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Punjab National Bank Vs. Tajammul HusaIn Bisheshar Nath and ors. - Court Judgment

LegalCrystal Citation
SubjectBanking
CourtAllahabad
Decided On
Reported inAIR1927All236
AppellantPunjab National Bank
RespondentTajammul HusaIn Bisheshar Nath and ors.
Cases ReferredDavid Torrance v. The Bank of British North America
Excerpt:
- - the principle applicable to a case like the present is one laid down in the case of sheikh akbar v. 256: when a cause of action for money is once complete in itself and the debtor then gives a bill or note to the creditor for payment of the money at a future time, the creditor, if the bill or note is not paid at maturity, may always as a rule sue for the original consideration provided that he has not endorsed or lost or parted with the bill or note under such circumstances as to make the debtor liable upon it to some third person......1921. the hundis were drawn by the firm of tajammul husain bisheshar nath, and the drawee was the firm of moti lal bisheshar nath at calcutta. these hundis were duly accepted by the firm of moti lal bisheshar nath. the question of acceptance has already been dealt with by us in our judgment in first appeal no. 524 of 1923 delivered to-day. we hold acceptance to have been made by a person duly authorized by the firm as required by section 27 of the negotiable instruments act, these hundis were renewed on the 4th of february, 1922 by the same drawer, but were not accepted by the firm of moti lal bisheshar nath on presentation. the learned judge of the lower court held that the renewal of the 4th of february 1922 was a full discharge of the two prior hundis and that therefore the firm of.....
Judgment:

Dalal, J.

1. The Punjab National Bank has appealed from the dismissal of its suit for money on foot of two hundis, dated the 2nd of November 1921. The hundis were drawn by the firm of Tajammul Husain Bisheshar Nath, and the drawee was the firm of Moti Lal Bisheshar Nath at Calcutta. These hundis were duly accepted by the firm of Moti Lal Bisheshar Nath. The question of acceptance has already been dealt with by us in our judgment in First Appeal No. 524 of 1923 delivered to-day. We hold acceptance to have been made by a person duly authorized by the firm as required by Section 27 of the Negotiable Instruments Act, These hundis were renewed on the 4th of February, 1922 by the same drawer, but were not accepted by the firm of Moti Lal Bisheshar Nath on presentation. The learned Judge of the lower Court held that the renewal of the 4th of February 1922 was a full discharge of the two prior hundis and that therefore the firm of Moti Lal Bisheshar Nath was not liable to make payment either on the former two hundis of the 2nd of November 1921 or on the subsequent hundis of the 4th of February 1922.

2. The learned Judge relied on a ruling of this Court reported in the case of Sirdar Kuar v. Chandrawati [1882] 4 All. 330. In our opinion the facts in that case were not similar to those of the present case. The principle applicable to a case like the present is one laid down in the case of Sheikh Akbar v. Sheikh Khan [1881] 7 Cal. 256:

When a cause of action for money is once complete in itself and the debtor then gives a bill or note to the creditor for payment of the money at a future time, the creditor, if the bill or note is not paid at maturity, may always as a rule sue for the original consideration provided that he has not endorsed or lost or parted with the bill or note under such circumstances as to make the debtor liable upon it to some third person.

3. There has been no such endorsement in the present case, and the principle of the above rule, which was followed by the Madras High Court in the case of Dargavarapee Sarrapu v. Rampratapu [1902] 25 Mad. 580, would apply. If we refer to the relevant section of the Negotiable Instruments Act, the different ways in which the acceptor of a negotiable instrument may discharge his debt are given in Section 82. The three ways are cancellation, release and payment. Admittedly there was no cancellation here and there was no discharge because the new hundi was only a provisional discharge, which would have been complete if that hundi had been accepted. For the same reason there was no payment in due course. In a case of the Judicial Committee [David Torrance v. The Bank of British North America [1873] L.R. 246,] it was held under similar circumstances that a fresh agreement between the drawer and the holder for value of a bill of exchange did not release the acceptor of the first bill from liability on foot of the first bill. The learned Counsel for the respondents drew our attention to the observations on renewal of a bill of exchange in Halsbury's Laws of England, Vol. II, page 553, where it is said:

Prima facie the giving of a new instrument in place of an existing one has the effect not of discharging the instrument then existing, but of being a conditional satisfaction of it, so that if the new instrument is duly paid at maturity the first instrument is discharged; but if not, then the dormant rights on the first instrument are revived.

4. This is the rule enunciated in Sheikh Akbar's case [1881] 7 Cal. 256. Then follows the sentence on which the learned Counsel for the respondents has relied:

Parties to the first instrument who do not assent to its renewal are in any case discharged.

5. Possibly this covers the case of sureties and not of principal debtors such as an acceptor of a hundi is. It is also to be noticed that Bisheshar Nath, one of the partners of the firm, was a party as partner in another firm to the drawing of the new contract and was cognizant of the renewal.

6. The ruling from the Privy Council Law Reports quoted above does not favour the view that the acceptor of a bill of exchange is discharged from his liability on the renewal of that bill to which he has not consented. We are of opinion that the Bank can enforce the liability of the firm of Moti Lal Bisheshar Nath on foot of the two bills of exchange of the 2nd of November 1921. In the result we set aside the decree of the lower Court and decree the plaintiff's suit on the two hundis of the 2nd of November 1921 with costs in all Courts.


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