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Chuni Lal Manga Vs. Mangat Ram - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtDelhi High Court
Decided On
Case NumberCivil Revision Appeal No. 125 of 1971
Judge
Reported inILR1975Delhi383; 1976RLR196
ActsCode of Civil Procedure (CPC), 1908 - Order 47, Rule 1
AppellantChuni Lal Manga
RespondentMangat Ram
Advocates: R.S. Oberoi, Adv
Cases ReferredLakshmi Narain v. Mst. Aparna Devi
Excerpt:
.....on the equitable principle of 'unjust enrichment'.(12) the well accepted principle is that when a promissory note or negotiable instrument follows the advance of money by the executee to the executant it is possible to rely on the advance of money when there is some infirmity attaching to the negotiable instrument. it is, however, of the first importance, that there should be no surprise sprung on the opposite party, i have explained how in this case sufficiently clear allegations have been made in the plaint in this respect, how they had also been well understood by the defendant and there can be no question of his being taken by surprise. the concession by counsel might well undoubtedly have been that if the negotiable instrument, either as a hundi or as a promissory note, was not..........is aggrieved by the order of dismissal of his suit by the learned commercial sub- judge (mrs santosh duggal) to review which an application was also made; a notice of the same was ordered by mrs. santosh duggal herself, but the application for review was subsequently dismissed by shri p. k. bahri, her successor. (2) the suit was laid by the plaintiff/petitioner, director of a company registered under the companies act of 1956, against the defendant (mangat ram alias mangtu) in respect of a borrowing in the sum of rs. 4550.00 (originally wrongly mentioned in the plaint as rs. 4500.00 but since corrected) in respect of which a hundi was said to have been executed on the same date, namely, 17th march, 1966, for a period of 180 days commencing 17th march, 1966 and expiring on the 12th.....
Judgment:

S. Rangaran, J.

(1) The plaintiff/petitioner is aggrieved by the order of dismissal of his suit by the learned Commercial Sub- Judge (Mrs Santosh Duggal) to review which an application was also made; a notice of the same was ordered by Mrs. Santosh Duggal herself, but the application for review was subsequently dismissed by Shri P. K. Bahri, her successor.

(2) The suit was laid by the plaintiff/petitioner, Director of a company registered under the Companies Act of 1956, against the defendant (Mangat Ram alias Mangtu) in respect of a borrowing in the sum of Rs. 4550.00 (originally wrongly mentioned in the plaint as Rs. 4500.00 but since corrected) in respect of which a hundi was said to have been executed on the same date, namely, 17th March, 1966, for a period of 180 days commencing 17th March, 1966 and expiring on the 12th September, 1966. The hundi was presented for payment through a Notary (P.W. 2), who was examined only in part and the defendant refused to pay the amount due. The suit was laid for recovery of the said sum as on a hundi, a negotiable instrument, for recovery of Rs. 4840.00 with interest at 12% per annum under Order 37 Civil Procedure Code . Leave to defendant was granted because the defendant not only denied his signature on the hundi but also denied the borrowing.

(3) It would be seen from the Notary Public's certificate dated 18-12-1966 (Ex. P. 1) that the defendant who was duly identified, not only admitted his identity as the executant but also the execution of the hundi and his liability to pay the amount there under; when asked to pay the same, he expressed his inability to pay for some time; asked how much time he wanted he said he was unable to say. He was also asked to state in writing, over his signature, all he had thus stated, but he declined.

(4) The following issues were framed: 1. Whether the defendant executed the promissory note in suit in favor of the plaintiff Opp 2. If so, whether this pronote is without consideration Opd 3. Whether the promissory note in suit is properly stamped If not, to what effect Opp 4. Whether the suit of the plaintiff is barred under Order 2 Rule 2 Civil Procedure Code Opd 5. Whether the plaintiff is a money lender? If so, to what effect? OPD. 6. Relief.

(5) Later on the plaintiff sought to amend the plaint to describe the negotiable instrument as a promissory note instead of hundi; in addition, as noticed already, a correction was also sought in the impugned claim. Both these amendments were allowed by order dated 5-9-1967. The evidence of the handwriting expert (Shri K. N. Johar) as Public Witness . I was recorded and thereafter the Notary Public himself was called and examined as Public Witness . 2. The cross-examination was not over. There seems to have been an attempt to compromise the matter at that stage. There having been no compromise a further application was made on 20-8-1968 for the purpose of amending the plaint including a plea, in the alternative, basing on the original cause of action. But this amendment was, however, disallowed by Mrs. Santosh Duggal by her order dated 18-9-1968. Not only did she disallow the amendment but also dismissed the suit in toto by the same order without writing a separate judgment in the suit and even without giving findings on each of the issues as required by Order 20 Rule 5 Civil Procedure Code . Mrs. Santosh Duggal observed, in the course of her order, which on its face does not amount to a judgment, that the payment and the execution of the hundi were simultaneous, that is, the execution of the negotiable instrument was at the same time when the loan was advanced and, thereforee, in such a situation the plaintiff could not fall back on the original consideration and section 91 of the Evidence Act would be such evidence. She further observed that the plaintiff's counsel had himself conceded that the pronote (as it had been described by that time) in suit was inadmissible in evidence and that the suit was liable to be dismissed accordingly. I am at a loss to understand how if such a concession was made it became necessary to discuss anything further as Mrs. Santosh Duggal, seems to have done and at that length in her order dated 18-9-1968. By an application for review dated 28-9-1968 the plaintiff had pointed out, among other things, that such a concession had not been made (vide para 6), that no opportunity had been given to lead remaining evidence and that the said order had been made without hearing arguments regarding the effect of insufficient stamping of the promissory note on the suit. It was also pointed out that since such arguments had not been addressed, issue 'by issue, the court had failed to give its decision on every issue. It is significant that Mrs. Santosh Duggal herself had considered it proper to order notice though, unfortunately, the review application was not ultimately heard by her, but only by her successor.

(6) The question of references in orders of court to concessions by the counsel and how and in what manner they could be called in question came in for elaborate consideration in Moran Mar Basselions Catholics v. Most Rev. Mar Poulose Athanasius A.I.R. 1954 S.C. 526 where Jagannadhadas, J. speaking for the Supreme Court, pointed out that it was necessary for the party aggrieved in that case to approach the very Judge who made those observations and set out the view expressed by Patanjali Sastri J. (as he then was) in Govinda Chettiar v. Varadappa Chettiar A.I.R. 1940 Mad 17 (2) that a misconception by the Court of a concession made by the advocate or of the attitude taken up by the party appears to be a ground analogous to the grounds set forth in Order 47 Rule I Civil Procedure Code . and affords good and cogent ground for review.

(7) It appears that Shri P. K. Bahri, while passing the impugned order, was really swayed by the concession of the plaintiff's counsel as recorded by Mrs. Santosh Duggal. But this was really to beg the question. If the only remedy of the aggrieved party was to go before the very same learned Judge who recorded the so-called concession of the counsel in order to point out that the counsel did not make any such concession and that the court was under a misconception about it one has necessarily to rely more on the circumstances when the same learned Judge was not available for hearing the review application. What seems to me important, in a context like this, is the fact that Mrs. Santosh Duggal had herself chosen to order notice to the other side when the same counsel for the plaintiff had applied for reviewing her order on the aforesaid grounds. The impugned order does not indicate any awareness of these considerations which seem so vital in a situation like this.

(8) Even apart from these considerations it further seems to me that the learned counsel for the plaintiff could not have conceded- at least would not have conceded-that the suit was not maintainable and that there was a misconception in this respect. It is worth repeating by way of emphasis, that if such a concession had been made then no question of any further arguments could have arisen ; it would have been clearly unnecessary for Mrs. Santosh Duggal to indulge in the long discussion that she did both of the facts and of the law. On the other hand, the strenuous arguments that had been put forward by the plaintiff's counsel, which were noticed by Mrs. Santosh Duggal, indicate that such a concession was not likely to have been made.

(9) Mrs. Santosh Duggal seems to have persuaded herself to come to the conclusion that the amendment sought for was not permissible in view of the so-called lending and execution of the promissory note being at about the same time and section 91 of the Evidence Act being a bar to the letting in of evidence. There is plenty of judicial dicta in support of the view that when a promissory note or any bill of exchange is given for a loan prima fade it is given and taken either as a conditional payment (not in accord and satisfaction) of the debt or as collateral security for the borrowing and that it is possible to let in evidence about the borrowing, preceding the execution of the negotiable instrument by, however, short an interval, when all the terms of the contract between the parties had not been embodied in the promissory note; in other words, section 91 of the Evidence Act would not be a bar in such a case. It would be needless to cite all the cases exhaustively on the subject. It may be sufficient to refer only to some decisions of the Full Benches of the different High Courts which have dealt with this question, not to speak of some other decisions of Division Benches as well as by Single Judges of the various High Courts. They are: Kanwar Bahadur v. Suraj Bakash A.I.R. 1932 Oudh 235 (3); Maung Chit v. Roshan N.M.A. Kareem Comer & Co.-A.I.R. 1934 Ran 389; Major Mistri v. Mt. Binda Debt : AIR1946All126 ; there were earlier decisions of the Full Bench reported in the years 1931 and 1943 Nazir Khan v. Ram Mohan Lal : AIR1931All183 ; Sheo Nath Prasad v. Sarjoo Nonia&Anr.; : AIR1943All220 ; Perumal Chettiar v. Kamakshi Ammal A.I.R. 1938 Mad 785; Salimunnisa Begum v. Abdul Qayyum Ansari A.I.R. 1956 Hyd. 32. In the last mentioned case it was pointed out that the suit can be dismissed only if the amount was taken in discharge of the debt.

(10) The question of applicability of section 91 of the Evidence Act has also been discussed in some of the above decisions; a Division Bench of the Andhra Pradesh High Court also considered this question in Mohammad Jamal Saheb v. Munwar Begum : AIR1964AP188 . For some other decisions on this question also see: Gour Chandra Sahu v. Garib Kar : AIR1957Ori212 ; Dhaneswar Sahu v. Ramrup Gir and others A.I.R. 1928 Pat 426; Shah Chimanlal Jagjivandas v. Khambhla Savji Bechar A.I.R. 1955 Sau. 74; Lakshmi Narain v. Mst. Aparna Devi : AIR1953All535 Section 91 of the Evidence Act has also to be read along with sections 65 and 70 of the Contract Act which read as follows:

'65.When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it.

'70.Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.'

(11) Even on a non-contractual basis if money had been received the plaintiff can succeed if it is established that he gave the said amount to the defendant, not intending to do so gratuitously and/or the loan was not to loose its separate identity. This is on the equitable principle of 'unjust enrichment'.

(12) The well accepted principle is that when a promissory note or negotiable instrument follows the advance of money by the executee to the executant it is possible to rely on the advance of money when there is some infirmity attaching to the negotiable instrument. The two causes of action are distinct and separate.

(13) In this case the allegations in para 1 of the plaint are as follows: 'that the defendant borrowed a sum of Rs. 4550.00 (as amended) from the plaintiff on 17-3-66 and executed a promissory note in plaintiff's favor for that consideration' etc. (emphases added). It is thus seen that the plaintiff alleged the borrowing earlier and the execution of the instrument later, however, short may have been the interval of time between both. That this was the way in which the defendant himself had understood the plaint is clear from the way in which he replied to the said allegation in paragraph I of the plaint in the written statement :

'THEdefendant did not borrow a sum of Rs. 4550.00 from the plaintiff on the 17th of March, 1966 and did not execute any promissory note in favor of the plaintiff', (emphases added ).

(14) It is important that the defendant had traversed, separately, the allegation concerning the lending and the allegation concerning (later) the execution of the negotiable instrument. It seems to me that even after disallowing the amendment the lower court had still to go into evidence pertaining to the allegation concerning the borrowing and find out whether a decree could be passed in favor of the plaintiff on the plaint, even as un-amended, based on the lending. It is clear, however, that the subsequent execution of the Hundi or promissory note (by whatever name it is called) could not be relied upon for the reason that both as a hundi and as a promissory note the instrument had been insufficiently stamped. It is only by recording evidence it will be possible to appreciate the circumstances which led to the execution of the instrument to evidence the borrowing of the amount for which it is said to have been executed and whether the instrument contained all the terms of the lending or not.

(15) It seems to me, on a study of the decided cases on the question, including those chosen for specific mention in this judgment, what is important is the antecedency of the borrowing and the execution of the negotiable instrument which was only a conditional security in respect of the said borrowing. The effort of the Court should obviously be in the direction of doing substantial justice between the parties, except in cases where, for some insurmountable reason, it is not unfortunately possible to do so. Procedural laws are the hand-maiden of justice and no 'traps' for unwary litigants. It is, however, of the first importance, that there should be no surprise sprung on the opposite party, I have explained how in this case sufficiently clear allegations have been made in the plaint in this respect, how they had also been well understood by the defendant and there can be no question of his being taken by surprise.

(16) Looked at in this way it seems to me that the suit has to be tried fully by permitting the plaintiff to adduce the rest of the evidence, the adduction of evidence having been abruptly terminated by the order passed by Mrs. Santosh Duggal. In the view that no revision has been preferred against the said application for amendment itself having been disallowed I feel some constraint in the matter of ordering the amendment. I am free to state, however, that if such a revision application had been preferred I might have, to put matters beyond any controversy, allowed the said amendment and allowed the amendment itself to be made basing the claim in the alternative on the original cause of action. Fortunately for the plaintiff the relief prayed in the plaint is for money and there is also mention in it of the borrowing preceding the execution of negotiable instrument; if the latter is not admissible in evidence either as a hundi or as a promissory note, there seems no impediment, even on the basis of the plaint as it is worded, in granting a decree in respect of the alleged borrowing if the same is proved. Only a new issue would have to be raised concerning the lending of the many as alleged in para, 1 of the plaint.

(17) It only remains for me to deal with the order of Shri P. K. Bahri. He had not, plainly, exercised the jurisdiction vested in him by law to grant the review in the circumstances explained; he probably felt some embarrassment in not being able to say that his colleague Mrs. Santosh Duggal had been under a misconception regarding the so-called concession by the plaintiff's counsel. The concession by counsel might well undoubtedly have been that if the negotiable instrument, either as a hundi or as a promissory note, was not admissible the suit on the said basis would not be possible. But this was not to say that the suit even based on the original cause of action of borrowing, would itself be liable to be dismissed, especially in the face of the allegations in this regard in paragraph I of the plaint and paragraph 1 of the written statement. Shri Bahri also did not advert to the other features mentioned in the application for review, that the order of Mrs. Dliggal dismissing not only the application to amend the plaint but also the suit was not a judgment within the meaning of Order 20 Rule 5 Civil Procedure Code .

(18) It is settled law that when the jurisdiction vested in the court is invoked to pass an order for review under Order 47 Rule 1 Civil Procedure Code ., the full scope of which has been explained by the Supreme Court in the above-said ruling itself (it being needless to cite further decisions on this question), the application for review ought, in the circumstances, to be allowed by a Court which exercises revisional jurisdiction; I do so accordingly.

(19) In the result the order dated 13-10-1970 passed by Shri P. K. Bahri and that passed by Mrs. Santosh Duggal (on 18-9-1968) are set aside and the suit is remanded to the trial for enabling the plaintiff to adduce such further evidence as the plaintiff wishes on the issues framed already. After the defendant also adduces evidence and arguments are heard, the suit will be decided in the light of the observations in this Judgment and according to law.

(20) I have, no doubt, been handicapped by the fact that the defendant/respondent has not been represented before me in spite of his having been served. I can, in the circumstances, order the plaintiff/ petitioner alone to appear before the Commercial Sub-Judge, Delhi on 29-5-1975 on which date the learned Judge would order fresh notice to the defendant of the actual date of hearing and proceed with the further trial of the suit according to law. I have also to point out that the effect of leave being granted to defend a suit filed under Order 37 Civil Procedure Code .. is that the suit would be tried in the manner it would have to be tried if it had been filed in the ordinary manner. This is what Order 37 Rule 7 provides : the procedure in suits under the Chapter should be the same as the procedure in suits instituted in the ordinary manner.

(21) Before parting with this case I have only to point out one feature which Happens to be in favor of the respondent who is not present before me. I do not find any averment in the plaint that there was any agreement to pay interest. There is only an averment in the plaint that interest at 12% would have to be paid as on negotiable instrument. The lower court would, thereforee, go into this question, of the liability for interest, in the absence of any specific plea regarding a specific agreement to pay interest and decide this question also according to law.

(22) The Revision Petition is accordingly accepted but there will be no order as to costs.


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