SREENIVASAN Vs. SUBBARAMA SASTRIKAL

JUDGEMENT

(1.) The short question for consideration is whether the subject matter of the suit is a promissory note payable on demand or otherwise than on demand. If it is payable on demand the stamp affixed is sufficient, otherwise it is insufficiently stamped. The Subordinate Judge found that it is payable otherwise than on demand and hence insufficiently stamped and therefore inadmissible in evidence. Plaintiff seeks to revise that order.

(2.) There is no dispute that taken alone by itself the promissory note is one payable on demand and hence sufficiently stamped. S.2(22) of the Indian Stamp Act accepts the definition of promissory note in the Negotiable Instruments Act. S.4 of the Negotiable Instruments Act defines promissory note as an instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking, signed by the maker to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument. A promissory note or bill of exchange, in which no time for payment is specified, and a cheque, are payable on demand according to S.19 of the said Act. The subject matter of the suit contains an unconditional undertaking signed by the maker to pay rupees fifty thousand with 12 percent interest to the plaintiff or his order on demand without fixing any time for payment.

(3.) But the whole difficulty arose because after execution of the promissory note, on the reverse side of it, on the same day it was recorded under the signatures of both the parties that if the amount is paid within one month it was decided that interest need not be paid. It was for this reason alone that the Trial Court held the promissory note to be one payable otherwise than on demand. The learned Advocate for the respondent/defendant would put this as a contemporaneous agreement postponing the time for payment by one month and as such an alteration of the terms of the instrument as held in Joharmal Behartlal v. Chettyar Firm (AIR 1936 Rangoon 136). I do not think that the argument is acceptable or the decision is applicable to the facts of the present case. The endorsement is independent of the promissory note and it was executed after execution of the pronote. Even if that was included and executed as part of the promissory note itself, it would not have in any way changed the nature of the pronote as one payable on demand. What is given by the endorsement is only a concession that if the defendant chooses to make the payment within a month he need not pay the interest. That does not in any way affect the right of the plaintiff to make a demand for payment even before the expiry of the concessional period of one month or the liability to pay immediately without demand. One month is not an extended period but only a concessional period within which at any time (immediately or forthwith) the amount is payable without interest. That concession does not affect any other agreement in the pronote. On the other hand it only reiterates and affirms liability for immediate payment with an added inducement for the same. In order to constitute an instrument a pronote payable on demand or otherwise than on demand, liability of the maker to pay interest is not an integral part. Time for payment is not in any way postponed for a period of one month by the endorsement. That concession was not availed of and the agreement has already run out its period and it does not survive for any purpose. That agreement does not in any way affect the terms of the pronote as matters now stand. Further it is an independent transaction signed by the maker and payee whereas the pronote is signed only by the maker.