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Sankaran Sankaran Namboori Vs. Mathai Abraham - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKerala High Court
Decided On
Case NumberCivil Revn. Petn. No. 1191 of 1971
Judge
Reported inAIR1973Ker22
ActsNegotiable Instruments Act, 1881 - Sections 4; Code of Civil Procedure (CPC) , 1908 - Sections 115; Kerala Stamp Act - Sections 35
AppellantSankaran Sankaran Namboori
RespondentMathai Abraham
Appellant Advocate K. Ravindranathan Nair, Adv.
Respondent Advocate M. Krishnan Nair, Adv.
DispositionRevision allowed
Excerpt:
commercial - promissory note - section 4 of negotiable instruments act, 1881, section 115 of code of civil procedure, 1908 and section 35 of kerala stamp act - undertaking in document not unconditional to satisfy requirements of section 4 - document which contains promise to pay on settlement of accounts not a promissory note - document not supported by consideration - liability to pay amount arises only when litigation ends and matter settled - no indication whether litigation comes to end or there has been settlement of accounts - held, suit for recovery dismissed. - .....and interest thereon. the plaintiff's claim is based on ext. p-2 dated 2-1-1967 purported to be a promissory note. the plaint proceeds on the footing that ext. p-2 happened to be executed in renewal of ext. p-1 promissory note dated 7-1-1964 for rs. 200/-.3. the defendant contests the suit on various grounds. according to him, there is no consideration either for ext. p-1 or ext. p-2. he also contends that ext. p-2 is not a promissory note as defined in the negotiable instruments act, 1881. explaining the circumstances under which exts. p-1 and p-2 happened to be executed, he has stated that the plaintiff's father was a tenant in respect of 10 acres of land belonging to his illom and that his grandfather had obtained a decree for eviction of the plaintiff's father from that property in.....
Judgment:
ORDER

K. Bhaskaran, J.

1. The revision petitioner is the defendant in a Small Cause Suit, S. C. S. No. 1/70 on the file of the Munsiff's Court, Changanacherry.

2. The suit is for the recovery of a sum of Rs. 295/- made up of principal Rs. 250/- and interest thereon. The plaintiff's claim is based on Ext. P-2 dated 2-1-1967 purported to be a promissory note. The plaint proceeds on the footing that Ext. P-2 happened to be executed in renewal of Ext. P-1 promissory note dated 7-1-1964 for Rs. 200/-.

3. The defendant contests the suit on various grounds. According to him, there is no consideration either for Ext. P-1 or Ext. P-2. He also contends that Ext. P-2 is not a promissory note as defined in the Negotiable Instruments Act, 1881. Explaining the circumstances under which Exts. P-1 and P-2 happened to be executed, he has stated that the plaintiff's father was a tenant in respect of 10 acres of land belonging to his illom and that his grandfather had obtained a decree for eviction of the plaintiff's father from that property in O. S. No. 218/1123 on the file of the District Court, Kottayam; at the instance of the plaintiff's father defendant filed an obstruction petition to prevent the plaintiff's father being evicted from the property. The expenses in connection with the obstruction petition had to be met by the plaintiff's father. The defendant had premised to execute a melotti along with other members of his illom in favour of the plaintiffs father and it is by way of security for the due performance of that promise that Ext. P-1 promissory note was executed without any consideration whatsoever. He also contends that Ext. P-2 is not a renewal of Ext. P-1 note.

4. The trial Court decreed the suit for Rs. 200/- with interest thereon from the date of execution of Ext. P-1. The contention of the defendant that in Ext. P-1 promissory note there were material alterations and therefore no claim could be based on that document was repelled by the learned Munsiff taking the view that in any event Ext. P-1 promissory note was superseded by Ext. P-2 document and there was also an endorsement on Ext. P-1 promissory note to that effect. The learned Munsiff gave the defendant the benefit of paying the decree amount in instalments as provided under Act 11 of 1970 accepting the contention of the defendant that he is an agriculturist entitled to the benefits of the Act. The reason for giving a decree for Rs. 200/- and interest thereon from the date of Ext. P-1 promissory note, according to the learned Munsiff, is that the interest on the principal amount of Rs. 200/- shown in Ext. P-2 document is not correct. Though there is no stipulation in Ext. P-2 promissory note, interest was given at the rate of 6%.

5. We have now to examine whether there was consideration for the promissory note. When the defendant denies to have received consideration, the plaintiff is to prove that consideration has actually passed. In this case we have only the interested evidence of the plaintiff who examined himself as P. W. 1. D. W. 2 appears to be an attestor both to Exts. P-1 and P-2. He has sworn to the circumstances under which Exts. P-1 and P-2 documents happened to be executed. If the evidence of the defendant as DW. 1 and the attestor of the documents as DW. 2 is accepted, it has to he held that there has not been any consideration for Exts. P-1 and P-2 documents. The evidence on record would lead to the conclusion that Exts. P-1 and P-2 came into existence in very suspicious circumstances and the true facts have not been unfolded by the plaintiff. I, therefore, hold that the plaintiff has not succeeded in proving that Exts. P-1 and P-2 documents are supported by consideration.

6. The next question that arises for consideration is whether Ext. P-2 is a promissory note as defined in Section 4 of the Negotiable Instruments Act, I881. Section 4 of the Act reads as follows:

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

Illustrations.

A signs instruments in the following terms:--

(a) 'I promise to pay B or order Rupees 500.'

(b) 'I acknowledge myself to be indebted to B in Rs. 1,000/- to be paid on demand, for value received.'

(c) 'Mr. B. I. O. U. Rs. 1,000/-.'

(d) 'I promise to pay B Rs. 500 and all other sums which shall be due to him.'

(e) 'I promise to pay B Rs. 500, first deducting thereout any money which he may owe me.'

(f) 'I promise to pay B Rs. 500 seven days after my marriage with C.'

(g) 'I promise to pay B Rs. 500 on D's death, provided D leaves me enough to pay that sum.'

(h) 'I promise to pay B Rs. 500 and to deliver to him my black horse on 1st January, next.'

The instruments respectively marked (a) and (b) are promissory notes. The instruments respectively marked (c), (d), (c), (f), (g) and (h) are not promissory notes.' The material portion of Ext. P-2 promissory note reads as follows:

(Being in vernacular is omitted here --Ed.)

The recital is to the effect that the amount due under the document would be paid on settlement of account when the litigation comes to an end. No doubt, in order to make it a negotiable instrument it may not be necessary to contain an undertaking 'to pay to the order' of the person or 'to the bearer' of the instrument. However, in this case, whether there would be a statement of accounts is not a certain thing even assuming that the litigation may come to an end one day. When there is such a condition, I do not think that it can be held that the undertaking in Ext. P-2 is unconditional to satisfy the requirements of Section 4 of the Act. In understanding the scope of Section 4 of the Negotiable Instruments Act, the illustrations thereto will be of considerable help. Illustrations (c) to (h) are all of instruments which are not promissory notes. In particular, it may be noted that illustration (d) which reads 'I promise to pay B Rs. 500/- and all other sums which shall be due to him' is stated to be an instrument which is not a promissory note. Tested in the light of the above illustration, Ext. P-2 which contains a promise to pay on settlement of accounts when the litigation comes to an end, cannot be found to be a promissory note. I, therefore, hold that Ext. P-2, wherein the condition is that the executant shall pay the amount due under the instrument on settlement of accounts when the litigation referred to therein comes to an end, is not a promissory note as defined in Section 4 of the Negotiable Instruments Act, 1881.

7. As per the defendant's promise in Ext. P-2, his liability to pay the amount arises only when the litigation ends and the matter is settled. In the pleadings there is no indication as to whether the litigation has come to an end or there has been a settlement of accounts. That being so, I hold that this suit has been filed without a proper cause of action.

8. Learned counsel appearing for the respondent has submitted that even if it is not a promissory note it can be treated as a bond and a decree granted. There is no such alternative prayer in the suit. I have already held that in terms of the promise made by the defendant in Ext. P-2, the cause of action in favour of the plaintiff arises only when the plaintiff alleges and proves that the litigation referred to therein had ended and there was a settlement of the whole matter. That apart, this document has not been duly stamped under the Stamp Act as a bond. The argument of the learned counsel is that though Ext. P-2 has not been duly stamped for the purpose of treating it as a bond, when once it has been admitted in evidence such admission cannot be called in question at any stage of the proceedings. Reliance is placed on Section 35 of the Kerala Stamp Act, 1959, which reads as follows:--

'35. Admission of instrument where not to be questioned.--Where an instrument has been admitted in evidence such admission shall not, except as provided in Section 59, be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped.'

In the instant case, the defendant contended in the written statement that Ext. P-2 is not a promissory note. Learned Munsiff admitted Ext. P-2 only as a promissory note and the parties joined issue as to whether it is a promissory note or not. Having now found that it is not a promissory note, it is not open for the plaintiff to contend that it could be treated as a bond and a decree granted accordingly. This plea is belated as it has been taken only at the hearing of this revision. Section 35 of the Kerala Stamp Act may enable the plaintiff to resist the contention of the defendant that it is not admissible in evidence for not having been duly stamped as a bond, but that cannot by itself enable him to spring a surprise on the defendant by asking for a decree treating Ext. P-2 to be a bond, which is not consistent with his case based on a promissory note.

In the light of the discussions above, I hold that Ext. P-2 is not a promissory note and that the plaintiff has not succeeded in proving that the document is supported by consideration. The plaintiff has no cause of action and, therefore, I allow this revision petition and dismiss the suit. In the circumstances of the case, I direct the parties to bear their respective costs.


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