NIMMAGADDA SATYNARAYANA Vs. ADUSUMILLI ANJANEYULU

JUDGEMENT

(1.) A small cause suit was brought on a promissory note dated 22 August, 1927, executed by defend dant 1 in favour of defendant 2, and endorsed by the latter to the plaintiff on 24th November 1927. Defendant 1 pleaded: (1) that the note was not sup ported by consideration, and (2) that the plaintiff was not a holder in due course. Defendant 2 said he had no notice of dishonour and hence the suit must be dismissed as against him. The lower Court found the suit note was not supported by consideration, that the plaintiff was not a holder in due course, and even if he were, he had notice of the defect in title of his transferor. The suit was therefore dismissed and this revision petition has been filed against the dismissal.

(2.) As regards the finding that the note itself is not supported by consideration, it had to be admitted for the petitioner that there is the evidence of the writer of the note, D. W. 2, who says that nothing was paid and that the real consideration was that defendant 2 was to get a sluice constructed and this sluice was not sanctioned. The lower Court has disbelieved the evidence of defendant 2 as P.W. 4 who says that he paid money under the note. There can be no doubt that the lower Court had evidence on which to reach this conclusion and it was rendered probable by several other circumstances such as the fact that defendant 2, although he a money lender who lent out Rs. 30,000 and was (paying income-tax, said he maintains no accounts and produced none, that defendant 1 never borrowed money from faim before, that the note was executed aiot in the village of defendant 2 but in Kedur, the village of defendant 1 and that its amount Rs. 144 corroborates such version of defendant 1; that a series of promissory notes were executed at the rate of Rs. 16 an acre by the raiyats the holding of defendant 1 being 9 acres. But it is argued for the petitioner that the whole of the evidence is inadmissible under Section 92, Evidence Act. In this connexion Sri Ram V/s. Sobha Ram Gopal Rai 1922 All 213 and Subramania Iyer V/s. Narayanaswami Iyer 1925 Mad 1240 were quoted. The former has been expressly dissented irom in two later cases of the Allahabad High Court Sheo Prasad V/s. Govind Prasad 1927 All 292 and Bhogi Ram V/s. Kishori Lal 1928 All 289, As regards the latter "Case, it is the decision of a single Judge of this Court and it would appear that he held on the facts proved that there was consideration but the agreement alleged was a postponement of repayment. I have looked at the English case quoted by him Moresby v. Hanford (1890) 10 B and C 729. The quotation extracted by the learned Judge where a promissory note, on the face of it, purported to be payable on demand, parol evidence is not admissible to show that at time of making it was agreed that it should not be pay-.able till after the decease of the maker relied on by the petitioner's advocate is followed by this: That evidence was adduced not to show a want of consideration or that the consideration for the note was illegal, or that it was not delivered to the party to be made use of for his own benefit. The utmost extent to which it could go was an attempt to prove that the note was not payable, as on the face of it, it purported: to be

(3.) So it it clear that consideration had been paid in that case. The decision in Ramjubun Serowji V/s. Oghore Nath Chatterjee (1898) 25 Cal 401, which has been followed in numerous cases in all Courts, for instance Panchapakesa Ayyar V/s. Ayyaswami Iyer (1928) 107 IC 510, of this Court, shows that a plea that an oral arrangement that a contract is to come in effect only on the happening of a certain contingency is a legal plea falling under Section 92(iii); and as has been pointed out, the distinction between this and a postponement of repayment of money is clearly brought out by comparing Illus. (b) with Illus, (j). There is therefore no reason to interfere with this finding of fact. Then the second finding of fact is as to whether there was consideration for the transfers, Here again the lower Court relied on the fact that defendant 2 does not produce his accounts and that the endorsement which was made soon. after the execution of the note does not state the consideration was cash and reads in some respects as if it were a mere endorsement for collection. However as the lower Court rightly says, even assuming it is cash consideration and that the plaintiff were holder in due course, if it is seen that he knew of the infirmity of the original document, the suit cannot he decreed. We here have the express evidence of the writer of the document on the point who says that the plaintiff was there at the time the document was drawn up, knew the real facts and asked the plaintiff to write that the amount was needed for cultivation purposes.