TAKRU, J. - (1.) THIS appeal by the plaintiff is directed against the judgment and decree of the learned Civil Judge, Aligarh, dismissing his claim against defendant No. 1, while decreeing it against defendant No. 2.
(2.) THE suit giving rise to this appeal was filed by Sri Mathura Prasad on the 31st of March 1951 against defendants Nos. 1 and 2 for the recovery of Rs. 18,100/- from them on the basis of a pronote executed by defendant No. 1 in favour of defendant No. 2. According to the plaintiff, defendant No. 2 endorsed that pronote in his favour for consideration and the plaintiff being thus the holder in due course of that pronote was entitled to recover the amount due on it from both the defendants. The suit was contested by defendant No. 1, while it proceeded ex parts against defendant No. 2. The contesting defendant admitted the execution of the pronote, but denied consideration. He also denied the endorsement in favour of the plaintiff and the payment of any consideration by him to defendant No. 2. The circumstances under which the pronote was alleged to have been executed by him might appropriately be stated in his own words : "(4)(a). Khan Bahadur Mohd. Khalilul Rahman Khan Saheb gave an application under the Encumbered Estates Act for arrangements with respect to his debts. Besides other debts he owed money in respect of pronto to Mohd. Salimulla Khan, father of defendant No. 2 also. The special Judge, 1st grade passed a decree against him in respect of the debt of Salimullah Khan and all the decrees in respect of the debts were sent to the Collector, Mathura for adjustment. (b) By chance, the actual creditor and the judgment debtor aforesaid died. Defendant No. 2 became the sole heir of the creditor as his son and the contesting defendant and Bibi Umatul Hafiz Begum became the heirs of the judgment debtor as his own nephew and as his widow. (c) The amount due under decree No. 2 of 1936 aforesaid which carried interest amounted to Rs. 58403/13/8 on 7-11-44. A private compromise was arrived at between the contesting defendant and defendant No. 2 with respect to the realization of the amount aforesaid and a deed of agreement, in accordance therewith was executed on 7-11-44 and registered, on the basis of which the defendant No. 2 was paid a sum of Rs. 38238-12-11 in cash after allowing credit for a sum of Rs. 1008-3-9 in respect of decrees relating to profits and a sum of Rs. 1056-13-0, as profits not decreed, which were due to defendant No. 1 and sister of defendant No. 1 and a sale was made of Mauzas Goeti, Sultanpur, Kanpur and Mirzapur, tahsil Kasganj, district Etah Mohal Karimullah Khan for a sum of Rs. 18100 and the sale consideration of Rs. 18100 was allowed as set off by defendant No. 2 to defendant No. 1. (d) The said Mauzas formed the ancestral properly of defendant No. 2, which Haji Mohd. Swaleh Khan Saheb deceased, brother of the contesting defendant, purchased at an auction sale. After his death, the contesting defendant and his sister inherited the said mauzas from Haji Sahab aforesaid. The contesting defendant is the lumbardar of the villages aforesaid with the exception of mauza Mirzapur. It was his (sic) desire to purchase back the shares sold by auction in the ancestral villages. Due to intimate relations defendant No. 1 agreed to make a sale of them to defendant No. 2 in accordance with the latters desire. Their price was settled at Rs. 18100 and credit for the same was allowed. The villages aforesaid were also, however, subject to the charge of the debts due by Haji Mohd. Swaleh Khan in the case under the Encumbered Estates Act in charge of the Collector of Aligarh and the execution and completion of sale deed could not be effected without his permission. (5) All the four villages aforesaid were sold for Rs. 18,100, the sale consideration whereof was paid by defendant No. 2 to defendant No. 1 by means of setting off the amount. But as it is according to law essential to show the sale consideration at the time of registration of a sale-deed, a pronote without consideration was executed in favour of defendant No. 2 to the extent of the sale consideration of the villages aforesaid in order that defendant No. 2 might be able to show the payment of sale consideration at the time of registration of the sale deed. Accordingly, this fact was clearly agreed upon and mentioned in the agreement aforesaid that Abdul Makit Khan, defendant No. 2 would not be able to file a suit on the basis of the pronote aforesaid; nor would any amount be payable by the defendant in respect of the pronotes aforesaid, nor would he be responsible for it in any way; except in case that the contesting defendant did not execute a sale deed in respect of the villages in favour of defendant No. 2 after permission for sale had been granted by the Collector of Aligarh or after they became free and were released by the Encumbered Department and freed from the charge the sale consideration of the villages aforesaid, paid by defendant No. 2 to defendant No. 1 by means of setting it off against the amount of the decree under the Encumbered Estates Act would be repayable to defendant No. 2 by means of the pronote aforesaid. The contesting defendant and his sister have always been and are ready to fulfil their part of the agreement i.e. execution and completion of the sale deed. But so far neither permission has been granted by the court of the Collector nor have the villages aforesaid been released by the Encumbered department. Under the circumstances it was not possible for defendant No. 1 and his sister to execute a sale deed in respect of the property aforesaid. No right accrues to defendant No. 2 for repayment of the sale consideration of the villages aforesaid." On these pleadings, the learned trial Judge framed the following issues : 1. Has the plaintiff got any cause of action for the suit ? If so, against which of the defendants ? 2. Is the pronote without consideration ? 3. Has it been executed under the circumstances as alleged by the defendant No. 1 ? If so, can a suit be maintained on the pronote and is it negotiable ? 4. Has any money become payable under the pronote ? 5. Is the plaintiff a holder in due course ? 6. Has it been validly endorsed and for consideration ? 7. Is the plaintiff entitled to sue ? 8. Has the defendant No. 2 committed breach of faith and contract ? If so, what is its effect ? 9. Is the defendant No. 1 entitled to get costs of the suit ? If so, from whom ? 10. To what relief, if any, the plaintiff is entitled ?
(3.) ON the main issue, namely issues Nos. 5 and 6 the learned trial judge held that the plaintiff was not a holder in due course, though he was a holder for consideration and as such entitled under Section 59 of the Negotiable Instruments Act to all the rights of his transferor i.e. respondent No. 2. On issue No. 2 h 3 held that the pronote was for consideration. On issue No. 3 he held that as the plaintiff was aware that the amount under the pronote could not be realised till either the Collector refused sanction to defendant No. 1 to sell the villages concerned to defendant No. 2 or defendant No. 1 refused to self them to defendant No. 2 after sanction to their sale was accorded by the Collector or they were released by the Encumbered Estates Department, and as none of these conditions had been fulfilled by the date the suit was instituted, the same was premature against defendant No. 1. He, accordingly, dismissed the suit with costs against defendant No. 1 and decreed it against defendant No. 2 with pendente lite and future interest at the rate of 3% per annum simple and costs, including costs which were payable by the plaintiff to defendant No. 1. Defendant No. 2 submitted to the decree, but the plaintiff feeling dissatisfied has preferred the aforesaid appeal to this Court.;