KUNDAN LAL RALLARAM Vs. CUSTODIAN EVACUEE PROPERTY BOMBAY

JUDGEMENT

(1.) This is an appeal by special leave from the order dated July 13, 1957, of the Custodian-General of Evacuee Property, New Delhi.

(2.) One Abdul Satar Ahmedbhoy owned a factory known as Empire Tin Factory at Hathi Baug, Love Lane, Mazagaon, Bombay. On partition of the country he migrated to Pakistan. One Nathuram Ramaldas, a resident of Karachi, owned a shop there named Inidan Electric and Trading Company. Abdul Satar Ahmedbhoy and Nathuram Ramaldasagreed to enter into a transaction of exchange in respect of the said properties. For the purpose of exchange the Empire Tin Factory at Bombay was valued at a sum of Rs. 1,48,000/- and the Indian Electric and Trading Company at Karachi was valued at Rs. 1,00,000/- In respect of the balance of Rs. 48,000/- payable by Nathuram Ramaldas to Abdul Satar Ahmedbhoy, the former paid to the latter a sum of Rs. 11,000/- in cash and executed a promissory note dated December 24, 1947, in his favour for the balance of Rs. 37,000/- On or about march 22, 1948, Abdul Satar Ahmedbhoy endorsed the said promissory note in favour of the appellant Kundan lal Rallaram. It is said that the said endorsement was made in consideration of the transfer of the stock-in-trade of the appellant's business in radios and gramophones in Karachi. On November 13, 1948, the appellant made a demand on Nathuram Ramaldas for the payment of the amount due under the promissory note, but Nathuram Ramaldas denied his liability Thereupon, having made a demand for payment on Abdul Satar Ahmedbhoy and having received his reply repudiating his liability. Nathuram Ramaldas filed a suit (No. 411 of 1950) in the High Court at Bombay against Abdul Satar Ahmedbhoy and the executant of the promissory note for the recovery of the amount due thereunder. Subsequent to the filing of the suit, the Deputy Custodian of Evacuee Property, Bombay, issued a notice dated September 23, 1950, to Abdul Satar Ahmedbhoy to show cause why he should not be declared an evacuee under the Administration of Evacuee Property Act. 1950 (Act XXXI of 1950) (hereinafter called the Act) The Deputy Custodian, by his order dated Oct 25, 1950, declared the said Abdul Satar Ahmedbhoy an evacuee under S. 2 (d)(I) and (ii) of the Act and the said promissory note as an evacuee property. The appellant filed a petition under S. 40 of the Act before the Custodian of Evacuee Property, Bombay for confirmation of the transaction of exchange whereunder he became the endorsee of the promissory note. The Deputy Custodian, by his order dated July 10, 1951, held that the endorsement of the promissory note was not bona fide or for valuable consideration and, on that finding, rejected the petition. The appellant filed an appeal against that order to the Custodian of Evacuee Property, Bombay, on August 10, 1951, and the same was dismissed on September 10, 1951. But the Custodian-General by his order dated December 7, 1955, in revision remanded the case to the custodian for further enquiry after giving the parties an opportunity to produce fresh evidence with regard to the genuineness or otherwise of the signature of Abdul Satar Ahmedbhoy to the endorsement. On remand, the Custodian, after considering the entire evidence placed before him, found that the transaction of exchange between Abdul Satar Ahmedbhoy and Nathuram Ramaldas was without consideration, though the endorsement on the reverse of the promissory note by Abdul Satar Ahmedbhoy in favour of the appellant was proved. On revision the Custodian General agreed with the Custodian that the endorsement was not supported by consideration and, on that finding dismissed the petition. Hence this appeal.

(3.) Learned counsel for the appellant contended that the finding of the Custodian-General was vitiated by the fact that he had held erroneously that the presumption under S. 118 of the Negotiable Instruments Act in favour of the appellant that the consideration had passed for the endorsement of the promissory note was rebutted by evidence and circumstances in the case, when as a matter of fact the respondent did not produce any evidence in rebuttal.