K K KORAN Vs. T TARA BAI

JUDGEMENT

(1.) This is a second appeal by the defendant in OS No. 494/1951 on the file of the District Munsiff's Court at Hosdrug, South Kanara. The plaintiff's claim in the suit is for recovery of the principal amount of Rs.1,200/- together with interest thereon, alleged to be due to her under a promissory note executed by the defendant on 18-11-1948. The promissory note was not filed along with the plaint, on the other hand, it was alleged by the plaintiff that the note was lost. Accordingly the suit was filed as on a lost negotiable instrument. The defendant, while admitting the execution of the promissory note, resisted the suit mainly on two grounds. The first ground is that no cash consideration passed under the note and that the note was executed towards part of the consideration due to the plaintiff under the sale deed Ext. A4 which was executed by the plaintiff in favour of the defendant on the same date. The second ground is that the allegation that the note was lost is false, that the note is deliberately withheld by the plaintiff because of the consciousness that its production will reveal the fact that it was executed under the circumstances stated by the defendant and that the .suit in the present form is unsustainable. It was also contended by the defendant that the sale deed Ext. A4 was set aside by the decree in OS No. 922/1949 with the result that the consideration for, the plaint promissory note has failed. The Trial Court found that the plaint promissory note is not fully supported by consideration and that the plaint allegation that the note is lost is not true. Accordingly, the suit was dismissed. The plaintiff preferred an appeal to the District Court of South Kanara. The learned District Judge came to the conclusion that since the defendant has no case that the promissory note is totally lacking in consideration, the plaintiff's claim on the basis of the admitted note is to succeed, and thus the Trial Court's decree was reversed and the plaintiff was given a decree as prayed for. Hence this second appeal by the defendant.

(2.) I think that this second appeal has to succeed on both the grounds urged on behalf of the appellant. The first question is whether the suit as , framed by the plaintiff without the production of the promissory note relied on by her, is sustainable. The normal rule is that the document on which the suit is based should be produced along with the plaint. The production of the basic document is thus insisted on to afford protection to the person liable under it against a similar claim in a subsequent suit brought by a party who might claim to have legally acquired the rights under the document and produce it in support of his claim. The possibility of such risk is greater in the case of negotiable instruments which may change hands frequently by successive endorsements. Against the claim preferred by a holder in due course of such an instrument, the person liable under it may not be entitled to set up a plea that the amount due under the instrument has already been paid. Possession of the instrument by the holder in due course will be prima facie evidence of the liability not having been discharged. The Legislature has taken care to guard against such risks. The relevant provisions are those contained in S.81 of the Negotiable Instruments Act and in R.16 of O.7 of CPC S.81 of the Negotiable Instruments Act runs as follows:-

(3.) On the second ground of failure of consideration also for the plaint promissory note, the defendant is entitled to succeed. The defendant's contention is that the promissory note was executed towards part of the consideration payable under the sale deed Ext. A4 of the same date and that no cash consideration passed under the note. The defendant as DW 1 has sworn in support of these contentions. DW 2, an independent witness, has also deposed to the same and he claims to have been present at the transaction and to have attested the promissory note. The evidence given by the plaintiff as PW 1 also shows that the version given by DW 1 and 2 is the true version. The plaintiff admits that the plaint promissory note as also the sale deed Ext. A4 were executed on the same date and that both these documents were prepared at the residence of one Gopala Shenoi as stated by the defendant also. It has also come out in the evidence of Pw. 1 that she was in need of money at that time and hence it is not at all likely that the cash consideration received under the sale deed Ext. A4 would have been lent by her to the defendant by taking a promissory note. The probability is that the cash payment under the sale deed must have been utilised by her to meet her own admitted necessities and that the promissory note must have been taken from the defendant towards part of the promised consideration which he had yet to pay towards the same transaction. This is the conclusion reached by both the lower courts also after a due consideration of the evidence on record and also the probabilities of the case. At the same time the lower courts appear to have taken the view that the two transactions are independent of each other and that the suit on the promissory note is maintainable irrespective of any consideration as to what happened to the sale deed Ext. A4. This view is clearly erroneous. In view of the finding that the consideration for the promissory note represents part of the consideration for the sale deed Ext. A4, it is clear that the two transactions are intimately connected. It has come out in evidence that soon after the execution of Ext. A4 the suit OS 922/1949 was instituted by the brother of the plaintiff's husband to have the sale deed set aside. That suit was decreed and the sale deed was set aside. This fact is not disputed. The result of that suit is that the defendant had to surrender possession of the property which had been conveyed to him by the plaintiff under the sale deed Ext. A4. Since the defendant has lost the property it is obvious that he is not liable to pay to the plaintiff the price agreed for the conveyance. Since the consideration for the plaint promissory note represents part of the price for such a conveyance, it is clear that the consideration for the promissory note has also failed. Such a plea is undoubtedly available to the defendant as against the plaintiff and it has to succeed by virtue of the provision contained in S.43 of the Negotiable Instruments Act. That section states: