S V R VEERAPPA CHETTY Vs. INKRMUTHURAMAN CHETTY

JUDGEMENT

(1.) I think that the hundi sued on is illegal, as contravening Section 26 of the Indian Paper Currency Act Nachimuthu Chetty v. Andiappa Pillai 42 Ind. Cas. 706 : 6 L.W. 630 : (1917) M.W.N. 778 Spencer and Krishnar, JJ.. The Subordinate Judge s view that a loan becomes a deposit with the debtor "after the loan become pay. able by the expiry of the time provided in the document of loan" and if the debtor happened to be a banker, the proviso to Section 26 of the Paper Currency Act will apply, cannot be accepted as sound.

(2.) The lower Appellate Court s decree dismissing the suit must, therefore, be confirmed on the above ground which was the ground on which the District Munsif properly dismissed it.

(3.) It is unnecessary, under these circumstances, to give a final opinion on the question whether the particular ground on which the lower Appellate Court dismissed the suit, namely, that plaintiff could not sue on the hundi because he had entered the name of Periannan Chetty on it and had not got Periannan Chetty to endorse it bask in plaintiff s favour, whether this particular ground is also a good defense to the suit. I shall content myself by saying that my present view is that a plaintiff who is suing only the drawer of a hundi and who is honestly in possession of that hundi which is made payable to bearer (and the presumption is that every holder is an honest holder in due Course) is entitled to deal with the endorsements and writings on the bank of the hundi in any manner he likes, provided that his so dealing does not subject the defendant (the drawer) to a greater liability than he would be under, if there had been no endorsements at all and the hundi had been left in its original state. This principle had been applied in the Muthar Sahib Maraikayar v. Kadir Sahib Maraikayar 28 M. 544 : 15 M.L.J. 384 in favour of the plaintiff in that case, who was the bolder of a hundi and who was also an indorser who got back the hundi, but I do not think that his having been an endorser also in that case has anything to do with the customs and conveniences of Mercantile Law on which the governing principle of that decision rests. If the plaintiff in the case was entitled to score out, and had soured out Periannan Chetty s name, from the back of the hundi, the result would be the same as if Periannan had never been its holder. Periannan could thereafter not sue on it and the plaintiff as bearer would be the only person entitled to sue thereon. Of course, even though the names or endorsements on the back had not been actually dealt with by a plaintiff (including the souring out names on the back) in the manner favourable to him, before he brought the suit, he could ask the Court to treat the hundi as if he had so dealt with them in any manner he was entitled to deal with them. I have (it will be seen) dealt with a case in which the drawer alone is sought to be made liable. It goes without saying that other considerations might arise, if an individual indorser is sought to be made liable as he will not be bound by alterations which would prejudice his right to proceed against the previous endorsers or the drawer, etc.