G. Aswathanarayana Setty vs M.N. Seshagiri Rao and Others

K.A. Swami, J.—The one and the only question that arises for consideration in this appeal is as to whether the lower appellate Court was justified in law in decreeing the suit of the Plaintiffs based on the insufficiently stamped pronote.

The trial Court held that the Plaintiffs were not entitled to a decree because the suit pronote was insufficiently stamped and the suit was not based on the original cause of action. However, the lower appellate, Court reversed the decree of the trial Court and decreed the suit on the ground that the suit was not based either on the original cause of action or on the pronote but it was based upon the acknowledgements made on the back of the suit pronote.

The proved facts in the case are: that the Appellant-Defendant executed the suit pronote on 5th Feb., 1960 for a sum of Rs. 7000 in favour of the predecessor of the Plaintiffs. Thereafter there were endorsements made on the pronote on 5th Feb., 1960 and 12th Nov., 1962 marked as Ex.P7 and P7 respectively. These endorsements record the payments made on those dates towards the amount advanced under the pronote in question.

It is settled position in law that if a pronote is insufficiently stamped it is inadmissible and invalid and the claim cannot be based upon such a pronote and the Plaintiff bringing a suit on such a pronote is not entitled to a decree unless it is shown that the claim is based upon the original cause of action (see T.S. Srinivasa Gowda v. Siddaiah reported in 1970 (2) M.L.J 547).

Sri W.K. Joshi, ld Counsel for the Plaintiffs submits that the averments made in the plaint are such that it is possible to construe that the suit is based on the original cause of action since along with the pronote, the Plaintiffs have also produced the receipt dated 8th Aug., 1957 executed by the Defendant (Ex.P.9) and as per the said receipt, the Defendant has received the amount mentioned in the pronote. It is further submitted that the suit claim is also admitted by the Defendant in the written statement, hence the decision in Ramu Tatoba Aparaj v. Gouravva CRP No. 937/61 dt. 26th June, 1962 is attracted, therefore, the decree passed by the lower appellate Court does not call for interference.

On a reading of the plaint, it is clear that the suit is based upon the pronote only. The receipt is produced to prove that the amount under the pronote is received by the Defendant. The cause of action as mentioned in the plaint arose on the date on which the suit pronote was executed. In para 2 of the plaint it is averred that the amount was advanced under the suit pronote on the date of its execution. Thus the payment of the amount and execution of the suit pronote have taken place at the same time. There is no plea that the amount in question was advanced anterior to execution of the suit pronote. In the evidence also we do not find anything with regard to advancing of the loan in question anterior to the execution of the suit pronote. That being so, it is not possible to hold that the suit is based upon the original cause of action. The Defendant has taken a specific plea in this regard. Even than the Plaintiffs have not chosen to take steps either to amend their plaint or to base the claim on the original cause of action, if any.

With regard to the admission of the claim by the Defendant, no doubt the Defendant in his written statement has admitted the allegations contained in para 2 of the plaint regarding the execution of the suit pronote and the receipt of the consideration and also the amount due to be paid to the Plaintiffs. But he has opposed the decree being passed on the ground that the suit is based upon inadmissible pronote. In T.S. Srinivasa Gowda v. Siddaiah 1970 (2) M.L.J 547, exactly under similar circumstances, this Court has held that the suit cannot be decreed on inadmissible pronote. No doubt in Ramu Tatoba Aparaj v. Gouravva CRP No. 937/61 DD on 26th June, 1962, this Court affirmed the decree of the Court below holding that the decree was passed on the basis of the admission contained in the written statement even though the suit claim was based upon inadmissible pronote, therefore, it was valid and correct. It is not clear from the order in the aforesaid CRP 937/1961 as to whether the Defendant took up a plea in the written statement that the suit was liable to be dismissed as it was based upon inadmissible pronote. In the instant case such a plea was taken in the written statement. The pleadings are to be read as a whole. It is not open to the party to take into consideration only that portion in the plaint or written statement as the case may be, which is favourable to him and leave the other portion which is not favourable to him and which if read with other portion takes away the very effect of admission and further affects the jurisdiction of the Court to pass a decree. No claim based upon inadmissible pronote can be decreed. In other words, it is not open to a Court to decree such a claim. An inadmissible claim does not become admissible by reason of the fact that it is admitted. That being so, in a case where such a plea is raised by the Defendant, irrespective of the fact that the execution of suit pronote is admitted, it does not alter the legal position pointed out above as to jurisdiction of a Court to decree the claim based on inadmissible pronote. Thus I am of the view that the decision in CRP NO. 937/61 is not applicable to the facts of the present case. That being so, I am of the view that the judgment and decree passed by the lower appellate Court are unsustainable.

In the result and for the reasons stated above, the appeal is allowed: The judgment and decree of the lower appellate Court are set aside and those of the trial Court are restored.

Having regard to the fact that the Plaintiffs have failed in the suit on a technical ground even though the suit claim is admitted by the Defendant, it is just and proper to direct both the parties to bear their respective cost throughout. It is ordered accordingly.