DUVVURU JAYARAMI REDDY Vs. REVATHI MICA COMPANY

JUDGEMENT

(1.) These two appeals arise out of two suits which were disposed of by a common judgment. The sole defendant in the suits is common and so is the appellant in these two appeals. The plaintiff's are different in the suits. The plaintiff in O.S. No. 59 of 1966 out of which A.S.No. 201 of 1968 has arisen is one Gangapatnam Venkata. Subba Reddy, hereinafter referred to as Venkata Subba Reddy only for the sake of brevity. The plaintiff in O.S. No. 87 of 1966 out of of which A.S. No. 385 of 1967 has arisen is a firm called Revathi Mica Company represented by two of its partners, one of them being the plaintiff in O.S. No. 59 of 1966 mentioned above and the other being his son. O.S. No. 59 of 1966 was filed to recover a sum of Rs. 8,298-50 as due under a promissory note (Exhibit A-1) dated 11 th May, 1963, executed by the defendant in favour of Venkata Subba Reddy for Rs. 7,000. O.S. No. 87 of 1966 was filed to recover a sum of Rs. 27,836-59 as due under a promissory note Exhibit A-2 dated 27th July, 1963, executed by the defendant in favour of the partner of Revathi Mica Company, Venkata Subba Reddy, for Rs. 23,590-39. Both the suits were decreed as prayed for by the Court of the Subordinate Judge, Nellore. Hence, these two appeals by the defendant who is common in both the suits.

(2.) The execution of the promissory notes was not denied by the defendant. It is common defence in both the suits that the promissory notes were nominally executed and they were not supported by consideration. The additional defence with regard to O.S. No. 87 of 1966 relating to Exhibit A-2 promissory note is that the suit filed by Revathi Mica Company is not maintainable, it being neither the payee nor endorsee or transferee of the promissory note, it having been executed in favour of Venkata Subba Reddy personally. The lower Court negatived the case of the defendant on both the contentions and accordingly decreed the suits. The same two contentions were pressed before us. Another contention raised on behalf of the defendant in the suits and found in his favour is that he is an agriculturist and he is entitled to the benefits of the Madras Agriculturists Relief Act. That benefit was allowed to the defendant by the lower Court allowing interest to the plaintiffs only at the rate of 5 per cent. as provided under section 13 of that Act. That point is not before us, no separate appeals or cross-objections having been filed by the plaintiffs, questioning the correctness of the decision of the lower Court on that question.

(3.) Taking the first point first, having gone through the evidence and heard the learned Counsel of the respective parties we have no hesitation whatsoever in agreeing with the conclusion arrived at by the lower Court on the question of consideration for the two promissory notes. It was recited in Exhibit A-1 promissory note that on the date of the promissory note the defendant borrowed a sum of Rs. 7,000 in cash from the plaintiff and executed the promissory note. In Exhibit A-2 promissory note it was recited that on taking accounts on nth July, 1961, between Subbarayudu Mica Mine and Revathi Mica Company, the former became indebted to the latter in a sum of Rs. 21,012-82. In that manner the defendant became indebted and therefore the defendant executed the promissory note for a sum of Rs. 23,590-39 with subsequent interest up to the date of the promissory note From the recitals in Exhibit A-2 it is clear that the defendant undertook the liability for the debt due by Subbarayudu Mica Mine to Revathi Mica Company and executed the promissory note. The facts which are not in dispute are: Yasodamma, wife of the defendant was the sole proprietor of Subbarayudu Mica Mine. There were business dealings between Revathi Mica Company and Subbarayudu Mica Mine from the year 1959 onwards and by the year 1961 the Subbarayudu Mica Mine became indebted to the Revathi Mica Company in a sum of Rs. 21,012-82 Ps. Thereafter from the year 1961 Subbarayudu Mica Mine suspended its business for a couple of years and during that period of suspension Exhibit A.-2, promissory note came to be executed by the defendant. 3. What was pleaded in the written statement and spoken to by the defendant who gave evidence as D.W. 1 is that Venkata Subba Reddy came to the defendant and represented that he needed two promissory notes to support the entries in accounts relating to the business dealings between him and Revathi Mica Company on one side and between Revathi Mica Company and Subbarayudu Mica Mine on the other for the purpose of income- tax. The defendant believed those representations made by the plaintiff and to accommodate him executed the two promissory notes on the understanding that the same would be returned to the defendant after the accounts of Revathi Mica Company with Subbarayudu Mica Mine were settled. Subsequently the accounts were not settled. Therefore the promissory notes are not supported by consideration. It is not understandable and not explained by the defendant how the execution of the promissory notes would be useful to explain the accounts of Revathi Mica Company to the Income- tax Authorities. According to the defendant the plaintiff came to his place and took his signatures on the two promissory notes by making the above representations. In support of his case besides his own interested evidence, the defendant has also examined two more witnesses as D.Ws. a and 3. D.W. 2, is no other than the clerk or the manager of Subbarayudu Mica Mine. Apart from his interested- ness in the defendant he is not connected with the actual execution of the promissory notes. What all he said is that the defendant and Venkata Subba Reddy subsequent to the execution of the promissory notes attempted to settle the accounts on one occasion but they could not be settled. D.W. 3, also is not connected with the execution of the promissory notes. He is neither the attestor nor the scribe for any of the two promissory notes. What all he said is that one day while he was talking with the defendant, Venkata Subba Reddy, came there and called the defendant aside and talked to him something and took his signatures on some documents. D.W. 3, also appears to be an interested witness. The defendant is a president of some panchayat and D.W. 3, is a contractor for small works below Rs. 10,000. It is said that D.W. 3, was obliged to the defendant in that way. He has also admitted in his cross-examination that he is a friend of the defendant since 1934.