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1959 DIGILAW 6 (ORI)

PARAMANANDA PATNAIK v. GOLAKBEHARI DAS

1959-01-14

BARMAN

body1959
JUDGMENT : Barman, J. - This is the Plaintiff's application in revision against an order of the learned Munsif of Athgarh refusing amendment of the plaint. 2. The material facts are shortly these: The Defendant No. 1 executed in favour of the Plaintiff a hand note dated June 23, 1953 for a sum of Rs. 60/- with interest payable thereon as mentioned in the hand note. It appears that there was a part-payment on February 15, 1956. The suit was filed on June 23, 1956. On November 9, 1956 the Defendant No. l filed a written statement taking the defence that the hand note was insufficiently stamped with the consequence that it was not admissible in evidence. Thereafter on January 22, 1957 the Plaintiff made an application for amendment of the plaint. The purport of the amendment was to' base his claim on the original consideration and not on the handnote. On February 7, 1957 the learned Munsif dismissed the application for amendment on the ground that it would change the nature of the suit and was inconsistent with the claim originally made in the plaint. The present revision is directed against the said order of the learned Munsif. 3. Mr. H. Kanungo, the learned Counsel appearing for the Plaintiff-Petitioner, contended that the amendment would not change the nature of the suit nor was it inconsistent with the claim originally made by the Plaintiff-Petitioner in the plaint as filed. In support of his contentions the learned Counsel cited before this Court several decisions. In a decision of the Bombay High Court in Sarafalli Mahomedalli Vs. Mahasukhbhai Jechandbhai. Chief Justice Beaumont in his judgment held that the cause of action on a promissory note is distinct from the cause of action on the loan which gave use to the promissory note. If two alternative and inconsistent claims can be combined originally in the plaint, there is no reason, on principle: why they should not be combined at a later stage by amendment. Two distinct causes of action could have been set up in the same suit by the original plant. The facts in the Bombay case were that the Plaintiff sued the Defendants for the balance of money due and the balance as secured by a promissory note signed by Defendant No. 2. Two distinct causes of action could have been set up in the same suit by the original plant. The facts in the Bombay case were that the Plaintiff sued the Defendants for the balance of money due and the balance as secured by a promissory note signed by Defendant No. 2. The Plaintiff's case was that Defendant No. 3 was a partner of Defendant No. 2 and that he was liable for the amount due. It seems to have been assumed that the Plaintiff's case was based initially on the promissory note and as the promissory note was signed only by Defendant No. 2 it was felt doubtful whether Defendant No. 3 was liable for the claim in the suit. The Plaintiff accordingly asked for leave to amend the plaint by claiming in the alternative the money due from the Defendant No. 3 on the dealings which resulted in the debt secured by the promissory note, that is to say, he sought to claim in the alternative on the promissory note or for the consideration giving rise to the promissory note and the learned District Judge gave leave to amend. The Bombay High Court in appeal from the said order while upholding the District Judge's order observed that the real subject matter was the indebtedness of Defendant No. 3 and that there was no objection in law to the amendment which the learned Judge allowed. The Patna High Court also decided the point in almost similar circumstances in Mahanth Kesho Das Vs. Hari Kishun Das and Others, where the facts ware that the Respondents sued to recover certain sum alleged to have been lent to Defendant No. 1 and Defendant No. 2 was impleaded as surety for repayment of the advance In the plaint the Plaintiff stated that the Defendant 1st party borrowed the said sum and in token of the acknowledgment of the sum executed a hand note and promised to pay the sum on demand with interest at one per cent per mensum. On the same date, as alleged in the plaint initially filed, that Defendant no 2 agreed by a letter to repay the amount if the Defendant No. 1 failed to do so. On the same date, as alleged in the plaint initially filed, that Defendant no 2 agreed by a letter to repay the amount if the Defendant No. 1 failed to do so. On these facts, it was held that where the Plaintiff distinctly set out in his plaint that the debtor had borrowed money from him and it was to recover that money that the suit was instituted, although he did not alternatively make a claim that he was entitled to recover the money as well on the original loan as on the basis of the hand note, that was not fatal to the suit, as all the facts necessary to a claim on the loan were alleged and proved. The Allahabad High Court in Rurmal Ram Nath Vs. Kapil Man Misir and Others in deciding an application for the amendment under Order 6, Rule 17 Code of Civil Procedure, which was refused by the lower Court, held that the dealings between the parties, as appears from the facts of that case, culminated or merged in a note of hand; and when the Plaintiff found that his suit on the basis of the note of hand might fail, he very naturally wanted to fall back on his original consideration and the real question in controversy was whether the balance of account as shown in the promissory note was or was not due from the Defendant and the foundation of the claim was the account books. The High Court took the view in revision that the lower Court ought to have allowed the desired amendment and by refusing to do so it disregarded an express provision of law and failed to exercise a jurisdiction which was vested in it. The real question in controversy in the Allahabad case was whether the balance of account as shown in the promissory note was or was not due from the Defendant and that was the foundation of the claim in the suit. These decisions were subsequently considered in later decisions of different High Courts in India-One of the recent decisions being that of Mysore High Court in P. Seshappa Setty v. Katta Venkataramana AIR 1956 May 37. These decisions were subsequently considered in later decisions of different High Courts in India-One of the recent decisions being that of Mysore High Court in P. Seshappa Setty v. Katta Venkataramana AIR 1956 May 37. On this case where the matter arose out of a suit on a negotiable instrument which was a mere sequel to an earlier transaction and not the basis of the transaction itself, a suit on the original consideration could be based. The High Court held-in revision against the order disallowing the amendment, that a creditor can be allowed to amend the plaint so as to base his suit on the original cause of action when it was found for any reason that he cannot maintain a suit on an instrument like a pronate, or a hundi, as being inadmissible on some legal or technical ground. In this decision some of the earlier decisions of other High Courts were considered including a decision of the Madhya Bharat High Court in Baburam v. Ochhelal AIR 1954 MB 117 . where the Plaintiff brought a suit on the basis of a dishonoured hundi which had been drawn by the Defendant for securing the repayment of the amount due on a prior and completed transaction of loan but the hundi was inadmissible in evidence for want of proper stamp, the Plaintiff fell back upon the original consideration and got the plaint amended so as to base it on the original consideration. Such an amendment had not the effect of changing the suit into one of a totally different and inconsistent character. The High Court held that in such cases, the cause of action on the original consideration for money lent remains suspended during the currency of the negotiable instrument and it revives when the negotiable instrument is dishonored. There is no reason why he should not be allowed to amend his plaint so as to base his suit only on the original consideration. The trend of all these decisions is to allow amendment of the pleadings where it is permissible. In this particular case there is no doubt that the cause of action on the pronate is different from the cause of action on the alleged loan which had given rise to the pronate. Such a claim, though inconsistent, will not have the effect of changing the nature of the suit. In this particular case there is no doubt that the cause of action on the pronate is different from the cause of action on the alleged loan which had given rise to the pronate. Such a claim, though inconsistent, will not have the effect of changing the nature of the suit. To allow an amendment to base the suit on the original cause of action or on original consideration, it is not necessary that the origin a 1 transaction should be indicated in the plaint already filed or in the document itself. That however should be a matter for evidence. 4. Mr. G.K. Misra, learned Counsel for the Defendant, with his usual clarity of exposition, tried to distinguish the applicability of these decisions on certain principles which indeed deserve consideration. He contended that the desired amendment was useless and had no substance and was unnecessary. He further contended that assuming such amendment was allowed, the suit was bound to fail. His main proposition was that by reason of the hand note having been insufficiently stamped, it was not admissible in evidence for any purpose u/s 35 of the Stamp Act and further that even impounding would not cure the alleged defect in the hand note. He went to the length of saying that the hand note in suit could not admitted in evidence even for collateral purpose. In this context the learned Counsel relied on a decision of the Privy Council in AIR 1946 51 (Privy Council) where their Lordships of the Privy Council on a construction of the words 'for any purpose' in Section 35 of the Stamp Act observed that the said words should be given their natural meaning and effect and would include a collateral purpose and that where an unstamped document is admitted in proof of some collateral matter it is certainly admitted in evidence for that purpose which the statute has prohibited. Consequently an unstamped partition deed cannot be sued to corroborate the oral evidence for the purpose of determining even the factum of partition s distinct from its terms. In the present case I do not make any comments on the admissibility of the document in question which is for the trial Court to decide. My attention was also drawn to Section 91 of the Evidence Act on the question of admissibility of the document in evidence. In the present case I do not make any comments on the admissibility of the document in question which is for the trial Court to decide. My attention was also drawn to Section 91 of the Evidence Act on the question of admissibility of the document in evidence. Then the learned Counsel referred to several decisions of different High Courts by way of distinguishing the cases cited by Mr. H. Kanungo, the learned Counsel appearing for the Petitioner. Before I proceed to deal with these decisions, the ratio decidendi on which these decisions rested was a decision of Chief Justice Garth in Sheikh Akbar v. Sheikh Khan ILR Cal 256 where a distinction was made between two positions in Law, namely, (1) when a cause of action for money is complete in itself, whether for goods sold or for money lent, or for any other claim and the debtor then gives a bill or note to the creditor for payment or the money at a future time, the creditor if the bill or note is not paid at maturity, may always as a rule, sue for the original consideration and (2) when the original cause of action is the bill or note itself, and does not exist independently of it, in such a case the note is the only contract between the parties and if for want of a proper stamp or some other reason the note is not admissible in evidence, the creditor must lose his money. Mr. G.K. Misra argued that it is under the second line of cases that the present case falls and therefore the desired amendment is useless and cannot help the Plaintiff. It is on the basis of this distinction made by Chief Justice Garth in the Calcutta case that the different High Courts in India came to deal with the point from this aspect in certain cases, some of which were cited before me a full Bench of the Madras High Court in Perumal Chettiar Vs. Kamakshi Ammal, which certainly supports the contention of Mr. G.K. Misra fully dealt with this aspect of the matter and held that if the promissory note embodies all the terms of the contract and the instrument is improperly stamped, no suit will lie. Section 91 of the Evidence Act and Section 35 of the Stamp Act bar the way. Kamakshi Ammal, which certainly supports the contention of Mr. G.K. Misra fully dealt with this aspect of the matter and held that if the promissory note embodies all the terms of the contract and the instrument is improperly stamped, no suit will lie. Section 91 of the Evidence Act and Section 35 of the Stamp Act bar the way. If, on the other hand, the document does not embody all the terms of the contract, the true nature of the transaction can be proved; and where an instrument has been given as collateral security or by way of conditional payment, a suit on the debt will lie. The fact that the execution of the promissory note is contemporaneous with the borrowing cannot exclude the possibility of the instrument having been given as collateral security or by way of conditional payment. Whether a suit lies on the debt apart from the instrument therefore depends on the circumstances under which the instrument was executed. The learned Counsel, while relying on this decision pointed out to me a special feature, namely, that the Madras Full Bench was not considering the case where a promissory note had 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. It is however contended that in the present case before me it was the hand note itself which created the debt and did not relate to oral transactions. The Allahabad High Court in Raffi Nath v. Bhagwati Prasad while discussing this aspect of the matter held on the same line as the Full Bench of the Madras High Court, that if the pronate in suit does not contain substantially all the terms of the contract of loan between the parties and the pronate is fund inadmissible in evidence for want of proper stamp u/s 35 of the Stamp Act, it is open to the Plaintiff to prove the loan by such evidence oral or documentary as may be available to him. But if the pronate is suit contains substantially all the terms of the contract of loan between the parties and the pronate is found inadmissible in evidence u/s 35 the Plaintiff cannot fall back upon an independent cause of action to recover the loan and prove the same by independent evidence for the simple reason that there is no cause of action independent of and apart from the promissory note. The gist of Mr. G.K. Misra's argument is that if there was an independent cause of action, amendment could have been allowed. Where however, as in the present case, according to him, the pronate itself is the cause of action, amendment should be disallowed because even initially the Plaintiff could not have brought the suit on the original consideration. 5. I have carefully considered this aspect of Mr. Misra's argument. But the question is whether on an application for amendment of the plaint, this Court should commit itself to any view at this stage. It is for the trial Court to decide on merits as to the contents of handnote regarding the terms contained thereon. In other words, whether the handnote itself formed a cause of action or whether there was a cause of action independent of the handnote. All these matters can only be gone into by the trial Court at the time of bearing of the suit. These are matters of evidence. It is not for this Court, at this stage, to speculate as to what evidence the Plaintiff can adduce at the trial. Under Order 6 Rule 17 CPC it is the direction of the Court to allow amendment which it may think necessary for the purpose of determining the real question in controversy between the parties. All such amendments should be allowed as are necessary unless they fall within any of the exceptions as mentioned at page 596 of Mulla's CPC (12th edition). 6. In this view of the matter, I set aside the order of the learned Munsif. I allow the amendment as prayed for by the Plaintiff. This revision is therefore allowed. As regards costs, I am reminded of the famous observations of Bowen L.J. in Gropper v. Smith (1884) 26 Ch. D.N. 700 (711) where he observed that there is one panacea which heads every sore in litigation, and that is costs. I allow the amendment as prayed for by the Plaintiff. This revision is therefore allowed. As regards costs, I am reminded of the famous observations of Bowen L.J. in Gropper v. Smith (1884) 26 Ch. D.N. 700 (711) where he observed that there is one panacea which heads every sore in litigation, and that is costs. It is only proper that the Plaintiff should pay costs which I assess at Rs. 75/- as a condition precedent to the amendment. Revision allowed. Final Result : Allowed