SWAMY RAMA KOTIAH Vs. BHETANABHATLA SURAIAH

JUDGEMENT

(1.) This Civil Revision Petition raises an interesting question of law as to the scope and effect of sections 7 and 9 of the Limitation Act. In order to appreciate the contention, it is necessary to set out a few relevant facts.

(2.) A promissory note was execute in favour of the petitioner herein on 18th March, 1934, by the father of defendants 1 and 2 and the husband of the third defendant. The plaintiff was a minor at the time of the execution of the promissory note and he was represented by his mother Lakshminarasamma. On 4th March 1937, the promissory note was transferred for collection to his brother-in law G. Adinarayana. He collected a sum of Rs. 5 and re-endorsed the promissory note in favour of the plaintiff on the next day, i.e., 5th March, 1937. The plaintiff attained majority amount on 16th June 1949 and he instituted the suit for the recovery of the promissory note amount on 16th June, 1952, i.e. the re-opening day of the Court. The defendants contented that the suit was barred by limitation. The trial Court held that section 9 of the Limitation Act applied and dismissed the suit. On appeal, the Subordinate Judge took the view that section 9 did not apply but that the suit was barred under section 7 of the Limitation Act inasmuch as the plaintiff's brother-in-law was capable of giving a valid discharge. The plaintiff has consequently preferred the Civil Revision Petition to this Court.

(3.) It is clear from the facts that the promissory note was endorsed during the minority of the petitioner in favour of his brother-in-law only for collection. Section 50 of the Negotiable instruments Acts enacts that the indorsement of a negotiable instrument, may, by express words, restrict or exclude such right (the property in the note), or may merely constitute the indorsee an agent to indorse the instrument, or to receive its contents for the indorser in Subranmanian chetty v. Alagappa Chetty, (1907) 17 M.L.J. 414 : I.L.R. 30 Mad. 441 , it has been held that the indorser is entitled to strike out the name of the indorsee for collection and sue for recovery of the amount due under the promissory note. Reference was made to both the English and American authorities. This decision was followed by another Division Bench of the Madras High Court in Ponnayya v. Palaniappa Chetty, (1909) 5 I.C. 435 . It was held that no re-endorsement of the promissory note was necessary in order to enable the endorser to sue on the note. These decisions were followed in Khair Mohammad v. Taj Mohammad, A.I.R. 1936 Pesh 181 . It was held that even without striking out the endorsement for collection, the endorser was entitled to institute the suit on the promissory note. The effect of all these decisions is that the indorsee for collection is in no higher position than an agent and the indorser can himself sue on the promissory note without getting it re-indorsed in his favour. In this particular case, the brother-in-law re-endorsed in his favour. In this particular case, the next day after it was transferred for collection.