PYNDA VENKATACHALAPATI GARU Vs. PYNDA RAMAKRISHNAYYA

JUDGEMENT

(1.) This suit is brought by the plaintiff to recover two loans given to a firm of four brothers, defendants 1 to 4. For each of the loans a promissory note was executed by defendant 3 alone which he signed in his own name and not in the name of the partnership, On the promissory notes therefore defendant 3 can alone be held liable; but it is contended for the plaintiff appellant that as the loans were given to the partnership, the other three partners will also be liable for their amount. The plaint is not worded so as to indicate clearly that the plaintiff bases his suit not only on the promissory notes but on the independent liability of the partnership, but it is I think capable of such interpretation; no question of amending it was raised in the lower Court because the Subordinate Judge held that because the promissory notes had been executed for the loans by defendant 3, it was not open to the plaintiff to base his claim on any other cause of action.

(2.) One of the earliest cases in which this question was considered is Sheik Akbar V/s. Sheik Khan [1881] 7 Cal. 256. There it was held that, when the original cause of action is the bill or note itself, and does not exist independently of it, there is no cause of action for money lent, or otherwise than upon the note itself, for the note is the only contract between the parties. If really there is no independent cause of action, this decision that the note alone can be sued upon must be accepted and has been accepted in many cases since it was propounded. The appellant, however, relies on the case in Karmali Abdulla V/s. Karimji Jwanji A.I.R. 1914 P.C. 132, in which the Privy Council held that one partner could he held liable upon hundis drawn by another partner when the transaction for which the hundis were drawn was a partnership transaction. In that case the suit was not based upon the hundis but upon the account between the parties, of which the hundis formed one item. In Shunmuganatha Chettiar v. Srinivasa Iyer [1916] 40 Mad. 727 a Bench of this Court held on the strength of the above case that in a suit on a promissory note executed by two out of the three partners of a firm for money advanced for purposes of the firm the third partner was also liable. If this latter decision is correct, the plaintiff's contention that he has a cause of action against the other partners, defendants 1 and 2 and 4 must succeed.

(3.) It is, however, argued for the respondent that the case in Shunmuganatha Chettiar v. Srinivasa Iyer [1916] 40 Mad. 727, goes beyond the case in Karmali Abdulla V/s. Karimji Jivanji A.I.R. 1914 P.C. 132, and is not good law. Even in the case in Sheik Akbar V/s. Sheik Khan [1881] 7 Cal. 256, it was recognized that, where there was a cause of action independent of the note, resort could be had to that cause of action; and in this Court it has been held that, where the note has been executed by the Manager of a Malabar tavazhi, the other members of the family or the tavazhi are liable: Krishna Iyer V/s. Krishnaswami Iyer [1900] 23 Mad. 597 and Thankammal V/s. Kunhanna . The Subordinate Judge has distinguished these cases as being cases governed by Hindu Law and has held that they are the only exceptions to the rule that the maker of a promissory note alone is liable thereon. This is quite true if there is no alternative cause of action, but in Sadasuk Janki Das V/s. Kishan Pershad A.I.R. 1918 P.C. 146, the Privy Council while holding that the principal could not be made liable on a promissory note which was not signed in his name, remarked that the plaintiffs in that case could: had they thought it fit to have framed their case in an alternative form and have sued both on the hundis and alternatively upon the consideration.