{"id":200794,"date":"1997-01-03T00:00:00","date_gmt":"1997-01-02T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/sree-visalam-chit-funds-ltd-vs-t-v-kumar-and-2-ors-on-3-january-1997"},"modified":"2018-09-19T03:42:14","modified_gmt":"2018-09-18T22:12:14","slug":"sree-visalam-chit-funds-ltd-vs-t-v-kumar-and-2-ors-on-3-january-1997","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/sree-visalam-chit-funds-ltd-vs-t-v-kumar-and-2-ors-on-3-january-1997","title":{"rendered":"Sree Visalam Chit Funds Ltd., … vs T.V. Kumar And 2 Ors. on 3 January, 1997"},"content":{"rendered":"
Madras High Court<\/div>\n
Sree Visalam Chit Funds Ltd., … vs T.V. Kumar And 2 Ors. on 3 January, 1997<\/div>\n
Equivalent citations: 1997 (1) CTC 284, (1997) IMLJ 438<\/div>\n
Author: A Lakshmanan<\/div>\n
Bench: A Lakshmanan<\/div>\n<\/p>\n
<\/pre>\n
ORDER<\/p>\n
 AR. Lakshmanan, J.<\/p>\n
 1. When the above civil revision petition came up for admission before this Court, notice of motion returnable by four weeks was ordered by this Court on 19-11-1996. Though both the respondents were duly served through Court on 2-12-1996, when the case is taken up to-day for final disposal, there is no representation on their behalf.\n<\/p>\n
 2. This civil revision petition is directed against an order dated 31-7-1996 made in I.A.No. 557 of 1994 in O.S.No. 0193 of 1991 by the Principal Subordinate Judge, Tirunelveli holding that the suit promissory note, dated 14-7-1987 is not payable ‘on demand’ and on that score rejected the plaint for the reasons recorded in his order. The first respondent is a subscriber to the chit conducted by the petitioner. The first respondent became the successful bidder and accordingly drew the prize amount after giving necessary security and his wife, the second respondent stood as a surety for the due payment of the balance of the chit amount. They accordingly executed a promissory note on 17-7-1987. Since the respondents committed default in payment of the chit subscription, the petitioner was constrained to institute O.S.No. 193 of 1991 on the file of the Court of Principal Subordinate Judge, Tirunelveli for recovery of the amounts due under the promissory note. The defendant filed I.A.No. 557 of 1994 contending that the suit promissory note is one payable otherwise than on demand and hence has not been properly stamped and should therefore be rejected. The petitioner filed a counter affidavit, denying the allegations and contending that the suit document is only a promissory note payable on demand and properly stamped.\n<\/p>\n
 3. The lower Court held that the suit promissory note should be stamped as a bond and being a pronote payable otherwise on demand and not having properly stamped cannot be admitted in evidence. On that view, the petition was allowed. Aggrieved by the said order, the present civil revision petition has been filed before this Court.\n<\/p>\n
 4. Mr. Muthukumar, learned counsel appearing for the petitioner submitted that when the suit document is a promissory note payable on demand the finding of the trial Court that the suit document is not one payable on demand is erroneous. I have carefully gone through the order impugned in this civil revision petition and also the decisions relied on and referred to by the Court below. I have also gone through the xerox copy of the promissory note dated 17-7-1987 filed alongwith this revision and executed by the respondents herein. A bare reading of the promissory note would clearly show that the suit promissory note is only payable on demand and that it will not come under the definition of Article 49 (2) of the Indian Stamp Act and as contended by the revision petitioner for determining the issue whether suit promissory note is one payable on demand or otherwise, the contents of the promissory note alone have to be looked into and extraneous evidence cannot be let in to determine the character of the promissory note. The learned Principal Subordinate Judge, Tirunelveli has relied on two decisions of this Court reported in Thenappa Chettiar v. Andiyappa Chettiar,  and Alamalu Ammal<\/a> v. P. Rangi Goundar, 1944 (2) M.L.J. 180.\n<\/p>\n
 In my view both the Judgments do not apply to the facts of the present case since the amount due under the promissory note in the said two decisions are payable only after certain period. Before me, learned counsel for the revision petitioner cited a decision of this Court in E. Subramaniam v. J.N. Esupatham,  wherein the suit was filed to recover certain amount due on a promissory note. The trial Court pointed out that in the promissory note, the words ‘on demand’ are not found. Therefore, it is a promissory note ‘otherwise payable on demand’. Therefore, the trial Court held that the stamp duty is payable according to Article 49 (b) of the Stamp Act. That is not the subject matter in the present revision. In the said decision, Thanikkachalam, J on a careful consideration of the entire materials placed before him and of the promissory note held that eventhough the words ‘on demand’ do not find a place in the suit promissory note, it can be considered as a promissory note. Under Section 4 of the Negotiable Instruments Act, a ‘promissory note’ is an instrument in writing (not being a bank-note or currency note), containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument. In the present case, no period for demand was fixed under the promissory note. Therefore, the decisions relied on and referred to by the Court below are not applicable to the facts of the present case. The promissory note in question is correctly stamped according to the provisions containing in Article 49 (a) of the Stamp Act. In the decision reported in Sreenivasan v. Subbarama Sastrikal, , it was held that a promissory note payable on demand is one payable without any demand and time limit. The true import of the words ‘on demand’ is that the debt is due and payable immediately. Therefore, the instrument involved in this case satisfied this test even read along with the endorsement. The endorsement does not mean that it is not payable immediately or without any demand. Even the words ‘on demand’ is not necessary to make it on demand because under Section 19(a) of the Negotiable Instruments Act, a pronote in which no time for payment is specified is one payable on demand. In order to make a promissory note ‘on demand’ it must be payable ‘at once”forthwith’ or immediately’. On the other hand, if any time limit is fixed for payment then payment could be demanded and the amount becomes payable only after that period and in such a case the instrument is only one payable otherwise than on demand even though the words ‘on demand’ are there.\n<\/p>\n
 5. The learned Subordinate Judge has failed to see that the recitals about the chit transaction in the suit pronote have been incorporated, as it is a mandatory requirement under Section 33 of the Chit Funds Act, 1982. The learned Subordinate Judge has also erred in thinking that the document must be one evidencing past transaction, the intention is to collect the pronote amount in instalments, and the reasons therefore are erroneous. The recitals in the promissory note that if the subscriber commits default in payment of any one of the instalments, the entire amount becomes due and payable have not been properly understood by the learned Subordinate Judge.\n<\/p>\n
 6. Therefore, the view taken by the lower Court that the suit promissory note was not properly stamped and that therefore the same cannot be admissible in evidence, is wholly erroneous. I therefore, set aside the said order of the Court below made in I.A.No. 557 of 1994 in O.S.No. 193 and 1991 dated 31-7-1996 and I direct the Court below to mark the promissory note as a document on the side of the plaintiff and proceed with the trial of the suit as expeditiously as possible.\n<\/p>\n
 7. This civil revision petition is allowed. However, there will be no order as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Madras High Court Sree Visalam Chit Funds Ltd., … vs T.V. Kumar And 2 Ors. on 3 January, 1997 Equivalent citations: 1997 (1) CTC 284, (1997) IMLJ 438 Author: A Lakshmanan Bench: A Lakshmanan ORDER AR. Lakshmanan, J. 1. When the above civil revision petition came up for admission before this Court, notice of motion […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,13],"tags":[],"class_list":["post-200794","post","type-post","status-publish","format-standard","hentry","category-high-court","category-madras-high-court"],"yoast_head":"\nSree Visalam Chit Funds Ltd., ... vs T.V. 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