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P.K. Murugan Vs. Vallabhan Kantan Styled Kunhanunni and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai High Court
Decided On
Case NumberA.A.O. No. 655 of 1951 and Civil Revn. Petn. No. 367 of 1952
Judge
Reported inAIR1955Mad53
ActsNegotiable Instruments Act, 1881 - Sections 16; Stamp Act, 1889 - Sections 2(10)
AppellantP.K. Murugan
RespondentVallabhan Kantan Styled Kunhanunni and anr.
Appellant AdvocateN. Sundara Iyer, ;T.S. Subramaniam and ;V.R. Venkatakrishnan, Advs.
Respondent AdvocateD.A. Krishna Variar and ;P.V. Rama Variar, Advs.
Cases ReferredSrinivasa Pillai v. Kannan
Excerpt:
.....promissory note liable to bear stamp duty - act of 1899 exempted promissory note from affixing stamp - promissory note not liable to be affixed with stamp. - - gopalakrishna iyer and endorsed to the plaintiff on 28-7-1951. the second defendant has been impleaded in the suit as the first defendant under a document dated 10-8-1951 authorised the second defendant to make collections of the rents due to him from the various tenants of his and has therefore made it difficult for the plaintiff to have re-course to those rents for the realisation of the amounts due to him under two promissory notes. sundara iyer for the appellant is not that at this time there is any justification for setting aside the order of the learned judge refusing to issue the attachment before judgment but that..........plaintiff to have re-course to those rents for the realisation of the amounts due to him under two promissory notes.2. pending the suit i. a. no. 1291 of 1951 was filed before the lower court under order 38, rule 5, c. p. c., for attachment before judgment of the rents due to the first defendant which the second defendant was authorised to collect under the deed dated 10-8-1951 which the plaintiff impugns as an invalid document brought about with the object of defeating his legitimate claims:3. the contention of the first defendant in the suit was that the two promissory notes were executed by him owing to coercion and undue influence of the plaintiff in the name of one gopalakrishna iyer whom he did not at all know and that the promissory notes were not supported by consideration. such.....
Judgment:

Govinda Menon, J.

1. O. S. No. 42 of 1951 on the file of the Court of the Subordinate Judge of Ottapalam was a suit filed by the appellant, petitioner against the two respondents-defendants for the recovery of a sum of Rs. 8542-8-0 from the first defendant personally and from the income of his stanom properties. The amount was made up of principal and interest on two promissory notes, the first dated 6-6-1950 for Rs. 5000 and another dated 9-6-1950 for Rs. 3000 executed by the first defendant in favour of one S. V. Gopalakrishna Iyer and endorsed to the plaintiff on 28-7-1951. The second defendant has been impleaded in the suit as the first defendant under a document dated 10-8-1951 authorised the second defendant to make collections of the rents due to him from the various tenants of his and has therefore made it difficult for the plaintiff to have re-course to those rents for the realisation of the amounts due to him under two promissory notes.

2. Pending the suit I. A. No. 1291 of 1951 was filed before the lower Court under Order 38, Rule 5, C. P. C., for attachment before judgment of the rents due to the first defendant which the second defendant was authorised to collect under the deed dated 10-8-1951 which the plaintiff impugns as an invalid document brought about with the object of defeating his legitimate claims:

3. The contention of the first defendant in the suit was that the two promissory notes were executed by him owing to coercion and undue influence of the plaintiff in the name of one Gopalakrishna Iyer whom he did not at all know and that the promissory notes were not supported by consideration. Such being the case it was alleged that as the plaintiff was not a holder in due course he has obtained no valid right to sue on the two promissory notes. At the time of the hearing of I. A. No. 1291 of 1951 the plaintiff produced the two promissory notes on the foot of which the suit had been laid. The learned Subordinate Judge after examining them came to the conclusion that on the face of the promissory notes there had been assignments of them in favour of the plaintiff and since those assignments are not properly stamped as required under Article 23, Stamp Act, until the proper stamp duty and penalty were paid it was held that the plaintiff had ho right to claim any relief.

The learned Subordinate Judge also went into the question as to whether there was any Justification for the application of the provisions of Order 38, Rule 5. C. P. C., for attachment of the rents before judgment on the merits and found that such a course was not justified and so dismissed the application. But he impounded the two documents and sent them to the Collector for levying proper stamp duty and penalty. This was done on the application by the plaintiff under Sections 10 and 151 and Order 17, Rule 1, C. P. C., for staying the trial of the suit. On that the learned Judge held that the stamp duty and penalty should be paid in accordance with the finding he gave in I.A. No. 1291 of 1951 within two weeks from 16-1-1952 and if that was not done the documents would be Impounded and sent to the Collector. A further order was made on 4-2-1952 that in default by the plaintiff of the payment of stamp duty and penalty the documents would be impounded and sent to the Collector.

4. C. M. A. No. 655 of 1951 is against I. A. No. 1291 of 1951 dismissing the application for attachment before judgment and C. R. P. No. 367 of 1952 has been preferred against the impounding of the documents and sending them to the Collector for collection of stamp duty and penalty. The main question argued by Mr. N. Sundara Iyer for the appellant is not that at this time there is any justification for setting aside the order of the learned Judge refusing to issue the attachment before Judgment but that the finding of the learned Judge that the two promissory notes in question were assigned over and not endorsed in favour of the plaintiff is without jurisdiction and should therefore be reversed. It may be mentioned that it was not the case of the first defendant in the Court below nor is it the case here that the documents were not endorsed and therefore, Mr. Krishna Variar contends that even if we were to hold that it was by proper endorsements that the plaintiff has come forward with the suit still there can be no basis for making the first defendant liable for any costs in this Court.

Mr. Sundara Iyer has not advanced any argument before us to show that the learned Judge in the Court below has not exercised his discretion Judicially in refusing to issue the attachment before judgment. Moreover more than two years have now elapsed since the order of the lower Court was made and the crops sought to be attached at that time have all been harvested and disposed of in these circumstances we feel that the order of the learned Subordinate Judge refusing to issue an order of attachment before judgment under Order 38, Rule 5, C. P. C., is just on the merits. C. M. A. No 655 of 1951 is therefore dismissed with costs.

5. C. R. P. No. 367 of 1952: We have now to see how far the lower Court was justified in holding that there was no proper endorsement on the face of the promissory notes. The endorsements in the two promissory notes are in English which are to the following effect:

'contents received with interest upto date. Please pay to Shri P. K. Murkan son of Kunchan, Pazhancheripat house, Mannur Amsom, Sd. S. V. Gopalakrishna Iyer, 28-7-1951.' Immediately following each of the endorsements in the two promissory notes we have another statement in Malayalam which is as follows: (Original in Malayalam is omitted.--Ed.) (6) The translation of the endorsement is 'As written above this promissory note has been assigned to Sri P. K. Murugan without recourse, (sd.) S. V. Gopalakrishna Iyer, 28-7-1951.'

According to the learned Subordinate Judge the writing in Malayalam is not an endorsement but is a conveyance as contemplated under Section 2, Sub-section (10) of the Stamp Act and as such it is not admissible to evidence until proper stamp duty and penalty are paid. He also finds that the earlier writing in English does not amount to an endorsement because it was not clear that as a result of that endorsement the two promissory notes were handed over to the plaintiff.

7. The conclusion therefore come to fay the learned Subordinate Judge was that Gopalakrishna Iyer purported to transfer the two promissory notes to the plaintiff not by the endorsements written in English but by the alleged assignments which followed the endorsements. The question, therefore, is whether the second writing in each of these two promissory notes amounts to a conveyance as defined in Section 2, Sub-section (10) of the Stamp Act or is it merely an endorsement. No doubt the word used in Malayalam is 'Theera' meaning assignment. But the question is what is meant by that expression. It is common ground that there is no term of art in the Malayalam language corresponding to the English term 'endorse'. Ordinarily in documents written in Malayalam where the word 'endorse' has to be used, the English word itself is used. It is seen that the expression 'made over' is also used but where the word Theera is used while transferring the rights under promissory notes does it necessarily mean that it should be deemed to be a conveyance and not an endorsement? in common parlance it is well known that when persons whose mother tongue is Malayalam intended to convey the idea of transferring the rights under promissory notes by means of endorsements they employ the word Theera generally and in our opinion it cannot be said that because the word 'theera' is used it must necessarily be a conveyance of the rights under the document under Section 2, Sub-section (10) of the Stamp Act where the word is denned as follows:

' 'Conveyance' includes a conveyance on sale and every instrument by which property, whether move able or immoveable, is transferred 'inter vivos' and which is not otherwise specifically provided for by schedule 1 or by schedule 1-A as the case may be.'

So if there is an endorsement then it is taken out of the term 'conveyance' and under Article 62 of the schedule I of the Stamp Act certain exemptions are given and the first of such exemptions is with regard to bills of exchange, cheques or promissory notes in respect of payment of stamp duty. In other respects the second column of that article gives the proper stamp duty payable. In the Madras Stamp Manual issued by the Government of Madras as part of the instructions to the Subordinate Officers who are authorised to collect stamp duty we find the Board's proceedings dated 22-1-1904 and 15-5-1907 in the following terms:

'The expression 'transfers by endorsement' occurring in the exemption to Article 62 is not restricted to transfers made in the manner described in Sections 15 and 16 and in the illustration to Section 50 of the Negotiable Instruments Act'.

8. Under Section 16, Negotiable Instruments Act, if the endorser signs his name only, then the endorsement is said to be 'in blank' but where he adds a direction to pay the amount mentioned in the instrument to or, to the order of a specified person the indorsement is said to be 'in full'; and the person so specified is called the 'indorsee' of the instrument. Where no specific words are mentioned to denote how the direction to pay should be made out it has to be said that when in a promissory note the endorser used the word 'assign' it should be understood as a direction to pay the amount mentioned in the instrument to or to the order of a specified person. Looked at in this way the authority conferred on the plaintiff to realise the amount can be said to be an 'endorsement in full.' in Stroud's Judicial Dictionary, Vol. 2, the following is the meaning given to the word 'endorse':

'Indorsement is that, that is written upon the back of a deed as the condition of an obligation is said to be indorsed for that that is written on the back of the obligation.' (Termes de la ley)

We cannot say that the Maiayalam writing is tantamount to any conveyance or assignment as contemplated in Section 2, Sub-section (10) of the Stamp Act.

9. It is not as if the point did not arise previously for consideration for we find in a case reported in -- 'Sivaramakrishnan v. Mangalaseri Kunhu', 33 Mad 34 (A), practically analogous terms had been used in the endorsement at page 34. The endorsement in question read as follows:

'I have this day received in cash from you Mangalasheri Kunhu Moidu Mosaliar .... Rs. 1189 made up of Rs. 1000 being principal due under this note and of Rs. 169 interest accumulated upto date and assigned to you this note with power to recover the amount due under it, by showing the same'.

The learned Judges, Munro and Abdur Bahim JJ. held that since Section 16, Negotiable Instruments Act, did not lay down any specific form of words to be used for the endorsement the entry 'assigned' on the promissory note in the above term amounted to an endorsement in full on the promissory note and that the endorsee was entitled as holder in due course to sue on the foot of the promissory note. As contended by Mr. Krishna Variar for the respondent the question as to whether the word 'assign' there amounted to a conveyance as contemplated in Section 2, Sub-section (10) of the Stamp Act was not specifically considered but we find the two eminent lawyers of Madras, namely, the late Mr. T. R. Ramachandra Iyer and Mr. J. L. Rosario appeared for the parties and both of them were fully conversant with the Maiayalam language in which the endorsement was written. If there had been any substance in the contention that because the word Theera was used the translation should amount to a conveyance then those learned lawyers would certainly have taken that point. In those circumstances it seems to us that even where the word 'assign' is used it should be understood as an endorsement under Section 16, Negotiable Instruments Act.

10. In a later case in -- 'Srinivasa Pillai v. Kannan', 24 MLJ 296 (B). the endorsement on the promissory note was in the following terms 'On 31-3-1906 the pronote was assigned to Pagalmedi Srinivasa Pillai.' But this form of endorsement appears only in the statement of facts though in the body of the judgment Miller J. has extracted the endorsement thus: 'This note has been made over to so and so. On 31st March.' Prom this it was contended that the observations of Miller J. cannot afford any substantial help to the petitioner in the present case for the words used are 'made over' and not 'assigned'. In the very nature of things we are not in a position to refer to the original promissory note but where the words 'made over' or the word 'assign' are used the intention of the parties has to be looked into and that is whether the parties wanted to have an endorsement of the promissory note and not an assignment. If an endorsement contains words equivalent to a direction to pay, though there may not be the actual words connoting the direction it would amount to a direction to pay within the meaning of Section 16, Negotiable Instruments Act. In these circumstances the Court has to look into the substance and see whether there was a direction by the holder of the note when the endorsement was made to pay the money due under the note to somebody else. It cannot for a moment be doubted that Gopalakrishna Iyer gave the direction that the amount due under the promissory notes should be paid over to Sri P. K. Murugan. The finding of the learned Judge that the Malayalam writing amounts to a conveyance is untenable and is without jurisdiction and is therefore set aside. The order impounding the two promissory notes and sending them to the Collector for levy of proper stamp duty and penalty to be cancelled. The suit will proceed on the merits. We are not to be understood as expressing any opinion as to whether the notes are supported by consideration at all or whether the plaintiff is a holder in due course. There will be no order as to costs.


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