Decided on November 14,1972



Obul Reddi, J. - (1.) The question referred to this Bench of seven Judges by a Division Bench to which two of us ( Obul Reddi and Madhava Reddy, JJ. ) were members, is "Whether a plaintiff can lay action for recovery of the amount advanced by him basing on the original cause of action when the negotiable instrument evidencing the transaction is inadmissible in evidence under Section 35 of the Stamp Act. "
(2.) The necessity to refer the question to a larger Bench arose as a result of the view expressed by Gopal Rao Ekbote, J. ( as he then was ) in Mohd. Jamal Saheb v. Munnar Begum, AIR 1964 Andh Pra 188, which does not accord with the ruling of the Full Bench of the Madras High Court in Perumal Chettiar v. Kamakshi Ammal, ILR ( 1938 ) Mad 933 = ( AIR 1938 Mad 785 ( FB ) ). The learned Judge, Gopal Rao Ekbote, held that the plaintiff can have his money back through the document is in-admissible in evidence because it is in-sufficiently stamped and that Section 91 of the Evidence Act is no bar to the plaintiff succeeding on a non-contractual basis, that is, in an action for money had and received. In so coming to the conclusion, the learned Judge seems to have felt that he is not bound by the decision of the Full Bench in ILR ( 1938 ) Mad 933 = ( AIR 1938 Mad 785 ( FB ) as " two decisions decided in 1918 by the Privy Council ( John v. Dodwell and Co. Ltd. AIR 1918 PC 241 and Juscurn Boid v. Prithichandlal, AIR 1918 PC 151 ) were not brought to the notice of the Full Bench ". Having regard to the fact that the High Courts of Allahabad, Bombay and some other High Courts have taken a view different from that expressed by the Full Bench of five Judges of the Madras High Court in ILR ( 1938 ) Mad 933 ( 935 ) = ( AIR 1938 Mad 785 ( FB ) the question posed above was referred for consideration by a larger Bench.
(3.) It may be necessary at the outset to refer to the contentions put forth by the counsel appearing for the petitioner and the counsel appearing for the respondent. Mr. C. N. Babu appearing for the petitioners in C. R. P. No. 255/65, relying upon the decision in Pithi Reddy v. Velayudasivan, ( 1885-1887 ) ILR 10 Mad 94 and Perumal Chettiars case, ILR ( 1938 ) Mad 933 = ( AIR 1938 Mad 785 ( FB ) ) contended that a plaintiff cannot recover money lent on a unstamped or an insufficiently stamped promissory note apart from the note in view of the bar of Section 35 of the Stamp Act and Section 91 of the Evidence Act. It is further contended by him that there is no presumption, when the lending of the money and the execution of a promissory note are contemporaneous that the promissory note operates as a conditional payment or a collateral security so as to say that the real contract is different from what is embodied in the promissory note and thus bypass the provisions of Section 91 of the Evidence Act.;

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