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Sivabaghathammal and ors. Vs. Thangappa Nadar - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Reported inAIR1976Mad248; (1976)1MLJ160
AppellantSivabaghathammal and ors.
RespondentThangappa Nadar
Cases ReferredPerumal v. Kamakshi
Excerpt:
- .....for rs. 220/-, that purporting to be a receipt for the payment of the said sum of rs. 220/- the suit promissory note has been taken from him stealthily and that in any event the suit document is inadmissible in evidence as not being duly stamped and that the suit based on the original cause of action is not maintainable. the trial court dismissed the suit holding that the suit promissory note was insufficiently stamped and further held that there was no borrowing by the defendant.3. on appeal, the lower appellate court upheld the borrowing but however confirmed the finding that the promissory note being insufficiently stamped it was not open to the plaintiff to recover the same and the suit will not lie on the debt since the promissory note embodied all the terms of the contract.4. a.....
Judgment:

S. Mohan, J.

1. The second appeal arises out of O.S. No. 154 of 1966 which is a suit for recovery of Rs. 4094-90. The case of the plaintiff is that on the morning of 24th April, 1964, the defendant took a hand-loan of Rs. 3,500 from the plaintiff for family expenses agreeing to repay with interest at 9 per cent, per annum and on that very day in the evening he executed a stamped receipt in token of having received this amount. Therefore, the suit is filed on the original debt, the receipt even if it be a promissory note, being insufficiently stamped.

2. In the written statement the defendant contended that he never executed any receipt nor did he borrow any hand-loan at all. His further case was that the plaintiff requested the defendant to sell one of his cows and thereupon it was sold for Rs. 220/-, that purporting to be a receipt for the payment of the said sum of Rs. 220/- the suit promissory note has been taken from him stealthily and that in any event the suit document is inadmissible in evidence as not being duly stamped and that the suit based on the original cause of action is not maintainable. The trial Court dismissed the suit holding that the suit promissory note was insufficiently stamped and further held that there was no borrowing by the defendant.

3. On appeal, the lower appellate Court upheld the borrowing but however confirmed the finding that the promissory note being insufficiently stamped it was not open to the plaintiff to recover the same and the suit will not lie on the debt since the promissory note embodied all the terms of the contract.

4. A careful reading of the plaint will clearly show that the borrowing was in the morning on 24th April, 1964 and in the evening the promissory note came to be executed. Therefore the Courts below are not right in holding that the suit cannot be maintained on the original cause of action. I say so because the very Full Bench judgment on which both the Courts below relied, Perumal v. Kamakshi : AIR1938Mad785 , clearly lays down that whether a suit lies on the debt apart from the instrument therefore depends on the circumstances under which the instrument was executed. If really the instrument is only an evidence of the lending, certainly the suit will lie. In this connection, I may usefully refer to the observations of the Full Bench made at page 789 :

The question is, how, far does this rule or the reason of the rule apply to cases in which a person borrowing money executes as part of the same transaction a promissory note in favour of the lender? That the terms as to rate of interest, date of payment, etc., form part of the contract and cannot be proved except by proof of the notice seems to be more or less admitted.

Again, at page 793 it is said :

In the case of a loan transaction, the principal contract itself consists of the promise to repay and it cannot be said that the implied promise on which the action for money had and received depends forms no part of but is merely collateral to the main contract.

Therefore, the finding of both the Courts that the suit is not maintainable is incorrect and is liable to be set aside. Inasmuch as the lower appellate Court has held that the borrowing is true, the suit will have to be necessarily decreed. Consequently the plaintiff succeeds and he will be entitled to a decree as prayed for. But the parties will bear their respective costs throughout. No leave.


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