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1913 (12) TMI 2 - HC - Indian Laws

Issues:
1. Validity of transfer of promissory note to an idol through a pujari.
2. Interpretation of Transfer of Property Act and Negotiable Instruments Act regarding the transfer of actionable claims.
3. Examination of gift under sec. 123 of Transfer of Property Act.
4. Consideration of Negotiable Instruments Act provisions regarding the transfer of actionable claims.
5. Entitlement of the Plaintiffs to sue on the promissory note.

Analysis:

1. The petitioner executed a promissory note in favor of a deceased individual, who then handed it over to an idol through its shebait without endorsement. The shebait sued the petitioner for the amount and obtained a decree. The petitioner argued that a promissory note to order cannot be transferred without endorsement and delivery as per the Negotiable Instruments Act. However, the court referred to precedent and rejected this argument, considering the transfer by gift or assignment.

2. The court analyzed the Transfer of Property Act, stating that a chose in action can be assigned only in writing. The court noted that the opposite party's reliance on an equitable assignment without writing was invalid as they were a mere volunteer without valuable consideration. The court also highlighted that even if there was a valid transfer to the idol, the Negotiable Instruments Act provisions would require payment to the "holder," not the petitioner.

3. Regarding the question of gift under sec. 123 of the Transfer of Property Act, the court emphasized that a gift of movable property could be effected by delivery. However, in this case, the handing over of the promissory note without endorsement did not constitute a completed gift as it did not put the idol in possession of the debt. Precedents were cited to support the view that there was no completed gift.

4. The court discussed the principles of the Negotiable Instruments Act, emphasizing that claims on negotiable instruments can be treated like ordinary goods, passing by delivery. However, the court concluded that in this case, there was no legal transfer of the actionable claim by any authorized means. The court highlighted that the rights resulting from different modes of transfer could vary.

5. Judge Richardson concurred with the view that there was no valid transfer or gift of the promissory note to the plaintiffs or the deity they represented. He noted that the Negotiable Instruments Act provisions must be followed for a valid transfer, and in this case, there was no writing or equitable assignment supporting the transfer. The judge also discussed the rights of the assignee and the necessity for the assignee to be the "holder" to sue on the note, as per sec. 78 of the Act.

In conclusion, the court held that there was no valid transfer of the promissory note to the idol, and the plaintiffs were not entitled to sue on the note. The judgment was made in favor of the petitioner without costs.

 

 

 

 

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