Ranchod Das Jivandas vs B. Madhava Shenoi and Co.

Subramania Iyer, J.—This is a defendant''s appeal to this Court against the decree passed by the court below in favour of the plaintiff-respondent for money on foot of two hundis executed by the appellant to the respondent. The appellant pleaded that the hundis were unenforceable on account of the fact that their consideration represented the loss incurred by the respondent in connection with certain Forward contracts entered into by the respondent with a third party, which were prohibited by law though they were entered into on behalf of the appellant. Learned counsel for the appellant did not dispute the facts found by the Court below nor the correctness of the findings recorded by that Court.

The argument was confined to urging that even on the basis of the findings reached by the Court below its decree could not be supported as the unenforceability of the contract between the plaintiff-respondent and the other party, according to learned counsel equally attaches to the hundis which were the outcome of that unenforceable contract and the settlement of account that followed. The legal effect of executing negotiable instruments like the hundis in question in this case would be that of actual payment. This Court said so in - ''Krishnan Iyer v. Lakshmi Ammal'', AIR 1950 Trav-C 73 (A) following certain decisions of the Cochin High Court. We are also of the same view. We consider that the effect of executing and delivering the hundis to the plaintiff is as though an actual payment of the sum had been made and that unless the defendant can recover back the payment made a defence based upon the unenforceability of the contract entered into by the plaintiff cannot be sustained. Learned counsel for the appellant conceded that if money had been paid by his client he would not be able in law to get it back. If so, as already stated there is in law no defence to the claim based on the hundis which as already stated amounted to payment.

The appeal therefore fails and is dismissed. We, however, make no order as to costs.