(1) This revision is on behalf of the defendant and is directed against the judgment and decree of the Subordinate Judge's Court, Adoni, allowing the appeal of the plaintiff and decreeing the suit, which was dismissed by the trial Court.
(2) The dispute between the parties relates to the recovery of the amount due under a promissory note, Ex. A-1, which was executed by the defendant in favour of one late Ayyanna. The respondent-plaintiff claiming to be the nearest heir of late Ayyanna, obtained a succession certificate, Ex. A-2, dated 20-10-59 in O. P. No. 13/59 on the file of the District Munsif's Court, Adoni, in respect of the above promissory note debt. On the basis of this succession certificate he filed the present suit for recovery of Rs. 552.50P. against the petitioner-defendant. The petitioner denied that the plaintiff was the nearest heir of late Ayyanna. He also pleaded discharge of the suit debt by payment of the amount to Ayyanna's widow. Mallamma before her re-marriage, under a receipt, Ex. B-1, dated 6-5-58. It was further averred that the issue of a succession certificate in favour of the plaintiff was not conclusive. The learned District Munisif held that the plaintiff was not the nearest heir to Ayyanna and was not entitled to maintain the suit. He also held that the plea of discharge was true. In the, result, the learned District Munisif dismissed the suit. On appeal by the plaintiff, the lower appellate Court did not agree with the view of the trial Court and decreed the suit. Hence this revision is filed on behalf of the defendant.
(3) In this revision, it is contended by Sri N. M. Sastry, the learned counsel for the petitioner, that the lower appellate Court had not taken into account the fact that Mallamma, the widow, was the only heir to Ayyanna and that, in her presence, the plaintiff cannot claim to be the nearest heir. He next contended that the lower appellate Court erred in holding that the plea of discharge was not true when Mallamma admitted in her evidence that she received the amount due under the promissory note. On behalf of the other side, it is contended by the learned counsel that, when the plaintiff-respondent holds a succession certificate, he alone, under the law, would be entitled to recover the amount and that the lower appellate Court was right in holding so. On the question whether the payment of the amount to Mallamma, the widow, would be a valid discharge, the learned counsel contended that it would not be a valid discharge.
(4) The first point that falls for consideration is whether the plaintiff has a right of action for the recovery of the suit amount. As stated earlier, the plaintiff has filed the suit on the basis of a succession certificate issued to him. Under Section 381 of the Indian Succession Act, such certificate would be conclusive as against the persons owing such debts or liable on such securities. But the grant of certificate can be revoked as provided under Section 383 of the said Act on the grounds stated therein. Under Section 384 of the said Act, a right of appeal is also provided. It follows, therefore, that the Act is a self-contained Act and makes ample provision for the aggrieved persons, who were either parties to it or were not parties. Admittedly, the defendant was not a party to the O. P. proceedings; but it cannot be denied that he had notice of the proceedings. On his own admission in the written statement, he filed I. A. No. 672/59 to implead him as a respondent; but that application was dismissed. He also filed another application in the same O. P. to implead Mallamma, which was also dismissed. But he did not get those orders revised and it is also his admitted case that he did not apply for revocation of the certificate under Section 383 of the Act.
The appellant therefore, cannot challenge the right of the plaintiff to sue. My attention is drawn to Section 387 of the Act and contended that grant of a certificate would not defer the court from going into the question. Section 387 reads.
'No decision under this Part upon any question of right between any parties shall be held to bar the trial of the same question in any suit or in any other proceeding between the same parties, and nothing in this part shall be construed to affect the liability of any person who may receive the whole or any part of any debt or security or any interest or dividend on any security, to account therefor to the person lawfully entitled thereto.'
It is no doubt true that, under the above provision, any decision given earlier is not resjudicata: but the point is not whether it is resjudicata, but who, under the Act, would be entitled to recover the debt. As stated earlier, it will only be the person to whom the certificate has been granted. It may also be stated at this stage that the grant of a succession certificate does not decide the question of title of any person. If a person has any right, the grant of a certificate or any decision given under Section 383 and 384 would not be a bar to him to establish his right.
(5) The next question that I have to consider is whether the plaintiff is the nearest heir to Ayyanna. The learned District Munisif, on the evidence of P. Ws. 1 to 3, held that P. W. 3 is the nearest heir. The lower Appellate Court agreed with the view of the trial Court. To my mind also, the plaintiff cannot be the nearest heir in view of his own admission; but, as discussed above, when a succession certificate has been granted to the plaintiff, even though he may not be the nearest heir, he alone would be entitled to recover the amount of the debt.
(6) The other question that I have to consider is whether the plea of discharge pleaded by the defendant can be accepted. The case of the defendant is that four months after the death of Ayyanna he paid the amount to his widow, Mallamma and got a receipt, Ex. B-1. He examined himself as D. W. 1 to speak to the payment of Rs. 520/- to Mallamma. He also examined D. W. 2, the village Karnam and D. W. 3, the President of the Panchayat Board, who support the evidence of D. W. 1. This is further supported by the evidence of P. W. 4, the widow of Ayyanna, who admits having received the amount. The District Munisif accepted this evidence and held that the discharge pleaded was true and acceptable. The lower appellate Court, no doubt, observed that the evidence of D. Ws. 1 to 3 read along with the evidence of P. W. 4 clearly goes to show that the defendant paid the amount to the widow but refused to attach any weight to this evidence in view of the fact that the promissory note was with the plaintiff and there was no endorsement of discharge on it (promissory note).
The contention of Mr. N. M. Sastry is that when the evidence of P. W. 4 was unchallenged, that alone was sufficient to hold the discharge as true even though the suit promissory note was in the possession of the plaintiff and there was no endorsement on it. Ordinarily, when the document remains in the possession of the creditor and there is no endorsement of payment, the Court would be reluctant to accept the evidence of payment. But, in the instant case, Mallamma to whom the amount is said to have been paid, admits having received the amount and she was not cross-examined. In the absence of any cross-examination, her evidence assumes importance. If her evidence is taken along with the evidence of D. Ws. 1 to 3, there would not be any hesitation in holding that Mallamma received the amount. The contention of the other side is that Mallamma has given this statement just to accommodate the defendant and as a matter of fact, no amount was paid to her. It may be so as contended by the learned counsel for the respondent; but Mallamma's statement being unchallenged it has to be accepted as true.
(7) The other question that arises is whether this payment to Mallamma amounts to a valid discharge of the debt. The contention of Sri N. M. Sastry, the learned counsel for the petitioner is that, when Mallamma was the only heir then and she accepts having received the amount and the plaintiff had no succession certificate at that time any payment to her would be a valid discharge. I find it very difficult to accept this contention of the learned counsel for the petitioner. The document in question is a promissory note, a Negotiable Instrument.
(8) Section 78 of the Negotiable Instruments Act, which relates to the discharge of the maker or the acceptor of the promissory note, runs thus:
'Subject to the provisions of Section 82, clause (c), payment of the amount due on a promissory note, bill of exchange or cheque must, in order to discharge the maker or acceptor, be made to the holder of the instrument.'
Section 8 of the said Act defines the 'holder' thus:
'The holder of a promissory note, bill of exchange or cheque means any person entitled in his own name to the possession thereof and to receive or recover the amount due thereon from the parties thereto.
Where the note, bill or cheque is lost or destroyed, its holder is the person so entitled at the time of such loss or destruction.'
According to the above definition, the term 'holder', in my opinion, would not include a person, who, though in possession of the instrument, has not the right to recover the amount due thereon from the parties thereto, such as the finder of a lost instrument payable to bearer or a thief in possession of such an instrument, or even the payee himself, if he is prohibited by an order of Court from receiving the amount due on the instrument. The learned counsel for the petitioner, relying on the above provisions, contended that, the plaintiff who is in possession of the promissory note cannot be called a 'holder'. This argument ignores the fact that the plaintiff has not come in this action stating that he is in possession of the promissory note as 'holder'; but he has based his claim on the ground of a succession certificate entitling him to recover the debt. Reading Section 8 and 78 of the Negotiable Instruments Act, the plaintiff, in my opinion, would be the only person entitled to recover the debt. I am supported in this view by the decision in Shantaram Vithal v. Shantaram Bhagwan, AIR 1938 Bom 451.
The learned counsel for the petitioner draws my attention to the decision in Rairam Kishore v. Ram Prasad, : AIR1952All245 and contends that when Mallamma was the only heir, it cannot be said that Mallamma was not entitled to recover the amount of the debt. I do not agree with the contention of the learned counsel. : AIR1952All245 (supra) was a case where the plaintiff formed a joint Hindu family with his brothers. They had a joint family firm under the name and style of Piru Lal Radha Ravan. The respondent executed four promissory notes in the name of one of the two brothers of the plaintiff as payee. This brother was the karta of the joint family and the money was advanced from the joint family fund. On partition by a decree of the Court, these promissory notes fell to the share of the plaintiff and the payee named in the notes filed them in Court to be delivered to the plaintiff who took them back from the Court and instituted a suit for recovery of the money due under them. In that action, it was pleaded by the defendant that the plaintiff not being a holder of the notes could not sue on them.
It was held that the plaintiff alone was entitled to recover the amount and the suit at his instance was maintainable. The learned Judges took the view that after the allotment of the promissory notes to the plaintiff in partition by a decree of the Court, the payee named in the notes ceased to be a holder thereof and at the time of the filing of the suit there was no holder of these notes. Consequently, the learned Judges came to the conclusion that in case of there being no holder of a promissory note the person who is entitled to the money due under it has a right to institute a suit to recover it. They also supported their view on analogy of a case where the sole payee is dead and his heirs or legal representatives sue on the note as well as of cases where the person suing have acquired the right to recover the money by operation of law. This Full Bench of the Patna High Court in Bach Prasad v. Janki Rai, : AIR1957Pat380 and the learned Judges of the Patna High Court had not approved of the decision of the Full Bench of the Allahabad High Court.
To my mind also, the devolution of interest by inheritance or by operation of any other law stands on a different footing. The Act does not purport to affect devolution of rights by operation of law. The principles of these cases cannot by analogy apply to a case where a payee named in the note is alive and a stranger comes and sues on the ground that he is the real beneficiary and is prepared to get a valid discharge for the debtor. This decision does not therefore, help the contention of the learned counsel for the petitioner. The decision in Narayanamoorthi v. Vumamaheswaram, AIR 1930 Mad 197 also does not help the contention of the learned counsel for the petitioner. That was a case where the suit promissory note was executed in favour of plaintiff No. 1 on behalf of the joint family of which he was a member. In a partition suit decree, this promissory note was allotted to the share of one Balkrishnayya although the promissory note appears to have remained with plaintiff No. 1. Balkrishnayya subsequently executed a release deed relinquishing his rights in the suit note in favour of both the plaintiffs.
On an action by the plaintiffs, the defence taken was a discharge to Balkrishnayya partly by cash and partly by execution of another promissory note. The trial Court held that the payment pleaded by the defendants was true but that it was not binding on the plaintiffs. The lower appellate Court agreed in holding that the payment was true but held further that the plaintiffs had no title to sue, not being holders in due course. It, therefore, dismissed the suit. On second appeal by the plaintiffs, the first contention urged by them was that, as the suit promissory note was in the name of plaintiff No. 1 and had not been endorsed by him to anyone else, he was the holder and entitled to recover from the defendants. Since this plea was not taken, the learned Judges did not allow the appellants to raise this point. When this plea was rejected, the learned Judges considered the question whether the second plaintiff had any right to that action. It was found that, since his name was not shown as the payee and there was no endorsement, he also could not sue on the promissory note. The facts of this case are quite different from the present action. If follows, therefore, that though the defendant has paid the amount to Mallamma, but since that does not discharge the maker or the acceptor, as provided under Section 8 read with Section 78 of the Negotiable Instruments Act, for a valid discharge, the present defendant petitioner cannot plead discharge as against the plaintiff.
(9) In the result, I do not see any substance in this revision petition. It is accordingly dismissed; but there will be no order as to costs in this revision petition.
(10) Revision dismissed.