matter as soon as the document is tendered in evidence and before it is marked as an exhibit in the case. Once a document has been marked as an exhibit in the case and has been used by the parties in examination and cross-examination of their witnesses, Section 36 comes into operation. Once a document has been admitted in evidence, as aforesaid, it is not open either to the Trial Court itself or to a Court of Appeal or Revision to go behind that order. Such an order is not one of those judicial orders which are liable to be reviewed Or revised by the same Court or a. Court of superior jurisdiction'. In view of this decision, when the Court passes an order, such order has to be challenged at that stage itself. If such steps are not taken, it cannot be taken at a later stage. In this view, the preliminary objection raised by the respondent's Counsel is overruled.

3. The document which is under

consideration is given below:

* * * * *

The document is stamped and styled as a demand promissory note and there is an unconditional undertaking to pay and the amount is certain and the person to whom money is payable is certain.

4. Section 4 of the Negotiable Instruments Act. 1881, defines promissory note as follows:--

4. Promissory note.-- A 'promissorynote' is an instrument in writing (notbeing a bank-note or a currency-note)containing an unconditional undertaking.signed by the maker, to pay a certainsum of money only to, or to the orderof a certain person, or to the bearer ofthe instrument'.Therefore, the conditions laid down inSection 4 of the Negotiable InstrumentsAct are that it has to be an instrumentin writing, containing an unconditionalundertaking to pay money to a person;these are all satisfied in the present case.The submission however is that there isomission of the words 'to the order of'or 'to the bearer' and that makes all thedifference and so it is not a promissorynote but a bond. Section 13 of the Negotiable Instruments Act reads thus:

'13. 'Negotiable Instrument'.--- A 'negotiable instrument' means a promissory note, bill-of-exchange or cheque payable either to order or to bearer.

Explanation (i)-- A promissory note, bill-of-exchange or cheque is payable to order which is expressed to be so payable or which is expressed to be payable to a particular person, and does not contain words prohibiting transfer or indicating an intention that it shall not be transferable'.

(The other explanations are not necessary for the purpose). A promissory note payable either to the order of or to bearer is a negotiable instrument and if it is not payable to the order of or to the bearer it may not be a negotiable instrument but it does not cease to be a promissory note. It may be that the benefit of the presumption available under Section 118 of the N. I, Act may not be obtainable to a promissory note which is not a negotiable instrument, but a promissory note does not cease to be as such merely because of want of negotiability.

5. Illustration (b) to Section 4 of the N. I. Act reads thus:

'(b) I acknowledge myself to be indebted to B in Rs. 1,000/- to be paid on demand, for value received'. This illustration clearly shows that a promissory, note need not contain a term 'payable either to the order of or to bearer'.

6. In Vejraj Pannalal v. Sadashiv-appa. (S. A. No. 1058 of 1957, D/- 8-12-1961 (Mys)) Hegde. J. (as he then was) held as follows:

'.........But an analysis of the relevant provisions and an examination of decided cases, yield the following tests to find out whether a given document is a promissory note or not. Those tests are (1) Is the sum to be paid a sum of money and is that sum certain? (2) Is the payment to be made to or to order of a person who is certain, or to the bearer of the instrument? (4) Has the maker signed the document? (5) Is the promise to pay made in the instrument the substance of the instrument? and (6) Did the parties intend that the document should be a Promissory note?

The test whether the sum mentioned in the instrument is made payable either 'on demand' or 'on order' is not conclusive. A document which is not negotiable may still be a 'promissory note' under Section 4 of the 'Act'. But the essence of the matter is that there should be an unconditional undertaking to pay a certain sum of money to a certain person'.

7. In Jagjivandas Bhikhabhai v. Gumanbhai Narottamdas, : AIR1967Guj1 , it has been held as follows:

'Thus every promissory note is not necessarily a negotiable instrument. 'Promissory note' is a wider term which may include two kinds of promissory notes, namely those which are not negotiable instruments and those which are. If the instrument satisfies the requirements of the definition in Section 4 the instrument must be held to be a promissory note, quite irrespective of the fact whether it is a negotiable instrument or not. If the promissory note is not a negotiable instrument, the person to whom it is delivered or purported to be endorsed and delivered may not be entitled, in his own name, to the possession of the promissory note and to receive or recover the amount due thereon from the parties thereto but that cannot deprive the instrument of its character of a promissory note and the payee can certainly sue on the promissory note'.

8. In Kadorilal v. Sukhlal Sajan Singh, : AIR1968MP4 . it was held as follows:

'A document, essentially a promissory note but not containing a recital to be payable to order, and which becomes negotiable by reason of Section 13 Explanation (1) of Negotiable Instruments Act, though attested by witness, should be treated as a promissory note for purpose of Stamp Act also.

*****

Illustrations cannot modify the language of a section or curtail or expand the ambit of a section which alone forms the enactment. But illustrations appended to a section form part of it and are of relevance and value in construing the section. They should not be readily rejected as repugnant to the section'.

9. Thus, the view taken by the Court below in the present case that the document is a promissory note is a sound one and does not call for interference.

in view of the decision of this Court in Vejraj Pannalal's case, S. A. No. 1058 of 1957, D/- 8-12-1961 (referred to earlier) I do not consider it necessary to refer to the authorities of the other High Courts taking a contrary view. Further, I decline to consider the contention urged by Sri Ganapathy Bhat that since the document could also be considered as bond, higher stamp duty as a bond has to be paid on the document. This question was not raised in the Court below and is being urged for the first time at the hearing of the revision petition, and hence I decline to consider the same.

10. In the result, for the reasons stated above, this revision petition fails and the same is dismissed. No costs.


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