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Meerasahib Muhammed Kunju Vs. Padmanabha Iyer Harihara Iyer - Court Judgment

LegalCrystal Citation
SubjectProperty;Commercial
CourtKerala High Court
Decided On
Case NumberS.A. No. 1056 of 1960
Judge
Reported inAIR1965Ker28
ActsNegotiable Instruments Act, 1881 - Sections 30; Transfer of Property Act, 1882 - Sections 55(4)
AppellantMeerasahib Muhammed Kunju
RespondentPadmanabha Iyer Harihara Iyer
Appellant Advocate P. Subramonian Potti, Adv.
Respondent Advocate G. Viswanatha Iyer, Adv.
DispositionAppeal dismissed
Cases Referred and Achuthan Raghavan v. Varkey Varia
Excerpt:
- - 5, that even if it was so, the claim for such balance must be held to be satisfied upon the cheque being accepted and that being a transferee without notice of the non payment of the consideration, the property in his hands could not be made liable. in appeal by the plaintiff, the subordinate judge gave him a decree against the property as well. the plaintiff has thus failed to prove that the second defendant had notice of non-payment of the sum of rs......therefor by the first defendant in favour of the plaintiff, being dishonoured. a charge on the suit property sold under ext. p. 5 was also claimed, in addition to a decree against the first defendant personally. ext. p. 5 is dated the 21st february, 1951, and, ext, p. 1 bears the date the 24th march 1951. the second defendant who had taken a simple mortgage, ext. d. 1 dated the 12th december 1951 for the suit property and others from the first defendant, contested the suit, on the ground that ext. p. : was not towards the balance of the consideration for ext. p. 5, that even if it was so, the claim for such balance must be held to be satisfied upon the cheque being accepted and that being a transferee without notice of the non payment of the consideration, the property in his hands.....
Judgment:

S. Velu Pillai, J.

1. This second appeal by the second defendant arises in a suit to recover the balance of consideration under a sale deed Ext. P. 5, upon a cheque Ext. P. 1, given therefor by the first defendant in favour of the plaintiff, being dishonoured. A charge on the suit property sold under Ext. P. 5 was also claimed, in addition to a decree against the first defendant personally. Ext. P. 5 is dated the 21st February, 1951, and, Ext, P. 1 bears the date the 24th March 1951. The second defendant who had taken a simple mortgage, Ext. D. 1 dated the 12th December 1951 for the suit property and others from the first defendant, contested the suit, on the ground that Ext. P. : was not towards the balance of the consideration for Ext. P. 5, that even if it was so, the claim for such balance must be held to be satisfied upon the cheque being accepted and that being a transferee without notice of the non payment of the consideration, the property in his hands could not be made liable. The first court held, that the connection between Exts. P. 1 and P. 5 has not been proved, and that the second defendant was a transferee without notice of nonpayment, and granted only a personal decree-against the first defendant; in appeal by the plaintiff, the Subordinate Judge gave him a decree against the property as well.

2. I find little difficulty in holding, that Ext. P. 1 was towards part of the sale consideration. The second defendant knew nothing about the circumstances under which Ext. P. 1 came to be drawn. The evidence is all one way and is that of the plaintiff, that Ext. P. 1 was given as part of the sum of Rs. 1361 odd, recited in Ext. P. 5 as made up of prior payment and of cash payment on that date. In the reply Ext, P. 2, which the first defendant gave on the 18th July, 1951, to the plaintiff's demand, he said that the cheque was drawn on the date of Ext. P. 5 but was post-dated on the understanding between him and the plaintiff, that the latter would satisfy him as to the extent of the property before the date the cheque bore, but that as this was not fulfilled, the cheque came to be dishonoured. This is at least useful as explaining the difference between the dates of Exts. P. 1 and P. 5. There is no other transaction in evidence to which Ext. P. 1 could be related; nothing was suggested. These are sufficient to support toy conclusion as stated above.

3. The second question is whether the acceptance of Ext. P. 1 was eqivalent to payment or discharge of the liability. Going by the dates, with reference to Ext. P. 1, the liability for Rs. 1000/- under Ext. P. 5 was a pre-existing debt. The presumption of law in such cases is that the cheque is taken only as a conditional payment, that is, subject to the condition subsequent, that if it is dishonoured the creditor could fall back on the original cause of action. It is unnecessary to refer to decided casts as the law has been summarised in Bashyam and Adiga's Negotiable Instruments Act, 11th edition, appendix C. At page 568 the following passage occurs:

'It is always a question of intention of parties whether a bill or note taken on account of a debt, operates as an absolute discharge of the debt or only as a conditional payment of it. Generally speaking a bill or note can never go in discharge of a debt, unless it is part of the contract that it shall be so; for, a mere promise to pay cannot be regarded as an effective payment.'

Evea in the case of contemporaneous debts, the presumption applies. The learned authors have summarised the law thus, at page 571.

'The preponderance of the view is in favour of applying the presumption and principle of conditional payment not only to pre-existing debts I but also to those contemporaneous with the transaction; because in all cases of loans, there is generally a cause of action independent of the note or bill.'

I had occasion to consider the point in three cases and adopted the same view; they are Mariam v. Mathew 1962 Ker LT 316, Ayichammal Kannoli Chathututty v. Nalppadi Cheerukutty, 1962 Ker LT 281 and Achuthan Raghavan v. Varkey Varia-thn 1962 Ker LT 518. The recital of payment of Rs. 1361 odd in Ext. P. 5 is not conclusive and the fact of such payment, not being a term of the document, is open to investigation. The mere passing of a receipt for 'payment in full', or 'in satisfaction', is not always conclusive that the payment under the bill was unconditional. Bashyam and Adiga, Negotiable Instruments Act, page 570. For these reasons, I hold that the payment of Rs. 1000/- under Ext. P. 1 was conditional.

4. The third point for consideration is whether the interests of the second defendant in the suit property can be held liable. The relevant part of Section 55(4) of the Transfer of Property Act is as follows:

'The seller is entitled--

* * * * *

(b) where the ownership of the property has passed to the buyer before payment of the whole of the purchase-money, to a charge upon the property in the hands of the buyer, any transferee without consideration or any transferee with notice of the non-payment for the amount of the purchase-money, or any part thereof remaining unpaid .... The plaintiff has not proved, that the second defendant had notice of non-payment, Ext. P. 5 ex facie showed payment of the consideration, except what was expressly reserved. It is not to be presumed, that the first defendant intimated the second defendant that he had not paid the full consideration. There is only the interested evidence of the plaintiff; no circumstance pointing to notice of non-payment was proved. The Subordinate Judge omitted to advert to this aspect of the case. The plaintiff has thus failed to prove that the second defendant had notice of non-payment of the sum of Rs. 1000/- under Ext. P. 5.

5. The result is, that while maintaining the decree against the first defendant, the plaintiff will take a decree as passed by the Judge against the property, but only subject to the interest of the second defendant in it under Ext. D. 1. Subject to this modification, the decree under appeal is affirmed and the second appeal is dismissed, with half of the costs of this court payable to the plaintiff.


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