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C. Venkatarangam Naidu Vs. B. Jagannadha Dass and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Reported inAIR1939Mad255; (1939)1MLJ140
AppellantC. Venkatarangam Naidu
RespondentB. Jagannadha Dass and anr.
Excerpt:
- .....is an appeal against an order requiring the appellant to furnish security before being allowed to defend a suit instituted on the original side of this court by the respondents. the respondents are the secretary and treasurer of an association known as the madras mahajana sabha. in 1931 and 1932 the appellant was the treasurer and also a trustee of the association. the suit has been filed to recover rs. 7,074 from the appellant, and the respondent base their claim on two grounds. in the first place they say that the appellant will be found liable for this amount on the taking of an account of the monies he received when holding the office of treasurer. in the second place they sue on a promissory note for rs. 6,000 which the appellant signed on the 20th december, 1934, in respect of.....
Judgment:

Alfred Henry Lionel Leach, C.J.

1. This is an appeal against an order requiring the appellant to furnish security before being allowed to defend a suit instituted on the Original Side of this Court by the respondents. The respondents are the secretary and treasurer of an association known as the Madras Mahajana Sabha. In 1931 and 1932 the appellant was the treasurer and also a trustee of the association. The suit has been filed to recover Rs. 7,074 from the appellant, and the respondent base their claim on two grounds. In the first place they say that the appellant will be found liable for this amount on the taking of an account of the monies he received when holding the office of treasurer. In the second place they sue on a promissory note for Rs. 6,000 which the appellant signed on the 20th December, 1934, in respect of monies he had received.

2. The suit was filed under Order VII of the Original Side Rules. This order contemplates a suit to recover a debt or to liquidate a demand in money payable by the defendant with or without interest arising upon a contract expressed or implied; or on a bond or contract for payment of a liquidated amount of money, or on a guarantee where the claim against the principle is in respect of a debt or liquidated amount. In a suit filed under this order leave to appear and defend must be obtained. The leave may be given unconditionally or subject to terms. So far as this suit is based on the promissory note it is within this order, but the amount is also claimed on the basis of an account, and a suit for an account does not come within the order.

3. The appellant applied for leave to defend and according to the Master's order advanced the following pleas:- (1) the promissory note was executed under duress; (2) it is devoid of consideration; (3) the consideration is against public policy as coming under Section 23 of the Indian Contract Act as stifling a criminal prosecution; and (4) there is no stipulation for interest and therefore the claim for interest is untenable. The master came to the conclusion that the defences were not of a bona fide nature and granted the appellant leave to defend only on condition that he furnished security for the full amount of the claim. An appeal from this order was heard by Gentle, J., who saw no reason to interfere and therefore confirmed it. It appears that the Madras Mahajana Sabha has been declared an unlawful association and when the matter was before the learned Judge the appellant wished to raise a defence based on this fact, but the learned judge refused to allow it as there was no evidence on the record to support it.

4. Without going into all the matters which have been mentioned by the learned Advocate for the appellant in the course of his argument it appears to us that the appellant is entitled to defend this suit without security being required of him. In the first place the claim on the account has not been withdrawn, and the learned Advocate for the respondents had made it quite clear that the claim for an account will be persisted in. In the second place there does appear to be a substantial question of law involved in the plea that the claim cannot be granted as being one against public policy. For these reasons we set aside the order requiring security to be furnished and grant the appellant unconditional leave to defend. We direct that the costs of this appeal shall be costs in the cause.

5. The learned Advocate for the respondents asks us to direct that the hearing of the suit be expedited. This is a matter which concerns the Original Side and the application must be made there.


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