"The decision in the Brook's Wharf case was an application of the principle that where A has been compelled by law to pay, or, being compellable by law has paid money which B was ultimately liable to pay, so that B obtains the benefit of the payment by the discharge of his liability then B is held indebted to A in that amount. The principle is a familiar instance of liability in quasi-contract or, as the older pleaders described it an instance of the common indebitatus count for money paid. Lord Wright, in referring to some of the authorities on it. Said (at p.545)"These statements of the principle do not put the obligation on any ground of implied contract or of constructive or notional by the Court simply under the circumstances of the case and on what the Court decides is just and reasonable, having regard to the relationship of the parties.
 Now what is 'just and reasonable' except 'natural justice' in another guise? But I wish to add that (as I have tried to show elsewhere) this fiction of implied contract is really unnecessary in the law of quasi-contract at the present day. It did good service in the development of that department of the English system but at its best it was quite in adequate to explain intelligibly many of the decisions on quasi-contract and on the scope of elegantia juris we should be well rid of it nowadays. In 1914 AC 398 it led to this remarkable result . The Court started to search for a non-existent contract and abandoned the chase because even if it had found one, the contract would have been illegal. This remains one of a recent book by a famous mathematician intended for popular reading in which , in explaining the theory of relativity he first urged the uninstructed public to get into their heads the square root of -1 and then frankly admitted that no such quantity exist. "


Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972

54. Mr. Winsfield thus ridiculed the doctrines propounded by the English Courts, the latest of them being the principle of ' just and reasonable . ' That doctrine of ' just and reasonable ' applied in English common law cannot be invoked in the teeth of the provisions of Section 35 of the Stamp Act and Section 91 of the Evidence Act or beyond the scope of Section 70 of the Contract Act.


55. The case of Fibrosa Spolka Akcyjna v. Fairbarin Lawson Combe Barbour Ltd., 1943 AC 32 was a case of frustration of contract. It was, therefore, stated by Lord Wright that :
 "The claim of a party who has paid money under a contract, to recover it on the ground that the consideration for which he paid it has wholly failed is not based on any provision in the contract, but arises because in the circumstances the law gives a remedy in quasi contract to the party who has not got what he bargained for. Although, in the formation of a contract, a promise to do a thing may be the consideration, in dealing with the law of failure of consideration and the right to recover money on that ground it is generally speaking, not the promise which is referred to as the consideration, but its performance. "

 As it was a case of frustration, the contract having become impossible of performance, Viscount Simon, in his judgment observed ( at p. 49 ) that :
 "I can see no valid reason why the right to recover equally arise on frustration arising from supervening circumstances as it arises on frustration from destruction of a particular subject matter. "

 Lord Wright, in the course of the same judgment described the nature of a quasi-contract in these words :
 "It is clear that any civilised system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit that is to prevent a man from retaining the money of or some benefit derived from another which it is against conscience that he should keep. Such remedies in English Law are generically different from remedies in contract or in tort, and are now recognised to fall within a third category of the common law which has been quasi-contract or restitution. "


Mr. M. Jagannadha Rao also placed reliance on a passage in Anson's Law of Contract ( Twenty-third Edition ) at page 601 : " Where one person pays money to another in pursuance of an agreement which is ineffective, or which subsequently becomes so, he may recover from that other the money which he has paid ". Putting the case under the head of quasi-contractual liability, the nature of a quasi-contract is stated in Chapter XXI of Anson's Law of Contract, at page 589 in these words : " Circumstances must occur under any system of law in which it becomes necessary to hold one person to be accountable to another, without any agreement on the part of the former to be so accountable on the ground that otherwise he would be retaining money or some other benefit which has come into his hands to which the law regards the other person as better entitled, or on the ground that without such accountability the other would unjustly suffer loss. The law of quasi-contract exists to prove remedies in circumstances of this kind. " The three common law actions of a quasi-contractual nature as we get from page 590 of the same Volume are : (1) for money paid by the plaintiff to the defendant's use ; (2) for money had and received by the defendant to the plaintiff's use and (3) quantum meruit. It is under the first two heads that Mr. Jagannadha Rao sought to put his case as, according to him. Section 70 incorporates what is a quasi-contract in the English Common Law.


56. The question of quasi-contract or implied promise to pay has to be examined in the context of the statutory prohibitions where a contract is made in writing and not on the basis of the principles enunciated under the English Common Law. The Supreme Court laid down the conditions under which Section 70 can be called in aid. In the case of Gajendragadkar, J., ( as he then was ) said that ( at P. 786 ) :


Three conditions must be satisfied before this Section can be invoked. The first condition is that a person should lawfully do something for another person or deliver something to him. The second condition is that in doing the said thing or delivering the said thing he must not intend to act gratuitously and the third is that the person for whom something is done or to whom something is delivered must enjoy the benefit thereof. " That was a case where the contract was held to be invalid because of the provisions of Section 175 (3) of the Government of India Act corresponding to Article 299 of the Constitution. The case of the contractors there was that they feared to put up certain temporary storage godowns at Aranbagh for the use of the Civil Supplies Department and the offer was accepted by the department by a letter dated 12th February, 1944 and after the offer was accepted, the contractors completed the constructions and sent the bill, which was duly paid in July, 1944. But meanwhile on 7th April, 1944, the contractors were requested by the Sub-Divisional Officer of the Department to submit their estimate for the construction of a kutcha road, guard room, office, kitchen and room for clerks at Arambagh for the use of the Department of Civil Supplies. That was followed by the visit of the Additional Deputy Director of Civil Supplies, who instructed the contractors to proceed with the construction in accordance with the estimates submitted by them. The constructions were completed and a bill was presented.. The State of West Bengal refuted the claim on the ground that the claims made in respect of the constructions were invalid as the constructions were unauthorised and there was no valid contract as required under Section 175 (3) of the Government of India Act to bind the Government of West Bengal. Their Lordships therefore held that the claim for compensation under Section 70 of the Contract Act is not made on the basis of a contract but on voluntary acceptance of a thing


of the Contract Act is not made on the basis of a contract but on voluntary acceptance of a thing and there was no conflict between Section 70 of the Contract Act and Section 175 (3) of the Government of India Act. In upholding the claim for compensation, Gajandragadkar, J., ( as he then was ) observed :--


" Where a claim for compensation is made by one person against another under Section 70, it is not on the basis of any subsisting contract between the parties ; it is on the basis of the fact that something was done by the party for another and the said work so done has been voluntarily accepted by the other party. In regard to the claim made against the Government of a State under a Section 70 it may be that in many cases the work done or the goods delivered are the result of a request made by some officer or other on behalf of the said Government. In such a case, the request may be ineffective or invalid for the reason that the officer making the request was not authorised under Section 175 (3) of the Government of India Act, or if the said officer was authorised to make the said request the request becomes inoperative because it was not followed up by a contract executed in the manner prescribed by Section 175 (3) of the Government of India Act. In either case the thing has been delivered or the work has been done without a contract and that brings in Section 70. " The same learned Judge spoke for the Court in , and following the earlier decisions in the learned Judge said :
 " But in pursuance of the said void contract, A has performed his part and the Government of India has received the benefit of the performance of the contract by A ; Section 70 Contract Act, would apply and the Government of India was bound to make compensation to A in the form of the value of the said coal under that section. "


It is for the reason that the learned Judge held that since the Government had received the benefit under an invalid or void contract, it is nevertheless bound to make good or recompense the person who lawfully did something for the Government by which the Government benefited having voluntarily accepted the benefit, that Mr. Jagannadha Rao seeks to contend that here too the contract evidenced by the promissory note has become invalid by reason of the absolute bar of Section 35 of the Stamp Act and as such the lender cannot be deprived of the remedy available to him under the beneficial provision of Section 70. In support of his contention, he also invited our attention to another decision of the Supreme Court in where Ramaswami, J., construing the expression " anything " brought deposit of money into a Government Treasury also within the meaning of that expression. The learned Judge, after referring to the two earlier cases of the court referring to supra, observed :
 " But if money is deposited and goods are supplied or if services are tendered in terms of the void contract. The provisions of Section 70 of the Indian contract Act may be applicable. In other words. If the conditions imposed by Section 70 of the Indian contract Act are satisfied then the provisions of that section can be invoked by the aggrieved party to the void contract."


It is for the reason that in that case, the learned Judge said that money deposited is also recoverable by virtue of the provisions of Section 70, that Mr. M. Jagannadha Rao contended that. When a promissory note becomes invalid by reason of section 35 of the Stamp Act, it would still be open to the plaintiff to recover the money lent under the note under the provisions of section 70. As the expression "anything delivered," according to the learned counsel, is of wide import or amplitude as to take within its ambit or range money given under an invalid promissory note. That was a case where the appellant had purchased a right to pluck, collect and remove the forest produce. Out of the forest produce only the tendu leaves crop was allowed to be enjoyed by the appellant on his depositing a sum Rs. 3,000 in the Government Treasury. The deposit was made by the appellant to save the tendu leaves crop from being sold to others by the Government. The case of the appellant was that he was entitled to the refund of the amount, as the right to collect tendu leaves had already been purchased by him. From the facts it is clear that that was a case of deposit of money by way of security, so that the tendu leaves crop may not be sold to others. The deposit of money as a security cannot be equated to money lent under a promissory note. For there is no element of lending when the money is deposited into the Treasury in terms of a condition imposed by the Government. There, there is no borrower or lender. It was therefore observed by Ramaswami, J,. That "if money is deposited " and goods are supplied or if services are rendered in terms of the void contract. The provisions of Section 70 of the contract Act may be applicable and that the money deposited could be recovered under Section 70 when a contract becomes invalid or void. It is in that


deposited could be recovered under Section 70 when a contract becomes invalid or void. It is in that context that the expression "anything " was construed to include "money " deposited. There is nothing in what the Supreme Court said in the three cases cited above, as sought to be made out by Mr. M. Jagannatha Rao. Which over rules the opinion of the Madras Full Bench. As expressed by Varadachariar, J., that Section 70 of the Contract Act is scarcely appropriate to a case of money lent to the defendant ; that there is no possibility in such a case or even a contemplation of the " thing delivered " being restored - which obviously means in specie ; and that lending money to the defendant cannot be described as something done for the defendant .


57. The essential difference or distinction between the three cases of the Supreme Court and an action based on foot of a promissory note where the bar of Section 35 of the Stamp Act operates is this : The recover of "any thing "under Section 70 is only by way of compensation or to restore the " thing so done or delivered ". What the promisor promises to pay under a promissory note is a certain sum of money and therefore the question of payment of compensation will not arise in view of the specific terms embodied in the promissory note. The question of restoring the " thing so done or delivered " even if it is to be construed that that expression takes in "money " will not arise, for as stated by their Lordships of the Supreme Court. The remedy under Section 70 cannot be had on foot of a subsisting contract.
 58. Now let us turn to Section 35 of the Stamp Act which imposed an absolute prohibition on the use of a promissory note if it is not duly Stamped. This section to the extent relevant reads :
 "No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence. Or shall be acted upon, registered or authenticated by any such person or by any public officer unless such instrument is duly Stamped:
Provided that-


Provided that-
 (a) any such instrument not being an instrument chargeable with a duty not exceeding ten naya paise only, or a bill of exchange of promissory note, shall. Subject to all just exceptions be admitted in evidence on payment of the duty with which the same is chargeable, or. In the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees of when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion."
 It is well settled that a promissory note not duly stamped cannot be used for any purpose whatsoever and it is not one of those documents which could be received in evidence on payment of deficit duty and penalty.


59. The expression "for any purpose" occurring in Section 35 was construed by the Madras High Court as early as in 1907 in Thaji Beebi V. Tirumalaiappa, (1907) 17 Mad LJ 308 and by the Allahabad High Court in Mt. Bibbo v. Gokaran Singh. AIR 1937 All 101 and later by the Privy council in Ram Rattan v. Parmanand. AIR 1946 PC 51, and by this Court in Sanjeeva Reddy v. Johanputra Reddy, . The Madras High Court held that an instrument which should have been Stamped according to law but is unstamped , is not admissible in evidence for any purpose whatsoever . The Allahabad High Court construed the expression "for any purpose" as undoubtedly implying "for each and every purpose whatsoever , without any exception" and the Privy Council set at rest the conflicting views expressed by the various High Courts by pointing out that the words "for any purpose" should be given their natural meaning and effect and would include a collateral purpose. In one of us (Obul Reddi, J.) held that there is a total and absolute bar as to the admission of an unstamped instrument whatever foreign or independent the purpose may be for which it is sought to be used unless there is compliance with the requirements of the provisos to Section 35.


60. The question then to be considered is, when the promissory note itself cannot be used for any purpose for whatsoever because of the absolute bar of Section 35 of the Stamp Act whether the factum of loan can be established dehors or independently of the promissory note. Their Lordships of the Supreme Court were not considering a case where a contract becomes inadmissible for " any purpose " whatsoever. In those cases, the contracts were admissible in evidence; but they became invalid by reason of the constitutional provisions and hence an action could not be founded on those contracts which were not made in conformity with the requirements of the constitutional provisions. Here, the promissory note cannot be received in evidence and cannot be looked into for any purpose whatsoever, that is to say, no part of the document, be it a single sentence or a word can be received in evidence and to do so is to do violence to Section 35. Further as pointed out by Gajendragadkar, J. ( as he then was ) the claim for compensation was not based on foot of contract, which had become invalid, but on the work of lawfully done by the contractors under the orders of the Government officials, the Government having become the beneficiary of the works executed by the contractors. The obligation to recompense or make good to the extent the Government derived benefit arose not out of the contract, which became invalid, but independently of the contract. But here, the money is sought to be recovered on the basis of the contract put in writing viz., the promissory note, which cannot at all be received in evidence and looked into for any purpose whatsoever even if it be for a collateral purpose ( see AIR 1946 PC 51 ).


61. We may now read Section 91 of the Evidence Act to the extent material for our purpose :
 "When the terms of a contract, or of a grant or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document no evidence shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions hereinbefore contained.

xx         xx                xx                        xx           xx                   xx                    xx             xx          xx                xx

 Illustration (b) : If a contract is contained in a bill of exchange, the bill of exchange must be proved."

It is cardinal and well established principle of the law of evidence that where written contracts exist they shall be produced as being the best evidence of their contents. It is an inflexible rule that whenever a contract is reduced into writing the terms of the contract should be proved only by what is contained in the contract which the parties made voluntarily. They should be " the repositories and memorials of truth ". Any other evidence is excluded from being used either as a substitute for such instruments or to contradict or alter them. It may be mentioned that the exceptions contained in Sections 95 and 97 have no application as the use of the promissory note is prohibited for any purpose by Section 35 of the Stamp Act. Oral evidence, therefore, cannot be substituted for a written contract which embodies the contractual terms for proof of those terms.


62. Lord Cairns in the well known case of Shaw v. Foster, ( 1872 ) 5 HL 321 at p. 341 = ( 42 LJ Ch 49 ) dealing with deposit of a document of title, observed :
 "Although it is a well-established rule of equity that a deposit of a document of title without more, without writing, or without word of mouth will create in equity a charge upon the property referred to. I apprehend that that general rule will not apply where you have a deposit accompanied by an actual written charge. In that case you must refer to the terms of the written document and any implication that might be raised, supposing there were no documents, is put out of the case and reduced to silence by the document by which alone you must be observed. "

 Lord Carson in Subramanian v. Lutchman, AIR 1923 PC 50 = ( 50 ) Ind App 77 ) quoted with approval what Chief Justice said in ( 1873 ) 11 Beng LR 405 :
 "The law upon the subject admits of no doubt. The rule with regard to writings is that oral proof cannot be substituted for the written evidence which the parties have put into writing. And the reason is that the writing is tacitly considered by the parties themselves as the only repository and the appropriate evidence of their agreement. "


To the same effect is what is held by Patanjali Sastri, J. ( as he then was ) in Rachpal Maharaj v. Bhagwandas, while dealing with the case of deposit of title deeds: ' if the parties choose to reduce the contract to writing, the implication is excluded by their express bargain, and the document will be the sole evidence of its terms '. These cases were referred to and followed by the Supreme Court in V. G. Rao v. Andhra Bank, . Referring to Ex. A-6 a document in that case, Hegde, J., observed : " If that document is considered as a contract of mortgage between the Bank and the depositors, the same having not been registered, it is inadmissible in evidence. If on the other hand that document is considered as a mere memorandum evidencing the deposit of title deeds in pursuance of an earlier contract then the correctness of the recitals therein can be gone into without being inhibited by Sections 91 and 92 of the Evidence Act. "

 63. In K. Bhavanarayana v. S. Venkataratnam, a Division Bench of this Court, to which one of us ( Obul Reddi, J. ) was a party, dealing with the admissibility of a document. Ex. A-7 evidencing the deposit of title deeds, observed : that if a document of this nature is not registered as provided under Section 49 of the Indian Registration Act, it cannot be used as evidence at all and that the transaction cannot be proved by oral evidence either, in view of what is provided under Section 91 of the Evidence Act.


64. It is not necessary to multiply decisions on this point, for in view of what the Privy Council say, when once the parties agreed to put on record the terms of the contract, in other words, put the terms agreed upon into writing, it is the document alone that could be looked into to ascertain the terms of the contract and that Section 91 of the Evidence Act prohibits any other evidence to prove or construe the contract reduced into writing.


65. Now let us consider whether Section 91 comes in the way of a promissory note which does not incorporate or embody all the terms of the contract. Section 91 refers to all kinds of contracts. A promissory note is a document which requires by law to be in writing. The prohibition of Section 91 is only with regard to the terms of such contract reduced in writing. In other words, Section 91 excludes any evidence other than a promissory note for proof of its terms. All the terms of the contract need not be necessarily be embodied in a promissory note. If the terms required to be stated by Section 4 of the Negotiable Instruments Act, are incorporated in a contract, that would be sufficient to make it a promissory note. The parties may stipulate terms culminating in the giving of the promissory note, but all such terms may not be embodied in the promissory note in which event, if the promissory note becomes inadmissible in evidence by reason of Section 91 its terms cannot be proved by other evidence, but not the other terms of the contract which do not find a place in the promissory note. That is to say, if the terms of the contract relating to execution of the promissory note as a conditional discharge or collateral security are not embodied in the promissory note, it cannot be said that when the plaintiff seeks to establish on the basis of his pleadings that the promissory note was obtained by him by way of a collateral security or as a conditional payment, the bar imposed by Section 35 of the Stamp Act and Section 91 of the Evidence Act comes in the way of proving the terms relating to collateral security or conditional payment not embodied in the promissory note. To put it differently when a plaintiff sets up the case of collateral security or conditional payment on the failure of his action on foot of the promissory note, he does not


conditional payment on the failure of his action on foot of the promissory note, he does not seek to prove the terms contained in the promissory note, but seeks to prove the terms of the contract which are not embodied in the promissory note. In that case, it cannot be said that the plaintiff is attempting to nullify the provisions of S. 91 or by-passing or circumventing those provisions, for then his action is not on foot of the promissory note, but on the basis of the alternative cause of action shown in the plaint viz., that the promissory note was given by the debtor as a collateral security or conditional payment and on the basis of the alternative cause of action pleaded by him he would be entitled to let in other evidence to prove his claim. The bar of Section 91 therefore operates in such a case only to the extent of the terms of the contract embodied in the promissory note, but not to the terms of the contract which are not evidenced by the promissory note. In other words, the promissory note, which cannot be used for any other purpose whatsoever on account of the bar of Section 35 of the Stamp Act, becomes a ' worthless piece of paper ' in which event Section 91 will not come in the way, as the plea of conditional discharge or collateral security is not founded on the terms of the promissory note, but on the terms of the contract which do not find a place in the promissory note and that would put the case of the plaintiff beyond the reach of Section 91 of the Evidence Act.


66. Mr. M. Jagannadha Rao made a feeble attempt to alternatively rest his case on the doctrine of in pari delicto potior est conditio defendantis for the reason that under Section 29 of the Stamp Act, in the absence of an agreement to the contrary, the expense of providing proper stamp shall be borne by the person making or executing a promissory note. In the first place, it should be borne in mind that there could always be an agreement between the parties that the expense of providing proper stamp shall be borne not by the party executing it, but by the party in whose favour it is executed. This doctrine only lays down that the Courts will refuse to enforce al illegal agreement at the instance of a person who is himself a party to an illegality or fraud. To apply the doctrine to the case of a promissory note, the defendant should be in a position to put the case under Sections 23 and 24 of the Contract Act which lay down what considerations are unlawful making the agreements void. We are unable to see how on the basis of Section 29 of the Stamp Act, a promissory note not duly stamped could be brought within the mischief of Sections 23 and 24 of the Contract Act. It is one thing to say that the contract evidenced by the promissory note is hit by Sections 23 and 24 of the Contract Act and another thing to say that the obligation case upon the executant of a promissory note to bear the expense of providing proper stamp has not been discharged by him. Section 29 does not say that the defendant shall affix the proper stamp on the promissory note. It only says that the defendant shall bear the expense of providing the proper stamp. That distinction should be borne in mind. The promisee can always recover the expense initially incurred by him from the executant of the promissory note. The action brought on a promissory note fails


the executant of the promissory note. The action brought on a promissory note fails not on account of any illegality attached to it as laid down in Section 23 or 24 of the Contract Act, but because of Section 35 of the Stamp Act, which makes it 'a worthless piece of paper' for any use in evidence. In-admissibility in evidence should not be mixed up on confused with illegality.


67. Another feeble attempt was also made to contend that, when the cons, under Hindu Law are made liable for the father's debt not on the foot of a promissory note but on the basis of the personal law, why should not the debt be recovered from the promisor himself de hors or independently of the promissory not. It should be remembered that, if the action against a Hindu father, the executant of the promissory note, fails on account of the bar of Section 35 of the Stamp Act and Section 91 of the Evidence Act then there is no question of proceeding against the sons of recovery of the debt invoking the personal law. The liability of the sons to pay the father's debt arises not because the promissory note is duly stamped but on account of the personal law in respect of such a debt contracted by a Hindu father, so long as that debt is not tainted with immorality or vice. If this is borne in mind, there is no question of recovering the money lent under an insufficiently stamped promissory note, except in the manner and circumstances already made clear by us agreeing with the view of the Madras Full Bench.


68. For the reasons recorded by us. We find no conflict between Perumal Chettiar's case ILR (1938) Mad 933 = (AIR 1938 Mad 785 (FB) and Pothi Reddy's case. (1887) ILR 10 Mad 94 and hold that the view, as expressed by the Full Bench is correct and that Section 70 of the Contract Act cannot be invoked on the theories of implied promise, money had and received, quasi-contract and just and reasonable or unjust enrichment or any other equitable doctrine. We cannot, therefore, endorse the view expressed by Gopal Rao Ekbote. J. in Mohammad Jamal Saheb's case, that "on the basis of the theory of ' money had and received ' also, the plaintiff may be entitled to claim his money ". The questions posed by us are answered accordingly.

 69. Before parting with this case, we would like to observe that, if any provision in any enactment requires an amendment, there cannot be a better one than the provisions of Section 35 of the Stamp Act so as to incorporate a proviso to make an insufficiently stamped promissory note, admissible in evidence by directing the person relying upon it to make the deficit stamp duty and subjecting him to such penalty as the Legislature may deem fit to impose. Such an amendment in our view, would not only bring about uniformity in the law in the various States, but also avoid unnecessary litigation and save quite a lot of judicial time.

 70. We therefore, send back the civil revision petitions for disposal by a single Judge.


Alladi Kuppuswami, J.
 71. The question which has been referred to the Full Bench is as follows :
 "Whether a plaintiff can lay action for recovery of the amount advanced by him basing on the original cause of action when the Negotiable Instrument evidencing the transaction is inadmissible in evidence under Section 35 of the Stamp Act. "

 Having regard to the arguments advanced on both sides it was considered desirable to frame the following questions for consideration :
 "Whether a plaintiff can bring action for recovery of the amount advanced by him basing on the original consideration when the promissory note on foot of which action is brought is inadmissible, in evidence under Section 35 of the Stamp Act, and if so, under what circumstances ?


2. If the promissory note is inadmissible in evidence whether action can be maintained for recovery of the amount either on the theory of " money had and received " or under the provisions of Section 70 of the Contract Act. "
 For nearly a hundred years, the Courts in India have been struggling with the question whether a plaintiff is without any remedy if a promissory note executed in his favour is not stamped or insufficiently stamped and is in admissible in evidence or whether he is entitled to sue on the debt or on the consideration. Different views have been expressed from time to time expressing different shades of opinion. A mass of authorities representing the views of the High Courts from Jammu & Kashmir in the North to Kerala in the South have been placed before us. Sitting as we are in a Full Bench of seven Judges, it is not necessary for us to consider in detail all these decisions as none of these decisions are binding upon us. Of course, we have derived considerable light from the reasoning contained in some of those decisions and we are indebted to the advocates on both sides for the able manner in which their respective cases were presented. As the decisions have been discussed in detail in the judgments of my learned brothers Obul Reddi and Venkataramasastry, JJ. I have considered the matter mainly in the light of first principles.

 72. The three provisions of law which have to be considered in dealing with the first question are :
 (a) Section 4 of the Negotiable Instruments Act which contains the definition of a ' promissory note ', (b) Section 35 of the Stamp Act and (c) Section 91 of the Evidence Act.


Section 4 of the Negotiable Instruments Act is as follows :
 "A 'promissory note' is an instrument in writing ( not being a bank-note or a 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. " Section 35 of the Stamp Act in so far as it is relevant for the purpose of this reference is in these terms :--
 "No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any public officer, unless such instrument is duly stamped ;
Provided that :--
 (e) any such instrument not being an instrument chargeable with a duty not exceeding ten naya paise only, or a bill of exchange or promissory note shall subject to all just exceptions, be admitted in evidence on payment of the duty with which the same is chargeable or, in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to tentimes such duty or portion. "
 It is seen at once that a promissory note does not come under the proviso and is covered by the main Section.


73. The relevant portion of Section 91 of the Evidence Act is in the following terms :
 "When the terms of the contract, or of a grant of any other disposition of property, have been reduced to the form of a document no evidence shall be given in roof of the terms of such contract, grant or other disposition of the property............... except the document itself or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions hereinbefore contained. "

Illustration :
 (b) If a contract is contained in a bill of exchange, the bill of exchange must be proved.
 74. Applying Section 91 to the document with which we are concerned viz; a promissory note, it is seen that if the promissory note contains the terms of the contract between the parties, then proof of such terms is to be given only by the document itself and no evidence except the document shall be given in proof of the terms. But in this case as the promissory note is unstamped or insufficiently stamped, it shall not be admitted in evidence for any purpose, nor shall it be acted upon. The combined effect of S. 91 of the Evidence Act and Section 35 of the Stamp Act would therefore be, in the case of unstamped or insufficiently stamped promissory note which contains the terms of the contract, that the promissory note is inadmissible for any purpose and no other proof of the terms of the contract is permissible, except the document, with the result that the plaintiff's suit in such a case will have to be dismissed.


75. The question therefore, in every suit for the recovery of an amount for which a promissory note is executed resolves itself into this viz., whether the terms of the contract have been reduced to the form of a document, namely, the promissory note, or in other words whether the promissory note contains the terms of the contract. All that is required to satisfy the definition of a promissory note is that there must be an unconditional undertaking to pay a certain sum only to, or to the order of, a certain person or to the bearer of the instrument. There may be other terms of the contract between the parties, which may not find a place in the promissory note but still if the conditions mentioned in Section 4 of the Negotiable Instruments Act are satisfied it will be a valid promissory note. For instance, among the eight illustrations that are given to the definition, illustrations (a) and (b) are mentioned as being promissory notes. Illustration (a) states : " I promise to pay B or order Rs. 500 ": and (b) states: " I acknowledge myself to be indebted to B in Rs. 1000 /- to be paid on demand for value received. " It is seen from the illustration (a) that the only term that is stated is that A promises to pay B or order Rs. 500 /-. No other terms of the contract are mentioned, for example, the rate of interest, or when the amount is to be paid and so on. Even so it is a valid promissory note. On the other hand a promissory note may also contain all the terms of the contract. The question whether a promissory note contains all the terms of the contract between the parties or not is a question of fact and has to be decided on the evidence in the case. There is no presumption either that it contains all the terms or that it does contain all


the case. There is no presumption either that it contains all the terms or that it does contain all the terms. If it contains all the terms, no evidence shall be given in proof of the terms, except the promissory note and as the promissory note is inadmissible for any purpose, the result would be that the terms cannot be proved at all and the plaintiff is left without a remedy. If, on the other hand, the promissory note does not contain all the terms, Section 91 of the Evidence Act is not a bar and he is entitled to allege and prove such terms by evidence other than the promissory note.


76. In this connection it is necessary to bear in mind that a promissory note may be executed in different circumstances.

 (a) A person may incur a debt in the first instance and subsequently execute a promissory note promising to pay the amount due by him. For example, a promisor may purchase certain goods from the promisee and become indebted to him for the sale price and later on at the instance of the promisee execute a promissory note for the value of the goods purchased by him; or the promisor might have borrowed certain sum of money even without a document and later on at the instance of the latter may execute a promissory note for the amount borrowed.


(b) A promissory note may be executed simultaneously with the loan advanced or the debt incurred. In this connection the expression ' simultaneously ' is used in the sense that the execution of the promissory note or the incurring of the debt from part of one and the same transaction . It is possible that they may be separated in point of time, for instance, the amount may be borrowed in the morning and the promissory note executed in the evening, but the true position is that they form part of the same transaction, the mere fact that they are separated by some interval of time would not really make a difference.
 77. In cases coming under (a) it may be the intention of the parties that the previous debt is discharged by the execution of the promissory note and the promissory note alone should hence-forward be treated as constituting the contract between the parties. In other words, there is accord and satisfaction of the debt and thenceforward the liability based upon the promissory note. In such a case it is clear that the terms of the contract are reduced to a document within the meaning of Section 91 of the Evidence Act and it is not permissible to prove the terms of the contract by any other evidence except the promissory note, and as the promissory note itself is inadmissible under S. 35 of the Stamp Act for any purpose the suit must fail.


78. On the other hand, the intention of the parties may be that it is regarded only as a conditional payment of the antecedent debt, or is taken by way of collateral security for the debt. In either case, the original contract is not in any way affected and if for any reason the promissory note cannot be enforced, the plaintiff is entitled to fall back on the original contract. In the first case the payment being conditional ceases to be a payment when the promissory note cannot be enforced. In the second case, the only result is the security fails but the debt remains. In both these cases it cannot be said that the terms of the contract have been reduced to the form of a promissory note, for the promissory note is only treated as conditional payment or executed by way of collateral security and hence Section 91 of the Evidence Act does not come in the way and it is always open to the promise to sue upon the original cause of action, namely, the advancing of the loan by the promisee, or incurring of the debt by the promisor. The observation of Leach C. J. In AIR 1938 Mad 785 ( FB ) at p. 786, that where a negotiable instrument is executed in respect of an antecedent debt the creditor may sue on the debt and ignore the note would be applicable only to this class of cases and not the first where the debt is completely discharged and the promissory note is intended to substitute the debt.


79. Even in a case coming under (b) where the promissory note is simultaneous with the loan, it is still open to the parties to prove that the promissory note was not regarded as the embodiment of the contract but only taken by way of collateral security or by way of conditional payment. Where a promissory note has been executed subsequent to the incurring of the debt or simultaneously, the question still remains whether it was intended by the parties to reduce the terms of the contract into the form of a promissory note, or whether it was intended merely to be a conditional payment or by way of collateral security and that has to be decided with reference to the evidence in each case.
 80. It was sought to be argued by Sri M. Jagannadha Rao that in every case of a promissory note there is always an implied promise to pay, apart from what is contained in the promissory note and therefore, it must be taken that a promissory note must always be regarded as conditional payment or executed by way of collateral security. At any rate it was contended that there is a presumption that the promissory note was taken by way of conditional payment or by way of collateral security and unless that presumption is rebutted by evidence the plaintiff would be entitled to prove the contract by evidence other than the promissory note. We are not inclined to accept the argument. On a review of all the authorities referred to in the judgments of Obul Reddi and Sastry, JJ., it would appear that there is no presumption either way and in each case it has to be considered on the evidence on record whether the promissory note was executed only by way of conditional payment or by way of collateral security or whether it embodies all the terms of the contract.


81. A further question which arises is this-- Suppose the promissory note is not executed by way of conditional payment or as collateral security, but it turns out that it does not contain all the terms of the contract, would it still be open to the plaintiff to fall back on the original consideration ? An example of such a case has already been given, namely, where a person promises to pay a sum of Rs. 500 /- and nothing is mentioned regarding interest. If under the terms of contract the defendant had agreed to pay interest it cannot certainly be said that the promissory note contains all the terms of the contract. In such a case will Section 91 of the Evidence Act operate as a bar to prove the terms of the contract by evidence other than the promissory note ? It was sought to be contended that it is only in cases where the promissory note is executed by way of conditional payment or by way of collateral security that a suit would lie on the original cause of action and the following passage in AIR 1938 Mad 785 ( FB ) Supra, was relied on for this purpose.

 "If the promissory note embodies all the terms of the contract and the instrument is improperly stamped, no suit on the debt will lie. Section 91 Evidence Act and Section 35 Stamp Act bar the way. But if it does not embody all the terms of the contract the true nature of the transaction can be proved ; and where an instrument has been given as a collateral security or by way of conditional payment, a suit on the debt will lie. The fact that the execution of the promissory note is contemporaneous with the borrowing cannot exclude the possibility of the instrument having been given as a collateral security or by way of conditional payment. Whether a suit lies on the debt apart from the instrument therefore depends on the circumstances under which the instrument was executed. "


I an however, of the view that this passage does not lend support to the argument that the plaintiff can sue on the debt only in cases where the promissory note was executed by way of conditional payment or by way of collateral security. These are only two of the instances referred to, where the promissory note does not embody all the terms of the contract. The general principle as laid down in the decision of the Full Bench is that if the note does not embody all the terms of the contract the true nature of the transaction can be proved. I do not think there is any warrant for restricting the right of the plaintiff to fall back on the original debt only in such cases. The last part of the judgment of Leach, C. J. Also makes this clear, wherein it is stated "The learned trial Judge did not consider the question whether the promissory note embodied the whole of the terms of the contract between the parties. The case should therefore be remanded to the trial court for further consideration and decision in the light of this judgment. "

 While I agree with the conclusions of the Full Bench of the Madras High Court in AIR 1938 Mad 785 (FB ) (Supra) on this part of the case. I would like to make it clear that my understanding of the decision is that the plaintiff has a right to fall back on the original consideration in all cases where the promissory note does not contain all the terms of the contract and is not restricted merely to a case where the promissory note is executed by way of conditional payment or by way of collateral security.


82. Another question which has crept up during the course of the argument is whether the promissory note can be looked into for the purpose of finding out whether it embodies all the terms of the contract or not. As Section 35 says that the promissory note cannot be admitted in evidence for any purpose, it was suggested that it could not be looked into even for the purpose of finding out whether it contained all the terms of the contract or not. It is true that the Privy Council has decided in 73 Ind. App. 28 = AIR 1946 PC 51 that the expression " for any purpose " should be given its natural meaning and the document cannot be admitted in evidence for any collateral purpose. This decision has been uniformly followed by all the courts in India including the Supreme Court. But in my view the decision is not authority for the proposition that the document cannot be looked into even for the purpose of finding out whether the terms contained in the promissory note are the same as the terms of the contract between the parties. If this argument is accepted it will be impossible to put into effect Section 91 of the Evidence Act. In order that Sec. 91 may apply , one has to find out whether the terms of the contract have been reduced to the form of writing. Unless we look into that writing, one cannot say if the terms of the contract have been reduced to writing or not. If one has to close ones eyes to the terms of the promissory note, because it is unstamped, then it is impossible to ascertain whether it contains all the terms of the contract or not. The oral evidence or other evidence has to be placed side by side with the document and only then can it be found out whether all terms of the contract are contained in the document.


83. Before concluding the discussion on this point reference may be made to the decision of the Privy Council in AIR 1918 PC 146. There it was held that in an action on a bill of exchange or a promissory note against a person whose name properly appears as party to the instrument it is open either by way of claim or defence to show that the signatory was in reality acting for an undisclosed principal. In the course of the judgment they remarked it would have been open to the plaintiffs, had they thought fit to have framed their case in an alternative form, and to have sued both on the hundis and alternatively upon the consideration . But as they found that the plaint did not embrace both these forms of relief and was confined to an action brought upon the hundies themselves, the sole question for decision was whether upon the form of the hundi the first respondent was properly included as a defendant to the suit and proceeded to consider that question. This decision cannot be taken as an authority for the proposition that in every case of a hundi or negotiable instrument a suit can be filed on the original consideration. That would depend upon the terms of the hundi and on the question whether it contained all the terms of the contract or not, as has been pointed out earlier.

 84. Considerable arguments were advanced on the second question as to whether the plaintiff would in any event be entitled to recover the amount under the provisions of Section 70 of the Contract Act or under the theory of " money had and received. "


85. In , it was observed, quoting the judgment of the Privy Council in Ramanandi Kuer v. Kaalawati Kuer, 55 Ind App 18 = ( AIR 1928 PC 2 ) that where there is a positive enactment of the Indian Legislature the proper course is to examine the language of that statute and to ascertain its proper meaning uninfluenced by any consideration derived from the previous state of the law or of the English law upon which it may be founded. It is therefore, neither, necessary nor proper to consider the various English decisions on the doctrine of ' unjust enrichment ' or on the theory of ' money had and received ' . It is sufficient to consider the provisions of Section 70 of the Contract Act and see whether the plaintiff can found his claim on those provisions in the circumstances of the case. Section 70 of the Contract Act reads as follows :--
 "Where a person lawfully does anything for another person or delivers anything to him, not intending to do so gratuitously and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of , or to restore, the thing so done or delivered. "

 It is doubtful whether this provision is applicable to a case where the act is done by one person all the express request of another. In this case, the amount was paid to the promiser at his express request on his executing a promissory note. Section 70 of the Contract Act in such circumstances would have no application.


86. Further even if S. 70 of the Contract Act is applicable and the plaintiff is permitted to bring an action for the recovery of the amount paid on foot of Section 70 of the Contract Act there is insuperable difficulty in the way of the plaintiff obtaining a decree. In order to obtain a decree the plaintiff has to prove that the defendant has derived the benefit, in this case that he received the amount of the loan.

 87. No evidence other than the promissory note is admissible to prove that the amount of the loan was received by the promisor, as the amount of the loan is one of the terms of the contract. He cannot prove the same by the production of the promissory note as it is not admissible for any purpose under Section 35 of the Stamp Act ; with the result there is no evidence before the Court as to the amount of the loan received by the defendant. If, on the other hand the promissory note does not contain all the terms of the contract it has already been held that the plaintiff is entitled to sue on the original consideration. In that event there is no need for him to have recourse to Section 70 of the Contract Act. In such a case it does not make any difference whether the plaintiff's right is described as one based upon the original consideration or on the footing that the defendant had received the benefit or derived advantage.


88. I must confess that I felt considerable difficulty in arriving at the above conclusion in view of certain decisions of the Supreme Court which were relied on this connection. In ( Supra ) the Supreme Court had to consider a case where a contract was void by reason of its not being in conformity with Section 175 (3)of the Government of India Act . But the party to the contract had done some works and one of the questions was whether if the contract was invalid his claim for compensation for the work done. Fell under Section 70 of the Contract Act. The Supreme Court held that Section 70 was applicable to the facts of that case. One of the contentions urged was that the recognition of the respondent's claim for compensation virtually permits the circumvention of the mandatory provisions of Sections 175 (3)of the Government of India Act. Because the work done was no more than the performance of the contract, which was contrary to the said provisions. If a decree was passed for the compensation it would in substance amount to treating the invalid contract as being valid. This argument was rejected by the Supreme Court which observed the claim for compensation was based not upon the delivery of the goods or doing of any work. But acceptance and enjoyment of the said goods or said work and hence by awarding compensation under Section 79 the contravention of Sec. 175 (3) is not condoned. For the same reason it was submitted that by holding that the plaintiff is entitled to return all the money advanced by him under the inadmissible promissory note. There is no circumvention of the provisions of Section 91 of the Evidence Art or of Sec. 35 of the Stamp Act. As the action is based upon the advantage received by the defendant and not on the promissory note. Though there is considerable force in the contention that the present case is similar to the case considered by the Supreme Court, I am inclined to take the view, though not without hesitation that


case considered by the Supreme Court, I am inclined to take the view, though not without hesitation that the situation is not identical. As has been observed already in the case before the Supreme Court the work was done only under a contract which was void under Section 175 (3) of the Government of India Act. The contract was no doubt not enforceable. But there was nothing preventing the petitioner from proving the fact that he performed the work or that the defendant derived benefit or advantage and claiming compensation on that basis. In the present case. However, the plaintiff is precluded from proving the fact of the loan in view of Section 91 of the Evidence Act read with Section 35 of the Stamp Act. In this connection it was argued on the strength of some cases that the amount of the loan is not a term of the contract. I fail to see how such an argument can be advanced. If the amount of loan itself cannot be treated as a term of the contract. I wonder what else can be regarded as a term of the contract in the case of a promissory note?


89. I may however. State that I am not in agreement with that view expressed by Varadachariar J in AIR 1938 Mad 785 (FB) (Suprs) that "Sec 70 of the Contract Act is scarcely appropriate to a case of money lent to the defendant and there is no possibility in such a case or event a contemplation of the "thing delivered." Being restored which obviously means in specie; and lending money to the defendant cannot be described". This is the view of Vaaradachariar H. Only and cannot in any sense be regarded as the view of the Full Bench. There is no reference to S.70 of the Contract Act in the decision of Leach, C. J. No authority is cited by Varadachari, J., in support of the proposition that the expression "thing delivered" would only mean "in specie" and lending money to the defendant cannot be described as something done for the defendant. On the other hand. In of the Contract Act was made applicable to a case where an amount was paid in pursuance of a contract and the contract was ultimately found unenforceable as it was contrary to Sec. 175 of the Government of India Act. It was held that the plaintiff would be entitled to a refund of the amount though in the particular case they held that he was not entitled to such refund having regard to the evidence in that case. The expression "thing:" used in Sec. 70 is of general import and I am unable to see any valid reason why it should not take within its purview "money" also.


90. It remains only to refer to the decision in . In which Gopal Rao Ekbote. J. (As he then was)observed that the plaintiff can have his money back though the plaintiff can have his money back though the document is inadmissible in evidence on the ground that it is insufficiently stamped. Dealing with the opinion expressed by Varadachariar. J.in AIR 1938 Mad 785 (FB) (Supra) he pointed out that the two decisions of the Privy Council in AIR 1918 P. C. 241 and AIR 1918 P.C. 151. Where not brought to the notice of Varadachariar J. Gopal Rao Ekbote. J. Observed that from these cases it is clear that an action analogous to that for money had and received can be maintained without resort to any theory of implied contract and the plaintiff would be justified in asking his money back from the defendant although the suit promissory note is inadmissible in evidence on the theory of money had and received

 91. Before considering these observations it may be pointed out that as far as the first question referred to the Full Bench is concerned. Gopal Rao Ekbote. J. Followed the decision in AIR 1938 Mad 785 (FB) Supra. And held that the said suit based on the debt and the promissory note was sought to be given as collateral security and therefore the allegations had to be enquired into and the court below was in error in deciding the case without recording the evidence of the parties it is only with reference to the second question that Gopal Rao Ekbote, J. took the view that the plaintiff is entitled to claim his money back also on the theory to money had and received.


90. AIR 191d8 PC 241 (Supra) was a case from Ceylon. After referring to (1760) 2 Burr. 1005 and (1914)A. C. 398 their Lordships of the Privy Council observed that they where reluctant to deal with the question on the footing of money had and received. As they were of the opinion that the appeal could be disposed of on another ground. I am unable to find anything in the decision of the Privy Council which would cover a case of the right of the person to claim refund of the money which was advanced on foot of an insufficiently stamped promissory note. In AIR 1918 PC 151 the Privy Council had to deal with the question of limitation. Though they observed that the facts of the case would more nearly approach the formula of "money had and received" by the defendant for the plaintiff's use they said in view of the course the suit had taken and of the attitude of both sides they ought to deal with the fase on the assumption that the suit would come within Art 97 of the Limitation Act. In this case also. No light is thrown on the question for consideration. I do not think that a reference to the above decisions of the Privy Council would have affected the result of the decision of the Full Bench in AIR 1938 Mad 785 (FB) supra.


93. In the result the first question is answered by saying that the plaintiff would be entitled to sue on the original consideration if the promissory note does not contain all the terms of the contract. The plaintiff has to allege and prove that all the terms of the contract are not contained in the promissory note. While agree with the majority view that the decision of the Full Bench in AIR 1938 Mad 785 (FB) (Supra) is correct I am not able to share their view as to the interpretation and scope of that judgment.

 94. The plaintiff will not be entitled to claim compensation under Section 70 of the Contract Act if the promissory note is inadmissible in evidence under section 35 of the stamp Act. Here again I am in agreement with the conclusion of the majority though for some what different reasons which have been set out by me A.D.V. Reddy, J.
 95. The controversy that arises out of the question referred to us centres solely round the problem of proof relating to claims for monies due under negotiable instrument unstamped or inadequately stamped. Section 35 of the Stamp Act imposes an embargo on the admissibility of such negotiable instruments in evidence for any purpose and further stipulates that no claim can be based on it. Section 91 of the Evidence Act superimposes the additional disability of proving otherwise the terms embodied in the said document as they have been reduced into writing. We have therefore to consider the impact of these provisions on the claims for debts due under negotiable instruments unstamped. Or inadequantely or insufficiently stamped. As in this case we are concerned only with promissory notes. I will confine my remarks to promissory notes.


Promissory notes are of three kinds:
 1. promissory notes executed to evidence antecedent debts. Debts incurred anterior in point of time to the execution of the promissory note ;
 2. Promissory notes executed as a result of an agreement of arrangement between the parties as a collateral security or conditional payment; and

 3. Promissory notes executed for monies lent under it. Where the amount lent and the promissory note form part and parcel of the same transaction.
 96. In the first category of cases. Where there is an antecedent debt either on accounts settled. Goods supplied monies lent or for any other claim where the cause of action is complete in itself there is no dispute that de hors the promissory note . the party can fallback on the original consideration. In the second of the categories, where a promissory note is executed either after the incurring of the debt or even simultaneously with the lending on a specific understanding or agreement that the promissory note is only to serve as a collateral security or as a conditional payment, it is well settled that if the promissory note cannot be proved by reason of the provisions of Section 35 of the Stamp Act and Section 91 of the Evidence Act, the claimant can fall back on the original debt and the passing of the consideration thereunder. In both the cases, however the fact of the execution of the promissory note and the terms contained therein cannot be relied on for any purpose, as the promissory note is defective as it is inadequately stamped and is inadmissible in evidence. The term ' any purpose' excludes even a collateral purpose and evidence aliunde has to be let in regarding the prior debt and the understanding or agreement relating to the promissory note being only a collateral security or a conditional payment.


97. What we are concerned with is the third category of promissory notes. Where the lending is under a promissory note. Where the lending and the note form part and parcel of the same transaction and the entire contract is contained wholly in the promissory note. In such a case apart form the promissory note and the terms contained therein, there is no other transaction to evidence the debt and other transaction cannot be proved by reason of the provisions of Section 35 of the Stamp Act and Section 91 of the Evidence Act., the cause of action disappears because they are so inextricably interwined as the substance and its shadow. If the shadow is to be eliminated, the substance has to disappear. There is no factum of loan to be proved independent of the one that arises under the promissory note. There is no promise implied or express independent of the promissory note and no debt incurred dissociated from the one under the promissory note. No doubt, in every loan there is an implied promise to pay. If the loan fails for want of proof, the implied promise goes with it. The benefit had and received under Section 70 of the Contract Act, even if it should include a benefit by way of payment of money also should be proved that when the proof suffer from the infirmity of being hit by the provisions of Section 35 of the Stamp Act and Section 91 of the Evidence Act, there can be no claim based on it. Recognising such claims on the ground of implied promise or on the ground of benefit had any received under Sec. 70 of the Contract Act, amount to ignoring nullifying the effect of the statutory provisions of Section 34\5 of the Stamp Act and Section 91 of the Evidence Act and amount to an attempt at salving equity by sacrificing law. The impact of the above provisions of the third category of unstamped or inadequately stamped promissory note is to


above provisions of the third category of unstamped or inadequately stamped promissory note is to convert the promissory note into a scrap of waste paper and the lending under it a bad debt.


98. The reference to the instruction embodying or not embodying all the terms of the contract in the judgment of Leach. C.J. in ILR (1938) Mad 933 = (AIR 1938 MAD 785) (FB) had led to the contention that in case of the instrument does not contain all the terms of the contract, the promisee will be entitled to sue on the original consideration. A scrutiny of the Judgment shows that the above observations were made only in relation to the category of instruments that were executed as collateral securities or as conditional payments. This is made abudantly clear by the following paragraph contained in the Judgment of the Full Bench at Page 945 :-
 "In my opinion the law may be stated shortly this way. If the promissory note embodies all the terms of the contract and the instrument is improperly stamped no suit on the debt will lie. Section 91 of the Evidence Act and Section 35 of the Stamped Act bar the way. But if it does not embody all the terms of the contract the true nature of the transaction can be proved and where an instrument has been given as collateral security or by way of conditional security or by the way of conditional payment a suit on the debt will lie. The fact that the execution of the promissory note is contemporaneous with the borrowing cannot exclude the possibility of the instrument having been given as collateral security or by way of conditional payment. Whether a suit lies on the debt apart from the instrument therefore depends on the circumstances under which the instrument was executed".


99. The Court has necessarily to look into the instrument first to find out whether it constitutes a promissory note as per the provisions of Section 4 of the Negotiable Instruments Act and then find out whether it is properly stamped, to see whether the provisions of Section 35 of the Stamp Act are attracted. If the latter provisions are attracted, the other occasion for the Court to look into it is when oral evidence is sought to be let in to find out whether the instrument contains any of the terms with regard to which such oral evidence is adduced to exclude it if it offends the provisions of Section 91 of the Evidence Act. These are the two occasions when the Court has to took into the instrument and they are purely procedural.

 100. If the promissory not is inadmissible under Section 35 of the Stamp Act and the terms cannot be proved by other evidence as per the provisions of Section 91 of the Evidence Act, in the first of the categories detailed above, where the promissory note is executed to evidence and antecedent debt the promissory note need not be looked into all as independent evidence with regard to an antecedent debt can be let in.


101. With regard to the third of the categories, where it is executed for monies lent under it, no further evidence can be let in. If it is hit by the above provisions as all the essential terms that go to make out a promissory note under Section 4 of the Negotiable Instruments Act should be there to constitute a promissory note and any other evidence with regard to a term. I.e. for instance like interest though left out can be of no consequence as the promissory note itself of debt under it cannot be otherwise proved. Where the promissory note contains all the essential terms , the names of the promisor, the promisee, the unconditional undertaking to pay the consideration etc., and if the pronote is note by Section 91 of the Evidence Act even if it did not contain all the terms. The passing of the consideration under the note cannot be proved otherwise and no claim can be based on it. Therefore there is no force in the contention that if all the terms are not contained in the document the party can sue on the original consideration.


102. It is only in cases where there is an agreement that the promissory note is executed by way of collateral security or as a conditional payment . The question arises whether the terms which spell out that agreement if contained in the document that is defective, can be looked into. It is permissible to the party to prove other circumstances by leading evidence to show that the promisory note was executed as a collateral security or as a conditional payment but if those terms are contained in the document itself, they will also be hit by the provisions of Act 91 of the Evidence Act . However, if the document that purports to be a promissory note becomes inadmissible as a promissory note the terms contained in it relating to its being executed as a collateral security or as a conditional payment , being in the nature of an agreement, will be saved by the proviso of Section 35 of the Stamp Act and by paying penalty it can be admitted in evidence as an agreement containing the terms. This proof will however be need not for suing on the promissory note as it will be unenforceable but only to establish the agreement and enable the party to sue on the original consideration.

 103. With the above observations, I agree with the Judgment of my learned brother Obul Reddi. J. That the judgment of the Full Bench in I.L.R. (1938) Mad 933 = (AIR 1938 MAD 785) (FB) : lays down the correct law and that no claim can also be based under Section 70 of the Contract Act if the instrument on which a claim is based is hit by the provisions of Section 35 of the Stamp Act and Section 91 of the Evidence Act.


Venkatarama Sastry, J.
 104 . I agree with the judgment just delivered by my learned brother Obul Reddi. J on behalf of the Bench. But having regard to the importance of the question and the divergent views expressed by the several High Court in India I propose to add my own reasons :
 105. Following is the question referred to this Full Bench :-
 "Whether a plaintiff can lay action for recovery of the amount advanced by him basing on the original cause of action when the Negotiable Instrument evidencing the transaction is inadmissible in evidence under Section 35 of the Stamp Act".

 106. A negotiable instrument, according to Section 13 of the Negotiable Instruments Act 1881, means a promissory note, bill of exchange or cheque payable either to order or bearer. An instrument according to Section 2 (14) of the Indian Stamp Act, includes every document by which any right or liability is or purports to be created, transferred, limited, extended extinguished or recorded. It is an inclusive definition. There is no doubt that a Negotiable Instrument is an instrument coming within the ambit of this definition. An instrument of the nature of a Negotiable Instrument is liable for stamp duty according to Article 13 (bill of exchange) and Article 49. (Promissory Note). Section 35 of the Stamp Act deals with Instruments not duly stamped and provides as follows :-
 "No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped.


Provided that :


(a) any such instrument not being an instrument chargeable with a duty not exceeding ten naya paise only, or a bill of exchange or promissory note shall subject to all just exceptions be admitted in evidence on payment of the duty with which the same is chargeable or in the case of an instrument insufficiently stamped of the amount required to make up such duty together with a penalty of five rupees or when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees of a sum equal to ten times such duty or portion" 9 As seen from the proviso, there is no scope for paying a penalty in the case of a bill of exchange or a promissory note so as to make it admissible in evidence under Section 42 (2) of the Act. The prohibition enacted by Section 35 makes such an instrument not duly stamped inadmissible in evidence for any purpose. The Privy Council in its decision in AIR 1946 PC 51 says that the words ' for any purpose' should be given their natural meaning and effect and would include a collateral purpose. Hence such an instrument would be inadmissible in evidence whether it is intended to use it as the basis of a claim or for a collateral purpose. There is a difference between a document which is not duly stamped and a document which is not registered. The proviso to Section 49 of the Registration Act makes an unregistered document receivable in evidence of a contract in a suit for specific performance or evidence of part performance of a contract for the purposes of Section 53-A of the Transfer of Property Act or as evidence of any collateral transaction not required to be effected by a registered instrument. But the inhibition imposed under Section 35 is absolute and complete and makes it inadmissible in evidence for any purpose. Some decisions have gone to the length of saying that an instrument which is not duly stamped is a worthless one and nothing more that a waste paper. The principle


instrument which is not duly stamped is a worthless one and nothing more that a waste paper. The principle underlying this prohibition appears to be that promissory notes and bills of exchange are commercial instruments, which are put into circulation in large numbers in the commercial world and as the claims on them would be mostly settled out of court, severe penalties should attach to non-stamping them, or understanding them in order that there may be wholesome check on any tendency to defraud the public Revenue.


107. Failure to stamp a Negotiable Instrument properly does not affect the validity of the transaction embodied therein. But renders the document inadmissible in evidence ( Vide Purna Chandra V. Kalipada Roy. AIR 1942 Cal 386). It is unfit to be acted upon by person having authority to receive evidence or by any public offices. When a promissory note is not admissible in evidence on account of Section 35 of the Stamp Act, the question arises as to how to amount due under such a promissory note can be recovered in a court of law.

 108. The terms of contract of loan, which are embodied in the promissory note can be proved only by the production of the promissory note itself, according to Section 91 of the Evidence Act, which enacts the best evidence rule. If the unstamped or improperly stamped promissory note becomes inadmissible in evidence 'for any purpose' on account of the prohibition contained in Section 35 of the Stamp Act then is there any method by which such terms of the contract could be proved? There is the question which we have to answer here :-
 109. Section 91 excludes also secondary evidence of the contents of the original document if it is unstamped or insufficiently stamped (Vide Muthuswami Mudali v.Verri Chetti . (1907) ILR 30 Mad 382 and Ankur Chunder Roy Chowdhry V.Madhub Chunder Ghose (1874 ) 21 Suth WR 1)


110. "The rule with regard to writings " says Sir Richard Couch C.J. in (1873) 11 Beng. LR 405 is that oral proof cannot be substituted for the written evidence of any contract which the parties have put into writings And the reason is that the writing " is tacitly considered by the parties themselves as the only repository and the appropriate evidence, of their agreement". Following this decision the Privy Council upheld, in ILR 50 Cal 338 = AIR 1923 PC 50 the objection that oral evidence was not admissible as the memorandum therein constituted the contract between the parties and that Section 91 was a bar. The aforesaid two cases have again been approved and followed by their Lordships of the Supreme Court in . It is also well established that when there is specific provision in the Evidence Act like Section 91, resort cannot be had to equitable principles for the admission of any evidence which is otherwise inadmissible. Thus where a promissory note is not admissible in evidence the creditor cannot prove its terms even by other oral evidence. If there is no independent contract of loan except what is embodied in the promissory note.


111. This leads us to the question as to the admissibility of other evidence relating to the debt or original consideration apart from and dehors the promissory note. In the case of a promissory note executed in discharge of an antecedent debt arising out of goods sold or mutual dealings in account or on account of liability incurred prior to and not contemporaneous with the lending of money which is evidenced by the promissory note there arises no difficulty because there exists in all those cases a debt or liability dehors the promissory note. The evidence in proof of such a debt or liability is not shut out by Section 91 of the Evidence Act , since the plaintiff in such a case is not proving the terms of the contract as evidenced by the writing in the promissory note.


112. But difficulty has always arisen giving rise to a lot of divergence of judicial opinion in our country, in the case of proof of loans contemporaneous with the execution of the promissory note. The stricter view was that the promissory note represents all the terms of the contract and when the said note becomes inadmissible in evidence the suit should fail altogether. The liberal view was based upon the principles that a promissory note is only a conditional payment or conditional discharge of the debt and when the promissory note becomes inadmissible the suspension of the remedy on the note is removed and therefore the debt as such can be proved. Some cases of this line of reasoning have also put it on the ground of an implied promise in every debt represented by a promissory note, which could be used upon irrespective of the inadmissibility of the promissory note. Some other cases which toe this line of reasoning also base their judgments on the theory of 'Money had and received or by invoking to their aid the provisions of Section 70 of the Indian Contract Act. The third view which takes a via media view is that if the promissory note does not embody all the terms of the contract though no suit on the debt would lie, yet evidence can be let into prove the true nature of the transaction and if the promissory note has been given as a collateral security or by way of conditional payment, a suit is held to lie on the debt. These cases recognise the principle that the fact that the loan and the note are contemporaneous is not conclusive of the non-existence of an obligation apart from the note itself and permit only such evidence as to whether the note was given as a conditional payment or a collateral security both of which postulate a debt or for the conditional discharge of which or for security which the promissory note is taken. This view does not recognise the applicability of theories based upon implied promise or money had and received or Section


view does not recognise the applicability of theories based upon implied promise or money had and received or Section 70 of the Contract Act to such cases.


113. Nearly a century ago Sri Richard Couch C.J. and Glover J. have negatived a claim based on unstamped promissory note on the ground that it was inadmissible in evidence and observed:
 "This instrument clearly comes within these words (of the Stamp Act) and the plaintiff cannot make use of that part of it which states the deposit of the money and say from the deposit there arose a contract on the part of the defendant to repay it because here the parties have made an express contract which has been put in writing. The plaintiff cannot resort to any implied contract; if he recovers at all, it must be on the contract actually made, and he must prove that if it is denied. And he must do it by the production of the writing, which not being stamped, cannot be used in evidence, and the suit must fail" (the words in brackets are mine). (Vide (1874) 21 Suth WR 1)


114. The earliest of the decisions which stems all the development of the case law on the subject now under discussion is that of Sir Richard Garth C.J. and Mcdonnel J. In (1881) ILR 7 Cal 256, wherein two propositions have been laid down as follows:-
 "(1) When a cause of action for money is once complete in itself whether for goods sold or for money lend or for any other claim, and the debtor then gives a bill or note to the creditor for payment of the money at future time the creditor if the bill or note is not paid at maturity may always as a rule, sue for the original consideration provided that he has not endorsed or lost or parted with the bill or note under such circumstances as to make the debtor liable upon it to some third person. In such cases the bill or note is said to be taken but the creditor on account of the debt and if it is not paid at maturity the creditor may disregard the bill or note and sue for the original consideration.

 (2) But when the original cause of action is the bill or note itself and does not exist independently of it, as for instance when in consideration of A depositing money with B.B contracts by a promissory not to repay it with interest at six month's date, here there is no cause of action for money lent or otherwise than upon the note itself because the deposit is made upon the terms contained in the note and no other. In such a case the note is the only contract between the parties and if for want of a proper stamp or some other reason the note is not admissible in evidence the creditor must lose his money".
 115. I shall now deal with the development of case law in the various high Courts on this topic and indicate the divergence of opinion and the scope for reconciliation, if any.


116. Taking the decisions of the Madras High Court first, the earliest decision where the second proposition in (1881) ILR 7 Cal 256 was applied was by Sri Arthur Collins C.J. & Parker J. Is (1887) ILR 10 Mad 94 where money was lent in the morning and the promissory note was taken in the evening and it was held that the contract was contemporaneous with the note and that Section 91 of the Evidence Act was a bar to an attempt to prove the original consideration. This decision was followed by Benson & Sundarayyar J.J. 462 by Sadasivayyar and Spencer J.J. in Muthu Sastrigal v. Viswanatha Pandara Sannadhi. ILR 38 Mad 660 = (AIR 1925 Mad 351 by Pillay and Anantakrishnayyar JJ. Gura Sahu v. Krishnamma AIR 1932 Mad 687 by Anantakrishnayyar J. In Alimane Sahiba v. Subbarayudu, AIR 1932 Mmad 693 by Pandalai J. In Chandra Sekaran v. Srinivasa AIR 1933 Mad 71 by Varadacheri and Burn JJ and in Chockalingam Chettiar v. Palaniappa Chettiar ILR 58 Mad 261 = (AIR 1935 Mad 23) The (FB) in Ramaswami Pillai v. Murugaiah Padavachi ILR 59 Mad 268 = (AIR 1936 Mad 179) reviewed all these cases as well as those in which a contrary view was expressed and after referring to the divergence of views in other High Courts Beasely C.J. observes as follows:-


"So far as the Madras High Court is concerned the preponderance of opinion seems to be to support the respondent's argument. But all the courts take the view that with regard to antecedent debts, the position is that the original debt can be sued upon irrespective of the subsequent document or promissory note and the better opinion with regard to contemporaneous loans and promissory note is the consideration for the loan the debt cannot be proved aliunde. That view in my opinion is clearly the correct view in view of Section 91 Evidence Act".


xx xx xx xx xx xxxx "My view, therefore is that in all cases courts must be guided by what appears on the face of the promissory note. If it is expressed in such a way as to leave what was intended by the parties in any way in doubt then the facts must settle the question. If it is clear on the face of the promissory note that it is the contract, then no further evidence can be permitted".

 117. Even after this pronouncement the authority of the decision in (1877) ILR 10 Mad 94 was again challenged and a Full Bench of five Judges was constituted in 1938 and its decision is in AIR 1938 Mad 785 (FB). This Full Bench upheld the correctness of the decision in (1887)ILR 10 Mad 94 and overruled the two decisions in Gopala Padavachi v. Rajagopala Naidu. AIR 1926 Mad 1148 and Chinnayya v. Srinivasa, AIR 1935 Mad 206 which struck a different note. Sir Lionel Leach C.J. expressed the opinion of the Full Bench in the following words:
 "In my opinion the law may be shortly stated in this way. If the promissory note embodies all the terms of the contract and the instrument is improperly stamped no suit on the debt will lie Section 91. Evidence Act, and Section 35, Stamp Act bar the way. But if it does not embody all the terms of the contract, the true nature of the transaction can be proved and where an instrument has been given as collateral security or by way of conditional payment. Whether a suit lies on the debt apart from the instrument therefore, depends on he circumstances under which the instrument was executed".

(Underlining is mine).


(Underlining is mine).

 118. The learned Chief Justice approved five out of six propositions laid down by Page C.N. in the Full Bench decision ....... in ILR 12 Rang 500 = (AIR 1934 Rang 389) but disagreed with the 3rd proposition which ran as follows:
 "(3) The giving of a negotiable security by a debtor to his creditor operates prima facie "as a conditional payment only and not as a satisfaction of the debt, unless the parties so regard it".

 119. After further consideration Leach C.J. observed in regard to this proposition that it must depend upon the facts of the particular case and that there is no presumption that the instrument has been given as conditional payment. Varadachariar J. In his concurring judgment has discussed elaborately the case law, English and Indian, bearing upon the subject and rejected the pleas of conditional discharge, implied promise money had and received, and Section 70 of the Contract Act.

 120. The Full Bench decision can be taken to have settled the law finally so far as the Madras High Court was concerned and has been uniformly followed eversince. The plaintiff therefore in a suit upon a promissory note which is improperly stamped is at liberty to prove the true nature of the transaction. If he is able to establish that the instrument was given as a collateral security or as a conditional payment the suit on the debt can be proved, without any bar under Section 91. Evidence Act.


121. The case in Calcutta High Court reveal an approval as well as disapproval of the view expressed in (1881) ILR 7 Cal 256 over the years but each case taking a different view can be explained on some ground or other. In (1896) ILR 23 Cal 851 Petheram C.J., and Rampuri J., invoke the principle of an 'implied promise' in every case where money is lent and in view also of the admission of one loan by the defendant in that case the suit was held to be maintainable as an action for breach of an implied promise or contract independent of the promissory note. The case in (1881) ILR 7 Cal 256 was distinguished on the ground that deposit was not meant to be a loan. The case in (1913) 17 Cal LJ 399 permitted a suit if the debt did not merge in the promissory note. Though a similar view was held in Sudhir Chandra Das v. Govinda Chandra Roy, ILR 45 Cal 538 = (AIR 1918 Cal 688) it related to a Hundi, wherein the borrowing is complete before a direction is given by a hundi to a third party to pay. The suit was on an account between a principal and agent, in Ramendra Mohan v. Keshab Chandra, AIR 1934 Cal 554 where an amendment of plaint was allowed to sue on the basis of debt as per the 1st proposition in (1881) ILR 7 Cal 256. The decisions of Mukerjee J., in Shekh Abdul Rabbani v. Shyam Lal Tapa, (1930) 34 Cal WN 554 and of R.C.Mitter J. In Tarachand Protap Mal v. Tanijuddin Sheikh, 39 Cal 1241 = (AIR 1935 Cal 658);


Sheikh, 39 Cal 1241 = (AIR 1935 Cal 658); Indra Chandra Bag v. Hiralal Rong, 40 Cal WN 696 = (AIR 1936 Cal 127) and Mohatabudin Mia v. Mahmmad Najir Jodda (1936) 40 Cal WN 473 were based upon an implied promise in the case of money lent. D.N.Mitter J., held the suit to lie as there was also a claim on the debt in the plaint in Bhushan Chandra v. Kanai Lal, 41 Cal WN 537 = (AIR 1937 Cal 241) Nasim Ali and Biswas JJ. Also relied upon an implied promise in Iswar Sridhar Jick v. Jahorlal, 49 Cal WN 37 = (AIR 1945 Cal 268) but it can be seen from the facts that there was no stamp infirmity and so the question of Section 91. Evidence Act did not arise. The decision of Derbyshire C.J., and Mukherjee J., in Te E.B.Commercial Bank Ltd.m, v. Surendra Naravana Saha (1935) 39 Cal WN 1235 related to a promissory note and a voucher and an amendment was allowed.


122. The Allahabad High Court opined, while overruling the decision in Ram Sarup v. Jasodha Kunawar, (1912) ILR 34 All 158 and Chhotu v. Jawahar (1906) ILR 28 All 293 and approving the view of Aikram J., in (1904) ILR 26 All 178, that a plaintiff cannot set up a case independent of the note in view of Section 91 and cannot prove orally the terms of the contract in ILR 53 All 114 = (AIR 1931 All 183(FB). But this view was not accepted in the Full Bench in AIR 1943 All 220 wherein it was held that other evidence to prove the terms of the contract independently of the pronote is admissible that a pronote cannot be said to contain all the terms of the contract of loan and therefore the contract of loan could be proved independently of the note. In one respect it differed from the Full Bench of Madras High Court. It holds that there is a presumption that a pronote is given only as a conditional payment while the Madras view is opposed to it. A Full Bench of Allahabad High Court in Major Mistri v. Binda Debi. AIR 1946 All 126 (FB) also holds a similar view. But in Ramnath v. Bhagwati Prasad, AIR 1946 All 150 a Bench held that where a pronote contained all the terms the plaintiff cannot fall back on the independent cause of action to recover the loan because there is no cause of action independent of and apart from the promissory note. They explained the Full Bench in Sheonath Prasad v. Sarjoo Nonia, AIR 1943 All 220 in Kanhai Lal v. Brij Nanda. it was held by Raghubir Dayal J. (As he then was


Nanda. it was held by Raghubir Dayal J. (As he then was ) in the case of a promissory not executed in the following manner:-


"I have at this time borrowed Rupees 300/- half of which Rs. 150/- in cash according to my needs from you. I shall pay this amount of yours with interest at eight annas per cent per mensem on demand and have therefore written these few sentences by way of a stamped promissory note so that they may be of use in time of need".


That it included all the substantial terms of the contract of loan and therefore no oral evidence to prove the loan transaction was admissible. His Lordship referred to the Full Bench decision in AIR 1943 All 220 (FB) and yet the refusal of the trial Court to prove the loan transaction was upheld. If according to the Full Bench the contract of loan could be proved this decision strikes a different note.

 123. But in it was held that the promissory note was held to be a collateral security and a suit on the basis of original loan was held maintainable and Section 91 was no bar.

 124. Though Section 91 was held to be a bar for proof about original consideration in Nankhu Singh v. Girja Bux Singh, AIR 1929 Oudh 399 it was held by the Full Bench in AIR 1932 Oudh 235 (FB) that the factuum of loan is not a term of the contract and as such can be proved by evidence aliunde. This theory of the factum as not a term is not accepted by the Allahabad Full Bench, and with respect the latter view is the correct one.


125. In Chint Ram v. Shib Devi, AIR 1922 Lah 207 the Madras view was applied and it was held in the case of a hundi the plaintiff had no cause of action independent of the hundi and as the hundi was inadmissible for want of a proper stamp Section 91 was a bar to letting in secondary evidence. A similar view was held in AIR 1927 Lah 89 and in AIR 1934 Lah 606. In , after a review of some of the cases the same view was reiterated.
 126. In (1900) ILR 24 Bom 360 the Bombay High Court followed the decision in (1930) 34 Cal WN 554 and held that there was an implied contract in every loan which can be proved. In Ranchhod v. Ravji Bhai AIR 1926 Bom 357 this decision was followed, But in AIR 1927 Bom 437 the learned Judge while following the decision in (1909) ILR 24 Bom 360, laid down three pronositions. In Soma Bhai v. Kalyan Bhai, AIR 1938 Bom 286 also Rangnekar J. Followed the principle laid down in (1900) ILR 24 Bom 360).


127. In Mohan v. Ramji AIR 1931 Nag 113 and Lal Bahadur v. Gulam Yasin, AIR 1933 Nag 57 (2) the Nagput J.C.'s Court held that a suit would be on the debt, In Ananda Namdeo v. Pundalik Tukaram, AIR 1936 Nag 225. It was held by Stone C.J. and Niyogi J. At page 227 as follows:-
 "In every case it becomes a question of fact whether the promissory note was intended to constitute the contract or serve some collateral purpose. In the former case Section 91, Evidence Act would preclude proof of the contract otherwise than by the document itself. If it is inadmissible for any reason, the contract cannot be proved by any extraneous oral evidence. Nor can the money be recovered for the use of the lender a person pays money to another on a contract which he is unable to enforce by reason of any law governing it , he cannot recover it. (See Thomas v. Brown, 1876-1 QBD 714) In the latter case the promissory note is independent of and distinct from the oral agreement and the inadmissibility of the document will not affect the oral contract which may be proved aliunde".


128. This view was followed in Lalchand v. Pyare Dasarath, , where it was held:
 "It was next contended that the trial Court also erred in holding that the plaintiff could not be allowed to proved the loan except by producing the pronote. We have briefly stated the case set up in the plaint. The contract of loan was not contemporaneous with the pronote. The contract pleaded contained terms relating to the pledge of diamond and payment of interest. These terms do not find place in the pronote which according to the plaint was executed by the defendants not at the instance of the plaintiff but at the instance of other persons after the defendants had already committed the breach of the original contract by refusing to deliver the diamonds to the plaintiff. On the case pleaded in the plaint it cannot he held that the pronote was intended to constitute the contract or that the original contract of loan merged in or was extinguished by the promissory note. In these circumstances, the original contract of loan could be proved apart from the promissory note and the Court below clearly erred in not permitting the plaintiff to prove the original contract (See AIR 1936 Nag 225).

 129. In Gour Chandra v. Garib Kar, the Orissa High Court held that a promissory note is a conditional payment but if there is an agreement that the loan would not be sued upon then no suit lies.


130. In Ram Narain Sahu v. Lachmi Prasad Sahu, AIR 1921 Pat 317 a Bench of Patna High Court held in a case of a hundi that the cause of action was complete following the first proposition in (1881) ILR 7 Cal 256, and held the suit to lie. In Brahmadeo Rai v. Ram Kishun Mahton. AIR 1921 Pat 318 also Section 91 was held to be no bar even in the case of a promissory note. But in Choto Lal v. Gumani, AIR 1926 Pat 432 a suit was held not to lie. The learned Judge followed the decision in Chinnappa Pillai v. M.R.Muthuraman Chettiar. (1911) 9 Mad L.T.281. In Dhaneswar v. Ramrup, AIR 1928 Pat 426 the conflict between these two views was noticed by a Bench which ultimately preferred to follow the principle of an implied promise in every promissory note as laid down in (1896) ILR 23 Cal 851. In Abdul Md Khan v. Mahananda, AIR 1931 Pat 293, this view was held to be correct by another Bench of the same Court. In Domoo Khan v. Agha Arshad, AIR 1933 Pat 575 (FB) the Full Bench decided the case on the basis of the first proposition laid down in (1881) ILR 7 Cal 256 Manohar Lal., J., held in Anuplal Mahto v. Mahesh Jha, AIR 1937 Pat 656 that evidence on original consideration was admissible. In Kesho Das v. Hari Kishundas, AIR 1938 Pat 205 another Bench held that the consistent view in that High Court to be to allow evidence on original consideration or an