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Jogeshchandra Dhar Vs. Mahammad Ibrahim and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1930Cal697
AppellantJogeshchandra Dhar
RespondentMahammad Ibrahim and ors.
Cases ReferredSadasuk Janki Das v. Kishan Pershad A.I.R.
Excerpt:
- .....ahmed and sons of chittagong (defendant 4), who are alleged to have accepted the hundi or the bill of exchange. both the courts agreed in dismissing the plaintiff's suit against defendants 3 and 4 and in decreeing the suit ex parte against defendants 1 and 2, although their reasons for so doing are different. the lower appellate court does not regard the instrument in question as a bill of exchange, within the meaning of the negotiable instruments act, 1881, but regards it as a promissory note and, as the guptas are the makers of the promissory note, and not defendants 3 and 4, he considers defendants 3 and 4 are not bound by the instrument.2. the plaintiff in this appeal contends that the lower appellate court was in error in holding that the instrument in question was not a 'bill.....
Judgment:

Mitter, J.

1. The action in which this appeal is taken was brought by the plaintiff, now appellant, for the recovery of Rs. 1044-8-0, which is the principal and interest alleged to be due on an instrument, which is described in the plaint as a hnndi or bill of exchange. To this suit are impleaded as defendant the Guptas (defendants 1 and 2), who borrowed Rs. 1,000 from the plaintiff on 9th August 1924 and executed the hundi in question, promising to repay the same within 45 days from that data and Mahammad Ibrahim (defendant 3) and a firm known as Makbul Ahmed and Sons of Chittagong (defendant 4), who are alleged to have accepted the hundi or the bill of exchange. Both the Courts agreed in dismissing the plaintiff's suit against defendants 3 and 4 and in decreeing the suit ex parte against defendants 1 and 2, although their reasons for so doing are different. The lower appellate Court does not regard the instrument in question as a bill of exchange, within the meaning of the Negotiable Instruments Act, 1881, but regards it as a promissory note and, as the Guptas are the makers of the promissory note, and not defendants 3 and 4, he considers defendants 3 and 4 are not bound by the instrument.

2. The plaintiff in this appeal contends that the lower appellate Court was in error in holding that the instrument in question was not a 'bill of exchange,' whereas the respondent contends that the deed is merely a promissory note and the question for determination in this appeal is whether the view taken by the lower appellate Court is right.

3. The document in question is in the following form, on a paper, which is described as a 'hundi,' in print:

Forty-five days after date without grace we jointly and severally promise to pay to the order of Babu Jogeshchandra Dhar, Chittagong, the sum of one thousand rupees only for value received in cash and that with interest at 3 per cent, per annum after due date.

Prasannakumar Gupta.

Ramkamal Gupta.

4. In the corner, at the top, is the endorsement 'Accepted, payable on due date 23rd September.' Below this endorsement there are two signatures of defendant 3, Mahammad Ibrahim, one for self and the other for Makbul Ahmed & Sons.

5. Defendants 1 and 2 did not appear in the suit. Defendant 3 filed a written statement, which was rejected, as having been filed too late. Defendant 4 filed a written defence and defendant 3, in his evidence, said that he was asked to sign the document as a witness and he did so. He also said that the words Accepted, payable on due date 23rd September' were not in the document when he signed it.

6. The Munsif found that:

it seemed to him very likely that the words Accepted payable on due date were subsequently inserted in the document, with a view to make defendant 3 or his firm liable for the money, probably because they were more solvent than defendants 1 and 2.

7. The lower appellate Court apparently does not accept this conclusion of the Munsif and, although its finding in the part of the case is somewhat involved, it says:

Though, on the facts, having gone through the evidence of defendant 3, the plaintiffs' ledger, Ex. 3, I am of opinion that there was no inherent improbability in the circumstances of the case of Mahammad Ibrahim representing, the firm of defendant 4, or of his standing surety for defendants 1 and 2 (though not in the sense in which that term is used in the Negotiable Instruments Act),

and the lower appellate Court rejects the story of defendant 3 as untrue, for it says:

that if it be true, as Mr. Ibrahim says, that he attested the document as a witness merely,, there would not be two signatures, one for self and the other representing the firm.

8. As I said the finding of the Subordinate Judge is open to the comment of its being somewhat involved, but, as I read it, it means that the defence of subsequent interpolation of the words 'accepted,' etc., and of defendant 3's signing, as a witness, did not find favour with the Subordinate Judge. We are' unable to agree with the somewhat insistent contention of the learned advocate for defendant 3 that the finding of the Munsif on this part of the case has not been displaced by the Subordinate Judge. The Subordinate Judge evidently proceeds on his view of the law that the document in question is not a bill of exchange and rests his judgment on that alone.

9. The question for determination in this appeal really turns on the construction of the document dated 9fch August 1924.

10. We have no doubt that it is a bill of exchange, as defined in Section 5, Negotiable Instruments Act, and, even if there is any ambiguity about its being either a promissory note or a bill of exchange, the holder of the bill is entitled to treat] it as either, having regard to the provisions of Section 17, Negotiable Instruments Act, which enacts that:

where an instrument may be construed either as a promissory note or a bill of exchange, the holder may at his election treat is as either, and the instrument shall be thenceforward treated accordingly.

11. It seems clear that it is a bill of exchange. So far back as 1852, in the case of Lloyd v. John Edward Oliver [1852] 18 Q.B. 471, it was held, with reference to a document closely resembling the instrument in question, that it was a bill of. exchange. In the English case the document was in the following form:

London, July 17th, 1851, 99. 15s.

Two months after date I promise to pay Mr. T.R. Lloyd or order the sum of ninety-nine pounds fifteen shillings for value received.

Henry Oliver.

John Edward Oliver,

Birmingham.

12. Across this was written:

Accepted, payable Spooner, Attwood & Co., Bankers, London, Edward Oliver.

13. It was proved that Edward Oliver was the signature of the defendant. Lord Campbell, C.J., was of opinion that this instrument, even before acceptance, might be treated as a bill of exchange as against Henry Oliver, the drawer. As against the defendant it was clearly a bill of exchange.

14. This case is sought to be distinguished by the respondent from the present case on two grounds : (i) although there were no express words of request to J.E. Oliver to pay, if; had always been the custom in drawing bills of exchange to place the name of the party to whom the bill was directed, where the name of J. Rule Oliver was written; (ii) the acceptor could not be rendered liable unless he was the drawee. Lord Campbell did not resi; his decision on the ground that J.E. Oliver's name was placed where, according to mercantile usage, the name of the drawee would be placed. It is true Erie, J., referred to it, but neither Lord Campbell nor Crompton, J., referred to mercantile usage, from which it could be inferred that there was an implied request to J.E. Oliver to pay.

15. Reliance was placed by the learned advocate for the respondent on the case of Davis v. Henry John Clarke [1844] 6 Q.B. 16, for the proposition that, unless the acceptor is named expressly as the drawee, his acceptance does not render him liable. But the case lays down no such proposition and is obviously distinguishable. There, John Hart drew a bill payable to himself or order addressed to John Hart. Clarke wrote across this 'Accepted, H.J. Clarke'; and it was held that Clarke could not be sued as acceptor of a bill of exchange directed to Hart. Lord Danman, C.J., pointed out that there-is no authority either in the English law or the general law merchant for holding a party liable as acceptor of a bill addressed to another. In the present case, let us assume that no party is named in the address, but the acceptance by defendants 3 and 4 was not; inconsistent with the address, so that the acceptors might be deemed to have admitted themselves to be the party addressed. The present case also resembles the case of Gray v. Milner [1819] 8 Taunt 739. Patteson, J., while delivering judgment in Davis v. Henry John Clarke [1844] 6 Q.B. 16, commented on Gray v. Milner [1819] 8 Taunt 739 as follows:

In Gray v. Milner [1819] 8 Taunt 739 no party was named in the address; and I must say that the decision in the ease Appears to me to go to the extremity of what is convenient. It may be considered as having been decided on the ground that the acceptance was not inconsistent with the address, so that the acceptor might be deemed to have admitted himself to be the party addressed.

16. In the case before us the document, on the face of it, is shown to be a hundi or bill of exchange. Here, the Guptas are the drawers and, in the corner, are shown the names of defendants 3 and 4, who, by signifying their acceptance, have admitted themselves to be drawees. Defendants 3 and 4 are now estopped from contending that they are not the acceptors and that they are not drawees. No question of estoppel could arise in Davis v. Henry John Clarke [1844] 6 Q.B. 16, for, on the face of the bill, it was addressed to a person other than the acceptor : see the remarks of Patteson, J., at p. 19 of the Report in 6 Q.B. We are not unmindful of the decision of the House of Lords in the case of Steele v. M'Kinlay [1880] 5 A.C. 754, where it was laid down that, save in the case of acceptances for honour or per procuration, no one can become a party to a bill qua acceptor, who is not a proper drawee or an addressee. But, here, defendants 3 and 4 have, by accepting, admitted themselves to be drawees and this view is not inconsistent with the decision of the House of Lords just referred to. It has bean contended for the respondent that no consideration passed from plaintiff to defendants 3 and 4; therefore, under Section 45 of the Act, the plaintiff can have no relief against them. There is no substance in this ground, for it is common ground that the sum of Rs. 1,000 was paid to defendants 1 and 2, and Section 45 does not contemplate a further consideration flowing from the plaintiff to the drawee. Defendants 3 and 4 were under no obligation to accept the hundi, but, having done so, they were bound to make good the acceptance to the plaintiff who acted on the faith of it, provided defendant 3 had authority to bind the firm (defendent 4) by the acceptance.

17. We think therefore the judgments and decrees of the Courts below, in so far as they dismiss the suit against defendant 3, must be set aside and there will be a decree against defendant 3.

18. Defendant 4 has entered appearance separately from defendant 3 and has contended that defendant 4 firm is not bound, as defendant 3, who is the servant of the firm, had no authority to 'bind the firm by the acceptance of the hundi. The first point for decision is whether the hundi has been so drawn that in form it binds the firm of defendant 4. The first signature of defendant 3 below the acceptance is for himself and the second signature is 'for Makbul Ahmed & Sons.' It is plain therefore that the firm of defendant 4 is intended to be bound. In so holding, we are not unmindful of what was said by their Lordships of the Judicial Committee of the Privy Council in the case of Sadasuk Janki Das v. Kishan Pershad A.I.R. 1819 P.C. 146. at p. 668 (of 46 Cal.) in the passage quoted below. In that case Lord Buck-master observed as follows:

It is of the utmost importance that the name of a parson or firm to be charged upon a negotiable document should be clearly stated on the face or on the back of the document, so that the responsibility is made plain and can be instantly racogaized as the document pas3es from hand to hand.

19. In the present case there can be no difficulty in this behalf, for the form of the hundi shows that defendant 3 was signing on behalf of the firm defendant 4.

20. It now becomes necessary to determine whether defendant 3 had authority to accept the hundi on behalf of the firm, and to sign such acceptance. The true rule is that where a bill is accepted by an agenu of the drawee instead of by the drawee himself, the acceptance is good. The hand that holds the pan is immaterial if, in fact, there be authority to signs : see Halsbury's Laws of England, Vol. 2, p. 486. The decree of the lower appellate Court, in so far as it dismisses the suit against defendant 4 firm, must also be set aside and the case remitted back to the lower appellate Court in order that it may determine the question whether defendant 3 had authority to accept hundis or bills of exchange on behalf of the firm. If is comes to the conclusion that he had such authority, then it will pass a decree against defendant 4. If it comes to a contrary conclusion, then plaintiff's suit against defendant 4 will be dismissed. Costs will abide the result.

21. As defendants 1 and 2 have not appealed, the ex-parte decree against them will stand. The result is that plaintiff's claim is decreed against defendants 1 to 3. Defendant 3 will pay to the appellant costs throughout. Plaintiff's appeal against defendant 4 will be reheard in the light of the observations we have made.

Graham, J.

22. I agree.


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