Andhra HC (Pre-Telangana)
M.R.Venu vs Smt.Veluchuri Lakshmi And Others on 24 August, 2012
Equivalent citations: AIR 2013 ANDHRA PRADESH 76, (2013) 126 ALLINDCAS 434 (AP), 2013 (126) ALLINDCAS 434, 2013 (82) ALLCRIC 17 SOC, (2012) 6 ANDHLD 772
Author: N.R.L.Nageswara Rao
Bench: N.R.L.Nageswara Rao
THE HONOURABLE SRI JUSTICE N.R.L.NAGESWARA RAO SECOND APPEAL NO.598 OF 2011 24-08-2012 M.R.Venu Smt.Veluchuri Lakshmi and others Counsel for the Appellant : Sri K.G.Krishna Murthy Counsel for the Respondent: Sri Ravi Cheemalapati <Gist : >Head Note: ? Cases referred: 1.AIR 2005 A.P. 37 2.AIR 1958 A.P. 451 3.1969 An.W.R. 222 4.AIR 1966 A.P. 334 5. 2010 (5) ALT 96 (D.B) 6.AIR 1917 MADRAS 221 JUDGMENT:
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The unsuccessful defendant in O.S.No.119 of 1994 on the file of the Court of Senior Civil Judge, Vizianagaram is the appellant herein.
02. The suit was one filed for recovery of a sum of Rs.70,800/- alleging that the defendant has borrowed a sum of Rs.50,000/- on 06-09-1992 and executed a promissory note in favour of one Laxmi Narsu who in turn transferred the promissory note on 06-11-1993 for consideration in favour of the first plaintiff at Srungavarapu Kota.
03. The defendant claimed that he did not borrow any amount from the original holder Laxmi Narsu who is an employee of I.O.B at Chittoor. The defendant obtained some loan from IOB, Chittoor and at that time the original holder obtained signatures on blank papers and the suit promissory note might have been fabricated. The suit is, therefore, not maintainable. He also pleaded that the court at Vizianagaram has no jurisdiction to try the case.
04. After considering the evidence on record, the trial court has decreed the suit and in an appeal the District Judge, Vizianagaram in A.S.No.95 of 2004 has dismissed the appeal. Aggrieved by the concurrent judgments of the Courts below, the present Second Appeal is sought to be filed.
05. The Second Appeal has been admitted on the following substantial questions of law.
1. Whether the suit was properly instituted in the Court of the Senior Civil Judge at Vizianagaram and whether the plaintiff is a holder in due course?
2. Whether the judgments of the Courts below are not proper as the Courts have no jurisdiction to entertain the suits?
06. So far as the execution of the promissory note is concerned, there is a dispute and the defendant has come up with a theory of contributing signatures on blank papers. But, however, the evidence of PWs.1 and 2 clearly goes to show that the transaction of lending money is true and PW.2 supports the above version. His acquaintance with the original holder of the promissory note is not in dispute. PW.2 is the scribe of the promissory note and is also the scribe of the indorsement of transfer. This evidence has been accepted by the Court below and, therefore, in view of the above circumstances, the question of non- execution of the promissory note by the defendant cannot be accepted and it is a question of fact appreciated by the Courts below, which does not call for any interference.
07. However, the thrust of the argument of the counsel for the appellant is that the transfer indorsement for consideration does not create jurisdiction to the Court at Srungavarapu Kota as no transaction has taken place except the alleged transfer and as the defendant resides at Chittoor and following the decision reported in S.S.V.Prasad v. Y. Suresh Kumar1 the suit should have been dismissed. No doubt, in the above decision, it was held that a transfer endorsement does not create jurisdiction to the Court. The learned Judge has taken into consideration the provisions of Section 20 C.P.C and took into consideration the provisions of the Negotiable Instruments Act, 1881. Evidently, according to the learned Judge, the provisions of Sections 68 to 70 of N.I Act prescribes the place of presentation and if no place is agreed between the parties, it should be the place where the defendant resides or carries on business. Evidently, Sections 68 to 70 of N.I.Act deals with presentation of the negotiable instrument claiming the amount. None of those sections refer to the jurisdiction of a Court where the suit has to be filed. Presentation of a negotiable instrument for honouring or dishonouring is quite different from the institution of a suit for recovery of the amount due under the negotiable instrument. Therefore, the purport under Sections 68 to 70 of the N.I Act cannot be imported to consider the cause of action under Section 20 of C.P.C which mandates the procedure for filing of the suits. Having considered the scope of Section 20(C) of C.P.C, ultimately, the learned Judge found that cause of action in the larger context has two components, viz., (a) existence of a duty in the defendant towards the plaintiff and its breach; and (b) the damage or loss arising out of that breach. Therefore, the scope of cause of action evidently is from a bundle of facts. It does not start with the right of the defendant and it starts with the right of the plaintiff in instituting a suit. In this connection, it is useful to refer to a Division Bench decision of this Court reported in N.Narayana Murthy v. G.Ganga Raju2 wherein it was held as under "Cause of action is a bundle of essential facts which the plaintiff has to prove in order to sustain his action. This connotes that both the right to sue and cause of action are the same and the cause of action is synonymous with the right to sue."
08. The above judgment clearly lays down that a cause of action starts with the right to sue and it is evidently vested with the plaintiff. In the decision relied on by the counsel for the appellant in S.S.V.Prasad (1st supra) the learned Judge has referred to the judgment of this Court reported in P.S.Kothandarama Gupta v. Sidamsetty Vasant Kumar3, but, differed with the learned Judge in holding that Section 70 of the N.I Act does not lay the place of suing. In this connection, the judgment reported in Radhakrishnamurthy v. Chandrasekhara Rao4 also deals with the situation of this nature and it was held that a transfer of assignment on promissory note creates cause of action within whose jurisdiction the transferor endorsement has taken place. Therefore, the opinion of the two earlier single Judges of this Court is in favour of holding that the cause of action is created by virtue of the transfer of the promissory note at a place where it was transferred and particularly for consideration.
09. It is to be noted that exception to Section 64 of the N.I.Act is as follows:-
"Exception:-- Where a promissory note is payable on demand and is not payable at a specified place, no presentment is necessary in order to charge the maker thereof."
Therefore, the above provision makes it clear that a presentation of the promissory note is not necessary and when presentation is not necessary, the provisions of Sections 68 to 70 of N.I.Act can have no application. Consequently, the jurisdiction has to be decided only under Section.20 C.P.C.
10. It is to be noted that this Court is a Court established by merger of Andhra High Court and Hyderabad High Court. Andhra High Court being one carved out of Madras High Court, which is a Court of record, all its decisions prior to establishment of Andhra High Court are binding on High Court of Andhra Pradesh, subject of course to other rules of doctrine of precedent. [vide decision reported in Lakshminagar Housing Welfare Association Vs. Syed Sami @ Syed Samiuddin(5)].
11. In this connection, it is useful to refer to the decision of a Division Bench of Madras High Court reported in Manepalli Magamma and others v. Manepalli Sathi Raju6 which was referred by the learned single Judge in Radhakrishnamurthy (4th supra) with whom the learned Judge differed in the decision 1st supra. Exactly, the similar question arose before the Division Bench of Madras High Court and the question was whether assignee of a promissory note can sue in the Court having jurisdiction where his assignment was made. Ultimately, it was found that assignment is part of cause of action under Section 20 (c ) and further it was held as under:-
"The expression within 'cause of action', in Section 20 C.P.C must be read with reference to the suit instituted by the plaintiff; it means plaintiff's cause of action, and not the cause of action on the documents, sued on irrespective of the rights of the plaintiff under it, in other words, the cause of action as it existed when the right to sue on the note arose for the first time."
"The assignment of a promissory note by the payee is a part of the "cause of action" within the meaning of S.20 (c), C.P.C. and the assignee can sue on it in the Court having jurisdiction where the assignment took place: Read Vs.Brown [ (1989) 22 Q B D 128."
12. It is to be noted under Section 48 of the N.I.Act a promissory note is negotiable by the holder by endorsement and delivery thereof. There is not of much difference with reference to an "assignment" or a "transfer of a promissory note". They only create the right of the person in whom the endorsement or assignment was made to recover the money against the executant.
13. In-fact, it was also held in the above decision that the above interpretation may cause inconvenience to the defendant in particular cases, but, it cannot be a factor. In-fact, the learned Judge in the decision relied on by the appellant in S.S.V. Prasad (1st supra) referred to the inconvenience of the defendants in para 33 opining that if the interpretation of right to sue is given, it will result in disastrous consequences and the defendant will be subjected to face litigation with a person who is a stranger to him and at a place where he is neither resident nor undertaken any activity, if the suit is filed on the strength of a promissory note said to have been endorsed by the holder. In view of the judgment of the Division Bench which is binding and which has been relied on by the other two single Judges, it is to be held that jurisdiction of the Court to entertain the suit at Srungavarapu Kota on the basis of the transfer for consideration cannot be doubted. Therefore, the appeal is liable to be dismissed.
Accordingly, the Second Appeal is dismissed. No costs. Miscellaneous petitions pending, if any, in this Second Appeal shall stand closed. _______________________ N.R.L. NAGESWARA RAO,J 24-08-2012