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1979 DIGILAW 948 (ALL)

L. Parmanand v. Satya Prakash Rastogi

1979-09-03

N.N.MITHAL

body1979
JUDGMENT N.N. Mithal, J. - This is a plaintiffs second appeal who had filed a suit for the recovery of Rs. 1,200/- from the defendant. 2. The plaint allegation is that a loan of Rs. 1,000/- was advanced to the defendant on 15-7-1966 and that he had promised to repay Rs. 1,200/- instead of Rupees 1,000/- in 12 monthly instalments of Rs. 100/- each. The defendant failed to repay this amount in spite of the repeated demands and notice. As the pronote and the receipt executed by the defendant had been misplaced, therefore, it was not made the basis of the suit. 3. The defendant disputed the plaint case and denied having taken any loan as well. His contention was that the loan was taken by one Munni Lal who was related to the defendant and he had obtained the signature of the defendant on a blank pronote form. As now the relations between the defendant and Munni Lal had become strained therefore, this suit has been filed. The claim of the plaintiff was found to be correct by the trial court and the court categorically held that a sum of Rs. 1,000/- had been advanced by the plaintiff to the defendant. However, the court dismissed the suit of the plaintiff on the ground that the pronote was not sufficiently stamped and was, therefore, not admissible in evidence under Sec. 35 of the Stamp Act. For this, the trial court relied upon a Full Bench decision of this Court in Nazir Khan v. Ram Mohan Lal (1931 All LJ 64) and also on Chaudhari Karan Singh v. Lal Singh (AIR 1933 All 109). 4. When the plaintiff went up in appeal before the lower appellate court, it upheld the finding regarding the advancement of the loan etc., and held that the document being not sufficiently stamped was inadmissible in evidence and the plaintiff was, therefore, not entitled to a decree on its basis. It also relied on a decision in Sheo Nayak v. Babau (1937 All LJ 235) in dismissing the plaintiffs appeal. This is how the plaintiff has come up before this Court in second appeal. 5. It also relied on a decision in Sheo Nayak v. Babau (1937 All LJ 235) in dismissing the plaintiffs appeal. This is how the plaintiff has come up before this Court in second appeal. 5. The only point which has been urged before this Court by the learned counsel for the appellant is that the findings on law by both the courts below are absolutely incorrect and that they have not noticed the later Full Bench decision of this Court in Major Mistri v. Smt. Binda Debi ( AIR 1946 All 126 ) and also one reported in Lakshmi Narain v. Mst. Aparna Devi (1953 All LJ 222). 6. I have gone through the decision reported in 1953 All LJ 222 and I find that all the cases referred to above and relied upon by the two courts below have been considered by the Full Bench decision of this Court in Major Mistri v. Smt. Binda Debi (supra) and has been endorsed in 1953 All LJ 222. The main controversy between the parties was as to whether the plaintiff could fall back upon the original transaction of contract of loan in his effort to obtain the decree against the defendant in a case in which the pronote was insufficiently stamped and whether in such a case Section 91 of the Evidence Act would come as a bar or not. Section 35 of the Stamp Act reads as under: - "Instruments not duly stamped inadmissible in evidence, etc. Section 35 of the Stamp Act reads as under: - "Instruments not duly stamped inadmissible in evidence, etc. - No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or unauthenticated by any such person or by any public officer, unless such instrument is duly stamped: Provided that - (a) Any such instrument not being an instrument chargeable with a duty not exceeding ten naye paise only, or a bill of exchange or promissory note, shall, subject to all just exceptions, be admitted in evidence on payment of the duty with which the same is chargeable, or, in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion. (b) to (c)................... .. .." 7. The purpose of this section is to exclude the admission of a pronote in evidence or for being acted upon any promissory note or bill of exchange, if it be insufficiently stamped. In this case the question is not as to whether the promissory note should be admitted in evidence or not. The plaintiff has not based his case on the pronote and the receipt. In the plaint itself, the plaintiff has alleged that the pronote and the receipt had been misplaced and were not available and, therefore. the suit was in fact on the basis of the original transaction of loan under which a loan of Rs. 1,000/- was alleged to have been advanced by the plaintiff to the defendant. The question which crops up, however, is whether when admittedly the pronote and the receipt had been executed, was the plaintiff entitled to fall back upon the original transaction of loan and the evidence would or would not be barred under Section 91 of the Evidence Act? This point has been at great length, discussed in Lakslimi Narain v. Mst. The question which crops up, however, is whether when admittedly the pronote and the receipt had been executed, was the plaintiff entitled to fall back upon the original transaction of loan and the evidence would or would not be barred under Section 91 of the Evidence Act? This point has been at great length, discussed in Lakslimi Narain v. Mst. Aparna Devi (supra) wherein it has been held that Section 91 of the Evidence Act appears as a bar only in such cases in which all the terms of the original contract are intended to be reduced to the form of a writing and the parties-agree that on the execution of the document only such document should determine their rights inter se. If there is no such contract, alleged or proved, then Section 91 would not come in as a bar. In this case Mr. Justice Agarwala held as under : - "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. Where it is in absolute payment or discharge of oral debt, that document alone can be used to prove the terms of the debt because in that case the debt has been "reduced to the form of a document". But where the document is not taken in absolute discharge or in satisfaction of the debt, the debt has not been reduced to the form of a document and therefore Section 91 is no bar to the proof of the debt otherwise than by production of the document. It is conceded on all hands that where a promissory note is taken in lieu of a pre-existing debt, it is usually taken merely by way of collateral security and in such a case where the promissory note cannot be produced, the original oral contract of loan may be proved by evidence. This was so held even in the case of Nazir Khan v. Ram Mohan (1931 All LJ 64). This was so held even in the case of Nazir Khan v. Ram Mohan (1931 All LJ 64). But since then it has been held that it makes no difference whether the contract of loan is simultaneously made with the execution of the promissory note or precedes it." In the end Justice Agarwala concluded as under: - "A promissory note or other negotiable instrument is taken in discharge of a loan only when the contract is that the debtor will not be liable if the promissory note or other negotiable instrument could not be enforced. It is to such cases that illustration (b) to Section 91 applied." In the instant case, as I have observed above, the suit was not based on the pro-note and in fact the plaintiff had relied upon the original transaction of loan although it was simultaneous to the execution of the pronote. The two courts below appear to have misunderstood the case completely and have not considered the view expressed in the Full Bench decision of this Court in Major Mistri v. Smt. Binda Debi (supra) and Lakshmi Narain v. Smt. Aparna Devi (supra). The entire dispute between the parties to the suit is covered by the aforesaid two decisions. 8. Under the circumstances and for the reason stated above, I find force in this appeal. It is accordingly allowed. The suit of the plaintiff is decreed with costs throughout.