(1) This revision has been filed by the defendants against whom a decree had been passed in a small cause suit. The claim was made against them for recovery of a sum of Rs. 349-50, the principal and interest, due on an insufficiently stamped promissory note dated 14-2-1959, executed by them in favour of one Jaina Bibi. The plaintiff claims to be as assignee of the promissory note and it being insufficiently stamped, wants to rest his claim as a transferee of the debt. The main defence is that there is no specific transfer of the debt as such as a chose in action.
(2) Though no doubt no particular form is required for transfer of a debt, still when there is an endorsement the court has to construe it to find out whether in fact what is transferred is the debt or the promissory note alone. There is a vital distinction between the transfer of a debt and the transfer of the promissory note and a suit on the debt differs in substance from a suit on the promissory note. If there is an assignment of the debt the assignment will have to be duly stamped under the Indian Stamp Act. This is a matter which the court can bear in mind in interpreting whether the endorsement is in reality a transfer of the debt. No doubt, the court will liberally interpret the endorsement so as not to defeat a bona fide assignee of his rights. In the present case it is conceded that the borrowing was in the morning and the promissory note was executed in the evening. But for this it would be impossible to maintain even a suit on the debt, the promissory note being insufficiently stamped. Learned counsel appearing for the petitioners, defendants, contends that this is another factor which the court may have to bear in mind in interpreting whether the transfer was of the debt or of the promissory note. Now, construing the actual language of the endorsement which speaks of the promissory note being made over, in the light of these circumstances, one cannot but come to the conclusion that what was done on the occasion of the endorsement was an assignment of the therefore maintainable only as one on the promissory note and then the suit on the promissory note has to fail, the note not being properly stamped.
(3) It was pointed out to the lowers court for the defendants, that a mere transfer or endorsement of the promissory note will not carry with it a right of action on the debt and the decision of this court in Maruthamuthu Naicker v. Kadir Badsha Rowther, ILR (1938) Mad 568: (AIR 1938 Mad 377) was relied on. The learned District Munsif has attempted to distinguish this case in a manner which I am unable to understand. He observes that the Full Bench decision cited above related to a promissory note which was executed by the manager of a joint Hindu family and the endorsee sought to make the other members of the family liable. I fail to see what distinction from the principle of the case the learned District Munsif finds as to the law applicable in the present case. It is observed at p. 576 (of ILR Mad) : (at p. 379 of AIR) in the above decision :
'Where the endorsement is in blank it only operates to transfer the property in the instrument and not as an assignment of the debt, as was pointed out by Madhavan Nair J. in Periakaruppan Chetti v. Mottaya Mudali 41 Mad LW 177: AIR 1935 Mad 240 . An endorsement may operate to assign the debt as well when it is so worded and the requirements of the law with regard to stamping are complied with, but unless there is an indorsement of this nature the indorsee has rights merely on the instrument.....'
(4) The language of the endorsement in this case does not give any room for doubt that what was assigned was only the property in the promissory note and not the debt de hors the promissory note. The revision has therefore to succeed and the suit is dismissed. In the circumstances, there will be no costs in this court or in the court below.
(5) Revision allowed.