GOPALA PILLAY Vs. SANKARA IYER

JUDGEMENT

(1.) THESE two appeals are against the decree in O.S No. 49 of 1120 of the Alleppy District Court, defendants 1 and 2 being the appellants in A.S. 144 of 1122 and the third defendant being the appellant in A.S. 380 of 1122. The second defendant is the sole proprietor of the first defendant business concern known by the name of "The Travancore Agencies". On behalf of the first defendant the second defendant issued in favour of the third defendant Ext. A crossed cheque dated 17th July 1944 for Rs.6000 drawn on the Bank of Deccan Ltd., Kottayam. On the 18th July 1944 the third defendant opened an account in his name in the plaintiff's bank and indorsed Ext. A in favour of the plaintiff and got the amount credited in his own account. On the same day the third defendant drew Ext. D cheque payable to himself and received from the plaintiff the full amount of Rs. 6000/- less the discount of Rs. 11-4 as. Thereafter plaintiff indorsed Ext. A cheque in favour of the Presidency Bank Ltd., Kottayam, for collection. But the drawee bank dishonoured the cheque on presentment on the ground that the drawer had countermanded payment and accordingly it was returned to the Presidency Bank Ltd. After issuing notice of dishonour to all the defendants, plaintiff instituted the present suit for recovery from them the amount covered by Ext. A cheque together with interest thereon. All the defendants resisted the suit. The main contentions raised by the second defendant are that he had every right to countermand payment of the amount under the cheque, because the third defendant had failed to act in accordance with the undertaking made by him at the time when the cheque was drawn, that the third defendant is not entitled to the amount covered by Ext. A cheque, that the plaintiff is not a holder-in-due-course, and that the plaintiff's rights, if any, are only against the third defendant. According to the third defendant, he has no liability as an indorser of Ext. A cheque and that, if at all, he could only be made secondarily liable for the plaint claim, the primary liability being on defendants 1 and 2. The lower court repelled all these contentions and decreed the suit against all the defendants.

(2.) THE prayer for remand urged on behalf of the second defendant, appellant in A.S. 144 of 1122, may be considered at the outset. His complaint is that the lower court did not allow him sufficient opportunity to examine all his witnesses. A perusal of the progress diary in the case shows that there is not much substance in this complaint. THE issue in the case were raised on 8.8.1120 and the case was posted to 29.10.1120 for evidence and examination of parties. On that date, all the defendants applied for time. Next posting was on 3.12.1120. No witness was present on that day. Hence the case was adjourned to 18.12.1120. On that date also defendants 1 and 2 applied for time and the case was adjourned to 31.12.1120. After two more adjournments the case was posted for examination of parties to 8.2.1121. Again the defendants applied for time and this was allowed on payment of day-costs. On 18.2.1121, the date of the next posting, the second defendant produced one witness. Second defendant himself was examined as D.W. 1 and his witness was examined as D.W. 2. With such examination the evidence on the second defendant's side was closed. Plaintiff was the only other person whom the second defendant wanted to be examined as per his witness list. THE plaintiff has also been examined as P.W. 1. But on 27.2.1121, the second defendant filed an additional list of two witnesses. No explanation was offered as to why the names of these witnesses were not included in the first list. Even though it was stated in the supplementary list filed on 27.2.1121 that the additional witnesses will be produced by him, it is seen that he did not produce them on any of the next three adjournment dates. It was only after the case came up for final hearing that the second defendant again moved for the examination of one more witness on his side. That application was rejected by the lower court. In view of the circumstances already stated, the lower court was right in not allowing any further indulgence in favour of the second defendant, and we hold that the prayer for remand urged on his behalf does not deserve any serious consideration.

(3.) SINCE the cheque was dishonoured, plaintiff as a holder-in-due-course is entitled to make the drawer as well as the indorser liable for the amount due to him, provided that he has given due notice to them about the fact that the cheque has been dishonoured on presentment of payment. Defendants in this case have not set up any plea of want of any such notice. Plaintiff says that notices were duly given and he has produced Ext. J and J(1) acknowledgment receipts in proof of the acceptance of such notices by the defendants. It is argued on behalf of the third defendant that he could only be made secondarily liable. According to the second defendant the arrangement between himself and the third defendant was that the cheque may be cashed on any day after the 17th July 1944. It follows therefore that A(1) indorsement on the 18th July 1944 was after maturity. It has also come out in evidence that the plaintiff accepted the indorsement mainly because of his faith in the credit of the second defendant, the drawer of the cheque. In view of these circumstances, we think that equitable relief asked for by the third defendant has to be allowed. Thus, while upholding the lower court's finding that all the defendants are liable for the plaint claim, it is directed that the plaintiff should in the first instance proceed against defendants 1 and 2 for realising the amount decreed in his favour.