JUDGMENT
Shambhu Prasad Singh, J.
1. This second appeal by the plaintiffs and defendant No. 6 arises out of a suit for recovery of Rs. 2061/-, the principal advanced on the basis of a handnote dated the 8th of November, 1957, besides interest, which has been dismissed by the trial court. An appeal by the plaintiffs before the lower appellate court against the decree of the trial court was also dismissed. The handnote is in favour of defendant No. 6, who is appellant No. 4 before this Court, and was executed by Mosst. Pahil Sun-dari and Naresh Mishra, respondents 1 end 2 before this Court of the defendants first party.
2. According to the plaintiffs, at the time of the execution of the handnote (Ext. 1), the body portion of which was also written by respondent No. 2, they and defendant No. 6 constituted a Hindu Mitakshara joint family of which defendant No. 6 was the karta and the money advanced was of the joint family. Subsequently there was a partition between the plaintiffs and defendant No. 6. The handnote in question fell to the share of the plaintiffs. Their further case was that respondents 1 and 2 took this loan as managing members of a Hindu Mitakshara joint family of the defendants first party and all the five defendants first party were liable to pay it. Respondent No. 1 is the mother of respondent No. 2. The other three respondents are minor sons of respondent No. 1. Their father and husband of respondent No. 1 is dead.
3. The defence of respondents 1 and 2 who contested the suit as disclosed in
their written statement and in reply to interrogatories which they were called upon to answer by the court at the instance of the plaintiffs was that the hand-note was not executed by them though the thumb marks and signatures on the paper on which the handnote was written were theirs. They denied passing of any consideration under the handnote. Their case further was that the plaintiffs having no money lending licence, the suit was hit by Section 4 of the Bihar Money Lenders Act and not maintainable. According to them, it was also not maintainable as there was no endorsement in favour of the plaintiffs of the handnote by defendant No. 6.
4. The trial court held that besides the signatures and the thumb impressions the execution portion of the handnote (Ext. 1) below the stamp and up to the date was in the pen of respondent No. 2, but the body portion of the handnote was not in his pen, that the handnote in question was not a promissory note and that it was not for cash consideration for Rs. 2061/-. It further held that the plaintiffs had no locus standi to institute the suit though it was not hit by Section 4 of the Bihar Money Lenders Act. The court of appeal below has confirmed all the findings of the trial Court except that the suit was not hit by Section 4 of the Bihar Money Lenders Act. According to the lower appellate court. Section 4 of the Bihar Money Lenders Act was also a bar to the maintenance of the suit by the plaintiffs.
5. A preliminary objection has been taken by learned counsel for the respondents that there being no decree against appellant No. 4, an appeal by him is not maintainable. Along with the memorandum of appeal appellant No. 4 also filed a petition before this court for transposing him to the category of a plaintiff. That application has not been disposed of so far and has been heard along with the appeal itself. The fate of the preliminary objection depends on the fate of that application. In case that application is allowed, it has to be held that appellant No. 4 as a plaintiff is entitled to maintain the appeal and there is no merit in the preliminary objection, but in case that application is dismissed, the preliminary objection will prevail.
6. Lengthy arguments have been advanced by learned counsel for the appellants as well as the respondents on the merit of the said application for transposition by appellant No. 4 obviously for the reason that if that prayer is allowed, two of the grounds on which the suit has been dismissed, namely, that there is no endorsement by defendant No. 6 in favour of the plaintiffs and that the suit is barred by Section 4 of the Money Lenders Act, will disappear. It
may be stated that the plaintiffs did file in the courts below a certified copy of the money lenders licence (Ext. 2) showing that appellant No. 4 was a registered money lender during the period the loan was advanced. It is contended by Mr. Mishra, learned counsel for the respondents, that as appellant No. 4 did not file any written statement, his prayer for transposition cannot be allowed, because he has no case of his own which can be tried by the court.
On the other hand, learned counsel for the appellants has contended that according to rules of the pleading, it has to be presumed that by not filing any written statement appellant No. 4 admitted the correctness of the allegations made in the plaint and, therefore, his case is the same which is that of the plaintiffs, the other appellants. In my opinion, an application by appellant No. 4 for transposition to the category of plaintiff also implies that he is willing to adopt the plaint and, therefore, his prayer for transposition cannot be disallowed merely on the ground that he did not file any written statement in the trial court. In Bhupendra Narayan Sinha v. Rajeswar Prosad Bhakat, AIR 1931 PC 162 the plaintiff’s claim to the full amount of compensation was challenged before their Lordships of the Judicial Committee on the ground that having failed to establish that his estate was by custom impartible he could not get the entire compensation but only the quarter ascribable to his share in the estate.
Their Lordships rejected this objection by observing that as all the members of the family were party to the suit and were at least jointly entitled to the whole, the claim of the plaintiff ought not to be defeated on technical objection and the defect could be remedied under Order 1, Rule 10, Code of Civil Procedure, by adding the pro forma defendants as co-plaintiffs. Their Lordships added, “such a course should, in their Lordships’ opinion, always be adopted where it is necessary for a complete adjudication upon the questions involved in the suit and to avoid multiplicity of proceedings”. In Monghibai v. Cooverji Umersey, AIR 1939 PC 170 it was observed, “Once all the parties are before the Court the court can make the appropriate order and should give judgment in favour of all the persons interested whether they be joined as plaintiffs or defendants.”
Relying on Hughes v. Pump House Hotel Co. Ltd., 1902 (2) KB 485, their Lordships of the Judicial Committee further observed that in such cases it would not matter that a wrong person had originally sued though he had no cause of action. In the case before us appellant No. 4 was always on the record and the claim of the plaintiffs has also been de-
feated on two technical grounds. I am, therefore, of the opinion that it is a fit case where the application of appellant No. 4 for transposition to the category of plaintiff should be allowed and it is accordingly allowed.
7. The finding of the court of appeal below that the suit was not maintainable for want of endorsement on the hand-note by appellant No. 4 in favour of appellants 1 to 3 was also challenged by learned counsel for the appellants, it was contended that the facts in the case of Bacha Prasad v. Janki Rai, AIR 1957 Pat 380 (FB) were quite different and that according to the decisions in Rai Ram Kishore v. Ram Prasad Mishir, AIR 1952 All 245 (FB) and Muthuveeran Chetty v. Govindan Chetty, AIR 1961 Mad 518 (FB), the suit was maintainable. Much can be said in favour of the view taken in the Madras Full Bench case that where property in a promissory note gets trans-ferred by partition, such a change is the result of an operation of law and that in such cases the special modes of trans-fer envisaged in the Negotiable Instruments Act are not required, and a person to whom the property in the negotiable instruments stands so transferred is entitled to sue on the note as such. Bacha Prasad’s case, AIR 1957 Pat 380 was not a case where interest in the handnote had devolved upon the plaintiffs by partition in the joint family. It is doubtful, therefore, whether the rule laid down in that Full Bench decision of this Court will apply to the present case. However, as the petition of appellant No. 4 for transposition to the category of plaintiff has been allowed and the suit can no longer be defeated on the aforesaid ground of non-endorsement of the hand-note by appellant No. 4 in favour of the other appellants, it is not necessary to examine this point in any further detail.
8. The finding of the court of appeal below that the handnote (Ext. 1) is not valid, nor it is for consideration, also stands vitiated on account of the fact that it has wrongly placed the onus on the plaintiffs. Before starting with the consideration of the evidence on the point it has observed, “Under such circumstances it is for the plaintiffs to prove that the handnote was executed by the defendants and that it was for consideration and for family necessity.” After discussing the plaintiffs’ evidence it says, “It was necessary for the plaintiffs to establish that the handnote (Ext. 1) was really scribed and executed by defendants Nos. 1 and 2 in the manner alleged in the plaint. But they have not done so, and it has not been established that the hand-note (Ext. 1) was really executed for consideration.” Then after referring to the evidence of D, W. 2, one of the defendants, that he did not receive any consi-
deration for the handnote it concludes, “Considering the evidence adduced on the side of the plaintiffs, I find that they have really failed to show that the hand-note (Ext. 1) was executed for consideration by defendants Nos. 1 and 2.”
It is obvious from these observations that it is not a case where the court of appeal below has considered the evidence of both the parties irrespective of the question of onus and come to a finding. In my opinion, the onus in this case was on the defendants to prove that the hand-note was not executed for consideration. We have examined the handnote ourselves and, in my opinion, the endorsement portion of the handnote below the stamp and up to the date, which is admitted to be in the pen of defendant (res-pendent) No. 2 is by itself a negotiable instrument and in the circumstances even if the body portion is not in the pen of respondent No. 2, that does not make any difference. Of course, the name of the lender is not mentioned in that execution portion, but it could be supplied by the holder in due course as provided in Section 20 of the Negotiable Instruments Act which runs as follows :–
“Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in India, and either wholly blank or haying written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amourt intended by him to be paid thereunder.”
It is only a case of an incomplete negotiable instrument and the borrower is liable to pay to the holder in due course. The handnote being a negotiable instrument, a presumption will arise under Section 118 of the Negotiable Instruments Act that it was made or drawn for consideration. Therefore the burden in this case lies on the defendants to rebut that presumption. Of course, the onus that the amount was borrowed for family necessity will be on the plaintiffs.
9. For the foregoing reasons, the judgment and decree of the court of appeal below are set aside and the case is remanded to it for rehearing the appeal in accordance with law and in light of the observations made above. Costs of the appeal before this Court will abide the
result of the appeal in the lower appellate court.
Anwar Ahmad, J.
10. I agree.