SHEO NAYAK Vs. BABAU

JUDGEMENT

(1.) This is a civil revision on behalf of a plaintiff whose suit was dismissed by a Small Cause Court Judge. The plaintiff brought a suit on a promissory note dated 5 June 1932 for recovery of Rs. 592-8-0 olaiming the rate of interest at Rs. 1-8- 0 per cent, per mensem. The plaint sets out that the defendants borrowed to the extent of Rs. 592-8-0 on the date of execution of the promissory note and that the promissory nvSe was taken by way of further security. The written statement admitted that some ten years ago the defendants had borrowed Rs. 250 and had been making payments from time to time, that the promissory note in question was executed by the defendants but that payment was not received on the date of execution, that the rate of interest was annas eight per cent, per mensem and not Rs. 1-8-0 per cent, per mensem and that the rate of interest had been altered by the plaintiff after the promissory note in question had been executed by the defendants. A receipt was also executed at the same time by the defendants. The learned Small1 Cause Court Judge found that there had been an alteration after execution of the promissory note and that the words "Re. 1" had been added to the rate of interest which was originally annas eight per cent, per mensem, and as this was a material alteration, this made the promissory note and the receipt void, and that the defendants were discharged from all liabilities under the promissory note. The suit was therefore dismissed in toto.

(2.) In revision it has been urged that at-least the suit should succeed for the amount of Rs. 592-8-0 which the plaintiff had advanced on the date of execution of the promissory note. The Court below allowed the plaintiff to give evidence, The oral evidence of one witness is to the effect that this amount had been borrowed in cash but apparently, although the Court has not stated so, the Court did not accept this evidence. For the opposite party the case has been argued largely on the Full Bench ruling reported in Nazir Khan V/s. Ram Mohan . In that case it was- laid down that it was not open to a plaintiff who had lent money on terms recorded in a promissory note, which turned out to-be inadmissible in evidence for want of proper stamp duty, to recover his money by proving orally the terms of the contract, against the provisions of Section 91, Evidence Act. In considering the particular issue which was referred, the Full Bench went further and laid down that where there was a completed cause of action for recovery of money on foot of a distinct and separate transaction, and a promissory note was given as a collateral security the plaintiff would be entitled to sue for the original consideration, even if, for some flaw in the promissory note, the promissory note itself might not be sued upon, being inadmissible in evidence. On the other hand, where the plaintiff would not have lent the money without the? promissory note, the making and handing; over of the note and the payment of the money were concurrent conditions (that is part and parcel of the same transaction), and if the promissory note turned out to be inadmissible in evidence for any reason (such as the absence of a proper stamp), it was not open to the plaintiff to recover his money by proving orally the terms of the contract, against the provisions of Section 91, Evidence Act, (that is, by setting up a case independent of the note).

(3.) The present case appears to us to be one in which it is not possible to separate the transaction of the alleged loan from the transaction of the promissory note. Both transactions took place at the same time and although the plaint has introduced an allegation that the promissory note was merely taken as additional security, it appears to us that there is no doubt whatever that the money would not have been advanced without the promissory note. According to the evidence of the defendants there was no cash advanced at the time but there was a previous loan, some part of which was outstanding. There would therefore be no case for the plaintiff if we accept the evidence of the defendant and this is a case in which one man has given evidence against the other, and the burden of proof lies on the plaintiff, and there is no reason why the evidence of the defendant should not be accepted. Learned Counsel for the applicant argued that there was a distinction to be drawn between the present case and that reported in the Full Bench ruling because the present case was one in which the document had been, adjudged void under Section 87, Negotiable Instruments Act. The Full Bench ruling was a case where it was held that the promissory note was insufficiently stamped and was therefore under the provisions of the Stamp Act inadmissible in evidence. No doubt the penalty imposed by Section 87, Negotiable Instruments Act, in the case of material alteration is not so severe where the defendant is the maker of the instrument. It is only in the case of an endorsee that such an alteration discharges his endorser from all liability to him in respect of the consideration thereof. The first portion of Section 87 is as follows: Any material alteration of a Negotiable Instrument renders the same void as against any one who is a party thereto at the time of making such alteration and does not consent thereto, unless it was made in order to carry out the common intention of the original parties.