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1962 DIGILAW 131 (KER)

Achuthan Raghavan v. Varkey Variathu

1962-05-18

S.VELU PILLAI

body1962
Judgment :- 1. In this Second Appeal by the defendant, arising out of a suit on a promissory note, the two courts have concurrently held, that the plaintiff is not entitled to enforce payment, on account of a material alteration in it. Nevertheless they have decreed the suit as on the original consideration for the promissory note. It was contended on behalf of the defendant that the suit being laid on the promissory note only, no such decree could have been passed. The law is clear, that where the suit is on the promissory note only, no decree could be granted on the original consideration. Firm Tarachand v. Tamijuddin, A.I.R. 1935 Calcutta 658, is a case in point. 2. It was argued that the allegations in the plaint show, that the suit was also on the original consideration. In Para.4 of the plaint it was stated that the suit was upon the promissory note, and in Para.5 it was alleged, that on receipt of the sum of Rs. 575/- on July 21, 1952, the promissory note was executed undertaking to repay the amount with interest. These are all the relevant allegations in the plaint. I am unable to hold on the above allegations, that the suit was laid also on the original consideration. 3. But the lower court has relied on Chimanlal v. Saviji Bechar, A.I.R. 1955 Saurashtra 74, which has laid down the law as follows: "A loan is a contract by which in consideration of the lender lending the money to him, the borrower promises to repay the amount. If these terms are reduced in the form of a document that is,... if the contract is intended to be replaced by the document, then the document is the exclusive evidence of the terms... but where the terms are merely embodied or recorded in a document and are not intended to lose their independent existence, then the fact that the document cannot be admitted in evidence would not come in the way of their being proved by other evidence... On the other hand, if the promissory note is to replace the contract, or if the promissory note is the only contract between the patties, the fact that the loan and the promissory note were not executed simultaneously will not make any difference and the promissory note will be the exclusive evidence of the contract. On the other hand, if the promissory note is to replace the contract, or if the promissory note is the only contract between the patties, the fact that the loan and the promissory note were not executed simultaneously will not make any difference and the promissory note will be the exclusive evidence of the contract. As I have observed, according to the allegations in the plaint, the present is a case in which the promissory note is the only contract between the parties. In the Saurashtra cases it was found as a matter of fact, "that the intention of the parties was to treat the promissory note and the loan for which it was executed as distinct and separate from each other". The court considered the allegations in the plaint to be sufficient for making this inference. For these reasons, a decree was passed on the original consideration. This case is distinguishable. The learned counsel invited my attention to Lakshmi Narain v. Mt. Anarna Devi, A.I.R. 1953 Allahabad 535. But in that case it was alternatively pleaded, that the plaintiff was entitled to a decree on the original loan. There was thus no defect in the frame of the suit for granting a decree. Reliance was placed by counsel on the following observations: "It is clear that a promissory note or other negotiable instrument may be taken in supersession of or, absolute discharge of, an oral debt. But in the absence of the evidence to the contrary, the presumption is that it is as a conditional payment or as a collateral security only... it makes no difference whether the contract of loan is simultaneously made with the execution of the promissory note or precedes it". These observations were made in the context of deciding whether the cause of action on the original consideration survived the making of the promissory note or not. The presumption in law being that a promissory note is a conditional payment or collateral security, the other cause of action survived. I fail to see what part this presumption can play, where there is no suit on the original cause of action and none such is sought to be enforced. The Allahabad decision does not help the plaintiff. Lastly it was suggested, that the plaint may be allowed to be amended. I fail to see what part this presumption can play, where there is no suit on the original cause of action and none such is sought to be enforced. The Allahabad decision does not help the plaintiff. Lastly it was suggested, that the plaint may be allowed to be amended. The suit was instituted in the year 1955 and this appeal has been pending for nearly four years. It does not seem proper to allow an amendment at this distance of time and thereby deprive the defendant of his right to plead limitation as a bar to the claim on the original cause of action. In reversal of the decrees of the lower courts, the second appeal is allowed and the suit dismissed with costs to the defendant in the trial court. But the parties shall bear their costs in appeal and this Second Appeal. Allowed.