Bank Of Maharashtra vs Swastic Sales Corporation
1992 Latest Caselaw 92 Del

JUDGMENT

Arun Knmar, J.

(1) This order will dispose of the application of the defendant under Order 37 Rule 3 read with Section 151 of the Code of Civil Procedure for leave to defend the suit.

(2) The plaintiff filed the present suit for recovery of Rs. 3,26,036.00 against the defendant under the procedure prescribed in Order xxxvii of the Code of Civil Procedure. The suit is based on two hundies both dated 29th April, 1987 and for the amount of Rs. 87,615.00 and Rs. l,26,428.00 Apart from the total amount of the two hundies, the rest of the claim of the plaintiff in the suit is on account of interest that has accrued on the said hundies. While arguing the present application, the counsel for the defendant has urged various grounds to make out a case that an unconditional leave to defend the suit ought to be granted to the defendant.

(3) Firstly, it is urged that the hundies in the suit were given in blank after the same had been signed by Shri Vijendra Kumar, partner of the defen dant. It is submitted that in collusion with M/s. Paper & Pulp Conversions Ltd. who were the drawers of the hundies, the plaintiff bank has filled up the amount in the hundies and made its claim on that basis. In this context, it is also submitted on behalf of the defendant that the amounts mentioned as payable under the hundies became known only in May, 1987 and, therefore, obviously the said amounts could not have been filled up in the hundies on 29th April, 1987, the date which the hundies bear. Another point in this connection made out by counsel for the defendant is that as per Annexure P-l to the reply filed on behalf of the plaintiff to the defendant's present application the credit on account of discounting of the said two hundies was given by the plaintiff on 28th March, 1987, whereas the hundies bear the date 29th April, 1987. This according to the counsel for the defendant, is obviously on account of collusion between the plaintiff and M/s. Paper & Pulp Conversions Ltd. In its reply, the plaintiff submits that so far as the question of giving credit on account of the discounting of the hundies is concerned, the same was given on 30th April, 1987, the date on which the hundies were handed over to the plaintiff and it was on account of clerical error that annexure P-l shows the date as 28th March, 1987, the plaintiff has filed the photocopies of the complete accounts to substantiate this plea. I have no reason to doubt the stand of the plaintiff in this behalf, Annexure P-l seems to be on account of clerical mistake. The fact that the credit for the amount of bundles was given on 30th April, 1987 and the amount tallies with the amount stated on the hundies, it is not possible to believe that the hundies were blank when they were submitted to the plaintiff bank. In any case, it is urged by counsel for the plaintiff that he is a holder in due course without notice and as such defenses can not be urged so far as he is concerned. Thus, I neither accept the arguments that the hundies were blank or that they were filled up in collusion with M/s. Paper & Pulp Conversions Ltd. I also held that the plaintiff being a bolder its due course whithout notice such defenses are not open to the defendant so far as the plaintiff is concerned.

(4) The second point urged by counsel for the defendant is that the hundies are not sufficiently stamped and the amount mentioned on the hundies for exceeds the limit up to which the amount of hundies could be mentioned taking into consideration that each hundi is on a stamped paper of only Rs. 2.50. According to counsel for the defendant, the additional stamps attached to the hundi which covers the amount payable under the hundi have been added on subsequently and, therefore, the hundi not being properly stamped, the suit cannot be based thereon. He also relies on Section 20 of the Negotiable Instruments Act in this behalf and submits that the hundies in the suit are inchoate documents. To my mind, even this argument is not tenable. The reason is that the plaintiff has given credit of the exact amount of the hundies to the discounting party on 30th April, 1987 itself. There is n'o reason, why the plaintiff would have given credit if the hundi was not sufficiently stamped. I find that both the hundies are accompanied with the stamped papers which are sufficient to cover the amounts stated on the face of the hundies. When I have held that the amount was stated on the hundies on the dates they were discounted and they were not blank, the plea of insufficiency of stamps falls with that finding. A further fact is that in reply to the defendant's application, the plaintiff has clearly stated that the hundies were sufficiently stamped and the balance papers of requisite value were attached to the stamped paper for which the hundies were written. On 4th April, 1987, opportunity was given to counsel for the defendant to file a rejoinder to the reply filed by the plaintiffs However, no rejoinder has been filed. Therefore, the averment of the plaintiff that the hundies were sufficiently stamped has remained unredutted. In view of this fact, the arguments of insufficiency of stamps on the hundies is also rejected.

(5) The next point 'urged by counsel for the defendant in support of his application for leave to defend is that no demand was made on the defendant before filing the present suit. Regarding office copy of letter dated 29th August, 1987 placed on record by the plaintiff in this context, it is submitted that the sums was never received by the defendant. By the said letter, the plaintiff has requested the defendant to make payment on account of the hundies in suit Along with interest. The plaintiff was permitted to file a supplementary affidavit to explain the mode of delivery of t he said letter. In the supplementary affidavit, it has been stated on behalf of the plaintiff that letter dated 29th August, 1987 was issued by the plaintiff to the defendant and the said letter was delivered by hand to the defendant by an Officer of the plaintiff. An office copy of the letter has also been placed on record Along with the affidavit which contains an endorsement that the same had been delivered to the defendant by hand by the Officer of the plaintiff. Though, I have no reason to doubt the statement on behalf of the plaintiff that the said letter was delivered to the defendant by hand, the plaintiff has also placed on record a report of the Notary Public, Delhi dated 5th September, 1987. In his report, the Notary has stated that when hundies in the suit were presented to Shri Vijendra Kumar, partner of the defendant he admitted his signatures on the hundies and also acknowledged the factum of their acceptance by him. The only defense put up before the Notary on behalf of the defendant was that the amount under the hundies had already been paid to the drawers of the hundies i.e. M/s. Paper & Pulp Conversions Ltd. In view of these facts, the argument that no demand was made prior to filing of the suit is not open to the defendant. Lastly, the counsel for the defendant submitted that M/s. Paper & Pulp Conversions Ltd. who were the maker/drawer of the hundies were as such, principal debtors and ought to have been made parties to the suit. He further submits that the entire amount already stands paid to the said party by the defendant and, therefore, he can not be held liable to pay the amount all over again. A reference to Sections 32 and 37 of the Negotiable Instruments Act will show that the acceptor of the Bill of Exchange is himself a principal debtor. He is the person primarily liable to pay or the holder in due course. The maker or drawer of a Bill of Exchange is at best relegated to the position of a surety. As a principal debtor the liability of the acceptor is absolute. Therefore, I do not find that non impleadment of M/s. Paper & Pulp Conversions Ltd., can be fatal to the plaintiff's suit. So far as the question of discharge pleaded by the defendant on account of payment having allegedly been made to M/s. Paper & Pulp Conversions Ltd. is concerned, only a reference to Section 78 of the Negotiable Instruments Act has to be made. According to the provisions of that Section in order to discharge the maker or acceptor of an instrument, the payment has to be made to the holder of the instrument. Therefore, even if the payment has been made by the defendant to M/s. Paper & Pulp Conversions Ltd. on account of the bills raised by the said company. Such payment does not in law discharge the liability of the defendant on the hundies in the suit as an acceptor thereof. This liability of the acceptor is in absolute terms and can not be avoided. The liability, in this connection, goes to the extent that the acceptor is not bound to pay before the maturity of a hundi. However, if he does so, without having the same surrendered, he will be liable to any subsequent bonafide holder for value without notice. The plaintiff in the present case is a holder of the instrument in due course without notice and is, therefore, entitled to the payment on the hundies. No other point is urged.

(6) The application for leave to defend is accordingly dismissed. Suit No. 1626190

(7) The application for leave to defend having been dismissed, the plaintiff is entitled to Judgment forthwith. A decree is passed in favor of the plaintiff and against the defendant for a sum of Rs. 3.26.036/, The plaintiff will be entitled to interest @ 18 % per annum on the decretal amount from the date of filing of suit till realisation. The plaintiff will also be entitled to costs as per rules.

(8) The suit stands disposed of.