SURATH CHANDRA SAHA Vs. KRIPANATH CHOWDHURY

JUDGEMENT

(1.) The document upon which this case turns is described as a hand-note. The maker of the hand-note, Kripa Nath Chowdhury, was the father of defendants 1, 2 and 3. The holder was Banwari Lall Shaha, the father of the pro forma defendants 5 to 8. The note was given in exchange for a loan of Rs. 325 and was payable on demand. The holder without endorsing it, sold his right, title and interest in the hand-note along with other property to the plaintiff by a registered kabala. The main point for decision was whether the plaintiff could sue the defendants and recover the amount of the hand-note. Both Courts below have dismissed the suit, on the ground that the rights arising upon such a document can be transferred only by endorsement and delivery.

(2.) The hand-note is promissory note, and a promissory note is a written acknowledgment of debt with a promise to repay. It is also a memorandum of contract, and evidence of a chose in action or actionable claim. Thus, it may be transferred by assignment, and the assignee thereby gets such title as the assignor had in the note, and, in addition the right to have the endorsement of the assignor. In India, this has always been held to include the right to sue on the assignment in his own name; cf. Gour's Law of Transfer, 6 Edn., p. 2157. The assignment transfers the legal right to the chose in action to the assignee with power to give a good discharge. It passes all legal and other remedies for the chose in action, but subject to all equities A promissory-note is also a negotiable instrument, and according to the law merchant, as codified in the English Bills of Exchange Act, 1882, and the Negotiable Instruments Act, 1881, it is transferable merely by endorsement and delivery. As such, it is clothed with certain incidents intended to facilitate the business of merchants.

(3.) Owing to some confusion of thought, it has been suggested that the Negotiable Instruments Act in some way has affected the transferability of such a document by assignment as a chose in action. This contention was shown to be fallacious in Muther Sahib v. Kadir Sahib (1905) 28 Mad 544; Binode Kishore V/s. Asutosh Mukhapadhya (1912) 14 IC 720 and Akhoy Kumar V/s. Haridas Bysack AIR 1914 Cal 566. But in the later cases there occur observations in the nature of obiter dicta which seem to suggest the contrary view with the result that in Broja Lal V/s. Budh Nath Pyrialal and Co. ; Har Kishore V/s. Guru Mia ; Reoti Lal v. Manna Kunwar AIR 1922 All 70; Suhha Narayan Vathiyar V/s. Ramaswami Aiyar (1907) 30 Mad 88; Sewa Ram V/s. Hoti Lal and Sarjug Singh V/s. Deosaran Singh, AIB 1930 Pat 313, confusion has arisen again from time to time.