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2002 DIGILAW 213 (KER)

JOSE PAUL v. JOSE

2002-03-22

R.BHASKARAN, S.SANKARASUBBAN

body2002
JUDGMENT S. SANKARASUBBAN, J. - The appeal was re-opened and heard today. Defendants in O.S. No. 11 of 1987 of the Sub-Court Cherthala are the appellants. The suit was filed by the plaintiff on the basis of pronote executed by the defendants in favour of the plaintiff. The promissory note is Ext. A1. The plaintiff is residing within the jurisdiction of Cherthala Court. The defendants contended that they had series of transaction with the father-in-law of the plaintiff, who was a money lender and they did not have any transaction with the plaintiff. But the defendants admitted the execution of Ext. A1 pronote. According to them, it was executed benami for the father-in-law of the plaintiff, who was examined as DW 3 in the case. The defendants further set up the case that the suit was not maintainable at Cherthala, as it was executed at Thodupuzha. It was further contended that the plaintiff has to prove the consideration proceeded from the plaintiff. On the basis of the pleadings in this case, relevant issues were raised. One of the issue in the case was whether the Court has got jurisdiction. Of course the case of the plaintiff is that the defendants came to Cherthala and executed the promissory note. The lower Court said that even otherwise the principle of the debtor seeking the creditor is applicable and hence, Cherthala Court has got jurisdiction. Sri. K. Raveendranathan Nair, who appeared for the appellants contended that the above proposition is not correct. Learned Counsel attempted to challenge the correctness of the decision reported in Ramasubramoniam vs. Ranganathan (1978 KLT 906). In that case, Subramaniam Poti, J. (as he then was) speaking for the Division Bench held as follows : "It is evident from Sections 64 and 70 of the Negotiable Instruments Act that in the case of a pronote, just as in the case of bills of exchange or cheques, presentment is necessary with the exception that in the case of pronote payable on demand and not payable at a specified place no presentment is necessary to charge the maker. The place of presentment indicated in Section 70 would apply necessarily only to a case where presentment is contemplated. The place of presentment indicated in Section 70 would apply necessarily only to a case where presentment is contemplated. If presentment is not a requirement even without such presentment the claim would be valid and such a case is one contemplated by the exception in Section 64, namely, where a maker of a pronote is sought to be charged on a pronote payable on demand and not payable at a specified place. ....." Sri Raveendranathan Nair submitted that the decision in 1978 KLT 906 runs counter to the decision of a Division Bench in Prabhakara Kamath vs. C. M. Patel (1961 KLT 695). In that case, it was held that the place of making the contract, the place of its breach or non-performance and the place where money was payable under the contract were all outside the jurisdiction of the Court and no part of the cause of action arose within its jurisdiction. The fact that the correspondence which led to the contract as far as the plaintiff was concerned was from a place within the jurisdiction of the Court will not give jurisdiction to it. The rule of the debtor seeking the creditor is not applicable in India for the purpose of determining the local jurisdiction of the Courts because that would be engrafting something on to Section 20 of the Code of Civil Procedure. The above decision was referred to in 1978 KLT 906. Later the Division Bench distinguished the earlier Division Bench decision on the ground that the observations regarding Section 20 were only an obiter. We respectively agree with the decision of the Division Bench in 1978 KLT 906. That decision has stood test of time from 1978. Hence, we respectfully follow the Division Bench decision reported in 1978 KLT 906. Sri. Raveendranathan Nair next contended that the pronote was not actually executed in favour of the plaintiff. It was for the benefit of the father-in-law of the plaintiff and the plaintiff is only a benamidar. We are not able to accept this proposition. Section 78 of the Negotiable Instruments Act says that subject to the provisions of Section 82, Clause (c), payment of the amount due on a promissory note, bill of exchange or cheque must, in order to discharge the maker or acceptor be made to the holder of the instrument. We are not able to accept this proposition. Section 78 of the Negotiable Instruments Act says that subject to the provisions of Section 82, Clause (c), payment of the amount due on a promissory note, bill of exchange or cheque must, in order to discharge the maker or acceptor be made to the holder of the instrument. Section 82 of the Act says that the maker, acceptor or indorser respectively of a negotiable instrument is discharged from liability thereon. It has been held by the Privy Council in Sadasuk Janki Das vs. Kishen Pershad (1918 Privy Council 146), that negotiable instruments are to be taken at their apparent tenor and no one whose name does not appear on the instrument can sue upon the same on the basis of a claim that he is the real or the beneficial owner whereas the holder is only a benamidar for him and that the doctrine of benami cannot be recognised in the field of negotiable instruments. In Jawahar Trading Corporation vs. Ramadas (1989 (2) KLT 932), Padmanabhan, J. held that holder of a promissory note is any person entitled in his own name to the possession thereof and to receive or recover the amount due thereon from the parties thereto. In order to discharge maker or acceptor payment will have to be made to the holder. That is the effect of Sections 8 and 78 of the Negotiable Instruments Act. In a case which does not fall under Section 82(c) a discharge could be given under Section 78 to the maker of the promissory note only when a payment is made to the holder thereof. A plea that the ostensible holder is not the real holder or only a benamidar is barred. Rights and liabilities of undisclosed principals are not intended to alter the well established rules as to negotiable instruments. Thus, the question of payment to father-in-law of the plaintiff does not arise in the present case. Learned counsel then tried to argue that no consideration has been passed. We went through the evidence in the case and we are satisfied that the defendants have not discharged the burden under Section 118 of the Negotiable Instruments Act. The suit was decreed. The plaintiff was allowed to realise a sum of Rs. 1,20,050 from the defendants and their assets with interest on the principal sum of Rs. We went through the evidence in the case and we are satisfied that the defendants have not discharged the burden under Section 118 of the Negotiable Instruments Act. The suit was decreed. The plaintiff was allowed to realise a sum of Rs. 1,20,050 from the defendants and their assets with interest on the principal sum of Rs. 1 lakh at 12% from the date of suit till date of decree with further interest at 6% from the date of decree till realisation. Learned counsel made a fervent plea for the reduction of the interest. Under Section 34 of the Code of Criminal Procedure, in so far as the decree for payment of money, the Court may order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit with further interest at such rate not exceeding six per cent per annum as the Court deems reasonable on such principal sum, from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit. There is a Proviso to Section 34, which says that the rate of such further interest may exceed 6% per annum, but shall not exceed the contractual rate of interest. In a recent decision of the Supreme Court reported in Central Bank of India vs. Ravindra (AIR 2001 SC 3095 = 2001 (1) KLT SC 743), at paragraph 55, the Supreme Court has given certain guidelines. Clause (8) of paragraph 55 says as follows : "55(8) Award of interest pendente lite and post-decree is discretionary with the Court as it is essentially governed by Section 34 of the CPC de hors the contract between the parties. In a given case if the Court finds that in the principal sum adjudged on the date of the suit the component of interest is disproportionate with the component of the principal sum actually advanced the Court may exercise its discretion in awarding interest pendente lite and post-decree interest at a lower rate or may even decline awarding such interest." In the present case, the plaintiff has pleaded for interest on the principal sum of Rs. 1 lakh. 1 lakh. Hence, we didn't find any necessity to change the rate of interest granted by the lower Court. In view of the above, the appeal is dismissed. We don't find any ground to change the rate of interest. Cross appeal is also dismissed. No costs. Appeals dismissed.