Bhandari, J.—This is a civil second appeal on behalf of the defendant against the judgment and decree of the Civil Judge, Balotra dated the 24th of September, 1953 reversing the judgment and decree of the Munsif, Bhinmal, dated the 25th of March, 1953. 2. The defendant executed a Hundi in favour of Punamchand Genaji on Achlaji Lakhmaji of Bombay on Jeth Badi 7th Smt. 2001. Punamchand Genaji indorsed this Hindi in favour of Chhogaji Khushalji. He also named Fauzaji Khushalji as drawee in case of dishonour of the Hundi by Achlaji Lakhmaji. The Hundi was dishonoured by Achlaji Lakhmaji and Chhogaji Khushalji received payment from Fauzaji Khushalji. Punm-chand Genaji, thereafter, made payment to Fauzaji Khushalji and received back the Hundi. Subsequently, he transferred his rights under the Hundi to the plaintiff Sonraj who brought the suit under Hundi. The suit was decreed by the lower appellate Court. 3. In this appeal it is argued on behalf of the defendant that Fauzaji Khushalji had not re-indorsed the Hundi in favour of Punamchand Genaji and as such he had no right to transfer his claim under the Hundi. In my opinion no such indorsement is necessary. Punamchand Genaji had indorsed the Hundi in favour of Chhogaji Khushalji. Chhogaji Khushalji had received payment from Fauzaji Khushalji and Fauzaji Khushalj had received payment from Punamchand Genaji and the Hundi come in possession of a person who had first endorsed it though of course without any endorsement in his favour. The question is whether such indorsement is necessary. So for as the law in America is concerned, it has been settled beyond dispute that such re-indorsement is not necessary. Reference in this connection may be made to paragraph 576 in the Treatise on the Law of Negotiable Instruments by J.W. Daniel, Sixth Edition, quoted below:— "Whether or not an indorser of a bill or note which has upon it a subsequent special indorsement, and no prior indorsement in blank, is shown by mere possession of the paper to be entitled to demand payment, has been much questioned. There are a number of cases which hold that such an indorser cannot demand payment, for the reason that it would seem from the face of the paper itself that he had parted with his title; and that a receipt from the last indorsee, or a re-indorsement to him, would be necessary to re-establish it.
There are a number of cases which hold that such an indorser cannot demand payment, for the reason that it would seem from the face of the paper itself that he had parted with his title; and that a receipt from the last indorsee, or a re-indorsement to him, would be necessary to re-establish it. This doctrine was laid down in an early case by the Supreme Court of the United States and some of State tribunals have taken the same view, but in a more recent case the Supreme Court of the United States expressed the opposite opinion, which seems to us the correct one. Dugan vs. United States 3 wheaton, 172(1818). Some of the cases hold that possession of the bill by a prior indorser is sufficient where the subsequent indorsements are cancelled, but the better view seems to be, and it is sustained by most respectable authority, that it makes no difference that the subsequent indorsements remain uncancelled. The party may not be still the proprietor in interest of the intrument, but his possession of it would be prima facie evidence that he had paid it himself to a subsequent indorsee, and had reacquired the right to demand payment, And it would also be consistent with the idea that he was holding it and suing for the benefit of a subsequent indorsee." The above statement of law has been approved by the Madras High Court in the case of Muthar Sahib Maraikar vs. Kadir Sahib Maruikar (1). Defendants Nos. 1 to 6 in that case obtained 25 negotiable promissory notes from different persons and indorsed the same to one Meyyappa Chetty, who again indorsed them to the Bank of Madras at Colombo. The notes were dishonoured by the makers on presentation to them by the Bank. Thereupon Meyyappa Chetty paid the Bank and received back the notes. Meyyappa Chetty assigned those notes to the plaintiff in that suit who brought a suit for the recovery of the amount due under five promissory notes. The defendants had also given three promissory notes to Meyyappa Chetty payable to him or to his order which was similarly assigned by him in favour of the Bank and were returned to him after being dishonoured.
The defendants had also given three promissory notes to Meyyappa Chetty payable to him or to his order which was similarly assigned by him in favour of the Bank and were returned to him after being dishonoured. That suit also included the claim on one of the promissory notes executed by the defendants in favour of Meyyappa Chetty which claim had also been assigned to the plaintiff. One of the arguments addressed in that case was that the property in the notes should be taken to be residing in the Bank of Madras and the plaintiff had no right to sue on the notes. This argument was rejected. Their Lordships observed as follows:— "But it may be pointed out that, when a prior indorser, in the technical language of the law, takes up a note (see Ellsworth vs. Brewer 11 Pickering, per Shaw, C. J. at page 320) on payment to his immediate indorsee and discharge his liability under the contract arising by the indorsement, there is no provision either in the Negotiable Instruments Act or elsewhere prescribing the mode in which such taking up of the note is to be established. As laid down in sec. 452 of Story on Promissory Notes, "the possession of a note by the maker or by the payee or by any subsequent indorser is prima facie evidence that he has acquired the full title thereto" The proposition thus laid down is, it scarcely need to be added, supported by numerous authorities of which the leading one is the decision of the Supreme court of the United States in Dugan vs. The United Slates (3 Whearon, 172 at page 183) where Livingstone, J. delivering the opinion of the Court, said that if any person who indorses a bill of exchange to another whether for value or for purposes of collection, shall come to the possession thereof again, he shall be regarded, unless the contrary appears in evidence, in the bonafide holder and proprietor of such bill and shall be entitled to recover, notwithstanding there may be on it one or more indorsements in full subsequent to the one to him, without producing any receipt or indorsement back from either of such indorsees whose names he may strike from the bill or not as he may think proper". Subrhmaniam Chetty as. Alageppa Cherty(2).
Subrhmaniam Chetty as. Alageppa Cherty(2). The above view was approved in the cases of P. Setvanarauana vs. Distt. Panchayat Officer, East Godavari, Eluru (3) and Jameson & Co. vs. Scott (3). 4. Under English Law sec. 59(2)(b) of the Bills of Exchange Act, 1882 provides as follows:— "Where a bill is paid by an indorser, or where a bill payable to drawers order is paid by the drawer, the party paying it is remitted to his former rights as regards the acceptor or antecedent parties, and he may, if he thinks fit; strike out his own and subsequent indorsements, and again negotiate the bill." The effect of that provision is that if the instrument is paid by an indorser, he at once gets his rights which he J possessed as a holder before he indorsed the instrument. See Halsburys Laws of England, Third Edition, Volume 3, paragraph 414, page 230. 5. I am in respectful agreement with the views expressed in the above authorities. The principle governing this view may be taken to be that when an indorser comes again in possession of the negotiable instrument in his own right he is entitled to say so far as the parties antecedent to him are concerned that he never made the indorsement. So far as parties subsequent to him are concerned his liabilities to them are discharged. This may be shown by striking out the subsequent indorsement but the suit is maintainable even if he does not strike out the subsequent indorsement. Striking out of the subsequent indorsements may be necessary in case it is intended that the document is to be negotiated further, but when case is to be brought in a court of law it is a mere formality. In the case of S. V. R. Veerappa Chetty vs. I.N.K.R. Muthuraman Chetty in the last paragraph of the judgement, Spencer, J., expressed his view that the plaintiff could cancel the indorsement even after the suit had been filed. 6. In this case there is definitely an allegation in the plaint that the instrument had been received back by Punamchand Genaji from Fauzaji Khushalji after payment and this fact has been held proved. This is sufficient to entitle Punamchand Genaji or his assignee to maintain the suit. I therefore, reject this contention raised on behalf of the appellant. 7. It is next urged that the Hundi was without consideration.
This is sufficient to entitle Punamchand Genaji or his assignee to maintain the suit. I therefore, reject this contention raised on behalf of the appellant. 7. It is next urged that the Hundi was without consideration. This contention has been rightly rejected by the lower appellate court and has got no force. 8. The appeal is therefore, dismissed with costs.