1980 PLP 135 (CLC)

The circumstances giving rise to this second appeal by the plaintiff involving a short question of law are as follows. Muhammad Boota appellant filed suit against Muhammad Ali respondent for the recovery of Rs. 5,700 on the footing of a pronote executed by the respondent on 22nd of November, 1959. The plaint averred that the amount was advanced to the respondent by way of loan which the latter required to meet the expenses for construction of a house. The respondent executed a pronote (P. 1) payable at Ghazi Munara, District Sheikhupura as also the usual formal receipt (P. 2) in lieu of payment of money. The pronote was presented vainly to the respondent for repayment of the amount. Cause of action for the suit arose on 22nd of November, 1959, the date of execution of pronote. I have highlighted these averments in this short plaint to show that the claim for recovery of amount was based on the pronote only. The decision of the appeal turns on the question of the precise basis for the claim in the plaint. The respondent resisted the suit denying execution of pronote/receipt or payment of any amount by the appellant as also presentment of pronote for repayment of the alleged loan. After having examined the parties under Order X, C.P.C., learned trial Judge raised three issues reflecting the above contentions of the respondent. On consideration of evidence led before him, learned trial Judge held that the respondent had executed the pronote for consideration. The first two issues were accor dingly answered against the respondent. However, the remaining issue on presentment of pronote to the respondent was decided against the appellant with the result that the pronote was discarded and the suit was dismissed. The appellant went in appeal before learned District Judge which was heard and rejected by an Additional District Judge affirm ing the finding of learned Judge that the pronote in question which forms the basis of the suit was not presented to the respondent. It will be shown that the factual aspect of the dispute that the respondent had executed pronote for consideration which was however, not presented to him as required by section 64, Negotiable Instruments Act of 1881 stands decided conclusively by concurrent findings of fact by the Courts below which could not be displaced in second appeal or correctness thereof was disputed by either side.

2. It was argued on the side of the appellant that the appellant could fall back on original consideration when the pronote was discarded for non-presentment. The suit should have been decreed against the respondent in view of the finding that he had executed the pronote on payment of consideration. This argument was sought to be sustained on the judgment of Bombay High Court in Somabhai Naranbhai Patel v. Kalyanbhai Kashibhai Patel (AIR 1938 B L R 174). The question if the plaintiff in suit for recovery on the basis of promissory note which was liable to be left out for one reason or the other can be granted decree on the strength of other evidence led by him to prove consideration has been subject matter of a sharp cleavage in judicial opinion. It was held by Allahabad High Court in a Full Bench judgment Nazir Khan v. Ram Mohan Lal (133 I C 1931) that it, is not open to a party who has lent money on terms recorded in a Promissory Note which turns out to be inadmissible in evidence for want of proper stamp duty to recover his money by proving orally the terms of the contract. In Arm Sri Chand Sheo Pershad v. Lajjia Ram (A I R 1939 Lah. 31), the decree on the basis of pronote which was found inadmissible for want of cancellation of stamps was refused in spite of the fact the defendant had admitted his liability thereon. Both these judgments were noticed with approval in case Bharpura v Diwan Chand (A I R 1940 Lah 329). 1n that case also, the plaintiff was non-suited inter alia on the ground of non-presentment of promissory note. It was held with reference to a number of other judgments also that if the promissory note is ruled out of consideration no proof of loan may be allowed aliunde. It would be now unnecessary to thrash out in detail the various judgments with diametrically opposite 'views on the point under discussion. The controversy appears to have been conclu sively set at rest in the judgment of Karachi Seat of erstwhile High Court of West Pakistan in K. M. Munir v. Mirza Rashid Ahmad (P L D 1963 Kar. 905). The authorities which have been cited in the foregoing lines and a large number of other cases with divergent views were considered in this case. It was held that if the promissory note embodies all the terms of the contract and the instrument is improperly stamped, no suit on the debt will lie in view of the bar of section 91, Evidence Act and section 35, Stamp Act. But if it does not embody all the terms of the contract the true nature of the transaction can be proved and the plaintiff's claim can be decreed on that basis. The pronote in this case which has been ruled out for reason of non-presentment was complete in all respects and embodies all terms of contract between the parties, viz. advancement of loan for the purpose indicated in the earlier part of the judgment and repayment of loan, etc. The appellant cannot, therefore, be allowed to fall back on the original consideration of the pronote.

3. Besides, as I have shown in para. 2 of the judgment the appellant had in his plaint relied solely on the pronote and tie terms of the plaint were not wide enough to show that in the event of pronote being held' inadmissible the appellant intended to fall back upon the original transaction as the basis of the suit. The appellant did not file any replication nor he had averred in his statement tinder Order X, C. P. C. that he would press the claim on the basis of original consideration if the plea of non presentment of pronote raised by the respondent is upheld. The appellant could not therefore be allowed at this stage to put forth a different basis for cause of action than he was entitled to decree on the basis of original consideration. The view I have taken is supported by the judgment in Mst. Bhag Bhari and others v. Gujjarmal and others (A I R 1917 Lah. 220). In that case a similar situation had arisen. The suit was dismissed on the ground that the Hundi relied upon by the plaintiff was not duly presented to the drawee and dishonured by him. The judgment of trial court was reversed on appeal by learned District Judge with the view that although by reason of non presentment of the Hundis the plaintiffs were precluded from suing on their basis they could fall back upon the original transaction for which the Hundis were executed and that a decree for original loan advanced to the defendant should be passed upon evidence regarding that loan. The judgment of learned District judge was set aside on the ground that the plaintiffs had not the basis of the claim they were entitled to fall back upon the original transaction relating to the Hundis. K. M. A Appeal dismissed