(1) The defendant in the suit O.S. 259 of 1956, on the file of the City Civil Court, Madras, is the appellant before us. The said suit was filed by the respondent to recover a sum of Rs. 6600 as assignee of two hundies, Exts. A-1 and A-2, (which are now admitted to be promissory notes), executed by the appellant for Rs. 4000 and Rs. 1000 on 6-2-1952 in favour of one Rukmaniammal. Of the several pleas raised by the defendant the two pleas that were pressed before us are: (1) the amounts mentioned in the hundies are payable at a specified place, Madras and as there was no presentment of the promissory notes to the defendant for payment, the plaintiff has no right to maintain the suit: (2) the promissory notes were not supported by consideration, and that the defendant signed two blank, hundi forms and left the same with one T. S. Shanmugham, the husband of Rukmaniammal aforesaid, with a view to enable Shanmugham to raise money thereon, that the defendant's signature was obtained only by way of additional security and that the defendant did not have the benefit of the borrowing.
(2) The learned City Civil Judge held that the assignment of the promissory notes in favour of the plaintiff was only for purposes of collection, and that the plaintiff was not a bona fide holder in due course. On the merits he held that the plea of the defendant that he signed blank hundies was a false one, that the promissory notes were fully supported by consideration, and that sum of Rs. 5000 was paid to the defendant when he executed the hundies. He, however, dismissed the plaintiff's suit on the ground that there was no presentment of the promissory notes as required by S. 69 of the Negotiable Instruments Act. But on appeal by the plaintiff, Ramakrishnan J. came to a contrary conclusion and held that S. 69 requiring presentment of a promissory note would not apply to the instant case as the place of payment specified is a big city, Madras, and not a specified address in the city of Madras. On the merits he agreed with the finding of the trial Court that the promissory notes were fully supported by consideration, that Rs. 5000 was actually advanced as a loan to the defendant, and that his defence that he signed blank hundies merely with a view to accommodate Shanmugham, aforesaid, was totally false. In this view he decreed the suit as prayed for.
(3) On the question of consideration we have no hesitation whatsoever in holding that there is absolutely no substance in the plea raised by the defendant. The evidence adduced in the case taken along with the relationship between the parties and the probabilities of the case fully justify this finding. This is a pure question of fact. Learned counsel for the appellant took us through the entire oral and documentary evidence with a view to make out that the plaintiff's assignor, Rukmaniammal, had no means to advance the loans in question, and that the promissory notes were executed by the defendant merely with a view to accommodate Shanmugham. We are unable to agree and we find that on this portion of the case the defence is worthless. The evidence amply proves that Rukmaniammal could have easily commanded this sum of Rs. 5000 for advancing the loan, that her husband Shanmugham is admittedly a rich person having properties over the value of Rs. 3 lakhs, and that there was no question of this Shanmugham requiring the assistance of the defendant to enable the former to borrow money on the additional security of the defendant. It is unnecessary to advert in detail to the numerous circumstances and features of the case referred to in paragraphs 7 to 10 of the judgment of the trial court, all of which lead to the clear conclusion that the promissory notes were amply supported by consideration. We carefully scrutinised the promissory notes ourselves and we have doubt in our minds that the defendant's name as the maker of the hundi or promissory note was written by the defendant himself in the hundi forms which circumstance completely rules out the theory of the defendant having signed merely blank hundi forms. We entirely agree with the reasoning of the trial court that Ex.A 10, letter written by the defendant to Shanmugham asking for financial accommodation preceded the execution of the promissory notes and is only referable to the loans advanced thereunder. It is significant to notice that the defendant has otherwise no case as regard the purpose for which he wrote the letter to Shanmugham, asking for financial accommodation. We have no hesitation in holding that not only has the plaintiff proved beyond doubt that a sum of Rs. 5000 was advanced to the defendant as a loan but the defendant had totally failed to discharge the presumption of passing of consideration arising under Section 118 of the Negotiable Instruments Act.
(4) We shall now take up the question relating to the want of presentment. The promissory note. Ex. A-1, is as follows:
Madras 6th February 1953
"Due date 6th June 1958
(120) days after date without grace
I, C. M. Sivaram promise to pay to Srimathi Rukmaniammal or order at Madras the sum of Rs. four thousand only for the value received Rs. 4,000
Sd. C. M. Sivaram
Sd. C. M. Sivaram
Section 69 of the Negotiable Instruments Act, hereinafter referred to as the Act, which requires presentment of the promissory notes, runs as follows:
"A promissory note or bill of exchange made, drawn or accepted payable at a specified place must, in order to charge the maker or drawer thereof, be presented for payment at that place".
It may be mentioned that both the defendant as well as the plaintiff's assignor Rukmaniammal are residents of Madras. The defendant resides in Sarojini Street, T. Nagar, and the plaintiff in 90 Maddex Street, Choolai. When the plaintiff's advocate issued a notice to the defendant for payment of the amounts due under the promissory notes the letter as observed earlier, denied liability alleging that no consideration was received by him and that he merely signed blank hundies. This total denial or repudiation of liability will, as well be presently seen, have an important bearing upon the plea of want of presentment. In para 3 of the written statement, the plea of want of presentment was raised as follows:-
"The defendant further states that the plaint does not disclose a cause of action on foot of the said promissory notes. The promissory notes in question are made payable at a specified place and should therefore be presented for payment at the specified place, in the absence of which, no cause of action can accrue against the maker. The plaint does not mention that the suit promissory notes were presented for payment as required by law and the defendant submits that there has been no presentment at all of the suit documents. There is therefore no cause of action disclosed against the defendant on the basis of the suit promissory notes. The suit is liable to be dismissed on this ground also"
Learned counsel for the appellant urged that Shanmugham P W 2 husband of Rukmaniammal, who, representing his wife, paid cash of Rs. 5000 to the defendant, admittedly knew the defendant's address and place of residence at Madras, and that therefore even though "Madras" is mentioned as the place of payment, it was the duty of the plaintiff to present the promissory notes to the defendant at the latter's residence for payment. He urged that the fact that the place of payment mentioned in the promissory note is a big city like Madras would not be dispensed with the necessity for presentment as the defendant had admittedly a place of residence at Madras, and that was also known to the payee through her representative.
(5) On behalf of the respondent, his learned counsel contended that Section 69 of the Indian Act of 1881 embodies the law merchant of England (though the English Bills of Exchange Act was later being of the year 1882) that for Section 69 of the Act to apply the specified place must appear on the face of the document itself, and that if for any reason the place mentioned in the promissory note is not a specified place but is either vague, ambiguous or not precise necessitating the adducing of some evidence to determine or fix the particular place, the instrument cannot be said to be payable at a specified place within the meaning of Section 69. Learned counsel urged that a promissory note is intended to pass freely from hand to hand in negotiation and that every detail and particular concerning the place of payment should appear on the face of the document itself.
He further urged that the English cases both before and after the Bills of Exchange Act of 1882 would be relevant and useful in arriving at a proper interpretation of scope of Section 69. He also urged that mentioning a place like a big city, Madras, would be wholly insufficient in law to attract the operation of Section 69. In substance his argument was that for the maker to successfully urge the plea of want of presentment as a condition precedent to the arising of the cause of action, it was his duty to have taken care to mention in the body of the note a specified place, without anything more.
(6) Learned counsel advanced a further argument that even the extended rule that when a big city like Bombay or Madras is mentioned in the promissory note, the actual place of payment in the city can be localised or fixed with reference to the known place of residence or known place of business of the maker in the city would not apply to a case in which, in the same city both the maker and the payee reside. In other words, he contended that "Madras" referred to in the promissory note was intended to signify and connote that the money was payable at the residence of the payee at Madras, and not at the residence of the maker. He urged that in any event, the defendant ought to have specifically pleaded in the written statement, that Madras specified in the promissory note was with reference to the place of residence of the defendant and also adduced evidence to prove that that was the agreement between the parties.
Lastly he urged that on the facts of the instant case, the notice issued by the plaintiff's lawyer was sufficient presentment within the meaning of Section 69 and that in any event, as the defendant has totally repudiated his liability, even denying the very execution of the promissory notes, the plaintiff was absolved from the obligation to present the document. According to learned counsel insistence upon presentment would be wholly unmeaning and futile and the defendant should be deemed to have waived his right to take advantage of any default in presentment for payment within the meaning of Section 76 of the Act. On an examination of the relevant decisions, both Indian and English, and the leading text books on the subject, we are satisfied that the points urged by learned counsel for the respondent are sound and should be accepted.
(7) One preliminary observation requires to be made at the outset. The chief object of the Negotiable Instruments Act is to legalise the system under which negotiable instruments pass from hand to hand in negotiation like ordinary goods, and as far as possible except where conditions in India required a departure, the Indian Legislature has followed the English law. In fact, in many portions the Legislature while codifying, has faithfully reproduced the principles of English Law as enunciated in the English decisions rendered upto the time, besides taking such guidance as was necessary from the leading English text books like Chitty on Bills and Story on Bills. At the same time the Act, as it stands, cannot be said to be exhaustive and all comprehensive, touching all aspects of the negotiable instruments. Whenever there is any doubt on the interpretation of the provisions of the statute or any lacuna therein, it will be legitimate to refer to the English decisions for guidance. In fact, it has been said that the law of Negotiable Instruments is not the law of a single country but of the whole of the commercial world and that except for specific differences and peculiarities existing in each country the general rules of the law merchant will be of the same patter in all the countries. In this connection reference may be made to the decision in Veerappa v. Vellayan Ambalam 10 Mad LW 39: AIR 1919 Mad 179 in which a Bench of this court observed that the Negotiable Instruments Act should be read conformably to the provisions of the English law which follows the general commercial law of the rest of the world. Every effort should be made to interpret the provisions of the Act, as to achieve and promote the object of the Act, namely, a free circulation of the bill from hand to hand without "confusion and obscurity" but with "precision and certainty" Unless compelled by the express language of the statute courts should not accept any contention or interpretation which would result in "monstrous inconveniences and great embarrassment to commerce".
(8) Section 87 of the England Act, corresponding to Section 69 of the Indian Act, requires that the place of payment should appear in the body of the document thereby embodying the actual terms of the contract for payment. We may refer to the decision of the Court of Appeal in British Trade Corporation, In re 1932-2 Ch 1. in which a Bill of Exchange was drawn upon the branch of the British Trade Corporation at Batoum, without specifying the place of payment but at the end of the bill the address of the Corporation was given as "To the British Trade Corporation. 13 Austin Friars, London E. C."
The question was raised as to whether within the meaning of Section 87 of the English Act the place of payment has been specified in the body of the document. Eve J. took the view that having regard to the true bargain between the parties and the mention of the address of the drawee as a memorandum to the Bill of Exchange it should be held that a place of payment was specified. On appeal, the court of appeal took a contrary view. Lord Hanworth M. R. put the matter thus:-
"The point, therefore, is quite a short one. Is it to be held that in the body of this document regarded as a promissory note it is made payable at a particular place? What is relied upon is that it is addressed to the British Trade Corporation, 13 Austin Friars, London E. C., and it is said that those words are within the body of the document and, hence that it fulfils the terms of the first part of Section 87, Sub-section 1. That brings me to the question what is the meaning of 'in the body' of the note. I am in agreement with the observation made by Greer L. J in the course of the argument that 'in the body of' the note must mean in the terms of the actual contract to pay which is contained in the note. You may have some additional matter or a memorandum added to the note. But if it is to be in the body of the note, it must be part of the actual terms of the contract made by the maker of it. We have had our attention called to a number of cases which have decided before the codifying statute was passed, and, as we all know, the code was intended to embody the result of the cases which had been decided upon bills and upon notes. Turn now to the two or three cases which make plain the meaning of 'in the body of' the note. In Price v. Mitchell, (1815) 4 Camp 200 which was decided in 1815, Sir Vicary Gibbs decided that an addition in the corner or on a part of the note indicating a place for payment by the words 'at Messrrs. Veres, Smart and Co., 77 Lambard Street, London' is no part of the contract but a mere memorandum and he quotes the words from Beyley on Bills of Exchange, 3rd Edn page 96: If a note be made payable at a particular place, and that place be mentioned in the body of the note, presentment for payment must be made at the place; but where the place is mentioned in the margin, it does not appear that such presentment is necessary.' It would seem that Section 87, sub-section 1, was intended to carry out the statement referred to by the Lord Chief Justice. That case may be contrasted with Saunderson v. Bowes, (1811) 14 East 500 which was decided in 1811. In that case, there was a promissory note of the defendants promising to pay so much at their banking house at Workington, and it was held that a presentation for payment was necessary in order to give the holder a cause of action. This case shows that where a place for payment is embodied in the actual terms of the contract it is in the body of the notes and presentment for payment is required. The illustration which I have taken from (1815) 4 Camp 200 is confirmed by further cases such as Exon v Russell (1816) 4 M and S 505 which was decided in 1816, and Williams v Waring. (1829) 10 B & C 2, which was decided in 1829. Those cases seem to show that early in the last century it had became plain to practitioners that in order that a place for payment should be in the body of the note it must in effect form part of the contract for payment; whereas, words in the corner, in the margin or in the form of a memorandum, were not in the body of the note"
It is unnecessary to refer to other English cases on the point, as it is clear that when the English Act was enacted the law was fairly well settled that in order to constitute a part of a contract so as to make it incumbent upon the party suing on the note to aver and prove the presentment, it was necessary that the place should appear ex facie in the body of the document. It may be presumed that the Indian legislature while enacting Section 69 followed and adopted the English law on the subject as revealed in the decisions and statement of law by authoritative text book writers. There is nothing in the context or in the Indian conditions to presume that the Indian Legislature intended to make any departure from the English law. The difference in the language of the relevant provisions in the two enactments is merely the form of codification of the preexisting law and does not warrant any inference that the English law was deliberately departed from in India. We see no force in the argument of learned counsel for the appellant that the English decisions would not be of use or of any relevance (Vide ).
(9) Learned counsel for the appellant placed considerable reliance upon the decision of the Lahore High Court in Mehar Baksh v. Harichand, AIR 1935 Lah 623, as authority for the position that if the maker of the pronote has ordinary place of business known to the parties concerned the mention of a town as the place of payment, would be sufficient under Section 69 of the Act. In that case the place of payment mentioned was Sialkot and the law was stated in these terms by Beckett J:
"Whether the place named for payment in a negotiable instrument constitutes a specified place for this purpose, must be a question to be decided according to the circumstances of each case. If the maker of the pronote has an ordinary place of business known to the parties concerned, the mere entry of the town in which it is situated may provide a sufficient address; but if the town is large and there are no other means of ascertaining where the maker is to be found, then there is no place at which the holder can be expected to attend for the purpose of presenting the note for payment....... Difficulty only arises in this case, from the paucity of materials on the record From the address given by the parties, it would appear that none of them belong to Sialkot, but there is no evidence to show where any of them usually carry on their business. It is probable that Sialkot was only named in order to make the money recoverable in British India, the original holder of the note being resident of Jammu State. At the same time, I think it was for the parties contesting liability to show that the note was payable at a specified place in order to render presentment necessary. In the absence of further evidence. I am unable to hold that a large town of the size of Sialkot was a specified place for payment, any more than it would be possible to hold that British India was a specified place, if the note had been made payable in British India".
We do not read this decision as authority for the position that when a city is mentioned in as the place of payment the fact the maker of the note has an ordinary place of business known to the parties concerned is sufficient compliance of Section 69 irrespective of the other facts of the case. Further in that case neither of the parties belonged to Sialkot and the maker of the note had no place of business there. Learned counsel next relied upon a Bench decision of the Lahore High Court in Mahomed Ismail Maula Bakhsh, Firm v. Abdul Majid, AIR 1937 Lah 259 in which it was observed that 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 Act, and that presentment of the same would be necessary only if the maker has a residence or place of business in that city or town, and that in the absence of such residence or place of business mere possession of the note by the promisee in the city or town mentioned would be sufficient. In that case, the promissory note was made payable at Lyallpur and the contesting defendant had no place of business or residence at Lyallpur and it was therefore held that presentment was not necessary. The learned Judges were inclined to take the view that if the residence or place of business of the maker could be found out by the payee by the exercise of reasonable diligence, the bill should be presented at such a place for payment.
(10) In Dorabji Nowroji v. Jamashetji Pestonji, AIR 1936 Bom 218: 60 Bom 796 it was held that money payable at "Poona, Bombay or elsewhere" will not amount to mentioning a specified place within the meaning of Section 69.
Reference may next be made to the Bench decision of the Calcutta High Court in Dungarmull v. Sambhu Charan. . In that case, the promissory note was payable at Calcutta and it was held that the huge city like Calcutta cannot be said to be a specified place within the meaning of Section 69. The learned Judges did not accept as correct the view taken by the Lahore High Court in the decisions referred to earlier Harries C J delivering the judgment observed that searching out a person in the huge city like Calcutta, would be utterly an impossible task, that the adjective "specified" has been used in Section 69, so that there won't be any uncertainty and the specified place mentioned should enable the holder of the note with reasonable certainty to go to that place, find or search out the maker and present to him for payment. It does not appear from that judgment whether the payee there was aware of the place of residence or business of the maker. But from the discussion it is clear that the learned Judges were of the opinion that regardless of all knowledge on the part of the payee the place must be a specified place and not a big city or town. The address of the maker appeared on the top of the paper and so the payee must have known the address. But as that address however was not embodied in the body of the promissory note, the Bench following the principles of the English decisions, held that specified place had not been mentioned within the meaning of Section 69 of the Act. From this it has to be inferred that Bench of the Calcutta High Court did not consider payee's knowledge of the address of the maker, as of decisive significance when no specified place was mentioned in the body of the document. It may also be mentioned that this decision did not approve of an earlier decision of McNair, J. in Shankar Lal v. Narayanchandra, 47 Cal WN 658, which followed the decisions of the Lahore High Court. With respect we are of the opinion that this decision lays down the correct law and we prefer to follow the same in preference to the decisions of the Lahore High Court.
(11) Our attention has not been drawn to any English decision in which this question as to how far the mention of a big city as the place of payment would be sufficient was specifically raised and decided. The statement of the law at the foot-note at page 441 in Parson's notes and Bills, Volume 1, lends support to the view that the mention of a big city or town would not be sufficient:-
"Story on Bills, Ss. 282, 283. See Chitty on Bills 10th London Edn
240. But in Masson v. Franklin, 3 Johns 202 a bill drawn on a person at Liverpool, payable in London was protested for non-acceptance in Liverpool and afterwards for non-payment at the same place Kent C. J. after remarking that a good cause of action had arisen on the protest for non-acceptance, said,' But we are of opinion that, as no place of payment in London was designated, the demand for payment and protest for non-payment were well made upon the drawees personally at Liverpool. It would have been a very idle act for the holder to have gone into London to make enquiry, when no place in London was pointed out in the bill, and when the drawees resided at Liverpool, and had refused to accept the bill. The law merchant has not pointed out any particular spot in London for such enquiries, and to have attempted it at large would have been the height of absurdity. The common law in general, and especially the commercial law, which forms a distinguished branch of it, is founded on the principles of utility and common sense; and it would be truly suprising, and repugnant to the very spirit of the system, if an enquiry so senseless was requisite to consummate the right of the holder of the bill. It must be a sound rule that where no particular place of payment is fixed, a demand upon the drawee personally is good. A general refusal to pay, we a refusal to pay according to the face of the bill. It was equivalent to a refusal to pay in London. We do not mean to say that the demand of payment at Liverpool wad indispensable. The bill being payable at London, it would have been sufficient for the holder to have been there when the bill fell due ready to receive payment. In the present case a protest at London or a demand and protest at Liverpool, were sufficient, and the holder might take either course. The holders elected to demand payment of the drawers personally at Liverpool, and to cause the bill to be protested there and the plaintiffs, accordingly did all that in reason or law can be required to fix the antecedent parties to the bill."
On a careful consideration of all the aspects of the question, we are clearly of the view that the rights and obligations of the parties to the bill should not be made to depend upon the knowledge of the payee or the exercise of due diligence on his part to find out the address of the maker. The place of payment, when it attracts S. 69, is undoubtedly one of the essential terms of the contract, and, therefore, must appear ex facie in the face of the document. The essence, the very foundation of the policy of the law merchant, i.e., free circulation of the bill from hand to hand, requires incorporation of the essential terms in the document itself and should not be left to depend upon the facts of each case and the nature of the evidence adduced therein. The introduction of any notion of the payee's relative knowledge or exercise of due diligence would create complications seriously impending the free circulation of the bill. Suppose the bill is assigned and the assignee is obliged to file the suit without presentment as he was not aware of the address of the maker is the suit to be dismissed because the assignor had knowledge of the address? The position becomes still more complicated when the bill is passed on from hand to hand. We think that the liability of the maker and his right to insist upon presentment must arise even at its inception when the promissory note is executed and the liability cannot possibly vary depending upon the relative and varying knowledge and diligence of the subsequent assignee. It would be an anomalous position that in the chain of negotiation if one assignee has knowledge of the address of the maker the document would require presentment but in the case of another assignee it would not require presentment because, he was not aware of the address Again take for instance a money lender in the course of his business taking promissory notes from his numerous customers whose addresses he might have known and therefore the promissory notes would have mentioned merely the particular town or city of the makers. If the payee suddenly dies, his heirs or legal representatives may not know and may be completely ignorant of the address of the executants of the several promissory notes and for that reason presentment would be impossible or impracticable. Is it to be held that no suits at all could be filed on such promissory notes? It would work serious injustice if it is to be held that they should be bound by the supposed knowledge of the original payee, a condition or a circumstance de hors the document. It is unnecessary to multiply instances to indicate the serious anomalous consequence which would result in accepting the contention of the other side. We are clearly of the opinion that the place of payment mentioned in the bill should be precise, certain and definite and it is the duty of the maker to have it so incorporated in the face of the bill.
(12) We are also of the view that "Madras" mentioned in the bill cannot be presumed or taken as referable only to the defendant. The payee is a lady and is the wife of a respectable wealthy person and so would have naturally stipulated that the loan should be repaid at her place in Madras, without the necessity of her going and asking for payment. Again, as observed in some of the decisions "Madras" would have been mentioned merely to give the Courts in the city jurisdiction to entertain the suit on the notes. It is for the defendant contesting his liability to show that the agreement was that the money was payable at his residence and the word "Madras" as intended to signify the specific agreement. No such case has been put forward either in the pleadings or in the evidence, and we do not see any reason why a just claim should be defeated by necessarily inferring Madras (which is equivocal) as referring exclusively to the address of the defendant.
(13) Even otherwise, we hold, on the facts of the instant case, there has been sufficient compliance with S. 69, The notice of demand issued by the lawyer. Ex. A-3, contains all the particulars. The payee and the assignee are residents of Madras and from the contents of the notice it can be readily presumed that the notes were ready to be shown and returned to the maker if payment was made.
(14) Learned counsel for the appellant relying upon certain decisions of this Court Chhegganmull v. Manicka Mudaliar, 50 Mad LJ 242: (AIR 1926 Mad 792) and S.A. No. 289 of 1919 dated 5-2-1920 (38 Mad LJ (NCR) 4) contended that a demand for the payment of the amount due contained in a notice would not amount to presentment within the meaning of S 69. These decisions do not support the extreme contention, that under no circumstances could the demand notice be viewed as presentment under S
69. This aspect of the matter was considered by Krishnaswami Nayudu J. in Kottan v Kannan. 1949-2 MLJ 779, and the learned Judge, after an examination of the law was inclined to take the view that if, when the demand was made the person making the demand was in possession of the note and was in a position to hand it over on payment it would be sufficient presentment within the meaning of S. 69. All that is necessary is that when the demand was made the person who made the demand should have the promissory note with him or must be in a position to produce it when payment was to be made. We think this is the correct statement of the law. We may also refer to the statement of the law in Bashyam and Adiga's Text Book, on Negotiable Instruments, latest (11th) Edn pages 344 and 345. In Daniel on Negotiable Instruments, Vol. 1, 6th Edn. The law is also stated to the same effect at pages 721, 722:-
"Section 654: Presentment of the Bill or note, and demand of payment should be made by an actual exhibition of the instrument itself; or at least the demand of payment should be accompanied by some clear indication that the instrument is at hand, ready to be delivered and such must really be the case. This is requisite in order that the drawee or acceptor may be able to judge (1) of the genuineness of the instrument; (2) of the right of the holder of receive payment; and (3) that he may immediately reclaim possession of it upon paying the amount. If, on demand of payment, the exhibition of the paper is not asked for, and the party to whom demand is made declines to pay on other grounds, a more formal presentment by actual exhibition of the paper will be considered as waived.
It was so held where, on demand of payment of a note, exhibition of it was not asked for, the party saying he was not authorised to represent the bank, at which it was payable."
In Parsons' Notes and Bills, Vol. I, at pages 367, 368, the learned author has stated the law to the same effect in these terms:-
If his (party making the demand) ability to present it (the bill or note) be perfect, and it is, in fact, near and accessible, it may not be absolutely necessary that he should have it in his immediate personal custody, though this is proper. If on presentment the note is not asked for, and on this account, it is not actually exhibited, but its identity is perfectly known to the party on whom the demand is made, there is no reason why the non-exhibition of it should vitiate the demand; and indeed, the better rule, as drawn from the authorities, would seem to be, that in order to destroy the validity of the demand, on the ground that the note was not exhibited, the maker or acceptor should either expressly or by implication, refuse to pay on that account; otherwise, he will be deemed to have waived his right to require that the note should be shown to him."
Finally, on the last point we are clearly of the opinion that both under S. 76(c) as well as under general principles of law presentment is wholly unnecessary and would be futile in the instant case. It is settled law that when a maker refuses to pay the money or puts forward certain defences it is not necessary to present the bill for payment, and the maker would be deemed to have waived his right to require that the note should be shown to him. It must be held that the defendant must be deemed to have waived his right to take advantage of any default in presentment for payment. Due presentment is insisted upon solely for the benefit of the maker who is prepared to honour his obligation. But this requirement can obviously have no application to a party who repudiates his obligation. Waiver may not only be express but may also be implied and any conduct of the maker leading to the inference that the note if presented would not be honoured would dispense with the necessity of presentment. The principle of the decision in International Contractors Ltd. v. Prasanta Kumar Sur, clearly applies to the instant case. In that case a
party who was bound to reconvey the property under an agreement of reconveyance denied the very truth of the agreement and repudiated his obligation. It was held that when the party sued him for specific performance, it was not necessary for that party to have made a formal tender of the amount payable to the other party who had definity and unequivocally repudiated his obligation. We therefore, hold that presentment is dispensed with an unnecessary under S. 76 of the Act.
(15) For all these reasons the appeal fails and is dismissed with costs.
M. Anantanarayanan, Offg. C.J.
(16) This appeal involves certain questions of considerable interest with regard to the scheme of Ss. 64 to 71 of the Negotiable Instruments Act, and, in particular, S. 69 of that Act, against the background both of the law merchant and commercial practices. I have had the advantages of perusal of the judgment of my learned brother, and I am in entire agreement with him that this appeal fails, and ought to be dismissed. The area of facts in relation to the appeal, specially in relation both to the alleged failure of consideration under the two negotiable instruments, the plea that the mere demand in the notice would be insufficient to constitute a presentment, and the question of waiver has been fully traversed in my learned brother's judgment. It would be repetitious and prolix that I should set forth the facts again in any detail, or cover the same ground. I shall, therefore, content myself with attempting an analysis of the legal principles on which S. 69 has to be interpreted and applied to the facts of this character.
(16a) There are, obviously, two fundamental principles in considering whether evidence aliunde will be permissible, where a negotiable instrument does ex facie bear the inscription that it is payable "at a specified place" within the scope of S. 69, but that recital merely relates to a city at large, such as "Madras" or "Calcutta"; the problem here is, is evidence aliunde permissible to show the knowledge of the payee of the precise address of the maker at "Madras" or "Calcutta", as the case may be, so that there is an obligation to make presentment at that address? The two principles that I am referring to are, unfortunately, at variance with each other, and certainly a great deal of the difficulty seems to stem from this fact. The English cases, to which our attention has been drawn, proceed on the footing, that, to render presentment essential, the place must be particularised in the body of the instrument itself. It has been laid down, unambiguously in a line of authorities, that no marginal reference or address outside the body of the instrument, strictly construed, would suffice in law.
(17) The principle upon which this proceeds is a fundamental postulate of the law merchant, and has been sufficiently stressed by my learned brother. The essence of such instruments is that they are freely negotiable, and that they pass from hand to hand, the holder for value always being entitled to enforce the obligation. The Law Merchants has grown up from its historical origins, in such a manner as to subserve this need for free circulation of bills and to promote trade. It is from this angle that we have to interpret the English decisions, such as 1932-2 Ch. 1, and other cases in the same line. If this view is to prevail, certainly nothing which is in writing outside the body, or operative part, of the instrument, can be looked into, in testing the plea that presentment is essential; needles to say that where even a marginal reference or address is excluded, evidence aliunde relating to the knowledge of the payee, or the subsequent endorsee, would be excluded on stronger grounds. But the opposing consideration is that this is a document governed, like any other piece of writing, by the statute of evidence with regard to the proof and admissibility of evidence outside the document. If proviso (b) to S 92 and Ss 95, 96 and 97 of the Indian Evidence Act are applicable to negotiable instruments, as to any other document, an argument could at least be advanced that it cannot be laid down, as a rigid rule, that in all conceivable instances evidence aliunde would be barred.
(18) It is this aspect of the matter to which I propose to devote some attention. The point is worth noticing that the English cases are based upon S 87 of the English Act, and that the wording of this section is somewhat different, perhaps significantly different, from the wording of S 69 of our own Act. Section 87(1) runs as follows-
"Where a promissory notes is in the body of it made payable at a particular place, it must be presented for payment at that place in order to render the maker liable. In any other case, presentment for payment is not necessary in order to render the maker liable.
"It will at once be obvious that our own S. 69 is not in precisely similar terms. The difference between reference to a particular place in the body of the instrument, and in the margin of the instrument, has been commented on in the English cases; I may refer to Williams v Waring. (1829) 34 RR 306 and, more comprehensively, to the commentary upon S. 87(1) in "Byles on Bills of Exchange" 21st Edn page 227. As Sri S. Chellaswami, has argued, when we look at the scheme of Ss. 64 to 71 of our Act, it appears reasonable to presume that S. 69 was intended to relate to a presentment of the bill to the maker at his address, which is the "specified place". But, of course, difficulties may arise in individual instances, as my learned brother has pointed out. Where the specified place relates to the maker alone, there is no difficulty whatever. Where both the maker and the payee happen to reside in the same city or town, I conceive that it is a valid argument that the reference in the instrument really relates to the address of the maker. But, what will be the situation if the address "Madras" in this case, for instance, relates only to the payee, and not to the maker at all? The argument is that, in that case, presentment is not possible, and must be held dispensed with. Normally, of course, that would be the construction to be placed on the facts.
(19) It is in this perspective that we have to approach the case law on the subject. As I observed earlier, the English cases really involve no difficulty of interpretation. The matter is concluded by the dicta of Lord Hanworth M. R. in 1932-2 Ch.1, which itself follows earlier decisions. The place has to be particularised ex facie in the body or operative part of the instrument, and, to quote Lord Hanworth M. R.
"........... in order that a place for payment should be in the body of the note it must in effect from part of the contract for payment; whereas, words in the corner, in the margin or in the form of a memorandum, were not in the body of the note"
But can we adopt the same principle with regard to our own Act, particularly in the light of our statue of evidence? The decision in ILR 60 Bom 796: (AIR 1936 Bom 218) is really not very helpful on this aspect. The instrument, in that case, recited that the consideration was "payable at Poona, Bombay, or elsewhere" The Bench referred to the decision of our Court. 50 Mad LJ 242: (AIR 1926 Mad 792), and pointed out that the words "elsewhere" in the recital made the conclusion irresistible that the requirement of S. 69 was not satisfied. It will be noticed that in 50 Mad LJ 242: (AIR 1926 Mad 792) the Bench laid it down that the word "place" must be construed as including "places", as it would be anomalous to require presentment if one place is mentioned but none if two places are mentioned. The entire difficulty was squarely faced in AIR 1935 Lab 623, though, on the facts, that case could be totally distinguished, because neither of the parties belonged to Sialkot, the specified place. Beckett J. laid it down that even if a town is specified at large as the address, if the precise address of the maker is known to both the parties, that could be proved, and presentment would, therefore, become essential. But it is this view that must inevitably give rise to the serious difficulties stressed by my learned brother, in furnishing an interpretation of S. 69 which is in harmony with the fundamental principles of the Law Merchant. Acute illustrations can be furnished of the difficulty of any such construction of the requirements of S. 69. Anomalies are bound to result, and, as my learned brother has shown, the sudden death of a payee, who had personal knowledge of the addresses of the makers of several instruments in his favour might precipitate a crisis; his heirs might be totally unable either to present the documents or to sue upon them. On the contrary, as I shall endeavour to show, I think, that, within a very circumscribed region, evidence might be permissible in a conceivable case, though I would agree that, basically interpreted, S. 69 has to be construed in conformity with the English decisions.
(20) With regard to the Bench decision in AIR 1937 Lah 259 read in conjunction with the decision of the Calcutta High Court in , I think that there can be very little doubt that the view of the Calcutta High Court has to be followed or affirmed, with great respect, the view of the Judges in AIR 1937 Lah 259 after a reference to the definition of "place" in two Lexicons and to Hardy v. Woodraffe, (1818) 2 Stark 319, that "a city, town or village at large, may be taken to be a specified place within the meaning of Ss. 64 and 69 of the Negotiable Instruments Act," cannot be accepted. The reasons for that have been adequately indicated in the Calcutta decision, and need not be reiterated here. Perhaps, one observation from the judgment of Harries C. J. will suffice:--
"Where the note is payable in a large city, it appears to me that 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."
As I pointed out earlier, two propositions would appear to be clear on a scrutiny of the authorities. Firstly, the place must be sufficiently particularised, in order to meet the requirements of S. 69, for the very reason that the instrument is negotiable, and passes from hand to hand, according to the Law Marchant. The mere reference to a-city or town at large would not be enough. The subsequent holder or endorsee cannot be taxed with knowledge of the address of the maker at which presentment has to be made, and the obligation to present would, therefore, not exist. Secondly, for the same reason, evidence aliunde of the private knowledge of the payee, or subsequent transferee, would not be admissible. In that sense, the law on this aspect must be construed, very broadly, as governed by the special provisions of the Negotiable Instruments Act. But that does not mean that, in every conceivable instance, oral evidence would be automatically excluded. During the course of the arguments, an instance was furnished by one of us. The place specified might be sufficiently particularised, and, nevertheless, there might be two places having the same designation, one of which alone is the address of the maker. Or, the place might be a codeword for a particular spot. Strictly as between the maker and the payee, I do not see how evidence can be excluded, on the principle of Ss. 95 to 97 of the Indian Evidence Act, to show what the recital meant to the contracting parties. That, of course, may not apply to any subsequent holder.
(20a) Some difficulty seems to have been experienced, as will be clear from a perusal of , because of certain passages
expounding the American law on the subject, to be found in the Corpus Juris Secundum. The passage is extracted and set forth in the judgment, and our attention has also been drawn to two passages in Corpus Juris Secundum, Vol. 10, the first in S. 359 (page 874) and the second at page 897. But we do not see why, when we have to limit ourselves to the enacted scheme of Ss. 64 to 71 of our own Act, we should be troubled about this. Indisputably, if a town or city at large is alone, mentioned in the document, there can be no responsibility on the payee to search for the address of the maker in such a town or city; hence, the requirement of S. 69 "at a specified place" would not be satisfied. Moreover, it would not be permissible, where no ambiguity appears ex facie, to permit oral evidence to be adduced concerning the knowledge of the payee. In a case of the present kind, the proper inference should be that the instrument was drawn up in such terms that it made presentment to the maker wholly impracticable. For this reason, Ramakrishnan J. rightly held that the suit ought to be decreed, and I would agree that the appeal has to be dismissed with costs.
(21) Appeal dismissed.