MOTILAL LAD Vs. PUNJAJI

JUDGEMENT

(1.) 1. This is an application to revise the judgment passed by the Small Cause Court, Ellichpur, dismissing the suit instituted against non-applicant 2, for enforcing a promissory note alleged to have been executed by Punjaji, non-applicant 1, for the benefit of the family. The suit was dismissed as it was found that Punjaji did not execute any promissory note as a manager of the family.

(2.) ON behalf of the applicant it is contended that the pro-note wag enforceable against the joint family notwithstanding that it did not appear from the-promissory note that the executant was the manager of the joint family since the debt was proved to have been incurred for the benefit of the family. Perusal of Sections 26 and 27, Negotiable Instruments Act, leaves no doubt that when a person executes a promissory note in his own name and not as agent acting in the name of another, he alone is made liable thereunder. Section 1, Negotiable Instruments Act, makes no reservation in favour of promissory notes executed by Hindus. In Sadasuk Janki Das v. Sri Kishan Pershad AIR 1918 PC 146, their Lordships of the Privy Council laid down that no person is liable upon a hundi or bill of exchange unless his name appears upon the instrument in a manner which, upon a fair interpretation of its terms, shows that the name is the name of the person really liable. Later on they observed:

(3.) THIS dictum of their Lordships of the Privy Council must apply to every person unless there is anything in the Negotiable Instruments Act itself to exempt any particular class of persons. Reliance is placed on Krishna Ayyar v. Krishnasami Ayyar (1900) 23 Mad 597, Krishnanand Nath v. Raja Ram Singh AIR 1922 All 116. In the first mentioned case the decision turned on the construction of the plaint in that case. Two of the Judges who constituted the Bench interpreted the plaint as asserting the claim on the original debt. That case cannot therefore be accepted as an authority, for the proposition that Section 27 in effect does not apply to promissory notes executed by the manager of the joint family. No doubt in Krishnanand Nath Khare v. Raja Ram Singh AIR 1922 All 116 it was held that there was no inherent reason why the managing member of a joint Hindu family cannot in that capacity execute in his sole name a promissory note which shall be binding on the family as a whole and the property owned by it. Their Lordships of the Allahabad High Court were mainly influenced by the difficulty which might arise if a Hindu joint family could not be sued on a promissory note unless all the members had signed it. The argument of expediency cannot do away with the requirements of the statute. The real issue is whether in a suit based on a promissory note any person or persons other than the one whose name appears as an executant on the promissory note can be made liable. Section 27, Negotiable Instruments Act, says that a third party cannot be made liable unless the executant clearly indicates in the promissory note that he was acting as the agent of the persons or persons intended' to be liable under it.