SUNDERDAS SOBHRAJ Vs. LIBERTY PICTURES

JUDGEMENT

(1.) THE Plaintiffs sue to recover two sums of Rs. 5000 and Rs. 34,000 with interest from the Defendants. The Defendants are a partnership firm of which at all material times the partners were according to the Plaintiffs' Jamnadas, Lavji, Abbasbhai and Vyas. It is the Plaintiffs' case that on 16-6-1948 the plaintiffs lent and advanced to the Defendants for the purposes of their business a loan of Rs. 10,000/-at interest. As collateral security for repayment of that loan Jamnadas, who had approached the Plaintiffs for the loan, delivered to the Plaintiffs a postdated cheque for Rs. 10,000/ -. That cheque which was post-dated 19-6-1949 was drawn on behalf of the Defendants by Jamnadas and made out in favour of the Plaintiffs. The cheque was presented by the Plaintiffs on 20-3-1949 for payment and again on 22-6-1949 but it was dishonoured. The memo of the Bank showed the remarks : "not arranged for". The Plaintiffs intimated about the dishonour of the cheque to all the partners of the Defendants and called upon them to pay the Plaintiffs that amount. A sum of Rs. 5000/- was paid by the Defendants to the Plaintiffs in part payment on 12-7-1949 and the balance of Rs. 5000/- is the subject-matter of one of the claims of the Plaintiffs in this suit. At the hearing of the suit the Defendants gave up their contention that they were not liable to repay this amount of Rs. 5000/ -.

(2.) IT is also the case of the Plaintiffs, and that is now the subject-matter of dispute between the parties, that on 5-8-1949 the Plaintiffs lent and advanced to Messrs. Jamnadas and Co. , of which Jamnadas was the sole proprietor, a sum of Rs 34,000 at interest. As collateral security for repayment of that loan of Rs. 34,000 Jamnadas delivered to the Plaintiffs a crossed and bearer cheque for Rs. 34,000/- which was post-dated 20-8-1949. That cheque was drawn by the Defendants in favour of Jamnadas and Co. , and was signed on behalf of the Defendants by Jamnadas, as a partner of the Defendants firm. Jamnadas endorsed over that cheque as the proprietor of Jamnadas and Co. in favour of the Plaintiffs, when he handed over the same as security for the personal loan of Rs. 34,000/ -. The cheque was presented by the Pltffs. for payment but was dishonoured. On 24-8-1949 the Plaintiffs through their attorneys addressed letters to all the partners of the Defendants calling upon them to pay the amount of Rs. 34,000/ -. In the correspondence that ensued between the parties the Defendants denied their liability in respect of both the sums of Rs. 5,000/- and Rs. 34,000/ -.

(3.) VARIOUS contentions were raised by the Defendants in their written statement but the sole contention that was urged at the hearing of the suit was that although Jamnadas was a partner of the Defendants with full powers to manage the affairs of the Defendants and the power to borrow moneys and operate on banking account of the defendants, he had no authority either express or implied to draw, sign or deliver to the Defendants the cheque in dispute by making the amount payable to his firm of Jamnadas and Co. , i. e. to himself. It was also urged that the Plaintiffs knew that the cheque was drawn by Jamnadas in his own favour and that they were consequently on the facts and circumstances of the case not entitled to claim to be holders-in-due course of this cheque. As the Defendants gave up a number of contentions raised by them in their written statement it is not necessary to summarise their defence here. Most of the facts are not disputed and the brief evidence to which I shall immediately refer clearly chows that the facts are mostly not disputable.