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TMI Blog1961 (2) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... to the plaintiff's father. No endorsement was however made on the note. Subsequently, the defendant had been making various payments and appropriate endorsements of payment had been made on the Promissory note, On the death of the plaintiff's father, the right to this item of property survived to the plaintiff and his brother. The latter was given away in adoption so that the plaintiff became exclusively entitled to all the rights under the promissory note. Originally the plaintiff's brother had been joined in the action as second plaintiff, but in view of his adoption, he was struck off the record. Apart from other contentions, where under the defendant sought to invoke the application of Madras Act IV of 1938, the further contention was advanced by the defendant, that in the absence of an assignment of the promissory note, the plaintiff was not entitled to any rights thereunder. It Was this issue that was found in favour of the defendant, against which the revision was filed in this Court. 3. Balakrishna Aiyar, J., noticed the existence of divergent views on this question. He referred to one line of decisions wherein it has been held thai there could be no v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntiff claimed that the note had been assigned to him verbally at a partition. The managing member of the family in whose favour the note had been executed was also a party defendant in the suit and ho denied the assignment. The learned Judges did not examine the question whether the allotment to a member of the family of a promissory note in favour of the managing member would suffice to transfer the property in that promissory note. They observed; Assuming that the plaintiff would be entitled to sue on the chose in action if the note were assigned to him otherwise than by endorsement, he could not, in our opinion, when so suing, be regarded as suing on a negotiable instrument, and, therefore, would not come within the exceptions in Section 137 of the Transfer of Property Act. Consequently, the assignment of the chose in action on which he relies is bad for want of writing under Section 130 of the Transfer of Property Act. 6. This decision however did not find favour in Venkatadri v. Lakshminarasimha Row, 21 Mad LJ 80. The view take in 17 Mad LJ 393 that the assignment of a negotiable promissory note could not be recognised unless there is an endorsement was expressly diss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the contention under consideration is the definition therein of the term 'holder' and Mr. Krishnaswami Aiyar did lay stress on it. But the real import of this definition is that, to come within it, the party should be the owner at law of the negotiable instrument, i.e., according to the law merchant, whatever such party's position and liability in equity may be. But this in no way interferes with the due application of rules which are unaffected by that law and which are not to be ignored simply because the Negotiable Instruments Act does not refer to-them. The observation of Mr. Chalmers with reference to the English Bills of Exchange Act, 1882, may very well be applied to the Negotiable Instruments Act. He says at page 128 of his book of 'Bills of Exchange' that 'the act deals only with transfer by negotiation, that is, transfer according to the law merchant. It leaves untouched the rules of general law which regulate the transmission of bills by act of law and their transfer as choses in action or chattels according to the genera! law'. These, of course, are provisions inserted by way of caution only and do not mean that, but for them the rules of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended to the plaintiff by operation of law. I am of opinion that the plaintiff is entitled to sue on the suit notes. It was specifically held that Property in a note may also pass by operation of law. The judgment of Courts Trotter, J., wherein he differed from the decision of the Division Bench, was reversed in Ramanathan Chetti v. Katha Velan, ILR 41 Mad 353 : (AIR 1918 Mad 482). The following observations of the learned Judges are of considerable importance: The possibility of transfer of right in the note by operation of law has not been the subject of judicial pronouncements to any considerable extent. In this presidency, apart from certain observations of Miller, J., in ILR 31 Mad 534 the matter, is res integra. The Negotiable Instruments Act only deals with transfers by negotiation. Under the English Bills of Exchange Act, the common law of the land is expressly saved (See Section 97). It is a pity that there is no such saving clause in the Indian enactment. Section 57 of the Act by implication, seems to contemplate that the legal representatives of a deceased person can negotiate a promissory note. The practice of allowing legal representatives in this country to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence of any endorsement or assignment did not affect the claim of the persons suing. 10. In Kalicharan Prasad v. Muhammad Ibrahim, (41 Cal WN 697) the Calcutta High Court had to consider the case where a receiver appointed in a partition suit sought to sue on certain promissory notes. The question arose whether the receiver was not entitled to sue because his name did not appear of the body of the document as the original payee of the Instrument. The learned Judges, in dealing with the question, observed ; But the question is whether the receiver could give a valid discharge. There seems to be no reason why he could not. Analogy may be drawn from the case of death of the holder of a promissory note and it is conceded that in such a case his heir or executor or administrator ..... could give a valid discharge and, therefore, would be entitled to sue. In other words, such a person could be the holder of the note. Section 57 prescribes how a note may be negotiated by the legal representative of a deceased person, but this is not the only method of passing title to promissory note. It has been held in ILR 41 Mad 353 : (AIR 1918 Mad 482) that a promissory note executed in favou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essary to labour the point further. It is clear that in so far as the modes of transfer of negotiable instruments are concerned, the Negotiable Instruments Act is not exhaustive and does not prevent the passing of property in the note by operation of law. In the cases we have referred to, the property in the notes descended from father to son by operation of law and the son was held entitled to sue on the notes (see ILR 31 Mad 534). Succeeding trustees were also held entitled to sue on a promissory note executed in favour of a Predecessor, though there was no endorsement or assignment, ILR 41 Mad 353 : (AIR 1918 Mad 482). A receiver appointed by court has been held entitled to sue, notwithstanding the absence of an endorsement or an assignment. In a recent decision of the Andhra Pradesh High Court in Venkataswami v. Noor Muhammad Begum, AIR 1956 Andhra 9 Chandra Reddi J. as he then was, sitting singly, examined the several decisions and concluded that besides the two modes of transfer indicated in the Negotiable Instruments Act, there are two other methods, by operation of law and transfer as a chose in action under Section 130 of the Transfer of Property Act by which a person m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h one of the sharers had an antecedent title and therefore no conveyance is involved in the process as a conferment of a new title is not necessary. It is true that the opposing view was accepted by the learned fudges who decided Rasa Goundan v. Arunachala Goundan, 44 Mad LJ 513 : (AIR 1923 Mad 577). This case was however considered in and differed from. 15. Further weighty authority in support of this view that a partition is not merely the result of consensual act of parties but is really brought about by operation of law is found in the decision of the Privy Council in Mt. Parbati v. Naunihal Singh, 36 Ind App 71. Their Lordships of the Privy Council observe, after referring to Appovier v. Ramasuhba Aiyan, 11 Moo Ind App. 75 and Bal-kishendas v. Ramnarain Sahu, 30 Ind App. 139 : In both these cases, the members of a joint Hindu family, some of them being minors, acting by and through their parents, executed instruments in writing, providing in the first case that part, and in the second case that the whole, of the joint family property should belong to and he enjoyed by the different members of the family in specified shares. The effect of this was held to be that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne holding that a partition amounts to transfer of property and the other taking the contrary view. In that decision, the question that arose was whether a benamidar could maintain a suit for partition of joint immoveable property. There the plaintiff took a conveyance in respect of an undivided share of joint family property and instituted a suit for partition and Joined her vendor as pro forma defendant. The defence was that the conveyance was a fictitious transaction and that the plaintiff being only a nominal owner was not entitled to maintain the suit. This contention found favour with the trial court and the suit was dismissed. The learned Judges in dealing with the question referred to the distinction between suits for lands, suits for money claims and to the line of cases which denied the right of the benamidar to maintain a suit for land. According to the learned Judges, the substantial question that arose before them was whether a suit for partition fell within the class of the suits for land, or within the class of suits for money, they observe : In our opinions a suit for partition of immoveable property should, for our present purpose, be included in the same ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as observed : Where the self acquired properties of a coparcener --in this case the coparcener was the father of the other coparceners and the kartha of the coparcenary -- are pooled with joint family property and partitioned, there are three distinct stages. First the self-acquired properly of the coparcener is impressed with the character of the joint family property of the coparcenary. The next stage is the disruption of the coparcenary. The members thereafter became divided in status. The next stage after that is the actual division between the divided members of what had been the Property of the joint family. Each of these stages may be separated from the succeeding one by an interval of time, considerable or otherwise. The length of the interval however does not affect the principle in deciding the question, was there a transfer of property at any stage. Obviously, no question of transfer of assets can arise when all that happens is separation in status though the result of such severance in status is that the property hitherto held by the coparcenary is held thereafter by the separated members as tenants in common. Subsequent partition between the divided members of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest acquired by the members of the family as a result of such a partition is brought about by operation of law and not otherwise. 22. Amir Bibi v. Arokiam, 45 Ind Cas 813 ; (AIR 1919 Mad 1113) dealt with the case of an oral award under which a hypothecation bond was al-lotted to the holder. The maintain ability of the suit by the person to whom the hypothecation bond was allotted was attacked on the ground that even if the award was true, it was not followed up by the execution of a conveyance. The learned Judges took it to be settled law that an award may be oral and that an oral award is as binding on the parties as a written award. They further proceeded to hold on the basis of earlier decisions that partition were enforceable even in the absence of any writing or registration to evidence such a partition and that oral dedications of property to an idol were also valid and that the Transfer of Property Act is not exhaustive of all modes of transfer and if there is a transfer of property which would not come within the special modes discussed in the Transfer of Property Act the conditions as to writing and registration Prescribed by the Act have no application. The mode o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty from the dead to the living but as comprehending also the adjustment of the rights and obligations that subsist between the parties governed by the Hindu law. We might add that we do not also see any sufficient reason why in framing these lists the Parliament should have thought fit to take away the law relating to partition in joint families from the jurisdiction of the Indian legislature. We therefore consider this argument regarding the wide import of the expression 'devolution' and 'succession' and as to the words being apt to cover partition in a Hindu family, well founded. 26. In the view expressed in these decisions, it follows that the law as laid down in 44 Mad LJ 513 : (AIR 1923 Mad 577) viz, that a partition among members of a joint Hindu family is a transfer to which the provisions of Section 53 of the Transfer of Property Act will be applicable, is no longer good law. 27. The last case to which we need refer is the decision of the Bombay High Court in Virappa v. Mahadevappa, AIR 1934 Bom 356. In that case, also, a promissory note which was originally executed in favour of the son was allotted to the father on an arbitrator's award an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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