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1974 DIGILAW 183 (ORI)

BUDHUROY GOUNTIA v. GAJADHAR PRASAD JAISWAL ALIAS GADADHAR

1974-09-03

R.N.MISRA

body1974
JUDGMENT : R.N. Misra, J. - The Plaintiff is in appeal against the reversing judgment and decree of the learned Subordinate. Judge of Sambalpur in a suit for recovery of money on the basis of a promissory note dated 24-6-1965 (Ext. 4): 9. The Plaintiff filed the suit on 22-1-1968 against Defendants 1 and 2 pleading that the Defendant No. 1 had written a letter to the Plaintiff on 20th April 1965 (Ext. 1) requesting him to advance a loan to the Defendant No. 2 for the purposes of buying mohua flower. On 24-6-1965, the Defendant No. 2 obtained a sum of Rs. 2,000/- from the Plaintiff on executing a promissory note in his favour. As both the Defendants failed to pay back the loan, the Plaintiff ultimately was obliged to file the suit. 3. The Defendant No. 1 admitted his writing the letter (Ext. 1), but contended that it had been written at the behest of the second Defendant and that the second Defendant had informed the first Defendant that the Plaintiff did not pay. The Defendant No. 1 sent a sum of Rs. 1,000/- to the Defendant No. 2 and asked him not to receive any loan from the Plaintiff. The letter (Ext. 1) was thus not acted upon. The loan under Ext. 4 is for the benefit of the second Defendant and the first Defendant has nothing to do with the same. The Plaintiff is not entitled to any relief against the that Defendant. The second Defendant took the plea that the promissory note was duly executed by him pursuant to the authority given under Ext. 1 the letter by the Defendant No. 1, the receipt of the loan amount is admitted and it is contended that the same was utilised for the liquor shop of the Defendant No. 1. Thus, according to him, he has no liability for satisfying the loan. 4. The learned Trial Judge found that as the loan amount had been used in the liquor shop of the Defendant No. 1 and he derived benefit, the Defendant No. 1 has liability to satisfy the demand in question. He accordingly decreed the suit against the Defendant No. 1, but held that the Defendant No. 2 had no liability. 5. The Defendant No. 1 thereupon appealed impleading both the Plaintiff and the Defendant No. 2 as Respondents. He accordingly decreed the suit against the Defendant No. 1, but held that the Defendant No. 2 had no liability. 5. The Defendant No. 1 thereupon appealed impleading both the Plaintiff and the Defendant No. 2 as Respondents. The learned Appellate Judge took the view that the authority under Ext. 1 was not connected with the loan under Ext. 4 and Ext. 1 did not authorise the Defendant No. 2 to execute the promissory note under Ext. 4. He, therefore, held that the Defendant No. 1 had no liability and at best the second Defendant may have liability for the amount in dispute in view of the fact that he had executed the promissory note; but as he found that the suit had been dismissed as against Defendant No. 2 and there was no cross appeal by the Plaintiff, the refused to interfere in the matter. 6. The Plaintiff is in second appeal contending that he is entitled to a decree against both the Defendant and in the alternative against the Defendant No. 2, who executed the document. The promissory note was admittedly executed by the second Defendant. When translated into English, the document reads thus: I Sukadeb Prasad, son of Parameswar Lal of Rengalbeda, P.S. Kuchinda, District Sambalpur State that as lands are necessary for payment of Malgujari for the Rengalbeda liquirshop and for purchase of mohua flower, I incur a loan of Rs 2,000/- in cash from Sri Budhuroy Gountia of Sauntimal undertaking to pay the same to the creditor on demand. Sections 27 and 28 of the Negotiable Instruments Act hereinafter referred to as the "Act", are material for the purposes of this case. They provide: 27. Agency - Every person capable of binding himself or of being bound; as mentioned in Section 26, may so bind himself or be pound by a duly authorized agent acting in his name. A general authority to transact business and to receive and discharge debts does not confer upon on agent the power of accepting or indorsing bills of exchange so as to bind his principal. An authority to draw bills of exchange does not by itself import on authority to indorse. 28. A general authority to transact business and to receive and discharge debts does not confer upon on agent the power of accepting or indorsing bills of exchange so as to bind his principal. An authority to draw bills of exchange does not by itself import on authority to indorse. 28. Liability of agent, signing - on agent who signs his name to a promissory note, bill of exchange or cheque without indicating thereon that he signs as agent, or that he does not intend thereby to incur personal responsibility, is liable personally on the instrument, except to those who induced him to sign upon the belief that the principal only would be held liable. A Bench of this Court in the case of Pramod Kumar v. Damodar Bahu AIR 1951 Ori 179 , considered the effect of these provisions. After referring to some authorities, the Court concluded by saying: It is, therefore, of the essence of a claim based upon a negotiable instrument that the person executing that document should disclose, on the face of the document itself, that he is not personally able and that he is executing a promissory note for someone else. In the well-known case of Sadasuk v. Kishen Prasad AIR 1918 P.C. 146 , the hand-note ran as follows: By order of Sarkar may his happiness increase. To Mohan Lal, son of Hira Lal. Six months from the date of execution of this hundi, please pay to Seth Sadasuk Janki Das Sahu of the Residency Bazaars or to his order, the sum of H.S. Rs. 2500/- (half of which is Rs. 1250/-), which sum I have received in cash in the Residency Bazaars from the said Seth Sahib. Dated 14-4-1910 xxxxxx It was contended that the words 'By order of Sarkar' appearing in the preface to the instrument implied that the subsequent signatures were on behalf of Sarkar, and their Lordships of the Judicial Committee in rejecting this contention observed as follows: It is of the utmost importance that the name of the person or the firm upon a negotiable instrument, should be clearly stated on the face or on the top document so that the responsibility is made plain and can be instantly recognised as the document passes from hand to hand. Their Lordships went further and observed: It is not sufficient that the principal's name should be 'in some way' disclosed; it must be disclosed in such a way that on any fair interpretation of the instrument his name is the real name of the person liable upon the bill. It must, therefore, be held that in any action on a promissory note against a person whose name properly appears on that instrument, it is not open either by way of claim or defence, to show that the signatory was in reality, acting for on undisclosed principal. The decision of a Full Bench presided over by Chief Justice Leach and consisting of King, Somayya, Patanjali Sastri and Happell JJ., in the case of Sivagurunatha Pillai Vs. Padmavathi Ammal and Another put the effect of these two sections in the Act thus: The Court cannot look into the surrounding circumstances when deciding whether the maker of a promissory note has executed it as the agent or the representative of another. It is the instrument alone which has to be looked at. Of course, if the authority of the agent is questioned his authority must be established before the instrument is looked at. It is the duty of the Court to read the instrument and judge its effect from the words used but a promissory note drawn up in vernacular language cannot always be construed according to the literal translation into English.... (quoted from the Headnote) A bare reference to the promissory note clearly goes to show that the Defendant No. 1 cannot be saddled with liability for the loan. The learned Appellate Judge attached importance to the fact that the authority under Ext. 1 was prior to two months of the actual loan. The manner in which, Ext. 1 was written goes to show that the Defendant No. 1 had required the Plaintiff to accommodate the second Defendant in present and Ext. 1 was not intended to be a general authority valid for all times. As in fact, the lower appellate Court has found that Ext. 1 was not connected with the loan transaction. I do not think such a finding is open to challenge and in fact counsel for the Appellant has not been able to dislodge the finding of the lower appellate Court on that score. The Defendant No. 2 admits the execution d the promissory note. 1 was not connected with the loan transaction. I do not think such a finding is open to challenge and in fact counsel for the Appellant has not been able to dislodge the finding of the lower appellate Court on that score. The Defendant No. 2 admits the execution d the promissory note. A promissory note does not disown personal liability of the executant as required u/s 28 of the Act. There is even no mention of the principal and a plain reading of Ext. 4 gives the impression that the Defendant No. 2 intended to make a loan for himself. The lower appellate Court has, therefore, rightly found that the Defendant No. 1 cannot be saddled with liability. That finding of the lower appellate Court must stand endorsed. 7. The next question for consideration is as to whether the Plaintiff can have a decree against the second Defendant. The second Defendant owns the promissory note. The principle indicated in the Madras case referred to above is to the effect that the contents of the promissory note must decide the dispute of liability and other evidence cannot be taken into account for reaching the decision in such a dispute. The liability of the second Defendant has been rightly found by the lower appellate Court. The question for consideration, however, is as to whether in the absence of a cross appeal, the Plaintiff was entitled to succeed as against the second Defendant. Mr. Das for the Appellant relies upon the provisos of Order 41, Rule 33 of the Code of. Civil Procedure and contends that it is open to this Court to give a decree to the Plaintiff against the second Defendant. Rule 33 of Order 41 of the Code is to the following effect: The Appellate Court shall have power to pass any decree and make any order which ought to have been passed or made and to pass or make such further or other decree or order as the case may require, and this power may be exercised by the Court not with-standing that the appeal is as to part only of the decree and may be exercised in favour of all or any of the Respondents or parties, although such Respondents or parties may not have filed any appeal or objection: Provided.... Mr. Mr. Das for the Plaintiff-Appellant contends that on the finding reached by the lower appellate Court, the learned Subordinate Judge should have exercised power under Rule 33 of the Code and given a decree to the Plaintiff against the second Defendant. The learned Appellate Judge went wrong in law in not appreciating the effect of Rule 33 of Order 41 of the Code and since discretion vested in the lower appellate Court and in ignorance of such powers, the learned Appellate Judge, feeling helpless in the situation he was placed in on reaching the finding in favour of the Defendant No. 1 dismissed the suit, this Court should intervene and give a decree to the Plaintiff against the second Defendant. In the case of AIR 1949 106 (Federal Court), Federal Court 106, the effect of Order 41, Rule 33 of the CPC was considered by the Court. Mukherjea, J. as the learned Judge then was, speaking for the Court stated: Order 41, Rule 33, CPC is a purely enabling provision which enables the appellate Court to exercise certain powers in favour of a party who was not filed the appeal if the circumstances of the case and the interests of justice so require. The powers being discretionary no Court can be compelled to make on order under this rule; but if the appellate Court, while it allows the appeal, refuses to make any order in favour of a non-appearing party, whose position is identically the same as that of the successful Appellant without applying its mind to the provisions of Order 41, Rule 33, CPC and without considering whether it should or should not exercise its powers under that rule, we do not think that the Court is incompetent to rectify its emission and reconsider the matter if and when it is brought to its notice by way of on application for review. In the case of Pannalal Vs. State Bombay and Others the effect of this provision was considered by the C Supreme Court. Das Gupta, J. spoke for the Court thus: Even a bare reading of Order 41 Rule 33 is efficient to convince anyone that the wide wording was intended to empower the appellate Court to make whatever order it thinks fit, not only as between the Appellant and the Respondent but also as between a Respondent and a Respondent. Das Gupta, J. spoke for the Court thus: Even a bare reading of Order 41 Rule 33 is efficient to convince anyone that the wide wording was intended to empower the appellate Court to make whatever order it thinks fit, not only as between the Appellant and the Respondent but also as between a Respondent and a Respondent. It empowers the appellate Court not only to give or refuse relief to the Appellant by allowing or dismissing the appeal but also to give such other relief to any of the Respondents as 'the case may require'. In the present case, if there was no impediment in law the High Court could therefore, though allowing the appeal of the State by dismissing the Plaintiff's suits against it. Live the Plaintiff a decree against any or all the other Defendants who were parties to the appeal as Respondents. While the very words of the section make this position abundantly clear the illustration puts the position beyond argument. To the same effect are the decisions of the Patna High Court in the case of State of Bihar v. Dukhulal Das AIR 1962 Pat. 140 and State of Bihar Vs. Bank of Bihar Ltd., . In the lower appellate Court, the Defendant No. 1 had appealed. The Plaintiff and the Defendant No. 2 were impleaded as Respondents 1 and 2. While allowing the appeal of the Defendant No. 1 Appellant, the learned Subordinate Judge on his own finding should have decreed the suit against the Defendant No. 2, who was Respondent No. 2 in the appeal. The decision of the Supreme Court (supra) is on authority for the position that even if that had not been clone, the appellate Court could do so. The mistake committed by the learned Subordinate Judge is thus open to correction in second appeal by this Court as the mistake of the lower appellate Court is one in law. 8. I would accordingly allow the appeal and while dismissing the Plaintiff's suit as against the Defendant No. 1, direct that the Plaintiff shall be entitled to a decree for a sum of Rs. 2,000/-. As there is no stipulation for interest in the promissory note, the claim of interest up to date of suit from the date of loan is dismissed. 2,000/-. As there is no stipulation for interest in the promissory note, the claim of interest up to date of suit from the date of loan is dismissed. The Plaintiff is entitled to interest at the rate of 6 percent from the date of the decree in the trial Court, that is, 30th on September, 1969, until recovery. The Plaintiff shall have his costs against the second Defendant throughout. Appeal allowed. Final Result : Allowed