9911796707
TMI Blog1981 (3) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the company in liquidation while it was carrying on business. The chit value was Rs. 2,500. Respondent No. 1 was the highest bidder at the auction held for chit group-DLN of the company (in liquidation). The auction was held on June 23, 1974. He received the prize amount on July 22, 1974, and on the latter date he executed a promissory note for Rs. 1,675 promising to repay the said amount together with interest at the rate of 18 per cent, per annum. Respondents Nos. 2 and 3 executed the pronote as sureties. After the company came to be wound up, the official liquidator issued notice of demand to the respondents for the payment of the balance due by the 1st respondent in respect of the aforementioned transaction he had with the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay the sum demanded. It is, however, asserted in the statement of objections that the respondents had settled the debt due under the chit transaction of the 1st respondent as far back as December 2, 1975. 2nd respondent had paid totally Rs. 1,715 in respect of three accounts he had in pass books Nos. 1, 2 and 3. The statement of account of the 2nd respondent has been produced at annex. 1 to the objection statement. It is, however, asserted by the respondents that the managing director of the company (in liquidation) agreed with the 1st and the 2nd respondents in adjusting the amount in the account of the 2nd respondent to the extent of Rs. 1,078.80 which was due by the 1st respondent on the date of the agreement and the managing director is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d after adjusting the amounts due to respondent No. 2 and respondent No. 1 agreed to pay Rs. 1,078.80 to respondent No. 2. Exhibit R-1 is the receipt issued by the managing director of the company for Rs. 1,078.80. In cross-examination he has stated that Rs. 1,078.80 represented both the principal sum borrowed and the interest thereon. He did not remember how much his father owed to the company in January, 1975. He did not know the name of the managing director of the company. But the signature on Ex. R-1 is that of the managing director of the company. He denied knowledge as to whether a complaint to the police had been given about the company's failure to declare dividend regularly. He also denied the suggestion that Ex. R-1 was obtained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this statement is totally uncorroborated. Respondents Nos. 1 and 2 have not examined themselves and no reason has been offered as to why they could not step into the witness box to speak to the events that occurred on December 2, 1975. Though it is claimed that the 2nd respondent's account was adjusted against the account of the 1st respondent; that 2nd respondent had three accounts with the company has not been proved by any documentary evidence such as the pass books mentioned in the objection statement. Nor have the respondents taken the precaution to summon the books of the company now in the possession of the official liquidator to prove the same. In the absence of any corroboration of the oral evidence and the absence of formal proof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erala High Courts in support of his contention. In the case of Alapati Venkala Krishnaiah v. Vemuri Manikyaraw, AIR 1948 Mad. 171, Rajamannar J. (as he then was) had occasion to consider the plea of discharge with reference to section 81 of the Negotiable Instruments Act. In that case, the suit was filed by the plaintiff on the basis of the pronote. The pronote was executed by defendant No. 1 therein in favour of defendant No. 2 and defendant No. 2 transferred the pronote to the plaintiff on March 27, 1944, for consideration. The trial court granted a decree in favour of the plaintiff against the transferor, defendant No. 2, and his son, defendant No. 4, but dismissed the suit against defendant No. 1 and defendant No. 3 as they had died be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by a learned single judge of the Kerala High Court in the case of K. K. Koran v. T. Tara Bai, AIR 1958 Ker. 124. The learned judge has explained the scope and the application of section 81 of the Negotiable Instruments Act, in the following terms (p. 124): "The normal rule is that the document on which the suit is based should be produced along with the plaint. The production of the basic document is thus insisted on to afford protection to the person liable under it against a similar claim in a subsequent suit brought by a party who might claim to have legally acquired the rights under the document and produce it in support of his claim. The possibility of such risk is greater in the case of negotiable instruments which may change hands ..... X X X X Extracts X X X X X X X X Extracts X X X X
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