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Assaram and ors. Vs. Kesri Chand and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in33Ind.Cas.247
AppellantAssaram and ors.
RespondentKesri Chand and ors.
Cases ReferredPeto v. Reynolds
Excerpt:
civil procedure code (act v of 1908), section 115 - appeal--shahjog hundi not negotiable instrument attested--promissory note--bond--stamp duty--admissibility in evidence. - .....himself to pay money to another. now the first point that i have to decide is, is a shahjog hundi payable to order or to bearer? it has been expressly decided by the high court of allahabad in lalla mal v. kesho das 26 a. 493 : a.w.n. (1904) 100 : 1 a.l.j. 254 that a shahjog hundi is only payable to the respectable holder and is not equivalent to a hundi payable to bearer. that seems to dispose of the case in so far as it is said to be a negotiable instrument payable to bearer. the next point is, is this hundi a hundi or a bill of exchange payable to order? of course, these hundis drawn according to indian customs are matters of considerable difficulty to understand. but the high court of bombay in a case, ganesdas ramnarayan v. lachminarayan 18 b. 570 which was a reference by the.....
Judgment:

Fletcher, J.

1. This is a Rule obtained by the defendant in a Small Cause Court suit calling upon the plaintiff to show cause why the decree passed by that Court in a suit between the plaintiff and the defendant should not be set aside. The point is one of some nicety. The facts are as follows: The plaintiff on the 7th March 1911 brought a suit in the Small Cause Court against the defendant to recover a sum of Its. 806, being the amount of principal and interest due by the defendant to the plaintiff on two hundis for Rs. 400 each executed by the defendant in favour of the plaintiff at Calcutta for valuable consideration payable after 562 days and 573 days respectively after the execution. The defence in the written statement of the defendant who has been called the added defendant, is that the hundis were not admissible in evidence. The case came on for trial before the learned Second Judge. The learned Second Judge decreed the suit in favour of the plaintiff and on an application to the Full Court for an order for new trial the judgment of the Trial Judge was upheld, on the ground that the documents had been properly admitted in evidence. The point arises in this way. The defendant drew these two hundis in suit. The hundis are what are called shahjog hundis, that is, they are payable to the respectable holder. That apparently is a custom that exists amongst the Indian merchants, and the acceptor does not get a discharge unless he takes the trouble to satisfy himself that the person presenting the document for payment is either known in the bazar or identified to him. Now the point has been raised, and the Rule was granted on this footing, that these two documents were negotiable instruments, and were therefore not admissible in evidence under Section 35 of the Indian Stamp Act. Section 35 provides, that a document not being a document chargeable with a duty of one-anna or a bill of exchange or promissory note, shall, subject to the payment of penalties, be admitted in evidence. Now the point that has been raised in this case is that these two documents were bills of exchange within the meaning of the Negotiable Instruments Act, Section 2, Sub-section 5(b) of the Stamp Act provides that a 'bond' includes any instrument attested by a witness not payable to bearer whereby a person obliges himself to pay money to another. Now the first point that I have to decide is, is a shahjog hundi payable to order or to bearer? It has been expressly decided by the High Court of Allahabad in Lalla Mal v. Kesho Das 26 A. 493 : A.W.N. (1904) 100 : 1 A.L.J. 254 that a shahjog hundi is only payable to the respectable holder and is not equivalent to a hundi payable to bearer. That seems to dispose of the case in so far as it is said to be a negotiable instrument payable to bearer. The next point is, is this hundi a hundi or a bill of exchange payable to order? Of course, these hundis drawn according to Indian customs are matters of considerable difficulty to understand. But the High Court of Bombay in a case, Ganesdas Ramnarayan v. Lachminarayan 18 B. 570 which was a reference by the Presidency Small Cause Court at Bombay, decided that a shahjog hundi is not a bill of exchange or cheque payable to order. Then one is left with the hundi as being a hundi not payable to order or to bearer. That is, it is a bill of exchange which is not at any rate in the full sense a negotiable instrument; it is a bill of exchange payable to a certain person. That means that the transferee of shahjog hundis, so far as I can see on the authorities, takes hundis subject to equities, although there may be, according to the custom of the markets, some means of protection of the acceptor who after due enquiry satisfies himself that the person presenting the document for payment is a respectable holder. When we have got to that stage, we have got to see whether the learned Second Judge was right when he admitted this document subject to the payment of the penalty chargeable on a bond under Section 35, Sub-section (a) to the Indian Stamp Act. 'Bond', as I have already said, from the definition includes any instrument attested by a witness not payable to order or to bearer whereby a person obliges himself to pay money to another. It appears to me from the authorities that I have cited in Allahabad and Bombay that this document is not payable to order or to bearer. Therefore the question is, does this document create an obligation by the defendant to pay the plaintiff the sum of money mentioned in the hundi? So far as the attestation goes, it is not denied that the signature was in fact attested by a person who saw the document executed. Now the question whether an attestation sometime after the execution of the document was a proper attestation, in my opinion, is one of fact which the learned Second Judge was entitled to decide on the evidence. This document was a document attested by a witness. The next point is, does it create an obligation to pay? This hundi is drawn by the firm of Kesri Chand-Sugan Chand, the defendants, on themselves. By the definition in the Negotiable Instruments Act a bill of exchange is an instrument in writing containing an unconditional order signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument. It is quite obvious that the section of the Negotiable Instruments Act contemplates that there shall be two persons, the drawer and the drawee. It does not contemplate that the drawer is to be the same person as the drawee. That is in accordance with the law which had been laid down previously to the codification of the law relating to negotiable instruments in England. It appears that 'prior to the Bills of Exchange Act, 1882, 45 and 46 Vic, C. 61, the law was laid down in Peto v. Reynolds (1854) 9 Ex. 410 : 96 R.R. 772 : 2 Com. L.R. 491 : 23 L.J. Ex. 98 : 18 Jur. 472 : 22 L.T. (O.S.) 246 : 2 W.R. 196 and Parke, B. then said: 'I cannot, however, help observing that there is no case in which it has ever been decided that an instrument could be a bill of exchange where there was not a drawer and a drawee.' In the 5th section of the Bills of Exchange Act, 1882, the law has now been codified, but it expresses the law as it had been laid down prior to the Statute, namely, that where in a bill the drawer and the drawee are the tame persons, then the holder may treat the instrument at his option either as a bill of exchange, or as a promissory note. That seems to me to be the law from the decisions that have been cited. The Indian Statute has not apparently made any similar provisions for the case of a bill of exchange having the same person as both the drawer and the drawee. On principle the law must be the same; that is, that the holder has the right to treat the document either as a bill of exchange or as a promissory note. That, therefore, brings us to this, that the holder in this case has the right to treat the document as an attested promissory note. An attested promissory note, it cannot be doubted, does create an obligation to pay the sum mentioned in the promissory note, because by the very nature of the document the promissory note does contain an obligation to pay. If that be so, in this case there are two promissory notes to pay Rs. 400 each. Those two documents seem to me to come under Section 6 of the Indian Stamp Act, that is, documents chargeable under two headings in the Schedule, and the law provides that they shall be chargeable only with the higher of such duties. As a matter of fact the hundis being drawn for a period of more than one year, the stamp duty on a bond and a hundi of this nature is exactly the same. But the point is, was the learned Second Judge right in admitting these documents in evidence as bonds? In my opinion he was. I think this document could have been sued on either as a promissory note or as a bond containing the obligation to pay, attested by one witness and not being payable to order or to bearer. That being so, in my opinion, the learned Second Judge was correct in admitting these two documents in evidence subject to the penalties being paid as creating an obligation to pay in favour of the plaintiff. The present Rule fails and must be dismissed with costs.


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