1940 (12) TMI 33 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the Court can look into the surrounding circumstances to determine if the maker of a promissory note executed it as an agent or representative of another.
2. Whether the second respondent was authorized to execute the promissory note on behalf of the first respondent.
3. Whether the wording of the promissory note excluded the personal liability of the maker.

Issue-wise Detailed Analysis:

1. Whether the Court can look into the surrounding circumstances to determine if the maker of a promissory note executed it as an agent or representative of another:
The primary issue addressed by the Full Bench was whether the Court could consider surrounding circumstances when determining if a promissory note was executed by an agent or representative. The conflict arose from two previous decisions: *Koneti Naicker v. Gopala Aiyar (1913) 25 MLJ 425* and *Satyanarayana v. Mallayya (1934) 68 M.L.J. 540 : I.L.R. 58 Mad. 735*. The former held that liability could only be decided based on the instrument's reading, while the latter allowed consideration of surrounding circumstances. The judgment concluded that the Court should not look beyond the instrument itself to decide whether the maker excluded personal liability, aligning with the decision in *Koneti Naicker v. Gopala Aiyar*. The judgment emphasized that the instrument alone should be examined, following the principles established by the Privy Council in *Sadsuk Janki Das v. Sir Kishan Pershad (1918) 36 M.L.J. 429 : L.R. 46 IndAp 33 : I.L.R. 46 Cal. 663*.

2. Whether the second respondent was authorized to execute the promissory note on behalf of the first respondent:
The Courts below had investigated the authority of the second respondent, who was the husband of the first respondent, to execute the promissory note on her behalf. Both the Subordinate Judge of Cuddalore and the District Judge of South Arcot found that the second respondent was duly authorized under a power-of-attorney to execute promissory notes on behalf of his wife. The judgment concurred with this finding, noting that the husband was empowered to discharge his wife's debts and had executed the promissory note as her agent. The promissory note in question was a renewal of a previous note executed with the wife's knowledge and at her instance.

3. Whether the wording of the promissory note excluded the personal liability of the maker:
The judgment analyzed the wording of the promissory note to determine if it excluded the personal liability of the maker, the second respondent. The note described the maker as "the husband and agent under power-of-attorney of Padmavathi Ammal." The judgment concluded that this description implied that the maker was acting as an agent. The Court emphasized that in interpreting the document, one must consider the vernacular language and the common practices in the region. The judgment agreed with Sundara Aiyar, J.'s approach, which considered the local habits of expression in legal documents. The judgment held that the second respondent signed the promissory note as an agent, thus excluding his personal liability.

Conclusion:
The appeal was allowed, and the judgment of the Subordinate Judge, which held that the second respondent executed the promissory note as an agent and excluded his personal liability, was restored. The Court emphasized the importance of interpreting the instrument based on its wording and the local context, rejecting the approach of considering surrounding circumstances to determine the maker's intention.