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Shiv Kumar Gupta Vs. Permanand Ram Gopal - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtDelhi High Court
Decided On
Case NumberC.R. No. 139 of 1972, against order of S.R. Goyal, J. Sm. C.C., Delhi, D/-16.2.1972
Judge
Reported inAIR1973Delhi135
ActsNegotiable Instruments Act, 1881 - Sections 17
AppellantShiv Kumar Gupta
RespondentPermanand Ram Gopal
Appellant Advocate Iqbal Krishan, Adv
Respondent Advocate Vijay Kishan, Adv.
Cases ReferredHarsukadas Balkissendas v. Dhirendra Nath Roy
Excerpt:
.....instruments act, 1881 - petitioner challenged dismissal of recovery suit on basis of document 'hundi' - document on which suit brought contained promise - document was promissory note - no benefit can be sought by invoking section 17 - held, suit liable to be dismissed. - section 13: [altamas kabir & cyriac joseph,jj] custody of child - welfare of child vis--vis comity of courts - the minor girl child of 3 1/2 years was brought to india by her mother. the minor girl was a citizen of u.k. being born in u.k. her parents had set up their matrimonial home in u.k. and had acquired status of permanent residents of u.k. the child with her mother was supposed to return to u.k. but the mother cancelled her tickets and remained behind in india. the husband thereupon started procededings..........of money only to, or to the order of, a certain person, or to the bearer of the instrument. 5. 'bill of exchange'. -- a 'bill of exchange' is an instrument in writing containing an unconditional order, singed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument. a promise or order to pay is not 'conditional' within the meaning of this section and section 4, by reason of time for payment of the amount or any installment thereof being expressed to be on the lapse of a certain period after the occurrence of a specified event which, according to the ordinary expectation of mankind, is certain to happen, although the time of its happening may be uncertain. the sum payable may be 'certain',.....
Judgment:

1. The petitioner impugns the order dated the 16th of February, 1972, by which his suit instituted through the plaint dated the 23rd of September, 1971, for the recovery of Rs.318/- on the basis of a document which he called a Hundi was dismissed.

2. The petitioner came to court alleging in paragraph 11 of the plaint that the respondent had executed a hundi for Rs.300/- for consideration in his favor on 21st of September, 1970, and that the amount which became due on 20th September, 1971, had not been paid.

3. The controversy which arose before the trial court was regarding the nature of the document. It was urged on behalf of the defendant that the document was a promissory note and having not been executed on a stamped paper of the value of Rs. 3/- was inadmissible in evidence. As a promissory note, it was contended, the document would have been admissible in evidence if it had been executed on a stamped paper of the value of Rs.3/-. Reliance was placed on Article 49 (v) of Schedule 1-A of the Indian Stamp Act. The court below reproduced the document in paragraph 3 of the impugned order and came to the concussion that it was a promissory note and since it had not been executed on a paper carrying accurate valuation, it remained inadmissible in evidence and no decree could be passed on the basis thereof. It would be appropriate to reproduce the document in entirety:--

'Rs. 300/- (Rupees three hundred only) 2.Rs House No. 2648 Churiwalan, Delhi-6.

Dated/- 21-9-1970.

Due Date/- 20-9-1971.

After 365 days (Three hundred & Sixty five days) I, promise to pay to Shiv Kumar Gupta son of Lala Ramjidas, 2648 Churiwalan, Delhi Rs. 300/- which I have received in cash today.

Thump impression Hundi seen, and L. Thump impression of Accepted after hearing. Permanand, Darji son of Ram Gopal, Caste Brahmin Delhi. Prema Nand.

The learned counsel for the petitioner contends that the court below has erroneously construed the document as a promissory note and that in any event the plaintiff had the choice within the meaning of S. 17 of the Negotiable Instruments Act 1881, to obtain relief by pleading that the document was a hundi. Reference has been made to Section 4 and 5 of the said Act. These provisions as well as Section 17 of the act may be noticed:

'4. 'Promissory Note'. -- A 'promissory note' is an instrument in writing (not being a bank-note or a currency-note) containing an unconditional undertaking, signed by the matter, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument.

5. 'Bill of exchange'. -- A 'bill of exchange' is an instrument in writing containing an unconditional order, singed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.

A promise or order to pay is not 'Conditional' within the meaning of this section and Section 4, by reason of time for payment of the amount or any installment thereof being expressed to be on the lapse of a certain period after the occurrence of a specified event which, according to the ordinary expectation of mankind, is certain to happen, although the time of its happening may be uncertain.

The sum payable may be 'certain', within the meaning of this section and Section 4, although it includes future interest or is payable at an indicated rate of exchange, or is according to the course of exchange, and 'although the instrument provide that, on default of payment of an installment, the balance unpaid shall become due.

The person to whom it is clear that the direction is given or that payment is to be made, be a 'certain person', within the meaning of this section and Section 4, although he is mis-named or designated by description only'.

'17. Ambiguous instruments. -- Where an instrument may be construed either as a promissory note or bill of exchange, the holder may at his election treat it as either, and the instrument shall be thenceforward treated accordingly.'

A promissory note would be an instrument containing an unconditional undertaking by the maker to pay a specified sum of money either to a particular person or to the order of a particular person and such an amount would be payable to the bearer of the instrument. In a promissory note the obligation is incurred by the maker thereof. He may promise to pay the amount to the bearer of the instrument whether the bearer is the original person in whose favor the promise may have been made or is a holder in due course.

4. The document on which the suit was brought contained a promise by Prema Nand that after expiry of 365 days he will pay to Shiv Kumar Gupta a sum of Rupees 300/- which he had received in cash. I find no ambiguity in the document and I am persuaded that it is a promissory note.

Where it can be held that a document is either a promissory note or is a bill of exchange, the occasion for exercising the choice under Section 17 will not arise. Section 17, reproduced above, carries the heading 'Ambiguous instruments'. Apart from its heading, the opening part of the provision makes it clear that it will operate only in respect of a document which may be ambiguous and capable of being construed either as a promissory note or as a bill of exchange. Where the terms employed create no difficulty in construing the document, Section 17 will not apply. In the present case the instrument being unambiguously a promissory note, no choice within the scope of Section 17 could have been exercised.

The petitioner's counsel relies on the following observation in Bibi Kazmi Begum v. Lachman Lal Sao : AIR1930Pat239 .

'There is nothing in S. 5 to support the argument that if the drawer and drawee be the same person the instrument cannot be described as a bill of exchange. It is true that where the drawer and the drawee is the same person that person is not entitled to treat the instrument as a bill of exchange but the holder of the bill may treat it as a bill of exchange.'

The citation is unhelpful. The reason is that in the instant case the drawer Prema Nand had made the clear promise that on the expiry of 365 days he will pay Rs. 300/- to Shiv Kumar Gupta which he had received in cash at the time of executing the document.

The next citation is Alagappa Chetti v. A.L.A.L.N Narayanan Chettiar Air 1932 Mad. 765. It was held in that case that the election given to a holder by Section 17 of the Negotiable Instruments Act was in the nature of a privilege of which he could have full advantage and that the benefit given by that provision could not be taken away by anything contained in the same Act.

A litigant can invoke Section 17 only in a case where the instrument is ambiguous in its language and permits the controversy as to whether it is a promissory note or is a bill of exchange. Where an instrument is clear in its form and expression and permits of no controversy the litigant cannot invoke any privilege contained in Section 17 of the Negotiable Instruments Act.

5. The distinction between a promissory note and a bill of exchange is a statutory distinction created by Section 4 and 5 of the Act. In case of a bill of exchange the instrument contains an unconditional order which is not a promise and such an order is signed by the maker of the instrument and the order is in the nature of a direction given to a certain person to pay a specified amount of money only to or to the order of a specified person or to the bearer of the instrument.

The words employed in those sections demarcate the two kinds of documents. Section 17 of the said Act has been enacted to meet a situation where the parties being unaware of the technicalities contained in Sections 4 and 5 may be found to have used such words in framing the instrument which permits the controversy as to whether it is a promissory note or a bill of exchange.

6. Reliance is then placed on Jogesh Chandra Dhar v. Mohammed Ibrahim : AIR1930Cal697 . The document in that case was:

'Forty-five days after date without grace we jointly and severally promise to pay to the order of Babu Jogeschandra Dhar, Chittagong, the sum of one thousand rupees only for value received in cash and that with interest at 3 per cent. Per annum after due date.

Prasannakumar Gupta.

Ramkamal Gupta.'

The document was executed by two persons. The paper on which the document was executed described itself in print as a hundi. The Subordinate Judge had held that the document was not a bill of exchange. The High Court took the view that doubtlessly it was a bill of exchange as defined in Section 5 of the Negotiable Instruments Act and even if there was any ambiguity about its being either a promissory note or a bill of exchange the holder of the bill was entitled to treat it as either of them and could invoke the benefit of Section 17 of the Negotiable Instruments Act.

The view taken in that case was examined in C.C. Sinha v. Bidhu Bhusan De , : AIR1955Cal562 and was dissented from. One of the reasons for dissenting was the law laid down in Harsukadas Balkissendas v. Dhirendra Nath Roy : AIR1941Cal498 , wherein a Full Bench of that court had dealt with a document which had close similarity with the instrument with which I am concerned. The terms employed in the instruments concerned in : AIR1941Cal498 were:

'Sixty days after date without grace we promise to pay to M/s. Hurookhdas Balkisendass or order at Calcutta the sum of rupees two thousand five hundred only for value received.

Sd. Dhirendranath Roy.

Sd. Grindiranath Roy.

Sd. Birendrananth Roy.'

Across each document was written the word 'Accepted' and beneath it were the signatures of the executing. In this case also Prema Nand had signed beneath the words 'Hundi seen and accepted after hearing.' The Full Bench concerned with the determination as to whether the documents were promissory notes or bills of exchange noticed the definitions in the Negotiable Instruments Act as also the provisions in the Stamp Act and the Rules framed there under and then observed:

'It will be seen, thereforee, that S. 11, Stamp Act, R. 13 and R.17 of the Stamp Act Rules, have no application whatever to documents of the kind now under consideration and that R. 5 simply provides that a promissory note or a bill of exchange shall be written no paper on which a stamp of the proper value with or without the word 'hundi' is engraved or embossed. thereforee, an instrument on which the word 'hundi' is engraved may be either a promissory note or a bill of exchange. The word 'hundi' on the stamp does not determine the character of the document we must look to the provisions of the document itself.'

In terms of the Rules framed under the Stamp Act, a promissory note or a bill of exchange may be executed on a paper which may be describing itself as a hundi. Such description will not, however, alter the essential character of the instrument and where it is a promissory note or a bill of exchange, it must be executed on the stamp-paper of proper value. Execution on the stamp-paper of proper value would be a factor for considering its admissibility as evidence. Its nature would be determined in terms of Section 4 and 5 of the Negotiable instruments Act. The Calcutta High Court in the Full Bench case came to the conclusion that although the words 'hundi' were appearing on the documents, the documents were promissory notes.

In : AIR1955Cal562 : AIR1930Cal697 was dissented from, apart form relying upon the observations in : AIR1941Cal498 , (FB) the relevant English decisions were noticed and Section 17 of the act was also discussed. It was rightly observed by G.K. Mittar, J. that there being no ambiguity in the document it was not possible to accept the suggestion that the holder was entitled to treat the document as a bill of exchange.

The correct view is that where an instrument is without ambiguity either a promissory note or a bill of exchange, no benefit can be sought by invoking Section 17 of the Negotiable Instruments Act.

Holding that the document on the basis whereof the plaintiff-petitioner brought the suit was a promissory note, I find no justification for interfering with the impugned order. The petition is dismissed, but without costs.

7. Petition dismissed.


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