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Chelliah thevar (Died) and ors. Vs. Muthirulappa Kudumban - Court Judgment

LegalCrystal Citation
SubjectBanking
CourtChennai High Court
Decided On
Reported in(1971)2MLJ131
AppellantChelliah thevar (Died) and ors.
RespondentMuthirulappa Kudumban
Cases ReferredSubba Narayana Vathiar v. Ramaswami Iyer
Excerpt:
- - in our opinion sections 78 and 8 are clearly applicable......the instrument from pleading discharge by payment to anyone but 'the holder'.4. following the above decision i hold that the plea of discharge by payment to the brother of the payee put forward by the defendant, cannot be accepted in a suit filed by the holder of a promissory note. the order of the lower court is set aside and the suit decreed as prayed for. there will be no order as to costs in this court.
Judgment:

V.V. Raghavan, J.

1. The plaintiff is the petitioner. The suit was on a promissory note executed on 6th May, 1965 in favour of the plaintiff by the defendant for a sum of Rs. 400. As the defendant did not pay in spite of demands the suit was filed.

2. The defence to the suit was that the suit claim was discharged by payment to the plaintiff's brother who is not the promissee. The trial Court upheld the defence and dismissed the suit. The present revision petition is filed against the said order.

3. The promissory note stands in the name of the plaintiff and the discharge by payment made to a person who is not the holder of the promissory note, cannot prevent the holder of the promissory note from suing on the note for recovery of the amount due. Under Section 78 of the Negotiable Instruments Act, the promissee alone can maintain a suit and no payment made to a person who is not the holder can be recognised. On this question there is a direct decision in Subba Narayana Vathiar v. Ramaswami Iyer1 I.L.R. (1907) Mad. 88 : (1907) 16 M.L.J. 508 to the following effect:

In our opinion Sections 78 and 8 are clearly applicable.... Section 78 provides that subject to the provision of Section 82(c) which do not apply here 'payment of the amount due on a promissory note must, in order to discharge the maker, be made to the holder.' These provisions are imperative and in our opinion preclude the maker when sued on the instrument from pleading discharge by payment to anyone but 'the holder'.

4. Following the above decision I hold that the plea of discharge by payment to the brother of the payee put forward by the defendant, cannot be accepted in a suit filed by the holder of a promissory note. The order of the lower Court is set aside and the suit decreed as prayed for. There will be no order as to costs in this Court.


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