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Narasingha Panda Vs. N. Narasimha Murty and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtOrissa High Court
Decided On
Case NumberSecond Appeal No. 80 of 1964
Judge
Reported inAIR1966Ori194
ActsNegotiable Instruments Act, 1881 - Sections 8, 14 and 48
AppellantNarasingha Panda
RespondentN. Narasimha Murty and ors.
Advocates:S. Mohanty, Adv.
DispositionAppeal allowed
Cases ReferredSurath Chandra Sana v. Kripanath Choudhury
Excerpt:
.....the court. no specific order condoning any delay for the purpose of deposit under first proviso to sub-section (1) of section 173 is necessary. [new india assurance co. ltd. v md. makubur rahman, 1993 (2) glr 430 and new india assurance co. ltd. v smt rita devi, 1997(2) glt 406, approved. new india assurance co. ltd. v birendra mohan de, 1995 (2) gau lt 218 (db) and union of india v smt gita banik, 1996 (2) glt 246, are not good law]. - a promissory note endorsed in blank or a promissory note to the holder or bearer, is negotiated in simpler fashion, but the negotiable instruments act itself does recognise that negotiable instruments may be transferred and for consideration otherwise than by negotiation a transfer of a promissory note by means of a registered instrument is valid. 1 had..........who alone contested the suit is that the plaintiff is not a holder in due course in respect of the suit promissory note and therefore the suit by him is not maintainable both the courts below accepted this contention of the defendant and dismissed the plaintiff's suit. hence this second appeal by the plaintiff.2. in this second appeal mr. s. mohanty appearing for the plaintiff-appellant submits that assuming that the plaintiff is not a holder in due course even so the plaintiff is entitled to a decree on the promissory note as holder of the promissory note.3. section 8 of the negotiable instruments act defines 'holder' as follows:'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.....
Judgment:

S. Barman, J.

1. This appeal filed by the plaintiff arises out of a suit filed by plaintiff as transferee of a pronote for Rs 1,000 dated March 14, 1959 executed by defendant No. 1 in favour of defendant No. 4 who in turn is said to have sold the pronote to the plaintiff under a separate registered sale-deed dated December 12, 1960. Defendants 2 and 3 are said to be members of the family of defendant 1. The plaintiff in his suit claimed a decree against defendants 1, 2 and 3 as members of a joint family. The only point which was urged on behalf of defendant No. 2 who alone contested the suit is that the plaintiff is not a holder in due course in respect of the suit promissory note and therefore the suit by him is not maintainable Both the Courts below accepted this contention of the defendant and dismissed the plaintiff's suit. Hence this second appeal by the plaintiff.

2. In this second appeal Mr. S. Mohanty appearing for the plaintiff-appellant submits that assuming that the plaintiff is not a holder in due course even so the plaintiff is entitled to a decree on the promissory note as holder of the promissory note.

3. Section 8 of the Negotiable Instruments Act defines 'holder' as follows:

'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.'

The plaintiff's point is that by virtue of the separate registered sale-deed he came to be the holder of the suit promissory note and therefore entitled to a decree. There appears to be some misconception in the mind of the courts below that endorsement is the only means by which a negotiable instrument can be transferred. Indeed Chapter 4 of the Negotiable Instruments Act deals with the manner of the negotiation of these instruments. In the ordinary way under Section 48 of the Act, a hand-note would be negotiated by endorsement and delivery thereof; a promissory note endorsed in blank or a promissory note to the holder or bearer, is negotiated in simpler fashion, but the Negotiable Instruments Act itself does recognise that negotiable instruments may be transferred and for consideration otherwise than by negotiation A transfer of a promissory note by means of a registered instrument is valid. Thus, where the holder of a promissory note sells his right, title and interest in the note to another but without endorsing it, the assignee is within the definition of ' holder ' in Section 8 of the Negotiable Instruments Act quoted above. He can, sue in his own name and he is entitled in his own name to possession, and to receive or recover the amount due on the hand-note from the parties thereto The difference between transfer by assignment, and a transfer by endorsement and delivery is, that in former case the transfer is subject to all the equities, whereas in the latter it is not. (Ghanashyam Das v. Ragho Sahu. AIR 1937 Pat 100 (FB); Surath Chandra Sana v. Kripanath Choudhury, AIR 1984 Cal 549.)

4. In the present case admittedly there has been no payment not even a demand for payment on the promissory note between 14th March, 1959 when the promissory note was executed and December 14, 1959 when it was transferred to the plaintiff under the sale-deed as aforesaid Accordingly no equities are involved

5. The attention of the courts below was apparently not drawn to this aspect of the legal position of the plaintiff as holder of the promissory note even if the plaintiff could not be treated as a holder in due course. The Courts below thus overlooked the settled position in law and thus their judgment was vitiated.

6. Then the question arises whether the plaintiff is entitled to a decree against defendants 2 and 3. In my opinion the petitioner is entitled to a decree only as against defendant No. 1 who is the executant of the promissory note. Indeed there is nothing on the face of the suit promissory note to show that defendant No. 1 had incurred the loan for the purpose of the joint family consisting of himself and defendants 2 and 3 nor am I satisfied that the loan is in any way binding on the other two defendants, namely defendants 2 and 3 as claimed by the plaintiff.

7. In this view of the position the decision of the courts below is set aside and the suit is decreed in favour of the plaintiff as against defendant No. 1 alone; the suit as against defendants Nos. 2 and 3 stands dismissed. In the circumstances of the case there will be no order for costs in favour of defendants Nos. 2 and 3.

8. In the result, therefore, this secondappeal is allowed with costs throughout asagainst defendant No. 1 alone but inasmuch asthe defendants-respondents have not appeared,the plaintiff will not be entitled to hearing feeof this Court.


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