M ARUNACHALAM Vs. V RAJARAM REDDIAR

JUDGEMENT

(1.) There was one suit namely, O.S. No. 9 of 1983 on the file of the Sub-Court at Cuddalore. That suit was filed to recover a sum of Rs. 96,820/- made up of Rs, 49,995/- towards principal and the balance sum towards interest. The suit was decreed on merits by the learned Trial Judge by judgement dated 18.10.1985. Under the decree the plaintiff gets a sum of Rs. 46,060/- only together with interest at the rate of 6% p.a. thereon as against the claim made by him in the plaint. Aggrieved over that portion of the claim in respect of which the plaintiff was non-suited, the plaintiff is before this Court in A.S. No. 108 of 1986, to which the defendant in that suit is the respondent. Aggrieved over that portion of the decree which was passed against the defendant, the defendant is before this Court in A.S. No. 858 of 1986 as the appellant therein and the plaintiff in that suit is the respondent in this appeal. It is the correctness of the judgment referred to above in the original suit, that is being questioned in these two appeals. In this order the parties to the proceedings will hereinafter be referred to as the plaintiff and the defendant.

(2.) Two minimum facts that are necessary to dispose of these two appeals are stated here- under: The promissory note on which the suit is laid is dated 29.11.1968. It is stated to have been executed by the defendant in favour of one Subramania Reddiyar. The plaintiff relies upon three payments made by the defendant to the promisee in respect of which .endorsements have been made on the reverse of the promissory note itself. The plaintiff also relies upon two payments namely, one for a sum of Rs. 250/- dated 19.12.1979 and the other for a sum of Rs. 500/- dated 27.1.1980 stated to have been merely by the promisor to the promisee. The promissory note had been made over by the promisee to the plaintiff by an endorsement dated 5.10.1982 and therefore, he is a "holder in due course". A notice of demand was issued on behalf of the plaintiff to the defendant, which met with a reply. Thereafter the suit came to be filed.

(3.) The sum and substance of the defence is as follows : The plaintiff has no right to sue and he is not a "holder in due course". The plaintiff is fully aware of the defects in title. The defendant denies the truth and validity of the assignment and the assignment is not genuine. Since it is a bogus assignment, the lower Court has no jurisdiction. The plaintiff is only an agent of the promisee and hence the lower Court has no jurisdiction. The defendant admitted the execution of the promissory note as well as the two payments evidenced by endorsements dated 1.11.1971 and 1.10.1974 respectively on the promissory note. The third payment on 21.9.1977 and the endorsement in respect of the same were denied. Two cash payments of Rs. 250/- and Rs. 500/- stated to have been made on 19.12.1979 and 27.1.1980 were also denied. The defendant further stated that he was the owner of a bus bearing Registration No MDM 5150. As the said bus was running at a loss, the defendant approached the promisee for help, during which time the price of the bus was fixed at Rs. 79,000/-. The promisee suggested that out of the said sum of Rs. 79,000/-, a sum of Rs. 50,000/- would be adjusted towards the money due under the promissory note, to which the defendant agreed. Accordingly the said sum of Rs. 50,000/- was adjusted and the defendant was paid only a sum of Rs. 29,000/-. Therefore, the entire principal money due under the promissory note stands to fully discharged. Some years later the defendant wanted to have the bus re-sold to him. At that time the promisee sent a statement of account written by him to the defendant showing a total expenditure of Rs. 1,48,419.10 spent by the promisee in running the said bus. The promisee wanted the said payment as a condition for re-sale of the bus to the defendant. The statement of account sent by the promisee to the defendant contains a credit entry for a sum of Rs. 50,000/-, which represents the money adjusted from and out of the sale proceeds in respect of the bus sold by the defendant to the promisee.