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M. Venkata Raghavalu Chetty Vs. A.N. Sabapathy Chetti and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported in(1911)21MLJ1013
AppellantM. Venkata Raghavalu Chetty
RespondentA.N. Sabapathy Chetti and anr.
Excerpt:
.....the contrary is proved, that a pro-note was made with due consideration. the plain effect of the learned judge's estimate of the evidence is that he is not satisfied that there was no consideration or there has been a failure of consideration for the pro-note, or in other words, defendant has failed to make out his plea. neither the pro-note nor the plaint states any particular form of consideration, and i fail to see how, when the defendant failed to prove want of consideration, the fact that the plaintiff, in order to rebut the defendant's evidence, gave an untrue account as to the form of consideration, can be taken as admission or proof of want of consideration. mangiah chetty handed all the four documents to k ramachandra iyer for safe custody. hence exhibit a not executed for..........the basis of which his learned vakil has urged the contention that no liability accrued on the pro-note exhibit a at all, as it was not delivered to the plaintiff and delivery was not to be made to him and he was to have no right to enforce it unless he fulfilled certain obligations on his own part. the plea as set out in the judgment of sir v.c. desikachariar was in these terms : 'c.p. mangiah chetty handed all the four documents to k ramachandra iyer for safe custody. hence exhibit a not executed for cash received, and there has been failure of consideration.' it will be noticed that there is no distinct statement that the whole transaction was an escrow, and that exhibit a was to have no operation until the plaintiff did what he had undertaken to do. the agreement between the parties.....
Judgment:

Abdur Rahim, J.

1. By these petitions we are asked to revise the judgments of Sir V.C. Desikachari, a Judge of the Presidency Court of Small Causes, Madras, decreeing the plaintiff's claim on a promissory note for Rs. 1,000 (Exhibit A) and of the Full Bench of that Court dismissing an application made to it by the petitioner for a new trial. The question is, accepting the findings of fact by the court of first instance, as we are bound to do, is there a proper case fat revision? The defendant admitted the execution of the note and pleaded want or failure of consideration under Section 118 of the Negotiable Instruments Act XXVI of 1881. The court is bound to presume, until the contrary is proved, that a pro-note was made with due consideration. It was incumbent on the defendant, therefore, to make out his plea. The learned Small Cause Court Judge has disbelieved the story set up by the defendant in support of his plea. Upon that finding the plaintiff was entitled to judgment, but after the evidence of the defendant was taken the plaintiff gave evidence to show how the consideration for the pro-note was made up. The learned judge has also disbelieved the plaintiff's account as to what happened and he thinks that the true consideration for the pro-note was something other than that spoken to by the plaintiff in his evidence The latter finding does not appear to be supported by evidence and may be discarded for the present purpose. It is contended that, both the parties having gone into evidence and the plaintiff's evidence as to what was the nature of the consideration being disbelieved, it must be taken that the defendant lias shewn that there was no consideration. To my mind there is no force in such argument. The plain effect of the learned judge's estimate of the evidence is that he is not satisfied that there was no consideration or there has been a failure of consideration for the pro-note, or in other words, defendant has failed to make out his plea. But it is suggested that we must treat the fact that the plaintiff in his evidence alleged a particular form of consideration as an admission that there was no other consideration, and the particular form of consideration spoken to by the plaintiff having been disbelieved, the presumption under Section 118 of the Negotiable Instruments Act was rebutted and the defendant was relieved from proving that there was no consideration. This sort of reasoning is, in ray opinion, open to two objections. In the first place, I am not aware of any authority and none has been referred to during argument which would justify us in extending the rule relating to admissions to such a far-fetched inference as that on which the argument is based, and the next objection is that the argument requires us to regard the events from a wrong point of view. Neither the pro-note nor the plaint states any particular form of consideration, and I fail to see how, when the defendant failed to prove want of consideration, the fact that the plaintiff, in order to rebut the defendant's evidence, gave an untrue account as to the form of consideration, can be taken as admission or proof of want of consideration.

2. At the close of the defendant's case the learned judge might at once have passed a decree in favour of the plaintiff, and it cannot possibly make any difference that the plaintiff afterwards deposed to a story which the judge was unable to believe. Of course, after hearing the plaintiff's evidence, it was open to the judge to say, on considering the evidence of both sides, that the falsity of the plaintiff's story made the defendant's version of what occurred more probable, but here the judge rejects the defendant's case as false. It was also argued that the property in the pro-note was not intended to pass to the plaintiff until the happening of certain events, but such a defence was never put forward in the Small Cause Court and the facts found by the learned judge do not go sufficiently fat to support such a plea.

3. I would, therefore, dismiss the petition with costs.

4. My learned brother agrees in the result. The petition is therefore dismissed with costs.

Sundara Aiyar, J.

5. The facts have been stated with sufficient fullness in the judgment of my learned brother, and I do not think it necessary to repeat them. But I may refer to the petitioner's plea on the basis of which his learned vakil has urged the contention that no liability accrued on the pro-note Exhibit A at all, as it was not delivered to the plaintiff and delivery was not to be made to him and he was to have no right to enforce it unless he fulfilled certain obligations on his own part. The plea as set out in the judgment of Sir V.C. Desikachariar was in these terms : 'C.P. Mangiah Chetty handed all the four documents to K Ramachandra Iyer for safe custody. Hence Exhibit A not executed for cash received, and there has been failure of consideration.' It will be noticed that there is no distinct statement that the whole transaction was an escrow, and that Exhibit A was to have no operation until the plaintiff did what he had undertaken to do. The agreement between the parties might be either that Exhibit A was a completed and effective instrument, but, as a security for the plaintiff's performance of his part of the agreement, it was deposited with a third party, or that Exhibit A was to be legarded as an incomplete transaction altogether until the plaintiff carried out his own obligations. In the former case, the suit would not be unmaintainable though the defendent might plead that the plaintiff ought not to have a decree as he failed to fulfil his part of the contract. The defendant's statement, in his written statement, was that there was failure of consideration, and not that the plaintiff never acquired the right to enforce Exhibit A. The full court, on the application for a new trial, was of opinion that the written statement did not raise the contention that the defendant never incurred the obligation to pay the amount secured by Exhibit A. I am unable to say that the learned judges were wrong in their view. On the merits I have come to the conclusion that, en the findings of fact arrived at by him, the learned judge who tried the suit was wrong in his conclusion. The presumption with regard to every negotiable instrument, no doubt, is that it was drawn for consideration and the onus of proving absence of consideration would be on the defendant. Sir V.C. Desikachariar found that the defendant failed to prove want of consideration for Exhibit A. After the defendant had adduced his evidence, the plaintiff also let in evidence, and stated on oath that the consideration for Exhibit A was Rs. 8cc, due by the defendant as book-debt and Rs. 200 paid in cash. The learned Judge found that this statement was absolutely false. Neither the plaintiff nor any one else on his behalf stated that there was any other consideration for Exhibit A. The result is that the only consideration put forward for Exhibit A is false. On these facts, I am clearly of opinion that the question of onus has absolutely no bearing on the case. To my mind it could make no difference in this case whether the plaintiff's statement as to the consideration was made by him in his plaint or in his evidence as his own witness. No doubt where an admission is made by a party in the pleadings he would be absolutely estopped from going behind it, unless he obtains leave to amend his pleading, while it is possible that when he makes the admission in his evidence, tie may adduce other evidence to prove other consideration and it may be that the court would be legally entitled to act on such other evidence, though I should consider it very unlikely that it would do so. I can, however, see no reason why an admission made by a party in his evidence unretracted and adhered to by him as the truth should not be as binding on him as one contained in the pleadings or as a statement contained in the negotiable instrument itself. No doubt it was open to the learned judge to pass a decree in favour of the plaintiff as soon as the defendant had closed his case, and it might have been open to him also not to pronounce on the truth or falsity of the plaintiff's case as disclosed in his evidence. But I fail to see how we or the learned judge himself could ignore the conclusion arrived at that the plaintiff's case was false. I do not see further how iii the state of the record the plaintiff could be permitted to set up1 a case of some other possible consideration. I am of opinion that the learned judge should have dismissed the suit. This being my view I have to decide the question whether this Court has power to interfere in the case under Section 115, C.P.C. I am obliged to hold that it has not. My conclusion already stated is that on the facts found by the lower court, it ought to have held that Exhibit A was not supported by any legal consideration. The learned judge arrived at the opposite conclusion, and in doing so he committed, according to my view, an error of law. The Privy Council has laid down conclusively that we have no power to correct a mere error of law in revision. I cannot say that the learned judge acted with any material irregularity in trying the case. I agree that the petitions must be dismissed with costs.


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