There are two applications before me, one is Miscellaneous No, 1103/1970 under Order XXXVIII, rule 5, C. P. C. and the other is Miscellaneous No, 1200/70 under Order XII, rule 6, C. P. C. This latter application is for a decree on admission. These applications have come before me several times but adjourn-ments were taken on the ground that the case is under negotiation for compromise.
Today both the parties informed me that the compromise has fallen through.
2. Both the parties have further stated that I should first decide the second application, namely, Miscellaneous No, 1200/ 1970 under Order XII, rule 6, C. P. C. for a decree on admission. In this connection the defendants' contention, as put forth by their counsel, Mr. Rashid S. Hussain, is that the very suit is barred under Order II, rule 2, C. P. C. as a suit for part of the claim was subject-matter of Suit No, 76 of 1969 filed by the plaintiffs in the Court of the District Judge, Karachi.
3. Before discussing the contentions of the parties, it will be useful to give a brief reference to the facts as set out in the plaint.
4. The plaintiffs' case is that the defendants used to purchase cloth from the plaintiffs on credit and used to make part payments towards these purchases, which transactions brought about a running account between the parties. It is further stated in the plaint that the balance of Rs, 32,798.90 was due and payable by the defendants to the plaintiffs on this account and that the defendants gave two cheques, one of Rs, 4,000.00, dated 17th January 1969, and the other of Rs, 2,000.00, dated 22nd February 1969, both drawn on Habib Bank Ltd., Cloth Market Branch, Karachi.
These cheques, according to the plaintiffs, were dishonoured and, therefore, the plaintiffs filed Suit No, 76 of 1969, mentioned above, in the Court of the District Judge, this suit being under Order XXXVII of the Code of Civil Procedure. For the balance of the amount, that is, after deducting the sum of Rs, 6,OCO (the amount of the two cheques) from the sum of Rs, 32,798.90 and further deducting therefrom a sum of Rs, 361.00 on account of expenses for Suit No, 76 of 1969, which balance amounts to Rs, 26,437.90, the plaintiffs filed the present suit in this Court by presenting a plaint on 25-6-1970. Alongwith the suit an application under Order XXXVIII, rule 5, C. P. C. was also moved.
5. As stated above, the defendants' contention is that this suit is barred by Order II, rule 2, C. P. C. as part of the claim was the subject-matter of Suit No, 76 of 1969 filed on two cheques by the plaintiffs in the Court of the District Judge, Karachi. Now, this rule reads as under:- "(1) Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action ; but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any Court.
(2)Where a plaintiff omits to sue in respect of, or inten-tionally reliquishes, any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished.
(3)A person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs, but if he omits, except with the leave of the Court, to sue for all such reliefs, he shall not afterwards sue for any reliefs so omitted.
Explanation.--For the purposes of this rule an obligation and a collateral security for its performance and successive claims arising under the same obligation shall be deemed respectively to constitute but one cause of action."
The question is whether the plaintiffs had two causes of action, distinct from each other, or one cause of action. In other words, the point for determination is whether the two suits, namely, the suit before me and Suit No, 76 of 1969 filed in the Court of the District Judge, relate to the same cause of action and, therefore, by filing the latter suit the plaintiffs have relinquished or should be deemed to have relinquished their remaining claim for the balance due from the defendants.Mr. Rashid -S. Hussain contends that I should take this view and treat both the suits as relating to the same cause of action. But I am unable to accept his contention. The view has generally been taken that a promissory note, which is a negotiable instrument, creates a distinct cause of action from the original debt, so that if several promissory notes are taken for portions of the same debt, each promissory note can be used on separately.
This view is based on the proposition laid down by the Judicial Committee of the Privy Council in Payana Reena Saminathan and another v. Pana Lana Palaniappa . This case was decided with reference to section 34 of the Ceylon Civil Procedure Code, 1889 which is in the same terms as Order II, rule 2 of our Code of Civil Procedure.
In that suit, the first action based on the promissory note failed and, therefore, the creditor brought another suit to recover the consideration for which the promissory notes have been taken.
The Judicial Committee held that although the claims in the two actions arose out of the same transaction, they were in respect of different causes of action and that, consequently, the second action was not barred by section 34 of the Ceylon Civil Procedure Code.
6. Mr. Suleman Panja then brought to my notice the case of the Madras High Court in S. A.
Anantanarayana Iyer and others v. Savittri Ainmal in which a promissory note for Rs, 5,000 was executed by one person for the marriage expenses of his brother's daughter, as part of the family partition. It was held that the suit on promissory note was not barred by section 43 of the Civil Procedure Code, 1882 (corresponding with Order II, rule 2 of the present Code), as the promissory note constituted a separate cause of action, different from the family partition. Then, in the case of Beni Ram and others v. Ram Chandra the Allahabad High Court held that suit to recover the balance on an account, after failure of the suit on Hundi for the same amount, was not barred under Order II, rule 2, C. P. C. as the two suits were based on different causes of action. The same1 2 3 view was taken in M. Natesa Mooppan v. K. R. Ramchandra Iyer . The High Court of Bombay also took the same view in Umed Dholchand v. Pir Saheb Jiva Miya and others . Then, there are two cases of the Rangoon High Court. The first case is that of M. K. M. V. Chetty Firm v. Ma Mya and others in which it was held that a suit on the promissory note and suit for original loan are based on different cause of action, and that Order II, rule 2, C. P. C. is directed to secure exhaustion of the relief in respect of the same cause of action but not to the inclusion in one and the same suit different causes of action, even though they arise from the same transaction. The second case is that of Ma Kyi and others v. P. R. M. A. C. T. V. R. Chettyar Firm . In this case mortgage and promissory notes were executed for the same debt. It was held that after failing of the suit on the promissory note, a subsequent suit on mortgage is still not barred by Order 11, rule 2, as the notes and mortgage constitute distinct causes of action, even though made in settlement of single debt.
7. Mr. Rashid S. Hussain tried to take the protection of the explanation to Order II, rule 2, C. P. C., under which an obligation and a collateral security for its performance shall be deemed to constitute one cause of action. But the question is whether the two cheques, which were the Subject-matter of Suit No, 76 of 1969 filed by the plaintiffs in the Court of the District Judge, are collateral security? To this there was no answer from the defendant's learned Advocate. It is obvious that those two cheques were given, not as collateral security, or even as security at all, but towards part payment of the balance of account between the parties. This being so, the defendants cannot invoke the protection of the explanation to Order II, rule 2, C. P. C.
8. This being the law, and the cheques which were the subject-matter of Suit No, 76 of 1969 being admittedly negotiable instrument like promissory note, I have to hold that the cause of action on those two cheques is separate and distinct from the cause of action on which the present suit is based, this latter cause of action being the original consideration or the original debt, that is, the balance standing against the defendants in the books of the plaintiffs.
9. The next question is whether there is admission within the meaning of Order XII, rule 6, C. P. C. In the written statement in Suit No, 76 of 1969, the defendants admitted the claim of the plaintiffs.
Again, in the counter-affidavit of Abdul Majid, one of the planers of the defendant-firm, filed in this Court on 6th July 1970, an admission of the plaintiffs' claim is contained in paragraph 3 in the following language:-- "Contents of para. 3 are also not denied. It is true that on the said supply of cloth an amount or Rs, 32,000 and odd was payable by the defendants to the plaintiffs and as the plaintiffs insisted for the issuance of at least two cheques for a total amount of Rs, 6,000 to be treated as security, thus for their satisfaction two cheques bearing No, AKBA 964643 dated 17-1-69 for Rs, 4,000 and No, AAK 354334 dated 22-2-1969 for Rs, 2,000 drawn on Habib Bank Ltd. Cloth Market Branch, Karachi were delivered to the plaintiffs on a clear understanding that these will not be presented for encashment."
Then, in paragraph 5(b), again an admission is made in the following terms:-- "The defendants in their written statement raised inter alia an objection to the maintainability on the ground of valuation and jurisdiction as the plaintiffs ought to have filed the suit for the entire claim of Rs, 32,437.66 being the price of the cloth supplied by them."
In the same affidavit, Abdul Majid has admitted that Suit No, 76 of 1969 had been decreed against the defendants. Thus, there is a clear admission of liability. During the arguments before me, it was not contended by the defendants that the amount in suit was not due to the plaintiffs. Their only defence was that the suit was barred under Order II, rule 2, C. P. C. But this contention I have already rejected.
10.Thus, I have no hesitation in coming to the conclusion that the defendants have clearly admitted liability for the amount in suit. I, therefore, accept the application under Order XII, rule 6, C.4 5 6 7 P. C. and decree the suit as prayed with costs, which costs shall be levied as if the decree is a decree on compromise. (1913-14) 41 I A 142 (1912) 13 I C 458 AIR 1914 All. 494 AIR 1915 Mad. 688 I L R 7 Bom. 134 AIR 1925 Rang. 304 AIR 1935 Rang. 365