PERUMAL CHETTIAR Vs. KAMAKSHI AMMAL

JUDGEMENT

(1.) The question which the Court is called upon to decide in this case is whether a person who has lent money on a promissory note can sue to recover the debt apart from the note when the note embodies the terms of the contract with the borrower but is inadmissible in evidence owing to a defect in the stamping. In England the right to sue on the original consideration is recognised, and the same principle has been applied by some Judges in India, but Sec. 91 of the Indian Evidence Act says that no evidence shall be given in proof of the terms of the contract except the document itself, or secondary evidence where secondary evidence is admissible and other Judges have held that this section prohibits a suit on the original consideration. This Court, except in two cases to which I shall in due course refer, has held that Section 91 of the Evidence Act is a bar to a suit on the debt when the loan and the instrument are contemporaneous. Before turning to examine the decisions of this Court and certain of the other authorities to which reference has been made I should point out that the Court is not considering the case where a promissory note has been given in respect of an antecedent debt. It is well settled both in England and in this country, that where a negotiable instrument is given in respect of an antecedent debt the creditor may sue on the debt and ignore the note. We are merely concerned here with the case where the note has been given at the time of the loan or in pursuance of the arrangement then made and embodies in full the terms of the contract.

(2.) The earliest reported case of this Court to which our attention has been drawn is that of Krishnaswami Pillai V/s. Rangaswami Chetty (1883) I.L.R. 7 Mad. 112, where a promissory note had been given by two members of a joint Hindu family in consideration of a loan to the family. The instrument was improperly stamped, but the Court held that this was no bar to the suit because the cause of action for the money lent was complete in itself before the giving of the note. The report does not set out the facts and apparently the Court was of the opinion that the instrument had been given for an antecedent debt. The question was raised before Collins, C.J. and Parker, J., in Pothi Reddi V/s. Velayudasivan (1886) I.L.R. 10 Mad. 94. There the loan having been arranged and the money paid a promissory note specifying the terms of the contract was executed later in the day. The note was not duly stamped and the Court held that the suit was not maintainable. It was recognised that there might be circumstances under which the loan could be recovered apart from the note, but the Court was firmly of the opinion that when the contract is reduced to writing the instrument itself is the only evidence of the transaction. This decision was followed by Boddam and Sankaran Nair, JJ., in Yarlagadda Veera Raghavayya V/s. Gorantla Ramayya , by Sadasiva Aiyar and Spencer, JJ., in Muthu Sastrigal V/s. Visvanatha Pandara Sannadhi (1913) 26 M.L.J. 19 : I.L.R. 38 Mad. 660 and by Varadachariar and Burn, JJ., in Chockalingam Chettiar V/s. Palaniappa Chettiar (1934) 67 M.L.J. 595 : I.L.R. 58 Mad. 660. The same principle was applied by Madhavan Nair, J., in Pulugurta Somaraju v. Machiraju Venkatasubbarayudu (1924) 20 L.W. 943 and Reilly and Anantakrishna Aiyar, JJ., in Gura Sahu V/s. Tangi Krishnamma alias Babu Patro (1932) 36 L.W. 432, by Krishnan Pandalai, J., in Chandrasekharam Pillai V/s. Srinivasa Pillai (1932) 37 L.W. 723 and again by Anantakrishna Aiyar, J., in Alimane Sahib a V/s. Kolisetti Subbarayudu .

(3.) In Ramaswami Pillai V/s. Murugiah Padayachi (1935) 70 M.L.J. 267 : I.L.R. 59 Mad. 268 (F.B.), a Full Bench consisting of Beasley, C. J., Cornish and Pandrang Row, JJ., had to consider a promissory note which was expressed in these terms: We have taken from you on credit this day 10 kalams of Kuruvai paddy at Rs. 3 a kalam for Rs. 30 arid we have executed this hand-letter promising to pay the sum of Rs. 30 with interest thereon at 3 pies per rupee per mensem to you or to your order.