Kerala High Court
C.N. Sankaran Nambuduripad vs Vijayan And Ors. on 14 October, 1987
Equivalent citations: AIR1988KER120, AIR 1988 KERALA 120, (1988) 1 CIV LJ 366 (1987) 2 KER LT 745, (1987) 2 KER LT 745
JUDGMENT M.M. Pareed Pillay, J.
1. The above appeal was heard on 19-9-1987 and it was dismissed on that day. Thereafter the appellant filed C.M.P. No. 24632 of 1987 to readmit the appeal for hearing on the ground that the appeal happened to be dismissed without hearing the appellant's counsel. The petition was allowed and the appeal has been reheard.
2. Appellant is the 1st defendant in O.S. No. 330 of 1974 of the Sub Court, Trichur. The 1st respondent (plaintiff) filed the suit for realisation of Rs. 8,048/50 with future interest at 9% on the principal sum of Rs. 6,000/-. The learned Sub Judge decreed the suit for a sum of Rs. 6,000/- with interest at the rate of 9% per annum from 15-2-1972 up to the date of the judgment and interest thereafter at the rate of 6% per annum on the principal sum till realisation with costs. The Additional District Judge dismissed the appeal holding that the plaintiff is entitled to 9% interest from the date of Ext. A3 till the date of suit and 6% interest thereafter.
3. Contention of the appellant is that Ext. Al being a promissory note and not properly stamped is not admissible in evidence and on that score the plaintiff has to be non-suited. Defendants have admitted the execution of Ext. Al. Counsel for the plaintiff contended that the recitals in Ext. Al would clearly show that it can never be construed as a promissory note and therefore the contrary contention of the defendant is wholly untenable.
4. Section 4 of the Negotiable Instruments Act, 1881 defines "promissory note" as an instrument in writing (not being a bank-note or a currency note) containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person to the bearer of the instrument. The essential requisite of a promissory note is certainly as to the person to make the payment, the person to receive it, the time and place of payment, the conditions of liability and also as to the amount to be paid. No particular form of words is essential to constitute a promissory note. It may be in the form of a letter or in any other form of words which satisfy the requirements of Section 4 of the Act and from which the intention to make a promissory note can be discerned. A mere receipt with no such promise to pay is not a promissory note. The question whether an instrument is a promissory note or not has to be ascertained by the words used in the document. It cannot be said that the absence of the word "promise" is sufficient to declare that the document is not a promissory note. Any form of expression or recitals in the concerned document from which it can be deducted that there was an undertaking to pay a certain sum is sufficient to construe the document as a promissory note. It has to be ascertained whether the words used in an instrument import an unconditional undertaking to pay the amount. It is not enough that the substantial effect of the instrument is to make the executant liable to pay money. For instance, a letter containing a confirmation of an undertaking to pay unconditionally a specified sum to a person will not be a promissory note. A document which contains a promise to pay on demand a certain sum to a specified person is a promissory note though there may be no words of negotiability. The unconditional undertaking to pay a specified amount is the sine qua non in a promissory note. It is essential that the note must be payable at all events. The promise to pay must not be dependent upon a contingency. If the payment is dependent upon a contingency it would definitely amount to uncertainty and the document cannot be construed as a promissory note.
5. To consider whether a given document is a promissory note or not the following tests are helpful:
(i) Is the sum to be paid a sum of money and is that sum certain ?
(ii) Is the payment to be made to or to order of a person who is certain or to the bearer of the instrument ?
(iii) Has the marker signed the document ?
(iv) Is the promise to pay made in the instrument the substance of the instrument ? and
(v) Did the parties intend that the document should be a promissory note ?
In Ext. A1 Rs. 6,000/- is stated to be payable on 30th Makaram. The recitals in Ext. Al would show that the plaintiff had agreed to carry out the work of dewatering and watering of the paddy field and that there was no unconditional undertaking by the executants to pay the amount. It is apparent that the payment promised could be enforced by the plaintiff only if he had performed his part of the agreement. As there was no unconditional undertaking of the payment of the amount by the executants of Ext. A1 it is not possible to hold that it is a promissory note. Both the Courts have rightly rejected the appellant's contention that Ext. Al is a promissory note. As the recitals in Ext. A1 would show that the parties have intended to construe Ext. Al only as a letter and as that intention is patently obvious from the document it is indeed difficult to treat Ext. A1as a promissory note.
6. The next contention of the appellant is that he cannot be made personally liable for the decree amount. It is argued that the recitals in Ext. Al would show that the appellant executed Ext. A1 for the Kolepadavu committee and the agriculturists and therefore he cannot be made liable personally. There is no merit in the above contention as the appellant has agreed to pay the amount by himself, The recitals in Ext. A1 would show that the appellant has undertaken to pay the amount personally on behalf of the committee. The learned Additional District Judge made it clear that if the appellant makes such a payment it is up to him to claim reimbursement from his fellow cultivators. Relying on Harischandra Khanderao v. A. S. Craig, AIR 1942 Bom 136 counsel contended that in a suit where the defendants are sued in a representative capacity all that the plaintiff is entitled to against them is a declaration of his right as against the class whom the named defendants represent and that he is not entitled to a personal decree against them, but is only entitled to be paid out of the funds or the property and assets belonging to the class and in which all members of the class are interested. But it has to be noted that the suit is filed against defendants 1 and 2 in their individual capacity and defendants 3 and 4 as representing the committee. As Ext. Al shows that the appellant has undertaken to pay the amount by himself contention of his counsel that the trial Court went wrong in decreeing the suit personally against the appellant cannot be accepted.
7. It is next contended by the appellant that the lower appellate Court went wrong in awarding interest at 9% from the date of Ext. A3 notice. The above contention is well founded as Ext. A1 does not spell out any agreement to pay interest. Therefore I find that the Additional District Judge was not justified in granting interest at 9% from the date of Ext. A3. It is hereby held that the plaintiff is entitled to interest at 6% on the principal amount of Rs. 6,000/- from the date of suit till realisation.
8. Subject to the modification with regard to the payment of interest as stated above, the second appeal is dismissed. There is no order as to costs.