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Rangayya Naidu and anr. Vs. Sundaramurthy Mudaliar - Court Judgment

LegalCrystal Citation
SubjectBanking
CourtChennai
Decided On
Reported inAIR1943Mad511; (1943)1MLJ380
AppellantRangayya Naidu and anr.
RespondentSundaramurthy Mudaliar
Cases ReferredSanthu Mohideen Pillai v. Jamal Mohammad Jamaluddin
Excerpt:
.....a party is fraudulently sought to be made liable on a promissory note, even the party who has admittedly executed such a note can escape liability by virtue of the provisions of section 87. with respect i follow these decisions and hold that in the present case there ought to have been a finding by the learned district munsiff that the promissory note was void under section 87. the learned district munsiff failed to give any such finding and failed even to consider this point although it had occurred to him during the trial that the point was of considerable importance and he included it as the fourth question which arose......payee's step-son. the third defendant pleaded that his signature was forged.2. the findings of the learned district munsiff were that all the signatures of the first defendant were genuine and 'that the story that he signed on a blank piece of paper was incredible. the evidence of the plaintiff that rs. 243 was paid in cash was also rejected and the learned district munsiff held that only rs. 5 was received by the first defendant. this, however, did not involve the practical dismissal of the suit, as he further held that consideration had already passed in the form of prior indebtedness to the payee's step-son. on these findings a decree was given as against the first defendant and against the second defendant to the extent or his joint family interest but the suit was dismissed as.....
Judgment:

King, J.

1. This is a petition filed against the decree given by the learned District Munsiff of Ranipet in S.C.S. No. 127 of 1941. The suit was filed by the plaintiff as endorsee of a promissory note against three defendants. The first defendant is the father and guardian of his minor son the second defendant. It was alleged by the plaintiff that the promissory note had been signed by the first defendant both in his personal capacity and as guardian of his son the second defendant. The consideration of Rs. 243 was alleged to have been paid in cash. The first defendant admitted the genuineness of his signature in so far as it affected himself, but denied its genuineness in so far as he is supposed to have signed it as guardian of his son. He says, however, that when he signed the promissory note it was only a blank piece of paper and that he received only Rs. 5 as consideration and that amount also not from the payee but from the payee's step-son. The third defendant pleaded that his signature was forged.

2. The findings of the learned District Munsiff were that all the signatures of the first defendant were genuine and 'that the story that he signed on a blank piece of paper was incredible. The evidence of the plaintiff that Rs. 243 was paid in cash was also rejected and the learned District Munsiff held that only Rs. 5 was received by the first defendant. This, however, did not involve the practical dismissal of the suit, as he further held that consideration had already passed in the form of prior indebtedness to the payee's step-son. On these findings a decree was given as against the first defendant and against the second defendant to the extent or his joint family interest but the suit was dismissed as against the third defendant. This is a petition by the first and second defendants against that decree.

3. It was argued in the first place that there was no evidence upon which the findings can be based that the first and second defendants received consideration for the amount of the promissory note, in the sense that there is no positive statement by any witnesses which has been adopted by the learned District Munsiff in his judgment. This is no doubt true, but it seems to me that there is no law which prevents a Court from seeking the truth somewhere midway between the statements of parties to a suit. In this case, quite clearly, the learned District MunsifF holds, as the most significant feature in the case, that the first defendant could never have signed the promissory note if he had not received consideration in some way or other to the extent recited therein. It does not seem to me possible, therefore, to interfere with this decision on the ground that the findings of facts are based on no evidence.

4. It is next argued that the fact of the forging of the signature of the third defendant on the promissory note renders the note invalid as against defendants 1 and 2 also. There is a finding of fact in this connection that it was the payee who procured the signature of the third defendant. This time learned Counsel for the respondent argues that there is no evidence upon which this finding can be based. Here again this statement is true in the sense that there is no positive or direct evidence; but it seems to me that on all the facts and circumstances of the case and in particular the omission of the plaintiff to examine the payee herself, the learned District Munsiff was justified in holding that the forgery was brought about by the payee whom it would more directly benefit. I must therefore accept this finding of fact also.

5. The question then arises whether under Section 87 of the Negotiable Instruments Act this is a material alteration which renders the note void. It might plausibly be argued in deciding this point between the plaintiff and defendants 1 and 2 that the forged signature of the third defendant could make no difference in the liability of the other defendants who have admittedly signed the bond. But it has been held that it is unnecessary that a material alteration should be one which is prejudicial to the person who pleads it. Even if it were beneficial as it may well be said to be in the present case, it still remains a material alteration. There are two decisions of learned Judges of this Court sitting singly--one reported in Amirtham Pillai v. Nanja Goundan : AIR1914Mad369(1) and the other reported in Santhu Mohideen Pillai v. Jamal Mohammad Jamaluddin : AIR1928Mad1092 --which are clearly to the point and show that where at the instance of the plaintiff a party is fraudulently sought to be made liable on a promissory note, even the party who has admittedly executed such a note can escape liability by virtue of the provisions of Section 87. With respect I follow these decisions and hold that in the present case there ought to have been a finding by the learned District Munsiff that the promissory note was void under Section 87. The learned District Munsiff failed to give any such finding and failed even to consider this point although it had occurred to him during the trial that the point was of considerable importance and he included it as the fourth question which arose. He stated, however, that as there was no positive plea raising the applicability of Section 87 and no argument on this point during the trial, that question did not arise. It seems to me that this is a wrong view to take of the duties of the Court if the facts which he finds give rise to a particular situation in which the Legislature has enacted that certain consequences must follow. Then it is for him to consider how the law should be applied whatever may be the failings of the parties in raising pleas or arguing before him. It is only of course, if he considered that it was necessary to plead and prove certain facts that his attitude would be justified. Here he has given, as already mentioned, the finding of fact, that the forging of the third defendant's signature was done at the instance of the payee. For the reasons I have given, this petition must be allowed and the suit of the plaintiff dismissed as against the petitioners with costs throughout.


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