Bhandari, J - (1.) THIS is a Civil Second Appeal filed by the defendant in a money suit.
(2.) THE case of the plaintiff-respondent Niranjandas is that he and his brothers carried on business at Mandi Singaria under the name and style of Firm Motimal Tilokchand. THE defendant Asuram had executed a promissory-note for Rs. 3,500/-on the 22nd January, 1955 in favour of the said Firm Motimal Tilokchand in settlement of the old account. THE promissory note provided that interest shall be paid at annas eight per cent per mensem. THE case of the plaintiff further is that after the execution of the promissory-note the firm Motimal Tilokchand was dissolved and the said promissory note fell to the share of the plaintiff. THE plaintiff therefore, brought the suitfor the recovery of Rs. 3800/-including interest. Asuram defendant denied all the allegations made by the plaintiff and took some pleas in defence which need not be re-eiterated here as they have been disbelieved by the courts below. THE trial Judge held that the defendant Asuram had executed the promissory note and the amount for which the suit was filed was due from him. He, however, held that the Firm Motimal Tilokchand was not dissolved on the date of the filing of the suit and the promissory note had not fallen to the share of the plaintiffs. THE trial Judge also held that the promissory note was a negotiable instrument which could not be assigned by the said firm in favour of the plaintiff without endorsement and, as such, the plaintiff was not entitled to maintain the suit. THE suit was, therefore dismissed. On appeal by the plaintiff-respondent, the learned District Judge Ganganagar, agreed with the trial court that the promissory note was executed by the defendant Asuram. THE learned District Judge further held that the firm Moti Mal Tilokchand was dissolved on Phagun Badi 5, Sambat 2011 after the execution of the promissory note and before the filing of the suit and the promissory note had fallen to the share of the plaintiff on the dissolution of the firm. He also took the view that the other two partners of the firm namely Kesri Chand and Bhagwan Das had come in the witness box and deposed that they had nothing to do with the said promissory note which had fallen to the share of the plaintiff-respondent and under these circumstances the plaintiff had a right to give a valid discharge of the debt due on the promissory note and was entitled to bring an action on the promissory note, though it had not been endorsed in his favour. He also observed that the other two partners should be deemed to be parties to the suit. Taking this view of the matter, he decreed the suit of the plaintiff. Asuram defendant has filed this second appeal. He died during the pendency of the suit and he is now represented by the present appellants. During the pendency of the appeal in this Court Asuram in his lifetime had filed an application under sec. 6 of the Relief of Agricultural Indebtedness Act, 1956, in the Debt Relief Court, Suratgarh. The Debt Relief Court by its judgment dated the 17th of January. , 1962 granted some time to the judgment-debtor to pay the decretal amount and it further directed that in case he failed to do so, the decree-holder would be entitled to recover the whole amount at once together with interest at 6% per annum from the date of the decree. A revision application was filed by the present appellant before the District Judge, Ganganagar against the order of the Debt Relief Court. The learned District Judge modified the order of the Debt Relief Court to this extent only that the decree-holder will be entitled to recover interest at 6% per annum from the date of default and not from the date of the decree. A preliminary objection was raised on behalf of the plaintiff-respondent that the appeal is not maintainable. This objection is based on secs. 17 and 21 of the Agricultural Indebtedness Act. The relevant portions of both the sections are quoted below.- "17. Revision of order of Debt Relief Courts - Any person aggrieved by an order of a Debt Relief Court may, within ninety days of such order, apply to the District Court for revision of the order on any of the following grounds : - (a) that the order is contrary to law; (b) that the court has exercised jurisdiction not vested in it by law ; (c) that the instalments fixed under subsec. (3) of sec. 11 are inequitable : but Subject to the orders of the District Court on such application and further subject to the provisions of Sec. 18, the order of the Debt Relief Court shall be final. " "21.- Bar against jurisdiction of courts in certain matters - (1) Subject to the provisions of Sec. 17 to 19, the jurisdiction of the civil courts and the insolvency courts shall be barred in respect of - (c) the recovery of any debt, the recovery of which is included in any scheme under subsection (1) of sec. 11 for the time being in force and any order of a Debt Relief Court under subsec (2) and (3) of that section or under sec. 20: It was urged that under sec. 17 of the Rajasthan Relief of Agricultural Indebtedness Act, 1957, the order passed by the Debt Relief Court with such modifications as had been made by the District Court, Ganganagar had become final. It was also urged that the jurisdiction of civil court is also barred under sub-section (l) (c) of sec. 21 of that Act. In reply to these contentions it was urged that Asuram defendant had filed the present appeal before he had made an application under sec. 6 of that Act and that the appeal cannot be said to be proceeding in respect of the recovery of any debt but was a proceeding for vacating the decree already passed against Asuram defendant and the jurisdiction of this Court is not barred under sec. 21 of the Act. It was also urged that the order passed by the Debt Relief Court cannot be treated to be final as against the debtor, though it may be final against the creditor. It was also urged that before the order was passed by the Debt Relief Court, the defendant had already filed the appeal in this Court and any order passed by the Debt Relief Court must be taken to be subject to the decision of the appeal pending in this Court. On merits, the main contention on behalf of the appellants is that there being no endorsement by the partners of the dissolved firm in favour of the plaintiff-respondent negotiating the promissory note in his favour, he is not entitled to maintain the suit without making the other partners parties to the suit. In reply to this contention it is urged by the plaintiff respondent that the promissory note having fallen to his share on the dissolution of the said firm, he is entitled to maintain the suit. The other two partners have come in the witness box and supported the case of the plaintiff that the promissory note had fallen to his share on the dissolution of the firm and though they are not formally parties to the suit, it must be taken that there is now no apprehension that the debtor shall have to pay any amount due under the said promissory note to any of these two partners. I take up the preliminary point first. In sec. 17 of the Act, it has been provided that subject to the orders of the District Court on an application under sec. 6. the order of the Debt Relief Court shall be final. The order passed by the Debt Relief Court is binding both on the debtor and the creditor and its finality cannot be challenged in any proceedings by any of them. There is no room for taking the view that the finality of the order operated against the creditor only and the debtor was entitled to question the finality in any other proceeding. No doubt the Act has been enacted for making provision for the relief of agriculturists in the State from indebtedness but once an agriculturist has taken steps under the provisions of the Act he too is bound by the order passed by the Debt Relief Court. It has been urged by the learned counsel for the appellant that when the appeal challenging the very decree had been filed in this Court before the application for relief under the Act was made it must be taken that all orders passed by the Debt Relief Court are subject to appeal. In my humble opinion, the pendency of an appeal cannot affect the finality of the order of the Debt Relief Court It was also contended that sec. 21 (2) lays down specifically that a court which had stayed proceedings under the provisions of the Act is not debarred from relieving a debtor of any liability by passing such orders in regard to him as are not inconsistent with the Act. Sec. 21 (2) runs, as follows: - (2) Nothing herein contained shall prevent a court which has stayed proceeding under the provisions of this Act from resuming them and passing such orders in regard to them as are not inconsistent with this Act. " The argument is that the provision in sec. 21 (2) should be read as an independent provision applicable in all the circumstances. Even taking the view that sub-section (2) of sec. 21 is an independent provision, it only authorises the court which has stayed the proceedings under the provisions of the Act from relieving the debtors and passing such orders as are not inconsistent with the provisions of the Act. In this case there has been no stay of any proceedings by the Debt Relief Act. This provision, therefore, does not apply in so many words to the present case. Learned counsel has argued that under sub-section 3 of sec. 6 it must be taken that the proceedings in this appeal were automatically stayed. Unfortunately sub-section 3 does not apply as there were no proceedings against the debtor for the recovery of debt pending in this Court nor was any stay order passed by this Court. It was an appeal by the debtor in which the relief sought was that he should not have been adjudged liable to pay any amount in the suit filed by the plaintiff for the recovery of his debt. Moreover, sub-section (2) to sec. 21 authorises the court which has stayed the proceedings to pass any order not inconsistent with the Act. The order of the Debt Relief Court adjudging a debtor liable being final under sec. 17 it is not possible for a court of law to pass any order inconsistent with that order under subsection (2) of sec. 21. The appeal, therefore, fails on this ground. It was also urged by the plaintiff-respondent that the jurisdiction of the civil court is barred under sub-section 21 (1) (c) and the High Court should not hear this appeal. The appeal cannot be said to be a proceeding in respect of the recovery of any debt, it being directed for vacating the decree already passed against the debtor and as such sec. 21 (l) (c) does not apply. As the appeal has also been argued on merits, I consider it proper to express my opinion on the other points raised in the appeal. Let it be first clarified that the promissory note under consideration is not payable to bearer but is payable to order and is negotiable under sec. 46 of the Negotiable Instruments Act (hereinafter called 'the Act') by the holder by endorsement and delivery thereof. It may also be pointed out that the promissory note which is in favour of the firm Motimal Tilokchand has not been endorsed in favour of the plaintiff. The case of the plaintiff is that on the dissolution of the firm it had fallen to his share. It may also be pointed out that two of the other partners Kesrichand and Bhagwan-dass, have come in the witness box and supported the case of the plaintiff and their statements have been accepted by the lower appellate court to be correct. Now the argument on behalf of the appellant is that under sec. 78 of the Act payment of the amount due on a promissory note in order to discharge the maker must be made to the holder of the instrument and in this case on the face of the instrument the holder being the firm the plaintiff alone cannot give a valid discharge and he has no right to maintain the suit in his own name. This argument proceeds on the basis that on the face of the instrument it is the firm which could have given the defendant a valid discharge and a person who cannot give a discharge, cannot maintain the suit. There are a large number of cases taking this view. Some of these cases are referred to in a Division Bench judgment of this Court in Bhagirath Vs. Gulab Kanwar (l) which has not accepted this proposition. Bhagirath's cases deals with the law when the holder is merely a benamidar for the person who advanced the money and the suit is brought by the real creditor to recover the amount due under a negotiable instrument. It was observed that - "where the beneficial or a true owner brings a suit without impleading the holder (who is alive) either as a plaintiff or as a defendant, he cannot maintain his suit in the absence of the holder. The reason, to our mind, is simple and that is that if the matter is decided one way or the other in the absence of the holder, the latter cannot be held to be bound by any decision which might have been so arrived at, and the maker or the acceptor of the note would be exposed to unnecessary risk, and the object of sec. 78 would be clearly defeated. We, therefore, wish to point out that those cases which lay down that the claim of the true owner can be decreed even in the absence of the holder and the latter has not been made a party to the suit have gone too far. On this view, with utmost respect, it appears to us that the Full Bench case of Rai Ram Kishore Vs. Ram Prasad Misir (2) goes further than we would he prepared to go, because in that case the holder of the promissory note was alive but he was not made a party to the suit. The earlier decisions of the Allahabad High Court in Sewa Ram Vs. Hoti Lal (3) and Lachi Chand Vs. Madanlal Khemka (4) seem to us to have struck the correct note when it was laid down therein that the real owner of a note may sue provided he is in a position to obtain a good discharge from liability for the maker or acceptor of the note, and such a discharge could only be obtained with confidence or certainty where the holder himself is a party. " In another part of the judgment, it was observed that - "we may, however, point out that this position, in our opinion, will not hold good where the holder is neither a plaintiff nor even a defendant but has merely been produced as a witness in the suit brought by the real owner, as in such a case no decree can be passed qua the holder so as to effectively bind him, he being not a party to it. " (p. 709) I may point out that the law laid down in Bhagirath's case (l) is with reference to a case where the true owner brings a suit, the holder being merely a benamidar. The Division Bench has itself taken the view that if a negotiable instrument vests in a person by operation of law, then even in the absence of an endorsement in his favour by the holder, the suit is maintainable by the person who has acquired right to possess the instrument and to recover the amount due thereon. It is observed in that case that - "it is not difficult to conceive of cases where it is impossible for the holder to bring a suit, and such a case arises where the holder dies before recovering upon the promissory note, or a bill of exchange or a cheque. Can it be said that in such a case no suit at all can be brought? Obviously not. Again, it may happen that by operation of law, the property in a negotiable instrument vests in a person other than the holder and there has been no endorsement in his favour by the holder such as where a promissory note is allotted to the share of a person by a decree of the court in a suit for partition. In such a case also, we see no adequate justification why the true owner should be held to be precluded from bringing a suit in his own name. "
(3.) LEARNED counsel for the appellants has laid considerable emphasis on the observations made by the Division Bench that the Full Bench case of Ramkishore Vs. Ramprasad Misir (2) went further than the Bench was prepared to go. It may be mentioned that the Division Bench approved the decisions of the Allahabad High Court in Sewa Ram Vs. Hotilal (3) and Lachmi Chand Vs. Madanlal Khemka (4 ). In Sewaram Vs. Hotilal (3), the promissory note in suit was executed by Sewaram (Defendant No. 1) in favour of Pannalal (Defendant No. 2), and the suit was brought by Seth Hotilal plaintiff claiming that he was the real creditor and Defendant No. 1 was his benamidar. Niamatullah, J. observed, as follows - "in cases of benami promissory notes the real creditor runs considerable risk in not forthwith obtaining an endorsement in his own favour as cases are conceivable in which the holder may collude with the debtor and give him a discharge. In the case before us defendant 2 has not entered appearance and there is no suggestion that he has given a discharge to defendant 1, or that he opposes the claim of the plaintiff-respondent for the enforcement of the liability of defendant 1. As a mere lender of name he is apparently not concerned with the result of the suit. Unless on the authorities relied on by the appellant, to be presently noticed, the plaintiff-respondent is not entitled to maintain the suit at all, we are of opinthat justice should be done by passing a decree against defendant 1 and safeguarding the interest of defendant 1 in the manner already mentioned. " (p. 110) In that case, a decree was passed in favour of the plaintiff with certain conditions attached to it to safeguard the interests of the debtor. Full agreement was expressed with the view taken in Sewa Ram Vs. Moti Lal (3) and Lachmi Chand Vs. Madan Lal Kehmka (4 ). The facts of the Full Bench case of the Allahabad High Court (2) were that the plaintiff Rai Ram Kishore and his two brothers Rai Amar Nath and Rai Ramcharan formed a joint Hindu family. There was a joint family firm, "piru Mal Rudha Rawan". The defendant used to borrow money from this joint family firm. Four promissory notes were executed in favour of Rai Amar Nath. An arbitrator (Rai Krishnaji) had been appointed before the execution of the promissory notes to partition the joint family property between the three brothers. A decree from the civil court was obtained on the basis of the award under which the promissory notes which had come into existence fell to the share of Rai Ram Kishore. It was held that Rai Ram Kishore was entitled to bring the suit in spite of the fact that the promissory notes were in the name of Rai Amar Nath. The promissory notes came into existence after the award was made and the view could be taken that they were not joint family property when they were executed. In this context, the Division Bench may have felt that it was not proper to subscribe to the view taken by the Full Bench in passing a decree in favour of Rai Ram Kishore when the other brothers were not parties. In the instant case, the firm was dissolved after the execution of the promissory note and after dissolution it has fallen to the share of the plaintiff. The facts of the Allahabad Full Bench case are, therefore, distinguishable. When by operation of law or by agreement between the parties the debt under a negotiable instrument is transferred, the transferee is entitled to maintain the suit in his own name in spite of the fact that there is no endorsement in his favour. Bhagirath's case (J) does not lay down the law to the contrary, nor do I find it to the prejudice of the defendant to decree the claim against him as there is no risk to the defendant of facing any demand from the other two partners. They have appeared in the witness box and have expressly said that on the dissolution of the firm, the promissory note had fallen to the share of the plaintiff and they had no claim against the defendant on the basis of the promissory note. The decree has been rightly passed in favour of the plaintiff. It is next contended on behalf of the plaintiffs that there should have been an instrument in writing of assignment as required under sec. 130 of the Transfer of Property Act by the two partners, Kesrichand and Bhagwandass in favour of the plaintiff assigning their rights in the promissory note to the plaintiff and that in the absence of such instrument in writing, it cannot be taken that the promissory note had fallen to the share of the plaintiff. In my humble opinion, this argument has got no force. A partition of joint property is not transfer within the meaning of the Transfer of Property Act. This view has been taken in a large number of cases, the latest being the Full Bench case of the Madras High Court in Muthuveeran Chetty Vs. Govindan Chetty (5 ). By virtue of sec. 2 of the Transfer of Property Act the incidents of any contract or constitution of property which are consistent with the provisions of that Act are not affected in any way by its provisions. The promissory note which is the basis of the suit in the present case was the joint property of the three partners and fell to the share of the plaintiff by partition and partition being merely an incident of joint ownership cannot be affected by the provisions of the Transfer of Property Act. For this reason sec. 130 of the Transfer of Property Act is not applicable to the case. I am of the opinion that even in the absence of any written instrument it was open to the lower appellate court to hold that the promissory note in question had fallen to the share of the plaintiff appellant and he was thus entitled to sue for the same. No other point has been urged in this second appeal. The appeal has got no force and is dismissed with costs. . ;