Judgement This appeal is from the judgment and decree passed by the Second Subordinate Judge, Manipur in O. S. No. 47 of 1969. 2. Defendants Nos. 1 and 2 are brothers, carrying on business as partners of a firm, Messrs. Bharat Hardware Stores at Thangal Bazar, Imphal, and defendant No. 3 is the partnership firm. On 31-8-1968, defendant No. 1 in his capacity as a partner of the firm and on its behalf borrowed a sum of Rs. 9,240 from the plaintiff and executed a promissory note (Ext. A/1) promising to repay the loan on demand. Defendant No. 4 stood surety guaranteeing the repayment of the loan. The plaintiff made a demand of the defendants Nos. 1 and 2 for the repayment of the loan by registered letters dated 13-5-1969, a copy whereof was sent to defendant No. 4. The letters were refused and no payment was made. Hence the present suit. 3. The defendants have filed a joint written statement. They have denied the alleged loan. They have however admitted that defendant No. 1 received a sum of Rs. 7,808 payable with interest of Rs. 1,432. They, however, aver that by way of acknowledgement of the receipt of the above sum of Rs. 7,808, the defendants Nos. 1 and 2 put their signatures on a blank piece of paper, which was forged into the pro-note. It has also been averred that the sum of Rs. 9,240 had been repaid to the plaintiff. 4. After trial, the learned Subordinate Judge has decreed the suit with costs. Hence, this appeal. 5. The first submission of Shri B. B. Sen, learned counsel for the appellants, is that Ext. A/1 is not a promissory note but a bond. Ext. A/1 was executed by defendant No. 1 on behalf of defendant No. 3. It is in the following terms: "We have received the sum of Rs. 9,240 (nine thousand two hundred and forty only) from Shri Ram Ratan Sharma of Thangal Bazar, Imphal. The above amount will be repaid on demand. We have received Rs. 9,240 in cash today." The above writing was followed by four 10 P. revenue stamps on which defendant No. 1 put his signature followed by the expression, "for Bharat Hardware Stores, Manipur". Below it there is an endorsement by defendant No. 4 guaranteeing the repayment of the money.
The above amount will be repaid on demand. We have received Rs. 9,240 in cash today." The above writing was followed by four 10 P. revenue stamps on which defendant No. 1 put his signature followed by the expression, "for Bharat Hardware Stores, Manipur". Below it there is an endorsement by defendant No. 4 guaranteeing the repayment of the money. Shri Sen submits that in view of the acknowledgement of the receipt of the amount in Ext. A/1 and of the guarantors endorsement, Ext. A/1 is not a promissory note within the definition. I am unable to accept the submission of the learned counsel. The guarantors endorsement is entirely a different agreement and the promise to pay on demand is independent of the guarantee. 6. The material portion of the definition of promissory note as defined under Section 4 of the Negotiable Instruments Act, 1881, together with illustration (b) may be quoted: "A promissory note is an instrument xxx containing an unconditional undertaking, signed by the maker, to pay a certain sum of money, only to, or to the order of, a certain person, or to the bearer of the instrument." Illustration (b) "I acknowledge myself to be indebted to B in Rs. 1,000 to be paid on demand, for value received." The essential ingredients of a promissory note are: (i) that the promise to pay must be unconditional, (ii) that the note must be in writing and signed by the maker, (iii) that the promise to pay must be of a certain sum of money and (iv) that the promise to pay must be to, or to the order of, a certain person or to the bearer of the instrument. The present document Ext. A/1 has fulfilled all the above conditions. Illustraiton (b) to the definition shows that an acknowledgement of a receipt of the amount does not take away the document from the category of a promissory note. I agree with the learned trial Court that the document in question is a promissory note. 7. Although, under Section 118 of the Negotiable Instruments Act, payment of the consideration under a promissory note is presumed, and it was the burden of the defendant to disprove it, the plaintiff has examined five witnesses to prove the payment of the consideration. P.W. 4 is the plaintiff himself.
7. Although, under Section 118 of the Negotiable Instruments Act, payment of the consideration under a promissory note is presumed, and it was the burden of the defendant to disprove it, the plaintiff has examined five witnesses to prove the payment of the consideration. P.W. 4 is the plaintiff himself. He proves the execution of the promissory note by the defendant No. 1 and also payment of Rs. 9,240. He also proves the issue of registered letters Exts. A/2 and A/3 to defendants Nos. 1 and 2 respectively, who have refused to receive the letters, P.W. 5 is one of the partners of the firm of the plaintiff. He has proved the account book of the firm showing that the plaintiff withdrew Rs. 9,500 from the firms account on 31-8-1968. Ext. A/4 is the Ledger containing the entry of the withdrawal of Rs. 9,500 on 31-8-1968; Ext. A/5 is the Cash Book of the firm, Ext. A/4/1 is the entry in the Ledger; Ext. A/5/1 is the extract copy of the relevant entry in Ext. A/4/1 and Ext. A/5/2 is the extract copy of the relevant entry in Ext. A/5/1. P.Ws. 1, 2 and 3 deposed to the effect that about the relevant time they saw the plaintiff paying some money to defendant No. 1. 8. Shri Sen submits that P.Ws. 1, 2 and 3 are chance witnesses and no reliance can be placed on their evidence. In my opinion, they are natural witnesses. Even if this argument of the learned counsel is accepted, there is no reason to disbelieve the evidence of P.Ws. 4 and 5 who prove the receipt of the amount in question by defendant No. 1 and the execution of Ext. A/1. It was averred in the written statement and also a suggestion was put to the plaintiff in cross-examination that whatever amount was borrowed from the plaintiff had been repaid by defendant No. 1. When the plea of repayment is taken by a defendant, the burden is upon him to prove the plea. But, although the amount in question is a big one, no account has been proved by the defendants in support of their plea. The defendants have failed to discharge their burden. D.W. 2 is defendant No. 1 himself. He admits in cross-examination that it is not his habit to put any signature in a blank paper except in the instant case.
The defendants have failed to discharge their burden. D.W. 2 is defendant No. 1 himself. He admits in cross-examination that it is not his habit to put any signature in a blank paper except in the instant case. He also says that although he repaid the money to the plaintiff he did not request the plaintiff to destroy the blank paper containing his signature nor demanded for its return. This is a strange conduct of defendant No. 1 who is a sophisticated businessman who knows English. Another conduct of the defendants shows the falsity of the defence. They have not explained as to why they refused to accept the registered notices issued to them by registered post at their correct address. 9. The last submission of the learned counsel of the appellants is that no decree can be passed as against defendant No. 4 on the strength of Ext. A/1 executed by defendant No. 1. Ext. A/1 shows that it was executed by defendant No. 1 on behalf of the firm. Defendant No. 1 admits that defendant No. 3 is a registered partnership firm of which he and defendant No. 2 are partners. 10. "Partnership" has been defined under the Partnership Act of 1932 as "the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all". The definition shows that the business of a partnership firm may be carried on by any one of the partners acting for all. From the very definition itself it follows that there is implied mutual agency to each of the partners of a registered partnership firm. Shri Sen concedes to this legal proposition. So, when the amount in question was borrowed by defendant No. 1 on behalf of the partnership firm, that act of his was binding on the firm as well as the members of the firm. Therefore, Ext. A/1 executed by defendant No. 1 is binding on defendant Nos. 1 to 3, but it will not bind defendant No. 4, who is not a partner of the firm. Shri A. Nilamani Singh, learned counsel appearing for the respondent, also concedes that no decree can be passed against defendant No. 4, and he does not press for any decree against defendant No. 4. 11. In the result, the appeal of defendants Nos.
Shri A. Nilamani Singh, learned counsel appearing for the respondent, also concedes that no decree can be passed against defendant No. 4, and he does not press for any decree against defendant No. 4. 11. In the result, the appeal of defendants Nos. 1, 2 and 3 is dismissed with costs and the appeal of defendant No. 4 Uttam Singh, is allowed. The decree as against defendants Nos. 1, 2 and 3 is upheld and it is set aside as against defendant No. 4 without cost. Order accordingly.