1. The appellant instituted the suit for recovery of a sum of Rupees 1,658-8-0 as balance due under a promissory note, Ex. A, executed on 4th April 1924, by the defendant at Coimbatore. Though the plaint speaks of it as executed for money borrowed on that day, it would appear from the recitals in Ex. A, which are not disputed, that it was executed in discharge of the defendant's liability under an earlier promissory note dated 19th May 1921, for a sum of Rs. 9,500. The evidence and the recitals in Ex. A show that on the earlier promissory note the plaintiff had instituted O.S. No. 80 of 1924 on 3rd April 1924, claiming that a sum of Rs. 11,955 was due on that date under the earlier promissory note. Ex. A was executed on the very next day after the institution of the suit, that is on 4th April 1924 and it recites the institution of the suit and adds that the defendant executed that note as he agreed to pay a sum of Rs. 12,750 including the Court costs in that suit. There is no doubt that this amount of Rs. 12,750 was arrived at by adding the plaintiff's costs incurred in the institution of that suit to the sum of Rs. 11,955 which ha claimed was due on the date of the plaint.
2. The written statement in the present suit sets out the circumstances under which that document came to be executed for that particular figure. It also states that in the course of December 1921 the defendant had in fact paid to the plaintiff two amounts of Rs. 650 and Rs. 350 to the credit of the earlier promissory note of 1921, but that the amount of Rs. 11,955 stated in O.S. No. 80 of 1924 had been arrived at without giving credit to the said sum of Rs. 1,000 The defendant accordingly claims that the liability under Ex. A should be reduced by this sum of Rs. 1,000 and subsequent interest thereon. After stating these facts, the legal pleas based thereon are put forward under different heads: (1) that there was an agreement contemporaneous with Ex. A, that accounts should be subsequently looked into and the liability of parties determined accordingly, notwithstanding the particular figure inserted in Ex. A(2) that the consideration for Ex. A should be deemed to have failed to the extent of this Rs. 1,000 and (3) that this Rs. 1,000 should be treated as having gone in discharge of Ex. A.
2. Before the Courts below, the plaintiff did not deny the receipt of Rs. 1,000 in the course o-f December 1921, but he pleaded that the Rs. 1,000 was sent to him in satisfaction of another account. This story of the plaintiff has been disbelieved by both the lower Courts which accordingly held that it was paid in partial reduction of the promissory note of 1921. On behalf of the appellant hero it has been argued that the first of the above pleas, namely of a contemporaneous agreement to vary the figure in-sorted in the pronote, in the light of subsequent examination of the accounts, is inadmissible on account of Section 92, Evidence Act; and reference has been made in that connection to the decisions in Sir Ram v. Sobha Ram Gopal Rai 1922 All 213; Hira Lal v. Benarsi Das 1925 Lah 576 and D. Subbayya v. K.M. Subbarayulu Iyer and Sons 1921 Mad 474. Mr. Ramachandra Ayyar mentions that the case in Sri Ram v. Sobba Ram Gopal Rai 1922 All 213 has not been approved of in a later case in the same Court in 1928 Bhogi Ram v. Kishori Lal 1928 All 289, but it is unnecessary to pursue that plea, for the decision of this, appeal. Taking it for a moment that, the plea of contemporaneous agreement is inadmissible, it does not follow that, the case cannot be dealt with as one falling under Section 44, Negotiable Instruments Act, which provides that to the extent to which consideration was originally absent, the liability on the promissory note is proportionately reduced Section 92, Evidence Act, is no bar to the consideration of this question, and on the findings of the Courts below, the case will undoubtedly fall under Section 44, Negotiable Instruments Act but for one argument advanced on behalf of the' appellant, namely that the consideration for ; Ex. A was not merely a preexisting liability but also the withtdrawal of the suit O.S. No. 80 of 1924. It is noteworthy that this is not the consideration stated in Ex. A itself nor even, the consideration pleaded by the plaintiff in the course of his evidence. Further, on the figures as explained in the judgments of the Courts below, Ex. A was executed for the full amount claimed: and costs so far incurred by the plaintiff, and the subsequent withdrawal of O.S No. 80 of 1924 was not part of the consideration for the agreement but merely the result of the discharge of the claim. In this view, I do not see any difficulty in holding that the case falls under Section 44, Negotiable Instruments Act.
4. The appellant's learned Counsel is of course right in pointing out that the payment made long before Ex. A cannot be pleaded as 'discharge' of Ex. A. But as already explained all the material facts have been stated in the written statement though the legal pleas have been advanced under different heads on the basis of these facts. The plea of partial failure of consideration seems to me to be well founded and in this view the decision of the Courts below is right. The second appeal fails and is dismissed with costs.