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Alagappa Chetty Vs. Alagappa Chetty and anr. - Court Judgment

LegalCrystal Citation
SubjectBanking
CourtChennai
Decided On
Judge
Reported inAIR1921Mad382; (1921)ILR44Mad187
AppellantAlagappa Chetty
RespondentAlagappa Chetty and anr.
Cases ReferredArunachalam Chettiar v. Narayanan Chettiar I.L.R.
Excerpt:
indian paper currency act (ii of 1910), section 26 - hundi payable to bearer--suit by endorsee against endorser--invalidity of hundi--estoppel, if any. - - it is well established that there can be no estoppel against a clear injunction of a statute. if we were to accept the contention of the appellant, we should be virtually abrogating section 26 of the paper currency act, which prohibits altogether the issue of any document like this except in the case set out in the proviso. anantakrishna ayyar also argued that the endorser, second defendant, ought to be treated as a banker, apparently merely on the ground that the hundi was drawn on him and he endorsed it to somebody else......to enforce payment of the hundi. the case is pressed only against the second defendant, who is the endorser. the hundi itself is not forthcoming but the defendant in his written, statement admitted that such a hundi had been issued but that it was made payable to bearer on demand and as such it was an invalid document by virtue of section 26 of the paper currency act. that section is absolutely clear and there can be no doubt that it applies to a hundi of this character. the point is settled by a ruling of this court reported in chidambaram chettiar v. ayyasawmi thevan i.l.r.,(1917) mad., 585. but it was argued by mr. anantakrishna ayyar that the endorser is estopped from denying the validity of his instrument the authority for the proposition is an observation of one of the learned.....
Judgment:

1. The suit in which this Second Appeal has arisen was instituted by the endorsee of a hundi in order to enforce payment of the hundi. The case is pressed only against the second defendant, who is the endorser. The hundi itself is not forthcoming but the defendant in his written, statement admitted that such a hundi had been issued but that it was made payable to bearer on demand and as such it was an invalid document by virtue of Section 26 of the Paper Currency Act. That section is absolutely clear and there can be no doubt that it applies to a hundi of this character. The point is settled by a ruling of this Court reported in Chidambaram Chettiar v. Ayyasawmi Thevan I.L.R.,(1917) Mad., 585. But it was argued by Mr. Anantakrishna Ayyar that the endorser is estopped from denying the validity of his instrument The authority for the proposition is an observation of one of the learned Judges in Arunachalam Chettiar v. Narayanan Chettiar I.L.R., (1919) Mad., 470 . That observation is purely obiter and no authority is cited in support of the proposition. It is well established that there can be no estoppel against a clear injunction of a statute. If we were to accept the contention of the appellant, we should be virtually abrogating Section 26 of the Paper Currency Act, which prohibits altogether the issue of any document like this except in the case set out in the proviso.

2. Mr. Anantakrishna Ayyar also argued that the endorser, second defendant, ought to be treated as a banker, apparently merely on the ground that the hundi was drawn on him and he endorsed it to somebody else. There is no basis for this suggestion.

3. The Second Appeal is dismissed with costs of the first respondent.


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