ZUJYA PASCOL DAMEL Vs. MANMOHANDAS LALLUBHAI PRATAP

JUDGEMENT

(1.) THIS is a second appeal from a decision of the Assistant Judge of Thana in a suit to recover a debt due on a promissory note. The -only question argued is whether Hindu coparceners governed by the Mitakshara law, carrying on a joint family business, can institute in their individual names a suit to recover a debt on a promissory note obtained in the name of the family firm. The material facts can be shortly stated.

(2.) THE plaintiffs were members of an undivided Hindu family governed by the Mitakshara law, and they carried on a family business in the name of Kashidas Ambaidas. In the ordinary course of that business the defendant, who was a debtor of their firm, executed the promisssory note in suit on August 29, 1931, in favour of the firm. THE relevant portions of that promissory note are these : THE balance due on 29th of August 1931 is in figures Rs. 2,351. In consideration; thereof I the signatory Pascal Darnel pass this promissory note to the shop of Sha Kashidas Ambaidas and promise to pay with interest the said amount of Rs. 2,351 when demanded.

(3.) INTERPRETING those provisions the Calcutta High Court in Harkishore Barna v. Gura Mia Chaudhuri (1930) I. L. R. 58 Cal. 752 held that a true owner, who is not a holder, cannot maintain a suit on a promissory note, even though the holder is admittedly his benamidar and is made a party to the suit, for the property in a promissory note including the right to recover the amount due thereon is vested by statute only in the holder of the note. In some respects the view taken by the same High Court in an earlier case of Brojo Lal Saha Banikya v. Budh Nath Pyarilal & Co. (1927) I. L. R. 55 Cal. 551 was dissented from. The case of Harkishore Barna v. Gura Mia Chaudhuri has been followed in Bombay in Krishnaji v. Hanmaraddi (1934) 36 Bom. L. R. 814 and Virappa v. Mahadevappa (1934) 36 Bom. L. R. 807. In the latter case a promissory note which had been passed in favour of the plaintiff's son was allotted to the share of the plaintiff on partition. The promissory note was not endorsed by the son in favour of the plaintiff. In a suit brought by the plaintiff to recover the amount due on the note, making the son also a defendant, the trial Court in decreeing the suit held that though the note was not endorsed in favour of the plaintiff it was transferred to him by operation of law. That view was not approved by the High Court which held that inasmuch as there could be no assignment of the note by operation of law, the defendant-son might have been transposed to the plaintiff's side and a decree passed in his favour. The trend of the authorities is that no person can sue on a negotiable instrument unless he is named therein as a payee or endorsee, the ratio being that the right to sue on a promissory note for the debt is personal to the holder named in the note. Our Courts have recognised a distinction between a right to the note and a right to the debt. The latter might be claimed independently of the note. For instance, if the debt was part of the coparcenary estate, every coparcener could claim a right to it although only the coparcener named in the note could sue on it.