ARJUNA GOUNDAR AND ANR. Vs. PILLAIYAR GOUNDAR

JUDGEMENT

(1.) PILLAIYAR Goundar, the respondent in both these Civil Revision Petitions, had instituted two suits, the first one O.S. No. 397 of 1971 against Arjurva Goundar, the petitioner in C.R.P. No. 1984 of 1971 on a promissory note for Rs. 700 executed by the latter in favour of his elder brother Govindaraja after taking an assignment from Govindaraja and the second O.S. No. 398 of 1971 against Kista Goundar, the petitioner in C.R.P. No. 1985 of 1971 on a promissory note for Rs. 650 executed by the latter in favour of his elder brother Govindaraja after taking an assignment of the promissory note as in the other case.

(2.) THE petitioners contended that the promissory notes were not supported by consideration. According to the petitioners, the promissory notes were taken by their brother Govindaraja in consideration of each of them agreeing to discharge some debts in the family and as the debts are found not to be true, the promissory notes are devoid of consideration and are therefore unenforceable.

(3.) THE learned District Munsif had dismissed both the applications on the ground that the petitioners would not be entitled to indemnity against Govindaraja and that they are not than fore entitled to implead the said Govindaraja as a party to the suits under Order 8 -A of the Civil Procedure Code. The learned District Munsif has relied on the decision of Ramachandra Iyer, J., (as he then was) in Pattabiraman v. Ganapathi Kannappa Mudali : AIR 1962 Mad 202 . In that case the suit promissory note was executed by one Subramania Pillai, the deceased father of the defendants in favour of one Chinna Munusami Mudali; and the respondent Ganapathi Kannappa Mudali, claiming to have obtained an assignment of the promissory note and thereby had become a holder in due course, filed a suit on the promissory note. Chinna Munusami Mudali was not made a party to the suit; claiming that a number of payments had 'been, made to the original payee Chinna Munusami Mudali and on his behalf to his two undivided sons in respect of which no credit had been given in the suit and that Chinna Munusami Mudali had himself agreed to receive only 10 annas in the rupee of the balance due on the promissory note, the petitioners filed an application under Order 8 -A, Rule 1, Civil Procedure Code, for impleading Chinna Munuswami Mudali and his two sons as defendants. While observing that Rule 1 of Order 8 -A, Civil Procedure Code, applies to cases where the defendant would be entitled to -contribution or indemnity against a third party and that Order 8 -A will apply to suits on promissory notes, Ramachandra Iyer, J., has held that, if the maker of a promissory note is -made liable, he cannot proceed against the endorser as if the latter was a surety, as the liability under the note is always and ultimately that of the maker, that, where the endorser negotiates a promissory note for the full value without, giving credit to any payments that he might have received from the maker which are not endorsed on the note the case is one where the payee or the endorser fraudulently negotiates the note for the full value, that the holder in due in course in such an event cannot "be prevented from collecting the money due on the promissory note according to its tenor and that, if the maker is put to a loss on account of the fraudulent act of the payee or endorser, his remedy would be only in the nature of damages and not amounting to an equitable claim of indemnity. The learned Judge has further observed that the maker who is in the position of a principal debtor not having any right of indemnity against the original payee or endorser would not have any right to proceed against the latter under Order 8 -A, Rule 1, Civil Procedure Code.