JUDGMENT
1. This appeal and the connected appeal No. 582 of 1926 have arisen out of two independent suits, but the parties in them are the same except for this that in the suit out of which the appeal 582 of 1926 has arisen, there was an additional defendant in the firm of Bahadur Mull Priya Das.
2. The facts in the two cases being similar, they may be decided by the same judgment. The facts, briefly, are these. The firm of Ganesh Lal Har Bilas of Agra drew one batch of ten hundis on 28th May 1924, and another batch of five hundis on 12th June 1924 each of the fifteen being for Rs. 1,000. The same firm draw another hundi for the sum of Rs. 2,500 on 29th July 1928. In each of these 16 hundis, the drawees were the firm of Priya Das Pitam Chand of Delhi and the persons in whose favour the hundis were drawn were Jangi Lal Debi Prasad, a firm of Agra. Jangi Lal Debi Prasad endorsed the hundi in favour of the Benares Bank Limited in the case of the 15 hundis of Rs. 1,000 each and the Benares Bank sent the same to the Mercantile Bank of India of Delhi for collection. The hundi of Rs. 2,500 passed through another hand before it reached the Benares Bank Limited and in this case the endorser was the firm of Bahadur Mull Priya Das who obtained the hundi from the original holders.
3. The two suits were brought by the Benares Bank against all the parties to the hundi. In the suit 338 of 1925 which was based on the 15 hundis of Rs, 1,000 each the firm of Priya Das Pitam Chand alone were the contesting defendants. In the other suit which was based on the hundi for Rs. 2,500 (No. 326 of 1925) the contesting defendants were Priya Das Pitam Chand and Bahadur Mull Priya Das.
4. The learned Judge of the Court of first instance decreed the suits against the drawers and the payees, but dismissed the suits as against the drawees and Bahadur Mull Priya Das.
5. The Benares Bank Limited have appealed. The ground on which the suit failed against the drawees was this that the firm of Priya Das Pitam Chand never accepted the hundis and therefore never made themselves liable on them. The main point for decision in both the appeals therefore is whether the drawees ever accepted the hundis and made themselves liable to pay. In F.A. No. 582 of 1926 there is the further question of the liability of the firm of Bahadur Mull Priya Das.
6. It appears that when the hundis were received by the Mercantile Bank of India at Delhi, they sent them to the firm of Priya Das Pitam Chand. One of the partners of the firm, viz. Pitam Chand, wrote the word "seen" (dekhi) on the hundi and signed his name. It was urged on behalf of the plaintiffs that the word "seen" with the signature of Pitam Chand amounted to an acceptance of the hundis.
7. The evidence that has been adduced on behalf of the plaintiffs to prove that the word "seen" is equivalent to acceptance, is hardly worth anything. No witnesses have been called to prove on behalf of the appellants that in the Delhi market, the word "seen" is treated as equivalent to acceptance (sikari). Two witnesses who were servants of the Mercantile Bank have been examined, but what they say is really an expression of their opinion and nothing beyond that. They were unable to cite any instance of any other customer who ever wrote the word seen" or "dekhi" on a hundi and used the word in the sense of acceptance. The first witness Bala Prasad described himself as the "Bill acceptor in the Mercantile Bank, Delhi." He said that he took the hundis to the firm of Priya Das Pitam Chand and got the endorsement of "hundi dekhi" on the documents. Then he expressed the opinion that this endorsement, "hundi dekhi" meant that the hundis had been accepted. He added that after the endorsement had been made he asked the endorser whether he had accepted the hundis and received the reply in the affirmative. In cross-examination, the witness contradicted himself and stated that he did not ask the endorser whether he had accepted the hundis or not. In cross-examination, Bala Prasad further stated:
As regards acceptance of hundis too, I know nothing beyond this that "seen" and "accepted" mean the same thing.
Then he said:
I do not know whether in Delhi Mundi, "seen" and "accepted" are taken to mean the same thing, but I take them to mean the same thing.
8. It seems to be clear to us that this witness is not at all in a position to prove any practice or custom.
9. The next witness is Shyam Behari Lal. He is the accountant of the Bank. He too is unable to furnish any information as to practice. What he really says is that in his opinion, the hundis had been accepted by the endorsement of the word "dekhi" on them. At p. 18 of the record he says:
From these words (seen the hundi) I think they accepted the hundis.
10. At p. 19 again, he says in answer to the question:
Does the drawee become liable if he writes, "seen"? In my opinion, he becomes liable.
11. We presume that although the Mercantile Bank of India did not do much business in hundis drawn in oriental language, it should be in a position to produce or cause the production of hundis in which the word "seen" had been used in the sense of acceptance, if their contention were right. But no such document was produced except some to be presently mentioned. It appears that Pitam Chand as a member of the firm Priya Das Pitam Chand accepted several hundis drawn by Ganeshi Lal Harbilas and paid the money due on them as the drawee and acceptor. He was called upon to produce these hundis. These documents were produced, as also the defendants' bahi khata, as the evidence called for by the plaintiffs. The plaintiffs' counsel said that he did not want the account-books and accordingly only the hundis were placed on the record. They show two entries. The first entry is of "dekhi" and the second entry is of acceptance in clear terms, stating also that payment was made on that date. These documents therefore do not prove that the word "dekhi" was ever used in the sense of acceptance. The learned Counsel for the plaintiff-appellant argued that these hundis being in the possession of Pitam Chand, the latter was in a position to make any entry he liked. The suggestion is that the entry as to acceptance was made by Pitam Chand just before the documents were produced in Court. It is not open to a party to criticise its own evidence like that. Even if we exclude these hundis as affording no evidence against the plaintiff, his position does not improve, for the dearth of evidence still remains.
12. A drawee is not liable as such in a hundi till he has accepted the same. Where therefore, a person is to be charged with liability, it must be shown that he has accepted that liability. The burden of proof was, therefore, on the plaintiff to show that Pitam Chand had accepted the liability to pay the hundis on behalf of his firm. The plaintiff has failed in proving this.
13. On, the other hand there is a good deal of circumstantial evidence to show that it was not at all likely that Pitam Chand would accept any liability in respect of these hundis. The earliest due date of one of the hundis was 27th July 1928. Two days later, Pitam Chand gave a statement in writing to the Bank which is on the record as Ex. 45. It has not been printed, but we have been supplied with a type written copy of it. It runs as follows:
I am not receiving any goods from Babu Ganeshi Lal Har Bilas; so I return these hundis. There is no money due to them from me and therefore, I, cannot make any payments on these hundis.
14. On 16th hundi, which was brought to Pitam Chand on 6th August 1924 (this is the basis of the suit No. 326 of 1925 out of which appeal No. 582 of 1926 has arisen), Pitam Chand wrote the usual words, "hundi dekhi." It could hardly be expected that Pitam Chand would accept the liability on a hundi for Rs. 2,500 after he had definitely stated to the Mercantile Bank of India that he had not been put in funds by the drawers of the hundi to enable him to pay. The fact that on 6th August 1924, Pitam Chand wrote the same words as he had written on hundis which had been produced before him on earlier days goes to show that Pitam Chand never understood by writing "seen" that he was accepting any liability.
15. We find that the Mercantile Bank quietly accepted the Ex. 45 dated 29th July 1924, from Pitam Chand. There is nothing to suggest that the Bank insisted on payment of the hundis by the firm Priya Das Pitam Chand on the ground that they had accepted the hundis. This would go to show that the Mercantile Bank never regarded Priya Das Pitam Chand as acceptors of the hundis. This view is further confirmed by the letter addressed by the Mercantile Bank of India to the Agent, Benares Bank Limited on 2nd August 1924, printed at p. 109 of the record. The Mercantile Bank of India described Priya Das Pitam Chand as "drawees" and not as acceptors. The important portion of the letter is this:
Drawees say they will pay on receiving invoices from the drawers. Kindly let us have your instructions.
16. This letter was written long after three of the hundis had fallen due as the letter itself shows.
17. Pitam Chand has entered the witness-box and has given an explanation of the circumstances under which he wrote the words "hundi dekhi" on the hundis. His evidence receives corroboration from the statement of Bala Prasad as pointed out by the Court below. In view of the fact that the appellants have entirely failed to establish the liability of the firm of Priya Das Pitam Chand, we do not think it necessary to discuss the evidence adduced by the defendants.
18. We hold that Priya Das Pitam Chand never accepted the hundis and the appellants' suit against them was rightly dismissed.
19. The next point is whether the firm Bahadur Mull Priya Das are liable as endorsers of the sixteenth hundi. Under Section 66, Negotiable Instruments Act, a bill of exchange made payable at a specified period after date, must be presented for payment at maturity. There is no evidence that the hundi was ever presented for payment at maturity to the firm of Priya Das Pitam Chand. The want of presentment exempts the indorser Bahadur Mull Priya Das. On this short ground the appeal No. 582 of 1926 fails against Bahadur Mull Priya Das.
20. The result is that both the appeals fail The present appeal No. 213 of 1926 is hereby dismissed with costs.