GHISA LAL Vs. RATANLAL GODHANLAL

JUDGEMENT

(1.) Would an instrument cease to be a promissory note in terms of Section 4 of the Negotiable Instruments Act, where it provided for payment of interest which was ascertainable? This question has been posed by the first Appellate Court for answer by a larger Bench and that is how we are seized of the reference

(2.) The issue arises in Appeal No. 86/84 which was directed against the judgment and decree dated 29.10.1984 passed by Additional Judge, Neemuch in Civil Suit No. 6B/83, based on the disputed promissory note. The suit was dismissed on the jurisdiction plea. However, the first Appellate Court, while considering the appeal, came across an objection on the nature of the instrument and refused to accept it as a promissory note as it envisaged payment of interest. It was held as under -

(3.) All that was required to be examined in this backdrop was whether an instrument could be excluded from the tribe of a promissory note merely because it provided for payment of interest and whether the view taken by the first Appellate Court deserved acceptance.