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V.C. Jayaram Mudaliar Vs. C.M. Sivaram - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai High Court
Decided On
Case NumberAppeal No. 331 of 1959
Judge
Reported inAIR1963Mad294
ActsNegotiable Instruments Act, 1881 - Sections 68, 69 and 70
AppellantV.C. Jayaram Mudaliar
RespondentC.M. Sivaram
Appellant AdvocateD.C. Krishnamurthi, Adv.
Respondent AdvocateN. Panchapakesa Iyer and ;V.R. Rajagopalan, Advs.
DispositionAppeal allowed
Cases Referred and Manik Ratan v. Prakash Chandra
Excerpt:
.....cover large city - appeal allowed. - - thirdly,the lower court held that in the case of the suit promissory notes, presentment at madras was necessary, and thattherefore the suit should fail for want of such presentment as required in section 69 of the negotiable instrumentsact. therefore the suit should fail even as against the maker. 9. learned counsel for the appellant referred to a fine of decisions which show that the reference in a promissory note to a large city like madras as the place of presentment would not bring it within the scope--of section 69 of the negotiable instruments act. sambhucharan, air1951cal55 ,this decision of the punjab high court as well as an earlier decision of the calcutta high court in shankar lal v. manicka mudaliar, 50 mlj 242 :air 1926 mad 792..........collection, and not a holder in due course. thirdly,the lower court held that in the case of the suit promissory notes, presentment at madras was necessary, and thattherefore the suit should fail for want of such presentment as required in section 69 of the negotiable instrumentsact. the suit was therefore dismissed, and each partywas directed to bear his own costs. from the above decision the appeal is filed by the plaintiff.5. learned counsel appearing for the appellant attacked the finding of the lower court, regarding presentment and urged that this is not a case where presentment is necessary under section 69 of the negotiable instruments act. consequently, in view of the finding of the lower court that the promissory notes were supported by consideration, the suit should have.....
Judgment:

Ramakrishnan, J.

1. This appeal is filed by the plaintiff in O.S. No. 259 of 1956 on the file of the Fourth Assistant Judge, City Civil Court, Madras.

2. On 6th February 1953, the defendant C. M. Sivaram executed two hundis for Rs. 4,000 and Rs. 1000 respectively payable on 6th June 1953, in favour of Srimathi Rukmini Ammal or order, for value received in cash. These hundis according to the plaintiff were really promissory notes. The plaintiff got assignments of the above two hundis in his favour from Rukmini Ammal on 20th January 1956, for valid consideration. The suit was filed for recovery of the above amount with interest.

3. The plea of the defendant was that at the instance of a friend of his one T. S. Shanmugham, P. W. 2 in the case, for the purpose of accommodating the said Shanmugham, but without any receipt of consideration, the defendant affixed his signature on two blank hundis. However, the body of the two Hundies have been later on written up and it amounts to forgery. There was a further plea by the defendant that the Hundies, even if they were promissory notes executed for valid consideration, they were payable at a specified place, namely, Madras, that in such circumstances, under the provisions of Section 69 of the Negotiable Instruments Act, presentment at that place, was an obligatory requirement, but in this case, such a presentment had not been made, and therefore the suit was not maintainable. There was also a plea that the assignment to the plaintiff lacked consideration; and that the plaintiff was not a holder in due course.

4. The trial Court found that the defendant's plea,about the circumstances under which the suit hundies wereexecuted, was not substantiated, and that the suit hundies were really promissory notes executed for valid consideration. It also found that the plaintiff was only aholder for collection, and not a holder in due course. Thirdly,the lower Court held that in the case of the suit promissory notes, presentment at Madras was necessary, and thattherefore the suit should fail for want of such presentment as required In Section 69 of the Negotiable instrumentsAct. The suit was therefore dismissed, and each partywas directed to bear his own costs. From the above decision the appeal is filed by the plaintiff.

5. Learned counsel appearing for the appellant attacked the finding of the lower Court, regarding presentment and urged that this is not a case where presentment is necessary under Section 69 of the Negotiable Instruments Act. Consequently, in view of the finding of the lower Court that the promissory notes were supported by consideration, the suit should have been decreed against the defendant, the maker of the promissory notes, as prayed for.

6. The point for consideration, in this appeal, is whether the suit is not maintainable, for want of valid presentment. The learned counsel for the respondent in this appeal tried to support the dismissal of the suit by the lower Court, by urging that the finding of the lower Court that the promissory notes were supported by consideration, was not correct. This will also lead to a further point for determination in the appeal, namely, whether the suit promissory notes are supported by consideration.

7. The two suit instruments are Exs. A-1 and A-2. They are both drawn up in more or less identical terms, and Ex. A-1 reads:

'Due date 6-6-1953 Madras, 6-2-1953(120) days after data without grace 1. C. M. Siva Ram, promise to pay Srimathi Rukmini Ammal, or order at Madras the sum of Rs. four thousand only for the value received. Rs. 4,000 Sd. C. M. Sivaram(attestors)Sd. V. Panchaksharan Sd. S. V. Sembiam. x x x x x x x x'

It is clear that this instrument is a promissory note as defined in Section 4 of the Negotiable Instruments Act Involving an unconditional undertaking, signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person. It is not a Hundi, and this finding is not challenged by the respondent in this appeal.

8. The main finding of the lower Court on which the suit claim was negatived, was that the suit hundies were promissory notes payable at a specified place, within the meaning of Section 69 of the Negotiable Instruments Act, and that therefore, in order to charge the maker thereof, namely, the defendant, it should be presented for payment at that place. There is no pleading and no proof that such a presentment had been made. Therefore the suit should fail even as against the maker.

9. Learned counsel for the appellant referred to a fine of decisions which show that the reference in a promissory note to a large city like Madras as the place of presentment would not bring it within the scope--of Section 69 of the Negotiable Instruments Act. (Firm) Sheik Mohamed v. Abdul Majid, AIR 1937 Lah 259 which has been referred to by the lower Court, dealt with a case where a promissory note was payable on demand at Lyalpur city in the Punjab. After referring to several earlier decisions, the Punjab High Court held:

'a city, town or village at large, may be taken to be a specified place within the meaning of Sections 64 and 69 of the Negotiable Instruments Act, but its presentment there would only be necessary or indeed reasonably possible, if the maker has his residence or place of business there. In the absence of such residence or place of business the mere possession of the promissory note by the maker in the City, Town, or village, would be sufficient.'

10. In that particular case, there was evidence that the contesting defendant did not reside at Lyalpur nor did he have a place of business there nor was he present there on the relevant date. It was held that presentment to him was not necessary, the promissory note being admittedly in the possession of the plaintiff at Lyalpur. For this view, the Punjab High Court relied upon certain observations in Corpus Juris under the American law. But, in a later decision of a Bench of the Calcutta High Court In Dungarmull v. Sambhucharan, : AIR1951Cal55 , this decision of the Punjab High Court as well as an earlier decision of the Calcutta High Court in Shankar Lal v. Narayana Chandra, 47 Cal WN 658 were dissented from, and the Calcutta High Court held that Section 69 of the Negotiable Instruments Act,

'presupposes that the place is defined with sufficient particularity to enable the holder of the note to go to that place and to present it for payment. The phrase 'specified place' cannot be used to cover a town or a city. But it is a phrase intended to mean a place so described as would enable the holder of a note to go to it with a reasonable certainty or being able to find the drawer of the note to present the note to him. Where the note is payable in a large city presentation to the maker or drawer might be utterly impossible, and therefore it could never be the intention of the legislature that a large city or town or area should be regarded as a specified place.'

11. That particular case dealt with a promissory note payable at Calcutta. At the top of the promissory note there appeared an address. It was held that this address did not form part of the contract as to the place of payment, and that the promissory note did not fall within Section 69 of the Negotiable Instruments Act.

12. In Chegganmull Sowcar v. Manicka Mudaliar, 50 MLJ 242 : AIR 1926 Mad 792 this High Court referred to a promissory note which mentioned,

'Madras or any other place where you (the creditor) have your shop as the place of payment'.

That decision did not specifically go into the question whether the description of the place of payment as a large city like Madras, would be adequate for the purpose of Section 69. It held that the word 'place' must be construed as including 'places...... and if more than one place is mentioned, there must be presentment at one or other of those places. But, however, the suit was ultimately decided on the ground, that the defendant did not raise a plea about want of presentment, but only raised a plea about absence of jurisdiction.

This Madras decision was referred to by the Bombay High Court in Dorabji Nowrosji v. Jamshedji Pestonji, : AIR1936Bom218 where the question of applying Section 69 of the Negotiable Instruments Act, arose in regard to a promissory note where the amount was expressed to be payable at 'Poona, Bombay or elsewhere'. That decision also does not go into the question specifically, whether, reference to a large city like Poona or Bombay, would suffice for the purpose of Section 69, But relied on the circumstance that besides Poona and Bombay, other unspecified places were also added in the promissory note as place of payment and that therefore the case did not fall under Section 69.

The decision in 50 MLJ 242 : AIR 1926 Mad 792 was quoted by the Bombay High Court, because that decision also referred to a promissory note mentioning 'Madras or any other place' but it distinguished the Madras decision, on the ground that the reference to 'any other place', though apparently, general in nature, was qualified by the words 'creditor having a shop' and that amounted to a sufficient specification for the purpose of Section 69. As mentioned above, none of the cases, either of the Bombay High Court or of the Madras High Court went into the question, whether a reference to a large city line Madras or Calcutta, will attract Section 69 of the Negotiable Instruments Act.

13. A perusal of the several of the sections included in Chapter V of the Negotiable Instruments Act shows that they form a self-contained set of provisions in regard to the presentment. When a question about presentment arises in courts in India, it is these provisions that have to be applied. On an analysis of these sections, it is seen that some of these sections refer to presentment alone, without adding a charging section. But other sections combine a provision for presentment with a provision for charging one or the other of specified parties with liability. Sections 65 and 66 are instances of the former category. Sections 62, 68 and 69 are instances of the latter category.

Section 64, after referring to the necessity for presentment, as provided in the succeeding sections of chapter V lays it down that the penalty for such non-presentment is to make 'other parties not liable to the holder'. 'Other parties' for the purpose of Section 62 have been held to be, in the case of a promissory note, a person other than the maker, Vide Ramakrishnayya v. Kassim, ILR 13 Mad 172, followed in Phulchand v. Ganga Ghulam, ILR 21 All 450 and Manik Ratan v. Prakash Chandra, : AIR1955Cal338 . It has to be mentioned that In ILR 13 Mad 172, the necessity for presentment arose under Section 66 of the Act, which, as mentioned above, merely requires the presentment, but contains no clause for charging a party. It was held by this Court.

'seeing that in all these Sections 62, 68 and 69) the penalty that is to be entailed by default in presentment is expressly declared. I think the inference may be fairly drawn that express language would have been used if the same penalty was intended to ensue a default of the presentment which Section 66 enjoins'.

14. In view of this, it was held that there was no Intention to alter the pre-existing law, and that the language of the Act did not justify the contention that the maker of the note was discharged by the holder's failure to present it at the due date. ILR 21 All. 450 followed the abovementioned Madras case, and applied it to a case where the question of presentment arose under Section 69. But in the present case, the question of presentment has arisen under Section 69 of the Act, where, in addition to the provision for presentment a provision for charging the maker, only in the event of such presentment, is superadded. I am unable to accept the argument of the learned counsel for the appellant that under Section 64 of the Negotiable instruments Act, the liability of the maker is kept unaffected, and that the requirement of the presentment under Section 69 will not apply, when the maker is proposed to be charged with liability. Therefore the question that has now arisen must be dealt with only under Section 69, after a proper interpretation of the term 'specified place' found in that section.

15. Precise language is used in several sections of Chapter V of the Negotiable Instruments Act and these sections had to be construed strictly. When we have the term 'specified place' in Section 69, the place must be described with the sufficient precision to enable the holder to seek out the maker, and present the document to him for payment. When the place is described as a large city like, Madras, it would pre-suppose either a knowledge on the part of the holder of the maker's place of residence or place of business in Madras city, or would necessitate an enquiry on his part for that purpose. But such knowledge or obligation to make an enquiry cannot be spelt out as part of the contract itself.

A requirement of presentment 'at the place of business or at the usual residence of the maker' is contained in Section 70. Therefore, when the Legislature had contemplated including a provision of the above Kind of presentment at the place of residence or business of the maker, it has provided for it specifically in Section 70, When we wish to find out the meaning of the term 'specified place' in Section 69, we cannot import the provisions contained in Section 70, regarding the place of residence or place of business. Therefore, when a specifies place is referred to in Section 69, it must have been intended to refer not to a vast area in general terms, like a big city, but a place indicated with sufficient precision to enable the person, who wants to charge the maker with liability, to resort to him readily. Therefore I respectfully agree with the Calcutta High Court's view, above mentioned, and hold that the suit promissory notes having referred to a large city like Madras do not require presentment, as they do not fall under Section 69.

16. So far as the finding about consideration for the promissory notes is concerned, there is a presumption under the Negotiable Instruments Act, about payment of due consideration. It is for the party pleading want of consideration to prove it. The only interest on behalf of the defendant to support his plea is himself. According to him, he affixed his signature in some blank hundies, and handed them over to one T. S. Shanmugham. It is in evidence, that the payee Rukmini Ammal, a Malayalee lady, was living with T. S. Shanmugham, in his house and they were very friendly. It is not necessary for this case, to find out whether they were actually married or not. According to T. S. Shanmugham, P. W. 2, this Rukmini Ammal is his second wife, and that he was giving her considerable funds for her maintenance, and that it was her money that was lent for the suit promissory notes.

The defendant admits that T. S. Shanmugam is a well-to-do man and he does not deny the close association of Shanmugham and Rukmini Ammal. Therefore there is every probability in the suit promissory notes being supported by consideration as claimed by the plaintiff. The defendant has not adduced any reason why T. S. Shunmugham, after getting the defendant's signature on blank hundies on the representation that they were required for the purpose of being offered as security, should subsequently defraud him. I therefore uphold the finding of the lower court that the suit promissory notes are supported by consideration,

17. In the result, I allow the appeal with costsand decree the suit of the plaintiff with costs (but withsix per cent interest on the principal as restricted on theappeal).


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