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TMI Blog1941 (3) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... th Roy". The document was executed on a paper on which is engraved the form of a stamp for ₹ 2-4-0. The upper part of the stamp bears the word "hundi". In all seven documents, similar to the one mentioned, bearing different amounts were executed on 1st June 1936. The total amount specified in the seven documents is ₹ 20,000. Apparently, those documents were not met at maturity although they were presented to the makers, with the result that a suit was brought on the original side of this Court by the plaintiffs against the defendants. The suit was brought under the provisions of O.37, Civil P.C., which provide for a summary method of obtaining judgment. In the plaint the instruments just mentioned were set out and it was stated that the plaintiff-firm's claim was against the defendants as drawers of the seven hundis drawn upon and accepted by the defendants themselves, payable to the plaintiff-firm or order at Calcutta. Paragraph 2 of the plaint alleges that the defendants verbally agreed to pay interest after the due dates at the rate of 12 per cent per annum. Paragraph 3 alleges that the said hundis were duly presented for payment on the due dates, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chedule 7, Government of India Act, 1935, and consequently it was contended that legislation with respect to promissory notes can only be undertaken by the Federal or Central Government and not by the Government of Bengal. We asked counsel for the applicants to satisfy us that the interest included in the decretal amount exceeded ten per cent He did so, but he stated at the same time that it exceeded ten per cent by such a small sum that it was not worth his while to ask for relief from the excessive interest which was contained in the decretal amount. He abandoned that part of his claim for relief and simply asked for the abrogation of the interest from decree to realization, and an order for payment of the decretal amount without interest by instalments. The Bengal Money-lenders Act in Section 2 (12), defines "loan" to be an advance, whether of money or in kind, made on condition of repayment with interest and includes any transaction which is, in substance, a loan but does not include amongst other things, (e) an advance made on the basis of a negotiable instrument as defined in the Negotiable Instruments Act, 1881, other than a promissory note. 4. The first question, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esive stamps, namely: (a) Instruments chargeable with the duty of one anna (or half an anna), except parts of bills of exchange payable otherwise than on demand and drawn in sets; (b) bills of exchange and promissory notes drawn or made out of British India. 8. Rule 13 of the Stamp Act Rules, as far as is material, provides: The following instruments may be stamped with adhesive stamps, namely: (a) Bills of exchange payable otherwise than on demand and drawn in sets, when the amount of duty does not exceed one anna for each part of the set. 9. Rule 17 provides: The following instruments when stamped with adhesive stamp shall be stamped with the following descriptions of such stamps, namely: (a) Bills of exchange, cheques and promissory notes drawn or made out of British India and chargeable with a duty of more than one anna; with stamps bearing the words "foreign bill. 10. It will be seen, therefore, that Section 11, Stamp Act, Rule 13 and Rule 17 of the Stamp Act Rules, have no application whatever to documents of the kind now under consideration and that Rule 5 simply provides that a promissory note or a bill of exchange shall be written on paper on which a stam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd "bill of exchange" that these particular documents are nothing but promissory notes. Those conclusions follow from a consideration of the Negotiable Instruments Act. However, they appear to be in keeping with the decisions which were given upon promissory notes and bills of exchange before the law was codified either here or in England. In Davis v. Clarke (1844) 6 QB 16 in discussing the question as to whether a particular document was a promissory note or a bill of exchange Coleridge J., said: The safe course is to adhere to the mercantile rule that an acceptance can be made only by the party addressed, or for his honour. Here the last is not pretended; and the first cannot be presumed. If the John Hart addressed is different from the John Hart who draws, there is still no acceptance; if the same, then the instrument is a promissory note and not a bill of exchange. 12. There is also the dictum of a very great lawyer, Parke B., in Peto v. Reynolds (1854) 9 Ex 410 At p. 415, Parke B. said: With the exception of Regina v. Hawkes (1838) 2 Mood CC 60 there is no case in which it has ever been decided that an instrument could be a bill of exchange where there was not a d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... give promissory notes and it would be impossible to give relief to borrowers of money in a great many cases if promissory notes and decrees under them were untouched. The Act appears to deal with promissory notes only so far as is necessary to give relief to borrowers. If it were necessary to decide whether the Bengal Moneylenders Act 1940, in this respect, were encroaching upon the powers of the Central Legislature under List I, item 28 to legislate with respect of promissory notes, or dealing incidentally with rights of holders of promissory notes in the carrying out of its purpose of dealing with money-lenders and money-lending under List II, item 27, I should be prepared to decide that matter. But whatever the legal position as regards the Act and promissory notes may be, this case has to be decided upon its own facts. 16. When the Bengal Money-lenders Act came into force on 1st September 1940, after the Governor. General had given his assent, the rights and obligations of the promisees and the promisors under these notes had become merged in the rights of the decree-holders and the judgment-debtors respectively. The decree-holders obtained their decrees for the principal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inty. The word "accepted" and the signatures under that word may imply some sort of arrangement that the drawers themselves would be the drawees. But such arrangement is not an arrangement evidenced by anything in the writing of the maker. The instruments in question contain promises to pay. In view of the contents of the instruments in question it is very difficult to read these promises as orders. 19. The contention of the decree-holder firm is that the decision of the majority of the Judges of the Federal Court (Gwyer C. J., and Varadachariar J.) in Subrahmanyan Chettiar v. Muthuswami Goundan does not conclude the dispute relating to the question whether Section 34 (1) (b) (ii), Bengal Money-lenders Act, 1940, is ultra vires of the Bengal Legislature. The arguments in support of this contention are these : (1) The definition of 'debt' in the Madras Act does not expressly include a debt on a promissory note. Sections 7, 8 and 19, Madras Act, do not expressly refer to decrees on promissory notes, passed before the commencement of the said Act. In view of the special provisions of the Madras Act the pith and substance of the said Act was held by the majority of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h promissory notes is Item 28. This item having been interpreted by the majority of the Judges to exclude decrees in suits on promissory notes before the commencement of the Act it was not necessary for the learned Judges to refer to Item 53. If decrees on promissory notes before the commencement of the Act are outside Item 28, they are necessarily outside Item 53. The provisions of Section 34 (1) (b) (ii) are not in conflict with the Negotiable Instruments Act (an existing Indian law on a subject in List I within the meaning of Section 107 of the Constitution Act). These provisions are in conflict with Rules 3 and 11, Order 21, Rule 2 (2-b), (3), Order 37, Civil P.C. (an existing Indian law). In view of the decision of the majority of the Judges in Subrahmanyan Chettiar v. Muthuswami Goundan that decrees on promissory notes passed before the commencement of the Act do not come under Item 53 read with Item 28 of List I, the impugned provisions must be held to be with respect to the Code of Civil Procedure, and jurisdiction and powers of Courts with respect to matters outside the Federal List. They, therefore, come under Items 4 and 15 in List III. The repugnancy of the impugned pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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