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V. Sesha Aiyar Vs. Bhavaji Mangal Doss Jee Varu and anr. - Court Judgment

LegalCrystal Citation
SubjectBanking;Contract
CourtChennai
Decided On
Reported in(1910)20MLJ144
AppellantV. Sesha Aiyar
RespondentBhavaji Mangal Doss Jee Varu and anr.
Cases ReferredSubba Narayan Vathiyar v. Ramasawmi Iyer I.L.R.
Excerpt:
- - that being so, it could not be said that there was consideration for the promissory note so far as the defendant is concerned, and this is made clear by the definition as given in section 2 of the indian contract act, justice obviously requires that a plea like this, if made out, should prevail, and no rights of any transferees for consideration being involved, it does not seem to me that any principle of law merchant relating to negotiable instruments requires that such a plea should be barred......of the official position of narayana iyer, and that at the request of both of them he executed the suit note as a mere same-lender. the subordinate judge on this observed that the 1st defendant was liable, because, although the con-side ration did not pass to him it did pass to his friend. now the definition of ' consideration ' is to be found in section 2(d) of the indian contract act, and that definition shews that consideration means an act, abstinence or promise made by the promisee or some other person at the desire of the promisor. the appellant does not admit that the promisee did anything at his request, and on his mere admission it cannot be held, so far as he is concerned, that there was consideration for the note. i would, therefore, reverse the decree of the subordinate judge.....
Judgment:

Munro, J.

1. The suit was on a promissory note, execution of which was admitted by the appellant who however, contended that he received no consideration for it. The Subordinate Judge, on appeal, held that on the appellant's own admission the plaintiff was entitled to a decree. Now what the appellant admitted is contained in paragraph 3 of his written statement. He there says that the plaintiff and one Narayana Iyer, Police Inspector, had money dealings; that they were unwilling that any written documents should pass between them because of the official position of Narayana Iyer, and that at the request of both of them he executed the suit note as a mere same-lender. The Subordinate Judge on this observed that the 1st defendant was liable, because, although the con-side ration did not pass to him it did pass to his friend. Now the definition of ' consideration ' is to be found in Section 2(d) of the Indian Contract Act, and that definition shews that consideration means an act, abstinence or promise made by the promisee or some other person at the desire of the promisor. The appellant does not admit that the promisee did anything at his request, and on his mere admission it cannot be held, so far as he is concerned, that there was consideration for the note. I would, therefore, reverse the decree of the Subordinate Judge and remand the appeal for disposal on the merits. Costs will abide the result.

Abdur Rahim, J.

2. To a suit on a promissory note the defendant-appellant's answer was that he executed the note as a 'mere name lender' for a friend of his to whom the plaintiff, the payee mentioned in the note, advanced a certain sum of money and the defendant so executed the promissory note at the request made to him by his friend and the plaintiff. The Subordinate Judge held that this was no defence at all, and the learned pleader for the respondent has cited Subba Narayan Vathiyar v. Ramasawmi Iyer I.L.R. (1906) M. 88 in support of the judgment of the lower appellate Court. In that case, however, the only point decided was that in a suit instituted on a negotiable instrument by a payee named therein or the indorsee, it is not open to the defendant to plead that such payee or indorsee was a mere benamidar, and the learned Judges based their ruling on Sections 8 and 78 of the Negotiable Instruments Act, which, in their opinion, merely embody the law merchant governing Negotiable Instruments Act as enunciated in certain English decisions. But Sections 8 and 78 have no application to the present question, nor have we been referred to any English authority in support of the respondent's contention. On the other hand Section 43 of the Act in so many words permits the defendant to resist the suit on the ground that the note was made without consideration. It is true that the sum mentioned in the note was paid by the plaintiff to a friend of the defendant's, but as pointed out by the learned vakil for the defendant who is the appellant before us there is no admission in the written statement that the money was advanced at the request of the defendant. That being so, it could not be said that there was consideration for the promissory note so far as the defendant is concerned, and this is made clear by the definition as given in Section 2 of the Indian Contract Act, Justice obviously requires that a plea like this, if made out, should prevail, and no rights of any transferees for consideration being involved, it does not seem to me that any principle of law merchant relating to Negotiable Instruments requires that such a plea should be barred. It also appears to me that it is open to the defendant to show that he signed the promissory note as a mere ' name-lender' which, I take it, means that it was agreed that he was not to be sued upon it.

3. But this point has not been raised before us by the learned vakil for the appellant, and it is, therefore, not necessary to express a decided opinion upon it.

4. I agree in the order proposed by my learned brother.


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