BANDULAL RADHAKISAN Vs. HARIHAR RAMCHANDRA SANSTHAN, AKOLA

JUDGEMENT

(1.) This is an application in revision by the original defendant No. 1 from a decree passed by the Small Causes Court Judge, Akola. The plaintiff had filed a suit on the basis of a promissory note executed by Shri Harihar Ramchandra Sansthan, through Vahiwatdar Radhakisan Narayandas Agarwal, who is defendant No. 1. Defendant No. 1 contested the suit by stating that he was not personally liable for the claim. On the other hand, he had incurred the loan as a Vahiwatdar of the Sansthan and that he had also utilised the money for the liabilities of the Sansthan. The learned Judge found after hearing the suit that the loan in question was incurred for the necessity of the Sansthan but also found that the defendant No. 1 was personally liable for the suit claim. Accordingly, therefore, he decreed in favour of the plaintiff. The plaintiff was ordered to recover from Radhakisan Narayandas Agarwal, defendant No. 1, Rs. 475 with costs and future interest. The suit against Shri Harihar Ramchandra Sansthan and the receiver, who was defendant No. 2, was dismissed. This decree is challenged here by the defendant No. 1. The point, therefore, that arises here for consideration is to see whether the decree of the trial Court is legal and proper.

(2.) The learned advocate for the applicant contends here that the learned Small Causes Court Judge relied only on the rulings in P. Balavenkatarama Chettiar Vs. Maruthamutha Chettiar , A.I.R. 1943 Mad 247 as well as on the rulings in The Chikkottil Rama Variar Vs. Ananthanarayana Pattar, A.I.R. 1951 Mad. 423 , and decreed the claim of the plaintiff. According to him, this decree by the trial Court on the basis of these two Madras cases is erroneous. On the other hand, the learned advocates for the two opponents here contend that the principles laid down in those two Madras Cases are now settled and, therefore, the learned Small Causes Court Judge was right in following the principles laid down there. Let us see whether the contention of the learned advocate for the applicant is correct.

(3.) Mr. Justice Patanjali Sastri in P. Balavenkatarama Chettiar Vs. Maruthamuthu Chettiar (Supra) , was considering section 28 of the Negotiable Instruments Act. He was considering the promissory notes executed by the trustees or managers of a temple who had borrowed money. It was contended before that Court that though section 28 of the Negotiable Instruments Act did not in terms cover promissory notes executed by trustees, the principle underlying the provision applied to such cases. Sec. 28 provides that an agent who signs his name to a promissory note, bill of exchange or cheque without indicating thereon that he signs as agent or that he does not intend thereby to incur personal responsibility, he is liable personally on the instrument, to those, who induced him to sign upon the plea that the principal only would be held liable. The learned Judge, in that case, has observed, while dealing with this contention, as follows :