PASUPULETI VEERAVENKATARATNAM Vs. KAKIGOTLA BUCHIRAM NARASIMHAMURTHY
LAWS(APH)-1969-4-29
HIGH COURT OF ANDHRA PRADESH
Decided on April 25,1969

Pasupuleti Veeravenkataratnam Appellant
VERSUS
Kakigotla Buchiram Narasimhamurthy Respondents


Referred Judgements :-

BAJI NATH DAS V. SALIG RAM [REFERRED TO]
SINGLAIR V. BROUGHAM [REFERRED TO]
JOHN V. DODWELL AND CO. [REFERRED TO]
MOHAMMAD JAMAL SAHEB VS. MUNWAR BEGUM [REFERRED TO]
JUSCURN BOID VS. PIRTHICHAND LAL CHOUDHURY [REFERRED TO]


JUDGEMENT

CHINNAPPA REDDY,J. - (1.)The petitioner brought the suit out of which the Civil revision petition arises for recovering a sum of money said to be due on a promissory note executed by the defendant on 25.3.1959 for a sum or Rs. 290/- borrowed by the defendant from the plaintiff that day. The suit was dismissed by the learned Small cause judge who held that the promissory note was insufficiently stamped that the borrowing and execution of the promissory note were one and the same transaction and that a decree could not therefore be granted on the promissory note in view of Section 35 of the Stamp Act and Section 91 of the Evidence Act.
(2.)Sri P. Ramakrishna Raju, learned counsel for the petitioner contended that even though the promissory note was inadmissible in evidence, the creditor could still sue on the original consideration and recover the money lent by him on the basis of 'money had and received'. I thought such an argument was no longer open to the plaintiff in view of the judgement of the Full Bench of Five judges in Perumal Chettiar v. Kamakshi Ammal I.L.R. 1938 Madras 933. In that case the suit was for recovering a sum of money lent on a promissory note which was insufficiently stamped. The question which was referred to the full bench was 'whether a person who has lent money on a promissory note can sue to recover the debt apart from the note when the note embodies the terms of the contract with the borrower but is inadmissible in evidence owing to a defect in the stamping. The question was answered by Leach, C.J., who delivered the leading Judgement in this way;
"If the promissory note embodies all the terms of the contract and the instrument is improperly stamped no suit on the debt will lie. Section 91 of the Evidence Act and section 35 of the Stamp Act bar the way. But if it is does not embody all the terms of the contract the true nature of the transaction can be proved and where an instrument has been given as collateral security or by way of conditional security or by way of conditional payment a suit on the debt will lie. The fact that the execution of the promissory note is contemporaneous with the borrowing cannot exclude the possibility of the instrument having been given as collateral security or by way of conditional payment. Whether a suit lies on the debt apart from the instrument therefore depends on the circumstances under which the instrument was executed".

(3.)The view expressed by Venkata Subba Rao, J., in Chinnappa Naidu v. Srinivas Naidu 67 M.L.J. 912 . that "even where the loan is antecedent to and independent of the bill but is contemporaneous with it, the lender, when the note turns out to be invalid, can fall back upon the original express or implied, arising from the loan", was expressly overruled.
;


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.