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E. Sundaram Chetty and anr. Vs. B. Damodaran Chetty and anr. - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Reported inAIR1924Mad850
AppellantE. Sundaram Chetty and anr.
RespondentB. Damodaran Chetty and anr.
Cases ReferredIn Kishomal Kirpomol v. Kishindas Sukramdas
Excerpt:
- .....legal ground on which he refused to take evidence is not clear. at one place tie remarks that the suit note is a negotiable instrument. the plaintiffs being the trustees in bankruptcy of the payee firm are not holders in due course. again he says 'i do not see how i could direct the taking of accounts between him (i.e., errappa chetty) and the plaintiffs.' i do not see what the difficulty is. in paragraph 4, he suggests that the defence is extraordinary. i do not think so. it is a common thing for a borrower from a banker giving a promissory note to cover over drawings from the banker by himself or by another. the circumstances relating, to the payment of rs. 500 (eive hundred) can be considered only after the defendants adduce all their evidence including that relating to the.....
Judgment:

Ramesam, J.

1. This appeal arises out of a suit on a promissory note. The defendants are the son-in-law and wife of one Errappa Chetty and their plea was and is that the note was not executed for cash or other equivalent consideration but was executed only as a security to cover the advances to be made by the payees B. Kuppuswamy Chetty and Sons to Errappa Chetty and that they are liable only to such sums as may be found due on taking accounts between the payee firm and Errappa Chatty. The City Civil Judge without taking the evidence tendered by the defendants, decreed the suit. The exact legal ground on which he refused to take evidence is not clear. At one place tie remarks that the suit note is a negotiable instrument. The plaintiffs being the trustees in bankruptcy of the payee firm are not holders in due course. Again he says 'I do not see how I could direct the taking of accounts between him (i.e., Errappa Chetty) and the plaintiffs.' I do not see what the difficulty is. In paragraph 4, he suggests that the defence is extraordinary. I do not think so. It is a common thing for a borrower from a banker giving a promissory note to cover over drawings from the banker by himself or by another. The circumstances relating, to the payment of Rs. 500 (Eive hundred) can be considered only after the defendants adduce all their evidence including that relating to the payment.

2. Before me, the learned vakil for the respondents, Mr. A. Srinivasa Iyengar contended that the plea is not admissible under Section 92, Indian Evidence Act. I do not agree. Gases deciding that it is not open to one of two or more joint makers of a note to plead that he is only a surety have no bearing on this, for, here, the plea is not that the defendants are mere sureties, for they admit their liability on the taking of the accounts, but plead want of consideration.

3. In Subbayya v. Subarayulu Iyer and Son : AIR1921Mad474 , the consideration was admitted but the respondents pleaded an agreement by which, if the mills excused the plaintiffs should excuse the defendants. This is different from a plea of want of consideration. So also, in Visnu Ram Chandra v. Ganesh Krishna (1921) 45 Bom. 1155 the consideration was admitted but the plea was that the plaintiff agreed not to present the note until he paid off some encumbrances. In Sri Ram v. Sobha Ram Gopal Rao (1922) All. 213 the note was for sums due on aooounts and stated that the accounts had been looked into. The plea was that the accounts should be reopened. Here also the note was for an existing (and not a future) consideration such as advances to be made. In Hill v. Wilson (1873) 8 Ch. 888 it was found that, though the father-in-law wished to make a gift, the son-in-law insisted on a loan. The loan was admitted but the plea was that only interest should be paid during the lifetime of the payee. This was rightly held inadmissible. In Kishomal Kirpomol v. Kishindas Sukramdas there was no defence to the note itself but the suit was objected to on the ground that it is an item of dealing between the parties who were partners and the whole partnership account should be taken, This has no resemblance to the defence before me.

4. I think the defendant's plea is legally open to them. The onus is on them and their evidence will have to be taken. I reverse the judgment and decree of the Court below and remand the suit for disposal according to law.

5. Costs to abide the result. Court-fee paid by appellants will be refunded.


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