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T.R. Narasimhamurthi Sastry Brought in Place of Ramaswami Pillai Vs. A.T.V. Ramaswamy Chetty and anr. - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in18Ind.Cas.696
AppellantT.R. Narasimhamurthi Sastry Brought in Place of Ramaswami Pillai
RespondentA.T.V. Ramaswamy Chetty and anr.
Cases ReferredIn Hareck Chand Babu v. Bishun Chandra Banerjee
Excerpt:
negotiable instrument - promissory-note--unconditional undertaking to pay--surety signing as principal--admission of plaintiff's agent as to position of surety--oral agreement at time, of execution--evidence act (i of 1872), section 92. - - the contention in effect is that although the note contained an unconditional undertaking by the 2nd defendant to pay, his liability was in reality to be conditional on the 1st defendant's failure to pay it. this is clearly a variation of the contract between the parties and section 92 of the evidence act forbids evidence of such a variation being adduced......him as principal debtor. it has also been found that plaintiff did not agree to give the defendant time for payment by receiving rs. 75 for interest in advance or contract to receive the debt in instalments. the 1st question argued in second appeal is that the terms of the note which made the 2nd defendant liable as a principal are not binding on him as the person who took the promissory-note on the plaintiff's behalf admitted that he signed it only as a surety. we are of opinion that this contention cannot be upheld. the contention in effect is that although the note contained an unconditional undertaking by the 2nd defendant to pay, his liability was in reality to be conditional on the 1st defendant's failure to pay it. this is clearly a variation of the contract between the parties.....
Judgment:

1. This is a suit on a negotiable promissory-note executed by the two defendants in the plaintiff's favour payable on demand. The plaintiff obtained a decree against both the defendants in the Munsif's Court and the decree has been confirmed on appeal preferred by the 2nd defendant. The 2nd defendant contested his liability on the ground that although he executed the note as a principal jointly with the 1st defendant, it was agreed at the time of the execution that he should be regarded only as a surety for the 1st defendant for whose sole benefit it was executed and he was relieved from liability inasmuch as the plaintiff gave time to the 1st defendant for payment by receiving interest from him in advance for five months and also varied the contract by agreeing to receive the debt from him in small instalments. The lower Courts have held that this agreement, supposing it to be true, would not relieve the 2nd defendant from liability expressly contracted by him as principal debtor. It has also been found that plaintiff did not agree to give the defendant time for payment by receiving Rs. 75 for interest in advance or contract to receive the debt in instalments. The 1st question argued in second appeal is that the terms of the note which made the 2nd defendant liable as a principal are not binding on him as the person who took the promissory-note on the plaintiff's behalf admitted that he signed it only as a surety. We are of opinion that this contention cannot be upheld. The contention in effect is that although the note contained an unconditional undertaking by the 2nd defendant to pay, his liability was in reality to be conditional on the 1st defendant's failure to pay it. This is clearly a variation of the contract between the parties and Section 92 of the Evidence Act forbids evidence of such a variation being adduced. See Abrey v. Crux (1870) L.R. 5 C.P. 37. The learned Vakil for the appellant has cited several English cases according to which a parol agreement as between the joint executants of a document that one of them should be liable only as a surety could be proved against the promisee if he assented to such an agreement or was aware of it. See Rouse v. Bradford Banking Co. (1894) 2 A.C. 586. In Taylor on Evidence, Section 1153, it is pointed out that the earlier decisions in England were to the contrary. The learned author further observes that the more recent decisions relating to loans advanced by a money-lender are not in accordance with the general rules of evidence i.e., as pointed out by Phear, J. in Punchanun Ghose v. Daly 15 B.L.R. 331 the English Courts at first allowed such a parol contract to be proved as an equitable defence. In order to prevent fraud, we cannot, in India, allow any equitable exceptions to the provisions of Section 92 of the Evidence Act. Sea Balkishen Doss v. Legge 27 I.A. 58 In Hareck Chand Babu v. Bishun Chandra Banerjee 8 C.W.N. 101 the point raised in this case was directly decided by the Calcutta High Court and we are certainly in accord with that decision. It is unnecessary to consider whether by receiving Rs. 75 in advance for interest from the 1st defendant the plaintiff by necessary implication extended the time for payment. We dismiss the second appeal with costs.


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