This
definition of promissory note itself indicates that there may be
several types of promissory notes. Out of these various categories of
promissory notes, some may be treated as 'negotiable instrument' within
the meaning of Section 13 of the Negotiable Instruments Act and some
others may not be so treated, but by that very fact, the nature of the
document will not change, if it is otherwise a promissory note. In
other words, if a document is a 'promissory note' within the meaning of
Section 4 of the Act, it will continue to be 'promissory note',
whether it comes or does not come within the meaning of the term
'negotiable instrument' as defined in Section 13 of the Act. For this
reason, were are of the view that Section 13 of the Negotiable
Instruments Act, or the definition of the term 'negotiable instrument'
is wholly irrelevant when it comes to deciding the nature of a
particular document as a promissory note, or otherwise. Similarly and
for similar reasons, it is wholly irrelevant to refer to the provisions
of Section 13 of the Act while deciding the nature of any document as a
'bond' or otherwise. Accordingly anything to the contrary held in any
of the authorities referred to in the orders of reference is not a good
law.’
Promissory note is not a compulsorily attestable document:
Genearally no attestors are necessary to execute a promissory note. In Chandabolu Bhaskara Rao’s case, the Honble
High Court
of A.P held that ‘Since promissory note is not a compulsorily
attestable document, even if the signatures of the attestors are taken,
after its execution it does not amount the material alteration, and so
it does not get vitiated. Therefore, whether there were attestors or
not at the time of its execution is immaterial, more so when its
execution is admitted.
The Hon’ble Full Bench Judgment of Madras
High Court
reported in Hariram v. I.T. Commissioner, (F.B.). In this case the
following document was under consideration, which reads as follows:
"Promissory note executed on 14-6-1947 in favour of Arunachala
Chettiar, son of Kolakkara Chettiar residing at Palappudi Village,
hamlet of Sathyamangammal, Gingi Taluk by Kuppuswami Chettiar, son of
Venkatachala Chettiar, residing at the aforesaid village. In respect of
the sum received from you at Tiruvannamalai by me in the year 1943 and
given for opening a Javuli shop by T. Arunachala Iyer the sum found
due to you is Rs. 3,000. As this sum of rupees three thousand had to be
paid to you, I shall pay the same together with interest at Rs. 0-4-0
per month per Rs. 100 in six equal instalments, and discharge the same.
To this effect is the promissory note executed by me with my consent."
Their Lordships held that the document in question is not a promissory
note, because there is no unconditional undertaking to pay a certain
sum of money.
The distinction between the promissory note and
hundi or bill of exchange is explained by his lordship Vradachariar,
J., in these words :
"But where the borrower gives his own
promissory note as part of the loan transaction, it seems to me
artificial to treat that every ' promise to pay ' obtained in that note
as amounting to a payment, and then to seek to import the theory of '
conditional ' payment. "
If Promissory Note Is In-Admissible- Remedy:
1). "1. Whether a plaintiff can bring action for recovery of the amount
advanced by him basing on the original consideration when the
promissory note on foot of which action is brought is in-admissible in
evidence under Section 35 of the Stamp Act, and, if so, under what
circumstances ?
2. If the promissory note is in-admissible in
evidence, whether action can be maintained for recovery of the amount
either on the theory of " money had and received " or under the
provisions of Section 70 of the Contract Act. "
2). The
question referred to the Hon’bel Bench of seven Judges by a Division
Bench to which two of their lordships Obul Reddi and Madhava Reddy, JJ.
were members, is
"Whether a plaintiff can lay action for
recovery of the amount advanced by him basing on the original cause of
action when the negotiable instrument evidencing the transaction is
inadmissible in evidence under Section 35 of the Stamp Act. "
The necessity to refer the question to a larger Bench arose as a result
of the view expressed by Gopal Rao Ekbote, J. ( as he then was ) in
Mohd. Jamal Saheb v. Munnar Begum, , which does not accord with the
ruling of the Full Bench of the Madras
High Court
in Perumal Chettiar v. Kamakshi Ammal, ILR ( 1938 ) Mad 933 = ( AIR
1938 Mad 785 ( FB ) ). The learned Judge, Gopal Rao Ekbote, held that
the plaintiff can have his money back through the document is
in-admissible in evidence because it is in-sufficiently stamped and
that Section 91 of the Evidence Act is no bar to the plaintiff
succeeding on a non-contractual basis, that is, in an action for money
had and received. In so coming to the conclusion, the learned Judge
seems to have felt that he is not bound by the decision of the Full
Bench in ILR ( 1938 ) Mad 933 = ( AIR 1938 Mad 785 ( FB ) as " two
decisions decided in 1918 by the Privy Council ( John v. Dodwell and
Co. Ltd. AIR 1918 PC 241 and Juscurn Boid v. Prithichandlal, AIR 1918 PC
151 ) were not brought to the notice of the Full Bench ". Having
regard to the fact that the
High Courts of Allahabad, Bombay and some other
High Courts have taken a view different from that expressed by the Full Bench of five Judges of the Madras
High Court
in ILR ( 1938 ) Mad 933 ( 935 ) = ( AIR 1938 Mad 785 ( FB ) the
question posed above was referred for consideration by a larger Bench.
Promissory Note Requires Proper Stamp Duty:
Venkatasubbaiah v. Bhushayya, 1963 (1) An.WR (NRC) 31. That was a case in which the Hon’ble
High Court
of A.P considered the fact of Section 35 of the Stamp Act. It held
that the promissory executed in other State was liable for stamp duty
in the State where it was produced, and for not paying necessary stamp
duty, the document would be inadmissible. For such a contingency Section
19 of the Indian Stamp Act would apply. According to this Section,
promissory note drawn or made out of India shall, before it is
presented for acceptance or payment or endorses, transfers or otherwise
negotiate in India, affix thereto the proper stamp and cancel the
same. Prima facie the said section would not apply to the promissory
note executed in India, and any promissory note executed in one State
may be presented in any other State in India with the stamp bearing on
the promissory note, no additional stamp duty need be paid. Section 19
contemplates that a promissory note drawn out of India and used in India
or any State, it requires proper stamp duty as per Indian Law.
Recommendations For Amending Section 35 Of The Stamp Act, 1899
I deem that it is not out scope to see 178th Report of the Law
Commission of India, as to recommendations for amending section 35 of
the Stamp Act , 1899 & ‘bills of exchange on promissory notes’. The
relevant portion of the report reads as follows:
Section 35 of the Stamp Act, 1899 & ‘Bills of exchange on promissory notes’:
The opening part of sec. 35 of the Stamp Act, 1899 provides as follows:
‘No instrument chargeable with duty shall be admitted in evidence for
any purpose by any person having by law or consent of parties
authorized to receive evidence, or shall be acted upon, registered or
authenticated by any such person or by any public officer, unless the
instrument is duly stamped’.
Clauses (a) to (e) of the proviso
to the above sec. 35 contain provisions which permit the instrument to
be used as evidence upon payment of the stamp duty in full (where it is
unstamped) or upon payment of the deficient stamp duty (where there is
deficiency in the stamp duty ) and the proviso permits the collection
of penalty up to a maximum of ten times the stamp duty or the
deficiency, as the case may be. Levy of penalty is of course
discretionary
However, clause (a) of sec. 35 does not permit
the validation of the instrument as stated above, in the case of ‘a
bill of exchange or promissory note’. The result is that while in
regard to all other instruments there is a procedure prescribed for
subsequent validation of the instrument by collection of the stamp duty
or penalty, such a procedure is not available in the case of “bills of
exchange and promissory notes”. Even if the party who wants to use it
as evidence is prepared to pay the stamp duty and penalty, he is not
allowed to do so, so far as these instruments are concerned. The
document become ‘waste paper’. On account of this rigid procedure
applied only to “bills of exchange and promissory notes”, several
debtors are allowed to escape liablility unjustly.
The Indian
courts have also not been able to render justice in such cases where
one party relies upon a “bill of exchange or promissory note” which is
not stamped or is deficiently stamped. In addition, the provisions of
sec. 91 of the Evidence Act also come in the way and preclude oral
evidence being adduced in such cases. This is clear from illustration
(b) below section 91 of the Evidence Act. These disabilities have led
to a large volume litigation in courts. The Privy Council, the Supreme
Court and the
High Court
have declared their helplessness in getting over these provisions of
sec. 35 in so far as they disable validation of “bills of exchange and
promissory notes”. The result is that these instruments are not allowed
to be used as evidence ‘for any purpose’.
In one novel case in the Andhra Pradesh
High Court
during the time when our currency shifted from the old system of
“rupees, annas and paise” to the present system of ‘naya-paise’, a
promissory note which had to bear a stamp duty of 4 annas under the
Stamp Act was executed on a document bearing stamp duty of ‘twenty
four’ naya-paise on the undertaking that each anna was equal to six naya
paise. But, under the new system, the correct equivalent of 4 annas
was 25 paise, and the suit was dismissed on the ground of deficiency of
stamp duty of one naya paisa. The law never changed. In fact, a
special bench of seven Judges of the Andhra Pradesh
High Court in L. Sambasivarao vs. Balakotaiah AIR 1973 AP 343 (FB) affirmed an earlier judgment of five Judges of the Madras
High Court in Perumal Chettiar vs. Kamakshi Ammal (AIR 1938 Mad 785 (FB)). The judgment of the Andhra Pradesh
High Court
is exhaustive and refers to the entire cased law on the subject. In
fact it refers to 133 decisions of various courts. The question is
whether this injustice which is the result of the Act of 1899 is to be
remedied by enabling the deficiency to be paid, with or without
penalty, as may be decided by the competent authority.
In some
cases, courts invented various theories to grant relief, by holding
that the ‘bill of exchange or promissory note’ was a collateral
security or that it did not contain all the terms of the contract and
therefore sec. 91 of the Evidence Act could not exclude oral evidence.
In some other cases, Courts have stated that there could be an action
on the debt. However, whenever such pleas of inadmissibility are
raised, there is unending litigation and uncertainty. A party would not
know if any such plea would ultimately be accepted for getting over
the rigid posture of sec. 35 of the Stamp Act and the equally strict
rule in sec. 91 of the Evidence Act.
In our view, justice to
those who have parted with money under a bill of exchange or a
promissory note, requires that this provision in sec. 35 be deleted and
that the procedure for paying up the stamp duty or penalty, is made
applicable to these instruments also. That will further augment the
revenues of the State. Such a procedure will also eliminate unnecessary
disputes as to whether the plaint can be amended by permitting the
plaintiff to sue on the debt and also eliminate disputes as to
admissibility of oral evidence.
The Commission, after due
consideration of various aspects, namely, rendering justice to those
who have parted with money, the benefit that will accrue to the State
by way of collection of stamp duty or penalty, and elimination of
unnecessary disputes, is of the considered view that in the proviso (a)
of sec. 35 of the Stamp Act, 1899, the words “any such instrument not
being an instrument chargeable with a duty not exceeding ten naya paise
only, or a bill of exchange or promissory note, shall subject to all
just exceptions be admitted in evidence”, the words “any such
instrument shall be admitted in evidence”, shall be substituted It is
also proposed to give limited retrospective operation to this amendment
in all cases where proceedings before the courts or authorities
referred to under sec. 35 have not reached.
Scope of The Presumption: Burden Of Proof In Promissory Note Cases:
The Hon’ble Supreme Court in Kundan Lal Rallaram v. Custodian, Evacuee
Property, Bombay [AIR 1961 SC 1316], speaking through his lordship K.
Subba Rao, J. considering the scope of the presumption had laid down
the law thus:
"Section 118 lays down a special rule of evidence
applicable to negotiable instruments. The presumption is one of law
and thereunder a court shall presume, inter alia, that the negotiable
or endorsed for Consideration. In effect it throws the burden of proof
of failure of consideration on the maker of the note or the endorser,
as the case may be. The phrase "burden of proof" has two meanings- One,
the burden of proof as a matter of law and pleading and the other the
burden of establishing a case; the former is fixed as a question of law
on the basis of the pleading and so unchanged during the entire trial
whereas the latter is not constant but shifted as soon as a party
adduces sufficient evidence to raise a presumption in his favour. The
evidence required to shift the burden need not necessarily be directed
evidence or admissions made by opposite party; it may comprise
circumstantial evidence or presumptions of law or fact. A plaintiff who
says that he had sold certain goods to the defendant and that a
promissory note was executed as consideration for the goods and that he
is in possession of the relevant account books to show that he was in
possession of the goods sold and that the sale was reflected for a
particular consideration should produce the said account books. If such
a relevant evidence is withheld by the plaintiff, S.114, Evidence Act
enables the Court to draw a presumption to the effect that, if
produced, the said accounts would be unfavourable to the plaintiff.
This presumption, if raised by a court, can under certain circumstances
rebut the presumption of law raised under Section 118 of the
Negotiable Instrument Act."
‘ In Haribhavandas Parasaran and
Co. v. A.D. Thakur A.I.R. 1963 Mys. 107, it was held that- It is
mandatory that the presumption under Section 118(a) should be made
until the contrary is proved. The fact that the nature of the
consideration as recited in the negotiable instrument is different from
that alleged in the plaint may have to be considered by the Court at a
later stage, along with the entire evidence in this case, while
determining whether the contrary to the statutory presumption has been
proved. But, the mere existence of such a fact would not, by itself, be
a justification for the Court to disregard Section 118 and frame an
issue casting burden on the plaintiff to prove the consideration for a
negotiable instrument, the execution of which has been admitted. The
burden should still be on the defendant to prove want of consideration.’
In Kundanlal v. Custodian, Evacuee Property , it was observed ‘With
particular reference to Section 118 of the Negotiable Instrument's Act,
the Supreme Court observed thus: As soon as the execution is proved,
Section 118 of the Negotiable Instruments Act imposes a duty on the
Court to raise a presumption in his favour that the said instrument was
made for consideration. This presumption shifts the burden of proof in
the second sense, that is, the burden of establishing a case shifts to
the defendant. The defendant may adduce direct evidence to prove that
the promissory note was not supported by consideration, and if, he
adduced acceptable evidence, the burden again shifts to the plaintiff
and so on. The defendant may also rely upon circumstantial evidence and
if the circumstances so relied upon are compelling, the burden may
likewise shift again to the plaintif’.
In Alex Mathew v. Philips a Division Bench of the Kerala
High Court had occasion to consider the same question and the Bench held-
The true principle where different cases have been pleaded and evidence
has been let in, in support of both these sets of cases, is that the
entire evidence in the case adduced by the plaintiff and the defendant
and the findings entered by the Court or which are to be altered by the
Court as well as the presumptions of law and fact which have to be
drawn from all the facts established and attendant circumstances must
be looked into as a whole to find out whether the presumption under
Section 118(a) of the Act has been rebutted or not. It would not be
correct merely on the basis of the finding negativing the case of the
plaintiff regarding consideration to hold that the presumption under
Section 118(a) has been rebutted.
In Palaniappa Chettiar v. Rajagopalan A.I.R. 1928 Mad. 773. a Division Bench of the Hon’ble Madras
High Court
held that where the recital of the consideration in the pro-note is
admittedly false, the burden of proving consideration is shifted on to
the holder of the promissory note as against the maker of the note
himself and much stronger, therefore, would be the case when the
consideration has to be proved against third parties.
In G.
Venkata Reddi v. Nagi Reddi . Basheer Ahmed Sayeed, J., in dealing with a
similar question with reference to the burden of proof when the
recital in the negotiable instrument regarding consideration is not
made out, (where the recital in the promissory note was that
consideration was paid, but in the plaint it was pleaded that the
consideration was lease amount, that was due from the defendant) held
that the decision in Palaniappa Chettiar v. Rajagopalan A.I.R. 1928
Mad. 773. would prevail, as otherwise it will cause serious injustice.
To know more about the history of promissory note, the following rulings may be helpful to have a clear idea.
1. Mohd. Jamal Saheb v. Munnar Begum, , which does not accord with the ruling of the Full Bench of the Madras
High Court in Perumal Chettiar v. Kamakshi Ammal, ILR ( 1938 ) Mad 933 = ( AIR 1938 Mad 785 ( FB ) ).
2. The decision of the Full Bench in ILR ( 1938 ) Mad 933 = ( AIR 1938
Mad 785 ( FB ) as " two decisions decided in 1918 by the Privy Council (
John v. Dodwell and Co. Ltd. AIR 1918 PC 241 and Juscurn Boid v.
Prithichandlal, AIR 1918 PC 151 )
3. The Full Bench of five Judges of the Madras
High Court in ILR ( 1938 ) Mad 933 ( 935 ) = ( AIR 1938 Mad 785 ( FB )
4. Pithi Reddy v. Velayudasivan, ( 1885-1887 ) ILR 10 Mad 94 and
Perumal Chettiar's case, ILR ( 1938 ) Mad 933 = ( AIR 1938 Mad 785 ( FB
) )
5. The Full Bench in Perumal Chettiar's case. ILR ( 1938 ) Mad 933 = AIR 1938 Mad 785 (FB)
6. The Full Bench of the Madras
High Court
in Perumal Chettiar's case. ILR (1938) Mad 933 = AIR 1938 Mad 785 ( FB
), is not correct and the decision requires to be overruled.
7. In Perumal Chettiar's case. ILR (1938) Mad 933 = AIR 1938 Mad 785
(FB) it was the third view that was expressed by the Full Bench.
8. Sheikh Khan, (1881) ILR 7 Cal 256,
9. Golap Chund Marwaree v. Thakurani Mohokoom Kooaree. (1878) ILR 3 Cal 314
10. Pramatha Natha Sandal v. Dwarka Nath Dey. (1896) ILR 23 Cal 851,
11. That opinion of Petheram. C.J., was based on what is stated in Farr
v. Price, (1800) 1 East 55 = 102 ER 22 viz. That the existence of an
unstamped promissory note does not debar the plaintiff from recovering
on the original consideration if the pleadings are properly framed for
that purpose.
12. In Indra Chandra v. Hiralal Rong. AIR 1936
Cal 127 and Mahatobuddin Mia v. Md, Nazir Joddar AIR 1936 Cal 170
R.C.Mitter. J., sitting single, held that it is not necessary that
there should be an independent express contract prior to the execution
of such a promissory note and that the fact that the money has been
lent implies a promise to repay it and the plaintiff in such a case has a
cause of action on the implied promise, which is independent of the
promissory note.
13. Firm Tarachand v. Tamijuddin, AIR 1935
Cal 658 where he said that if the plaintiff's cause of action to
recover the money had become complete before the execution of the
promissory note, he would be entitled to sue and succeed on the
original: but if he does not base his case in the plaint on the original
consideration, he is out of Court because the promissory note is
inadmissible in evidence being insufficiently stamped.
14. The
Privy Council in Sadasuk Janki Das v. Sir Kishen Pershad, SIR 1918 PC
146 and followed the decision in Sheik Akbar v. Sheikh Khan, (1881) ILR 7
Cal 256 and Nazir Khan, v. Raz Mohan, AIR 1931 ALL 185 (FB). His view
in the 1935 case was that if the execution of the promissory note and
the borrowing of the money are contemporaneous constituting part and
parcel of the same transaction and the note becomes inadmissible in
evidence the plaintiff will be out of Court. The learned Judge with
great respect to him seemed to swing between the two stands taken by
the two Chief Justices of his Court.
15. Krishnaji Narayan
Parkhi v. Rajamal Manikchand Marwari, (1900) ILR 24 Bom 360 was dealing
with a case of liability arising out of a hundi.
16.
Chenbasapa v. Lakshman Ramachandra, (1894) ILR 18 Bom 369. Where the
distinction between cases in which the suit is brought solely on the
note or hundi and cases in which there is and can be a claim to recover
the original loan has been acknowledged.
17. Jacob 7 Co.v.
Vicumsey. AIR 1927 Bom 437, followed the decision in (1900) ILR 24 Bom
360 on the ground that it is binding upon him, in holding that if the
promissory note is insufficiently stamped the plaintiff can proceed with
the suit on the loan.
18. As the latest opinion of the Allahabad
High Court as expressed in AIR 1943 All 220 and is in conflict with the Full Bench decision of the Madras
High Court in Perumal Chettiar's case, ILR ( 1938 ) Mad 933 = ( AIR 1938 Mad 785 ) ( FB )
19. ( 1882 ) ILR 4 All 330, it was observed that :"Much though we might
have wished to be able to hold that the bond entered into between the
parties did not preclude the plaintiff-appellant from recovering on his
account stated, we find ourselves unable to do so. "
20. Ram
Sarup v. Jasodha Kunwar, ( 1912 ) ILR 34 All 158 which runs counter to
the above view was rested on the dictum of Lord Kenyon in the well-known
case of (1800) 1 East 55 = 102 ER
21. Banarasi Prasad v. Fazl Ahmad, (1906) ILR 28 All 298, though purported to follow the case of (1881) ILR 7 Cal 256
22. Baijnath Das v. Salig Ram, (1912) 16 Ind Cas 33 (All)
23. AIR 1929 All 254 and the view expressed by the learned Judges was
quoted and endorsed by Sir Lionel Leach, C. J. in Perumal Cettiar's
case, ILR (1938) Mad 933 = (AIR 1938 Mad 785) (FB) to the extent of the
scope of Section 91 of the Evidence Act.
24. Baijanath Das's case (1912) 16 1nd Cas 33 (ALL)
25. AIR 1931 ALL 183 (FB) overruled the decisions in (1912) ILR 34
AII158 and (1906) ILR 28 AII 293 referred to supra and followed the
decisions Parsotham Narain v. Taley Singh, (1903) ILR 26 AII 178 and
Sheikh Akbar v. Sheikh Khan. (1882) ILR 7 Cal 256.
26. Miyan Bux v. Mt. Bodhiya, AIR 1928 AII 371 (SB).
27. A Full Bench of five Judges in AIR 1943 All 220 ( FB ).
28. A Full Bench of the Oudh
High Court
consisting of Wazir Hasan, C. J. Srivastava and Raza, JJ. However,
took a different view from the one expressed in AIR 1931 All 183 ( FB )
29. The Full Bench case in AIR 1943 All220.
30. The Full Bench decision in AIR 1921 All 183 ( FB ) required reconsideration.
31. Maung Chit v. Roshan and Co., AIR 1934 Rang 339 = ILR 12 Rang 500 (
FB ). He, however, found himself unable to agree with the 4th and 6th
propositions of Sir Arthur Page C. J. ( which were endorsed by the Full
Bench of the Madras High Court ) on the ground that he ( Page C. J. )
did not correctly state the law.
32. Ram Bahadur v. Dasuri Ram, ( 1913 ) 17 Cal LJ 399.
33. Mohd. Akbar Khan v. Attar Singh, 1936 All LJ 986 = AIR 1936 PC 171.
34. A division Bench of the Allahabad
High Court in following the Full Bench decision in AIR 1943 All 220 ( FB)
35. The Full Bench decision, the question can scarcely be regarded as
settled ; ( Dhaneshwar Sahu v. Ramrup Gir, ILR 7 Pat 845 = ( AIR 1928
Pat 426) where Macpherson, J., concerned only on the ground of stare
decisis.
36. A Division Bench of the Patna
High Court
in Sarajoo Prasad v. Rampawari Devi. considered the question whether
every loan carried with it a contract to repay and if so, it was open
to the plaintiff to bring a suit on the original consideration of the
handnote.
37. Udaram Mangiram v. Laxman Marwari, AIR 1927 Nag
241 held that even though the promissory note becomes inadmissible in
evidence for want of proper stamp, the creditor can fall back on the
original transaction under Section 70 of the Contract Act treating the
promissory note as non-existent and ask for refund of the consideration
paid. This decision supports the view of the learned Judge in , but
runs counter to the Madras Full Bench view in Perumal Chettiar's case.
ILR (1938) Mad 933 = AIR 1938 Mad 785 (FB).
38. Gulam Mohad.
Labroo v. Habib Ullah. AIR 1966 J & K 127. After an elaborate
review of the cases expressing divergent views, disagreed with the view
expressed by the Full Bench of the Allahabad
High Court in AIR 1943 AII 220 (FB).
39. K. Anantharajaiah v. Shivaramaiah. AIR 1968 Mts 148
40. The Full Bench decision of the Rangoon
High Court in AIR 1934 Rang 389 = ILR 12 Rang 500 (FB) which was approved by the Full Bench of the Madras
High Court.
41. When a loan is contracted it is an implied term of the agreement that the loan shall be repaid (1913) 41 1nd App 142 (PC)
42. When a promissory note or a bill of exchange or indeed anything
else, is given by the narrower to the lender in connection with the
loan, either at the time when the loan is contracted or afterwards, the
terms upon which it is given and taken is a question of fact and not
of law, (1889) 22 QBD 610.
43. Re Romer and Haslam, (1893) 2 QB 286 at p. 296 and Bowen. L.J. (Ibid. P. 300):Farr v. Price (1800) 1 East 55 = (102 ER 22)
44. Commr. Of Income-tax, Bombay v. Ogale Glass Works Ltd., ( 1885-1887
) ILR 10 Mad 94 and also the two of the cases in Gopala Padayachi v.
Rajagopal Naidu, AIR 1926 Mad 1148 and Chinnayya Naidu v. Srinivasa
Naidu, AIR 1935 Mad 206 = ( 67 ad LJ 912 ) which struck a different
note were referred to in main judgment of Sir Lionel Leach, C. J., and
in the judgment of Justice Varadachariar, Krishnasami v. Rangaswami, (
1884 ) ILR 7 Mad 112
45. Pothireddy's case, ( 1885-1887 ) ILR 10 Mad 94,
46. Muthusastrigal v. Viswanatha, ILR 38 Mad 660 at p. 663 = ( AIR 1914 Mad 657 (2) ).
47. Dula Meah v. Abdul Rahaman, 28 Cal WN 70 = 81 Ind Cas 461 = ( AIR 1924 Cal 452 ),
48. The case of Brown v. Watts, ( 1808 ) 127 ER 870,
49. Re Romer & Haslam, ( 1893 ) 2 QB 286
50. Crowe v. Clay, ( 1854 ) V. 9 Exch
51. Payana Reena Saminathan v. Pana Lena Palaniappa, (1913 ) 41 Ind App 142 ( PC )
52. Dargavarabu Sarrapu v. Rampratabu ( 1902 ) ILR 25 Mad 580 ( FB )
53. Jambhu Chetty v. Palaniappa Chettiar ( 1903 ) ILR 26 Mad 526,
54. Palaniappa Chetty v. Arunachellam Chetty, ( 1911 ) 21 Mad LJ 432
55. Felix Hadley & Co. v. Hadley ( 1898 ) 2 Ch 680 and Lord Maugham
in Rhokana Corpn. Ltd. v. Inland Revenue Commrs. 1938 AC 380 observed
at p. 433 :
56. Chitty on Contracts ( Twenty-third Edition )
57. The book on Bills of Exchange ( Twenty-second Edition ) at page 392 :
58. Taylor on Evidence Vol. 1 P. 276 ( 12th Edition
59. The Madras
High Court
in AIR 1926 Mad 1148 and AIR 1935 Mad 206, which conflict with Pothi
Reddy's case, ( 1885-1887 ) ILR 10 Mad 94, for those two decisions were
referred to and overruled by the Full Bench.
60. Pothi Reddy's case ( 1885-1887 ) ILR 10 Mad 94, and Sheik Akbar v. Sheikh Khan, ( 1881 ) ILR 7 Cal 256
61. Chanda Singh v. Amritsar Banking Co., AIR 1922 Lah 307
62. Ram Jas v. Shahabuddin, AIR 1927 Lah 89.
63. Sohan Lal Nihal Chand v. Raghu Nath Singh, AIR 1934 Lah 606
64. Amin Chand v. Firm Madho Rao Banwari Lal, .
65. The two decisions of the Privy Council in AIR 1918 PC 241 and AIR 1918 PC 151
66. Sadasuk Janki Das's case, AIR 1918 PC 146
67. Three decisions of the Supreme Court in State of West Bengal v. B.
K. Mondal and Sons, ; New Marine Coal Co. v. Union of India,and
Mulamchand v. State of Madhya Pradesh,
68. The case of a Royal
Bank of Canada v. The King, 1913 AC 283, was an appeal from the
judgment of the Supreme Court of Alberta. The main controversy was as
to the validity of the statute ( Alberta Act 1 Geo 5 C 9 ) passed in
1910, dealing with the sale of certain bonds.
69. Wilson v. Church, ( 1879 ) 13 Ch D 1 at p. 49,
70. Moses v. Macferlan, ( 1760 ) 97 ER 676
71. Sinclair v. Brougham, 1914 AC
72. see Smith's Leading Cases, Notes to Marriot v. Hampton, ( 1797 ) 7 TR 269 = 2 Sm LC ( 11th Ed. ) 421)
73. Brook's Wharf and Bull Wharf Ltd. V. Goodman Brothers, )1937 1 KB 534,
74. 1914 AC 398 by P.H. Wins-field in (1937) 53 LQR 447.
75. The case of Fibrosa Spolka Akcyjna v. Fairbarin Lawson Combe Barbour Ltd., 1943 AC 32 ;
76. Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah: AIR 1973 AP 342
Conclusion:
This article does not give information as to all the aspects of
promissory note, for instance, I did not touch on the aspect of
material alterations of the promissory note, the plea of forgery,
fabrication, ect.,. Inasmuch as there are catena of rulings on the
‘promissory note’, it is very difficult to discuss all the case-law.
However, I attempted to put forth some rulings on this aspect. A close
scrutiny and understanding the dicta observed in the above rulings, I am
in no doubt to say our knowledge on the aspect of Promissory note will
be enriched. There are certain amendments are needed as to section 35
of the stamp act, 1899 & ‘bills of exchange on promissory notes. It
is not out scope to remember the words of Lord Atkin "Being primarily a
receipt, even if coupled with the promise to pay, it was not a
promissory note. As the document did not record or purport to record
all the terms of the contract between the parties and as there was
nothing in the document explaining how the money came to be received
the parties were not prevented from showing that it was paid by way of
loan or deposit or for some other purpose. ".
****************
# Chandabolu Bhaskara Rao vs Betha Saidi Reddy; decided on 5 April, 2006
# Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah ; AIR 1973 AP 342
# Law Commission of India; One hundred and seventy eighth report On
recommendations for amending various enactments, Both civil and
criminal.; December,2001
# Observed in K.P.O. Moideenkutty Hajee vs
Pappu Manjooran & Anr ; JT 1996 (3), 329 1996 SCALE (2)784; Bench:
Justice Ramaswamy, K.
# In Kundanlal v. Custodian, Evacuee Property
(1963) 1 S.C.J. 347 : (1963) 1 An.W.R. (S.C.) 85 : (1963) 1 M.L.J.
(S.C.) 85 : A.I.R. 1961 S.C. 1316.
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