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P.V. Kothandaramaswami Naidu Vs. P.M.A. Muthia Chetti - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported inAIR1918Mad344; 45Ind.Cas.186
AppellantP.V. Kothandaramaswami Naidu
RespondentP.M.A. Muthia Chetti
Excerpt:
.....instruments act (xxvi of 1881), section 118(e) - negotiable instrument, endorsements on--order of endorsements--presumption. - - 1. this appeal raises an interesting question, as to whether a suit can be filed on an endorsement made by a stranger on the back of a note, who does not satisfy the definition of an endorser. it was with reference to the bills of exchange act that we are told in the well-known words of lord halsbury in the vagliano case, (1891) a. but the plaintiff has stated also in his deposition that the promissory notes used to be sent by the defendants through the 1st defendant's gumasta properly endorsed, and that the plaintiff's gumasta would receive from the 1st defendant's gumasta. on these findings of facts, the interesting legal questions strenuously argued by mr......section 56 of the english bills of exchange act, but there is no recognition of it in the indian negotiable instruments act. it was with reference to the bills of exchange act that we are told in the well-known words of lord halsbury in the vagliano case, (1891) a.c. 107: 39 w.r. 657 : 55 j.p. 676. that the essence of a code is to be exhaustive. we may apply that principle to the negotiable instruments act, and say that we are not prepared to recognise this backing of bills by strangers. that is the view which i am at present disposed to take, but it is not necessary to express a final opinion on the point, because i think the appeal fails upon another ground.2. section 118 of the negotiable instruments act provides that the presumption is that the endorsements were made in the same.....
Judgment:

John Wallis, C.J.

1. This appeal raises an interesting question, as to whether a suit can be filed on an endorsement made by a stranger on the back of a note, who does not satisfy the definition of an endorser. There is such a usage of law on the continent known as the making of an aval, which is recognised by Section 56 of the English Bills of Exchange Act, but there is no recognition of it in the Indian Negotiable Instruments Act. It was with reference to the Bills of Exchange Act that we are told in the well-known words of Lord Halsbury in the Vagliano case, (1891) A.C. 107: 39 W.R. 657 : 55 J.P. 676. that the essence of a Code is to be exhaustive. We may apply that principle to the Negotiable Instruments Act, and say that we are not prepared to recognise this backing of bills by strangers. That is the view which I am at present disposed to take, but it is not necessary to express a final opinion on the point, because I think the appeal fails upon another ground.

2. Section 118 of the Negotiable Instruments Act provides that the presumption is that the endorsements were made in the same order as the names appear on the back of the bill, and in this case it is the payee's name that appears first and then the name of the alleged endorser. There is evidence also that this was the case, though the evidence is not of a very satisfactory character. On the other hand, the defendants did not go into the box to establish that the endorsements were made in any other order. On the whole, I think that there is no sufficient evidence to rebut the presumption that the endorsements were made in the order in which they occur. If that be so, I think that there is sufficient ground to sue the endorsers of the promissory notes.

3. In the result, the appeal fails and must be dismissed with costs.

Sadasiva Aiyar, J.

4. Section 118, Clause (e) of the Negotiable Instruments Act provides that the presumption shall be made, that the endorsements appearing upon a negotiable instrument, were made in the order in which they appear thereon.' In the present case, the 2nd defendant's (appellants') endorsement-signatures in Exhibit A series appear below the endorsement signatures of the 1st defendant, who is the payee in all the promissory notes. No oral evidence was adduced on the appellants' side to rebut this presumption raised by Section 118, Clause (e).

5. The appellants' learned Vakil (Mr. T. Rangaohariar) relied on a statement in cross examination, made by the plaintiff as to the order in which the defendants made their endorsement-signatures. But the plaintiff has stated also in his deposition that the promissory notes used to be sent by the defendants through the 1st defendant's gumasta properly endorsed, and that the plaintiff's gumasta would receive from the 1st defendant's gumasta. The plaintiff himself evidently does not know much about these matters. Mr. Bangachariar, also relied upon an ambiguous statement made by the plaintiff in the plaint Exhibit B in the suit on the mortgage instituted by him against defendants Nos. 1 and 2. The above, however, are wholly insufficient to rebut the statutory presumption that the 1st defendant as payee made the endorsement-signature on the back of the note, before the 2nd defendant and that the 2nd defendant afterwards made himself liable as the next endorser to the ultimate holder in due course, namely, the plaintiff. On these findings of facts, the interesting legal questions strenuously argued by Mr. Bangachariar do not arise.

6. Therefore I agree with my Lord the Chief Justice that the appeal fails and should be dismissed with costs.


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