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Bank of Madras Vs. Subbarayalu and anr. - Court Judgment

LegalCrystal Citation
SubjectBanking
CourtChennai
Decided On
Judge
Reported in(1891)ILR14Mad32
AppellantBank of Madras
RespondentSubbarayalu and anr.
Excerpt:
stamp act - act i of 1879, sections 9, 33, 34, rule 6--promissory note--hundi stamp. - - best, j. and to justify the exclusion from evidence of a document like a (which is admittedly executed on an impressed sheet of the proper value) on the ground that the stamp bears the word hundi, there must be a distinct and positive rule against the employment of such paper for the purpose and not merely a dubious inference as to the intention of the framers of the rules......behalf of the first defendant that the note a is not admissible in evidence as it is written on a hundi paper. in support of this contention reference was made to the rules made under section 9 of the stamp act by the governor-general in council, dated 3rd march 1882, no. 1288, and 1st december 1882, no. 2955. see ponnuswami chettiar's stamp manual, pp. 45-60. the rules of 3rd march 1882 relied on are nos. 4 and 6, the former of which is that ' all instruments chargeable with duty, except hundis, may be written on impressed sheets, and, except as provided by section 10 of the said act (i.e., stamp act) and by these rules, shall be so written.' while rule 6 relates to the paper on'which hundis shall be written. it is as follows:hundis other than hundis which can be stamped with an.....
Judgment:

Best, J.

1. This is a suit by the Bank of Madras for the recovery (with interest) of a sum of Rs. 4,300 due under a promissory note. The first defendant is the drawer of the note and the second defendant' the indorser. First defendant admits his execution of the note, but pleads that he did so ' at the request of the plaintiff (Bank) who through their agent T. Murugasa Mudali promised and agreed that the plaintiff would not at any time call upon him, the first defendant, to pay same or any part thereof,' and that the note was executed by him (first defendant) for the accommodation of one Gurunatha Chetti, who was at the time already indebted to the Bank under two previous notes for Rs. 2,000 and Rs. 2,500 respectively, both of date 8th March 1889.

2. The plaint note has been filed as Exhibit A; it is dated 10th September 1889. The acceptor of the note is Ramaswami Chetti, brother of the Gurunatha Chetti referred to by first defendant. He has allowed the suit to proceed ex parte as far as he is concerned.

3. The issues are as follows:

(i) Whether the promissory note was signed by first defendant on the understanding that he should not be called upon at any time to pay any part thereof?

(ii) Was Murugasa Mudali empowered to make any such promise so that it should be binding on the plaintiff?

(iii) Was there no consideration for the note so far as the first defendant is concerned?

(iv) What relief, if any, is plaintiff entitled to?

4. On the case coming on for trial it was objected on behalf of the first defendant that the note A is not admissible in evidence as it is written on a hundi paper. In support of this contention reference was made to the rules made under Section 9 of the Stamp Act by the Governor-General in Council, dated 3rd March 1882, No. 1288, and 1st December 1882, No. 2955. See Ponnuswami Chettiar's Stamp Manual, pp. 45-60. The rules of 3rd March 1882 relied on are Nos. 4 and 6, the former of which is that ' all instruments chargeable with duty, except hundis, may be written on impressed sheets, and, except as provided by Section 10 of the said Act (i.e., Stamp Act) and by these rules, shall be so written.' While rule 6 relates to the paper on'which hundis shall be written. It is as follows:

Hundis other than hundis which can be stamped with an adhesive stamp under Section 10 of the said Act shall be written as follows:Hundis payable otherwise than on demand, but not more than one year after date or sight and for amounts not exceeding Rs. 30,000 in individual value on impressed sheets bearing the word hundi.' (The rest of the rule need not be quoted.)

5. The rule of 1st December 1882, No. 2955, is that promissory notes ' drawn or made in British India arid chargeable with a duty of annas 6,10 or 12 shall be written on impressed sheets of those values bearing the word hundi.'

6. The contention on behalf of the first defendant is that the rule last quoted allpws only of promissory notes chargeable with a duty of annas 6, 10 or 12 being written on paper bearing the word hundi, and as the plaint promissory note is for a sum requiring a stamp of Rs. 3 and as it consequently does not come within this rule, it being written on a hundi paper, must be held to be not duly stamped.

7. I am unable to accede to this argument. If it was intended that promissory notes requiring a stamp other than 6, 10 or 12 annas should not be written on impressed sheets intended for hundis and bearing the word hundi, the rule might easily have been worded so as to make the intention clear. As the rules now stand, I find that a document such as A must be written on an impressed sheet, and that, though promissory notes chargeable with a duty of 6, 10 or 12 annas must be written on hundi paper, there is no prohibition against other promissory notes also being so written, as these hundi papers are also ' impressed sheets.' Had the rule of 1st December 1882 been merely permissive with regard to the promissory notes therein specified, there would be force in the argument for the first defendant--that only such notes could be made on hundi paper, as such a rule would have shown that hundi paper could not have been used theretofore for the execution of promissory notes. But the passing of an obligatory rule with regard to some particular classes of notes is not a sufficient declaration that other notes shall not be executed in the same kind of paper; and to justify the exclusion from evidence of a document like A (which is admittedly executed on an impressed sheet of the proper value) on the ground that the stamp bears the word hundi, there must be a distinct and positive rule against the employment of such paper for the purpose and not merely a dubious inference as to the intention of the framers of the rules. A decision of the Judicial Commissioner of Oudh to the effect now contended for on behalf of the defendant has been brought to my notice. It is not a reported case, and I am unable to accept the conclusion arrived at by the learned Judicial Commissioner in that case. I, therefore, allowed the note A to be filed as an Exhibit.

8. Murugasa Mudali has been examined by the plaintiff and denies that he obtained first defendant's signature to A on the understanding that first defendant should never be called on to pay anything on account of the debt. First defendant's statement to the contrary is unsupported by any evidence except that given by himself. Both Murugasa Mudali and Mr. Duffield swear that the former was not empowered to make any such promise to the first defendant. The letter B admitted by first defendant shows that he was a party to the original loans of December 1888, and it is clear from his letter D, dated 13th December 1889, that he knew he was also liable for the debt. The other exhibits filed on behalf of plaintiff merely show the manner in which the original notes were renewed from time to time. My findings on the first and second issues are in the negative.

9. On the third issue I find that there was consideration for the note such as to make first defendant also liable for the debts, and as to the fourth issue my finding is that both the defendants are liable to pay to the plaintiff the amount sued for, with interest, amounting in all to Rs. 4,527-4-0.

10. I decree, therefore, that defendants do pay to plaintiff this amount and costs of the suit, with further interest on the whole amount at 6 per cent, per annum from this date to date of payment.


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