SEWA RAM Vs. HOTI LAL

JUDGEMENT

(1.) This is a defendant l's appeal from the decree passed by the learned Additional District Judge, reversing the decree passed by the Munsif of Kasganj in a suit brought by the plaintiff respondent for recovery of Rs. 1,000 on foot of a promissory-note, dated 14 April 1924.

(2.) The promissory-note in suit was executed by Sewa Ram, defendant 1 (the appellant) in favour of Panna Lal, defendant 2, on 14 April 1924 for a sum of Rs. 700 advanced thereunder at the rate of Rs. 1-4 per cent per mensem. Seth Hoti Lal, the plaintiff respondent sued on the promissory-note on the allegation that defendant 1 is his brother-in-law (wife's brother) to whom he advanced the loan in question. He took the promissory-note in the name of defendant 2 and retained it in his own possession. In other words, the plaintiff claims to be the real creditor under the promissory-note in suit, defendant 2 being his benamidar.

(3.) The suit was contested by defendant 1 who denied having borrowed any money from the plaintiff but admitted the execution of the promissory-note in suit under circumstances stated in his written statement, viz., that one Ganeshi Lal said to be the plaintiff's karinda agreed to secure for defendant 1 a loan of Rs. 700 from defendant 2 Panna Lal; that in anticipation of the loan he (defendant 1), executed the promissory-note and made it over to Ganeshi Lal, but that no money was subsequently lent and the transaction fell through. The suggestion is that the plaintiff got the promissory-note from Ganeshi Lal and preferred a groundless claim. It was also pleaded that the plaintiff is not competent to maintain a suit on foot of a promissory-note in favour of defendant 2 in view of Section 78, Negotiable Instruments Act.