1. This appeal arises out of a suit instituted by the respondent Chartered Bank claiming Rs. 28904/2/- as the holder of a hundi against the respondent Dawoodayal Kothari as the drawer and the appellant Manick Chand Bagri as the alleged acceptor of the hundi. The defendants filed separate writ ten statements denying their liability. Dawoodayal Kothari did not contest the suit at the hearing. Manik Chand Bagri contested the suit but the learned trial Judge decreed the suit against both the defendants. Manik Chand Bagri has preferred this appeal from the decree Passed against him. On the 3rd February, 1950, Sadasukh Gambhirchand of Bombay drew a darshani hundi on A Bill of Exchange payable at sight for the sum of Rs. 25,000/- on Manick Chand Bagri at Calcutta . in favour of the respondent Chartered Bank. On the top of the hundi the drawer wrote the following words: "Please accept the hundi according to the terms written". On the back of the hundi the following words appear in print: "Pay in full Rs. 25,000/- four times of Rs. 6000/- and a quarter-half of the half thereof." One Basdeo Chowbey a darwan in the employ of the bank presented the hundi at the Gadi of Manik Chand Bagri at Calcutta on the 7th February, 1950. It is common case that on that date one Harisankar Tewari, an employee of Manick Chand, put his signature and date '7-2-50' on the back of the hundi. On the top of the signature he affixed a rubber stamp reading: "For Manick Chand Bagri". The case of the Bank is that by the aforesaid signature Tewari accepted the hundi on behalf of Manick Chand. Manick Chand denies that Tewari had any authority to accept the hundi on his behalf or that Tewari accepted the hundi. His case further is that Tewari affixed his signature on the hundi solely for the purpose of enabling Basdeo to satisfy the Bank authorities that the hundi was duly presented for payment.
2. The evidence on the record establishes the following facts: Originally the defendant Dawoodayal Kothari and one Kastur Chand Kothari used to carry on a business in co-partnership under the name and style of Sadasukh Gambhirchand in Bombay. Kastur Chand Kothari thed on the 19th January, 1950. On the 3rd February, 1950, when the hundi in suit was drawn the defendant Dawoodayal Kothari was the sole surviving "partner of Sadasukh Gambhirchand. On the 3rd February, 1950, the hundi was sent by the drawer Sadasukh Gambhirchand to the Chartered Bank with a covering letter requesting the Bank to credit the amount of the hundi to the account of the drawer with the Bank. The Bank discounted the hundi and allowed the drawer to cash a cheque for Rs. 25000/-against the hundi. The hundi was then sent by the Bombay office of the Bank to its Calcutta office for collection. On the 6th February, 1950, one Basdeo Chowbey a collecting Jamadar in the employ of the Bank went to the gaddi of Manick Chand at 32 Cross Street, Calcutta with the hundi. He presented the hundi to one of the Babus in the gaddi together with a memo, giving the particulars of the hundi. The Babu retained the memo and told Chowbey that he would ask his master and send the money if it is feasible (See Basdeo Q. 20 and 57). On the 7th February, 1950, Basdeo again went to the gaddi of Manick Chand with the hundi and a fresh memo. On reaching the place he presented the memo and the hundi to Harishanker Tewari. Manick Chand Eagri was present at the gaddi. After showing the hundi to Manick Chand and making enquires of him. Tewari said that the memo was taken, then put his signature on the hundi and added that the money would be sent. The memo was retained by Tewari and Basdeo came back with the hundi. Basdeo stated that the parties who were to make payment to the Bank used to sign the papers which were presented to them. In answer to a question put in cross-examination whether he told Tewari that he must get Tewari's signature to satisfy the Bank authorities that he had brought the hundi to Tewari and whether Tewari accordingly signed, he answered in the affrmative adding that he asked Tewari to put the signature. (Basdeo Q. 29 to 39, 49 and 60 to 65). On the 8th February, Basdeo again went to the gaddi of Manick Chand Bagri with the hundi and another memo., and showed the papers to a Babu who sat there, who took the memo., and said, "Go away. It is all right." (Basdeo Q. 42 to 44 and 69-70). Basdeo then came-back to the office of the Bank with the hundi. On the 8th February the Calcutta Office of the Bank sent a telegram to its Bombay office stating that the bill was unpaid and that no reason was given. The Bombay office received the telegram on the 9th February. On receipt of the telegram, one Chandrasekhar Ananta Krishnan, an employee of the Bombay office of the Bank, rang up Messrs. Sadasukh Gambhirchand, told them that the hundi was unpaid and requested them to refund the amount. In reply, he was told that Sadasukh Gambhirchand were not in a Position to pay the amount, immediately and that they were referring the matter to their Head Office in Calcutta. (See Chandrasekhar Ananta Krishnan, Q. 68). Thereafter, the Bombay office of the Bank sent a telegram to its Calcutta Office stating that the bill should be re-presented and should be protested if still unpaid, and adding that the drawer was awaiting advise from its Calcutta Office. On the same date the Bombay office of the Bank sent a letter to Sadasukh Gambhirchand stating that the hundi remained unpaid and that no reason was furnished by the drawers for their failure to pay the hundi on demand. The letter accordingly requested Sadasukh Gambhirchand to refund the amount. On the 9th February, Basdeo Chowbey again went with the hundi and a fresh memo., to the gaddi of Manick Chand and presented the documents to Tewari. Tewari did not accept the memo, and stated that Manick Chand would not make payment of the hundi. Basdeo thereupon returned to the office with the hundi and the memo. (See Basdeo Q. 45-48, 71-75). Basdeo met Tewari both on the 7th and on the 9th February, but he is unable to identify the person or persons whom he met at the gaddi on the 6th and the 8th February. The Calcutta office of the Bank maintained an Inward Bills Department Cash Book. Particulars of the bills sent out for collection used to be entered in that book. On the report of the collecting Durwan the drawee's remarks used to be entered in the book. Under the column, "Drawee's remarks", the following entry appears in the book on the 6th February 1950 "Memo, taken. Will send." On the 7th February, the following entry appears under this column : "Memo, taken. Will send." Under that column the following entry appears on the 8th February : Will send." Under that column, the following entry appears on the 9th February : "Refused to pay. Not prepared write anything." It is plain from these entries that the Bank authorities took the drawee's remarks on the 9th February to be the definite refusal by the drawee to pay the hundi. The Head Jamadar of the Bank maintains a collection book in which the particulars of the bills sent out for collection and the name of the collecting Durwan are entered. The entries in the collection book show that the hundi was sent out for collection through Basdeo on the 6th, 7th, 8th and 9th February. On the 10th February the hundi was protested for non-payment by a Notary Public, On that date, the hundi was presented to some person at the gaddi of Manick Chand Bagri who described, himself to be the Cashier of Manick Chand Bagri but who refused to give his name. The Cashier stated that Manick Chand Bagri would not pay the bill. Four or five days after despatch of the letter dated the 9th February 1950, Chandratan Domani, a person in the employ of Sadasukh Gambhirchand, came to the Bombay office of the Bank and saw Chandrasekhar Ananta Krishnan who took him to one Mr. Dodds. Chandratan assured the Bank that the amount on the Hundi would be repaid as it was not honoured. . (See Chandrasekhar Ananta Krishnan Q. 90). The Bank was unable to obtain payment of the amount of the hundi. Eventually after a lapse of about two and a half years, on August 26, 1952 a formal letter of demand was sent by the Bank's Attorneys Messrs. Sanderson and Morgans, to Manick Chand Bagri demanding payment of the amount of the hundi. The letter stated that Manick Chand Bagri had accepted the hundi but had later dishonoured it. On receipt of the letter, Manick Chand Bagri took inspection of the original hundi and caused his attorneys. Messrs. Dutt and Sen, to write a letter to the Bank on the 10th September 1950, denying his liability in respect of the hundi. Messrs. Dutt and Sen stated that the draft had never been accepted by Manick Chand Bagri and as such the question of payment did not arise. The suit was instituted on the 11th September, 1952.
3. The Bank adduced both oral and documentary evidence. The Bank called 7 witnesses. Of these seven witnesses Chandra Sekhar Anant Krishnan works in the Outward Bills Department of the Bombay office of the Bank. He has satisfactorily proved the relevant Bombay records and the operations of the Bombay office relating to the hundi. Karsi Jasarawanji Seodia Works in the Postage Department of the Bombay office. He proved an entry relating to postage expenses. Sachindra Nath Ghose of the Inward Bills Department Kartick Chandra Dutta and Tarak Nath Pal both of the Cash Department and Srikrishna Singh, the head Durwan have satisfactorily proved the relevant records of the Calcutta office of the Bank. These four employees of the Bank work in its Calcutta office. The main witness on behalf of the Bank was Basdeo Chowbey. He gave consistent and acceptable evidence. His evidence was not shaken in cross-examination. In agreement with the learned trial Judge I have no hesitation in accepting his testimony. His testimony shows that Hari Sankar Tewari was specifically authorised by Manick Chand Bagri on the 7th February, 1950 to sign the hundi on behalf of Manick Chand Bagri, The signature was put by Tewari and the rubber stamp was affixed in the presence of Manick Chand and with his approval. The testimony of Basdeo also establishes that Tewari affixed the signature with a view to signify the drawee's assent to the hundi. Tewari signed the hundi on behalf of Manick Chand Bagri to signify the acceptance of the hundi by Manick Chand. The" hundi was presented for payment. Tewari accepted the accompanying memo, and orally promised to pay the amount of the hundi. The acceptance of the memo, and the oral promise to honour the hundi were contemporaneous with the signature. To emphasise the formal nature of the signature, the rubber stamp was affixed above the "signature indicating that Tewari signed the hundi on behalf of Manick Chand. The hundi was payable at sight, that is to say, on demand. In that context the presentment for payment also implied presentment for acceptance. The affixing of the signature on the hundi by the drawee on that occasion indicated acceptance of the hundi by the drawee. When the drawee to whom the hundi is presented for payment signs the hundi it is understood that he intends to pay the hundi. Basdeo told Tewari that his signature would satisfy the Bank authorities that the hundi was duly presented for payment. The signature of the drawee on the bill would no doubt show that the hundi was presented to him for payment. But before affixing his signature Tewari accepted the memo, and orally promised to honour the bill. In the circumstances his signature on tile hundi plainly indicated his acceptance of the hundi on behalf of Manick Chand. I accept Basdeo's testimony and I hold that Basdeo did go to Manick Chand's gaddi on four successive days, namely, on the 6th, 7th, 8th and 9th February and I also accept his version of what happened at the gaddi on those occasions. The fact that Basdeo went to the gaddi on those four dates is corroborated by the entries in the collection book and by the other records of the Bank.
4. Manick Chand Bagri gave evidence on his own behalf. He also called Hari Sankar Tewari as a witness. The evidence of Hari Sankar Tewari does not ring true. In agreement with the learned trial Judge I reject his testimony on all those points on which his testimony differs from that of Basdeo. This witness had the hardihood to deny that Basdeo did not go to the office of Manick Chand on the 6th, 8th and 9th February (See Hari Sankar Q. 17 to 24). He said that he was in the gaddi of Manick Chand on all those days and he did not see Basdeo. I have no hesitation in accepting the evidence of Basdeo that he did go to the gaddi of Manick Chand on the 6th, 8th and 9th February. The testimony of Basdeo is corroborated by tile Bank's records and is also consistent with the probabilities of the case. This witness also denied that Manick Chand was present at the gaddi on the 7th February. On this Point again I prefer the testimony of Basdeo. It is significant that Manick Chand was unable to pledge his oath and to say positively that he was not present at the gaddi on the 7th February, Indeed Manick Chand's evidence is that he used to go to the gaddi every day. Hari Sankar Tewari also denied that he used to write to the Bank on behalf of Manick Chand Bagri and to send letters on his behalf (see Hari Sankar Q. 65-66). This part of his testimony is plainly false. Manick Chand admitted that Tewari used to sign letters on his behalf. Besides, Sachindra Nath Ghosh has testified that Manick Chand had am account with the Bank and in that connection Tewari used to write and sign letters on behalf of Manick Chand (see Sachindra Nath Ghosh Q. 117-119). This part of the testimony of Sachindra Nath Ghosh was not challenged in cross-examination. The testimony of Hari Sankar also gives the impression that he was trying to conceal the extent of his authority to act on behalf of Manick Chand. He made an attempt to-bifurcate the staff of Manick Chand into the Gunny Department and the Accounts or Cash Department. He said that he used to look after the customs works, Port Commissioners' job and other shipment jobs in respect of the Gunny-Department and that he had no authority to accept hunthes. The evidence shows that the gaddi of Manick Chand Bagri was run on the Indian style. The gaddi was located in a big hall and the entire work used to be transacted under the supervision of the master who used to attend the gaddi every day. Hari Sankar suggested that it was the exclusive function of the Cash Department to deal with hundis presented at the gaddi of Manick Chand. If that be so, it is somewhat strange that Hari Sankar took upon himself the trouble of accepting the memo., taking the hundi, writing his signature and affixing the rubber stamp-of Manick Chand Bagri on the back of the hundi. In answer to Q. 82 Hari Sankar suggested that when Basdeo approached him with the hundi lie told Basdeo that Basdeo should better go to the Cash Department because that was not his job, whereupon Basdeo told him that there was nobody and that as he was always delivering all the letters and all those things to him he should sign the hundi as a token of its presentation. In answer to Q. 140 he stated that he affixed the rubber stamp because Basdeo told him that otherwise nobody would recognise who he was. It was thereupon put to him that his signature was already known to the Bank. He was discreetly silent and did not attempt to answer to this question. His silence is significant. There is cogent testimony on the record showing that the signature of Tewari was known to the bank officials. Sachindra Nath Ghosh said that he was familiar with Tewari's signature (Q. 117). I am unable to accept the explanation given by Tewari as to why he put his signature and the rubber stamp on the hundi.
5. I will now refer to the evidence of Manick Chand Bagri. The evidence of this witness also gives the impression that he is trying to conceal the extent of the authority of Hari Shankar Tewari to act on his behalf. He said that the Darsani Hundis" need not be accepted and therefore he could not have accepted such a hundi (Q. 31 and 43). I am unable to accept this testimony. I see no reason why a Darsani hundi could not be accepted by the drawee. He also said that Sadasukh Gambhirchand had an arrangement with him under which Sadasukh Gambhirchand could draw upon him to the extent of six and a half lakhs of rupees, that Sadasukh Gambhirchand had already drawn to that extent and furthermore Kasturchand Kothari, one of the partners of Sadasukh Gambhirchand had thed on the 19th January, 1950 (Q. 46). He said that for these reasons he had instructed the Cash Department not to honour any hundi drawn by Sadasukh Gambhirchand after 19-1-1950 (Q. 84). Significantly Manick Chand did not disclose nor did he tender at the trial his books of account. If instructions had been given as spoken to by Manick Chand, it is surprising that Tewari would put his signature on the hundi on the 7th February. 1950. Besides, I am satisfied that Manickchand himself was present at the gaddi on the 7th February. 1950 and with his approval and under his directions Tewari affixed his signature and put the rubber stamp on the back of the hundi. In answer to Q. 27 Manick Chand said that he did not know anything about whether the durwan had approached his firm on the 7th February and as to whether one Tewari had consulted him and then signed on the hundi. I have no doubt in my mind that Manick Chand was present at the gaddi on the 7th February and that he is now avoiding to give to the Court any explanation as to why Tewari had put the signature in consultation with him. Manick Chand also suggested that although he came to know of the protest by the Notary Public from the cashier on the 10th or 12th February, 1950, he did not have any talk with Tewari before the institution of the suit as to whether Tewari had signed the hundi (Q. 74-76, 23, 95). It is also surprising that the Cashier did riot inform him that Tewari's signature appeared on the back of the hundi (Q. 101), The evidence of Manick Chand is unreliable and I am unable to place any reliance on his testimony.
6. Regarding disputed questions of fact Mr. Roy's argument was twofold. He argued that Tewari had no authority to accept the hundi on behalf of Manick Chand. Secondly, he argued that the signature of Tewari was affixed solely with the object of enabling -the durwan to satisfy the Bank authorities that the Hundi had been presented for payment and Tewari by his signature did not intend to accept the hundi. On the first question I am satisfied that Tewari had specific authority from Manick Chand to sign the hundi on behalf of Manick Chand. Manick Chand was present at the gaddi and the signature and the rubber stamp was affixed on the back of the hundi with his approval and under his directions. The evidence also shows that Tewari used to write letters and to sign other documents on behalf of Manick Chand. The exact extent of the authority of Tewari is best known to Manick Chand and Tewari and as I have shown already, both of them had tried their best to conceal the extent of this authority. I am satisfied that Tewari had authority from Manick Chand Bagri to accept the hundi in suit. On the second question I am again satisfied for the reasons already given that Tewari accepted the hundi on behalf of Manick Chand as a token of the acceptance affixed his signature and the rubber stamp on the back of the hundi.
7. The formal letter of demand by the Bank's attorneys asserting that Manick Chand accepted the hundi was sent to Manick Chand after a delay of two and a half years. Mr. Roy suggested that the Bank's conduct indicates that the Bank did not treat the signature of Tewari on the back of the bill as an acceptance by Manick Chand." I do not accept this suggestion. The suggestion was, not put to any of the Bank's witnesses. The hundi was duly protested for non-payment on the 10th February 1950. It is likely that thereafter the plaintiff Bank was trying to realise the amount of the hundi from the drawer Sadasukh Gambhirchand and that for that reason earlier letters of demand were not sent to Manick Chand.
8. Mr. Roy contended that the bare signature of the drawee on the back of the hundi cannot amount to an acceptance of the hundi by the drawee. Beyond doubt an acceptance of a hundi or a Bill of Exchange by a drawee must satisfy the requirements of the third paragraph of Section 7 of the Negotiable Instruments Act. That paragraph reads as follows :
"After the drawee of a bill has signed his assent upon the bill, or, if there fire more Parts thereof than one, upon one of such parts, and delivered the same or given notice of such signing to the holder or to some such person of his behalf, he is called the 'acceptor'".
To become an acceptor the drawee of the bill must sign his assent upon the bill. In my opinion the mere signature of the drawee on the bill is sufficient acceptance of the bill. In order to signify his acceptance, the drawee very often adds words such as "accepted" and thereafter affixes his, signature on the bill. But the section does not require the addition of those words in order to bind him as acceptor. All that the section requires is that he must sign his assent upon the bill. His unqualified signature upon the bill signifies that he assents to the order of the drawer.
9. At Common Law even an oral acceptance of a bill of exchange was sufficient. This state of affairs was much regretted and accordingly in 1821, by Section 2 of the Statute of 1 and 2 Geo. 4 c. 78, it was enacted that no acceptance of any inland bill of exchange was sufficient to charge any person unless such acceptance be in writing on the bill. This Statute did not require the signature of the drawee. It was laid down by high authority that under this Statute a mere signature on the face of the bill without any words of acceptance may be an acceptance in writing within the Statute. See Hindhaugh v. Blakey, (1878) 3 C. P. D. 136 at p. 140. Thereafter Section 6 of the Mercantile Law Amendment Act, 1856, (19 and 20 Vict. c. 97) enacted that no acceptance of any bill, inland or foreign should be sufficient to charge or bind any person unless the same be in writing on the bill and signed by the acceptor or on his behalf. In (1878) 3 C. p. D. 136, it was held that in view of the Statute of 1856, simply writing the name of the drawee across the face of a bill of exchange would not constitute a valid acceptance and that there must also be upon the face of the bill some word or words indicating an intention on the part of the drawee to be bound by it as acceptor. This case was not correctly decided. By the Bills of Exchange Act, 1878, (41 and 42 Vict. c. 13), it was expressly enacted that the mere signature of the drawee without additional words should be deemed sufficient acceptance. This Act was declaratory of the then existing Law. See the observations of Lord Watson and Lord Selborne L. C. in Steele v. M'Kinlay, (1880) 5 AC 754 at pp. 781-82 and 785. The provisions of this Aot were re-enacted in Section 17 of the Bills of Exchange Act 1882. That section provides that the acceptance of the bill is the signification by the drawee of his assent to the order of the drawer, that an acceptance is invalid unless it is written on the bill and is signed by the drawee and that the mere signature of the drawee without additional words is sufficient. In the meantime, the Negotiable Instruments Act was enacted in 1881. The section was considered by the Supreme Court in Jagjivan Mavji v. Ranchhoddas Meghji, . In that case,
Venkat-rama Ayyar J. observed that Section 7 of the Negotiable Instruments Act following the English Law. provides that the drawee becomes an acceptor when he has signed Ms assent upon the bill. There is no express provision in the Negotiable Instruments Act, 1881, corresponding to Section 17 (2) (a) of the Bills of Exchange Act, 1882, (45 and 46 Vict. c. 61). But the provisions of Section 17(2)(a) of the Bills of Exchange Act, 1882, are declaratory of the existing law. I am satisfied that on this point, the Indian law does not differ from the English Law. Section 7 requires that in order to become an acceptor, the drawee must sign his assent on the bill. In my opinion, an unqualified signature by the drawee on the bill without additional words 5s sufficient signature of his assent on the bill.
10. In this, connection the wording of the hundi in suit must be borne in mind. The hundi expressly requests the drawee to accept the hundi. There is also a written request on the back of the hundi asking the drawee to pay the amount of the hundi. The signature of the drawee on the back of such a hundi plainly indicates his acceptance of the hundi and his assent to the written request of the drawer to accept and pay the hundi.
11. The acceptance need not appear on the face of the hundi. In order to fix liability upon the drawee as an acceptor Section 7 of the Negotiable Instruments Act requires signature of his assent "upon the bill". In my opinion the signature on the back of the bill is sufficient signature of assent upon the bill. In Young v. Glover, (1857) 3 Jur. N. S. 637, Lord Campbell C. J. observed during argument by counsel, "Suppose the drawee wrote the word 'accepted' on the back of the bill, would it not be a valid acceptance."
12. In this case the bill of exchange is payable at sight. By Section 21 of the Negotiable Instruments Act such a bill is payable on demand. The bill therefore fell due upon demand for payment being made on the 6th February 1950. By Section 22 the bill then attained maturity. But by Section 32 a bill may be accepted at or after maturity and the acceptor is then bound to pay the amount of the bill to the holder on demand.
13. Mr. Roy next contended that a hundi payable at sight does not require acceptance by the drawee. In my opinion this argument is not open to Mr. Roy having regard to the decision of the Supreme Court in, . Even In the case of a bill payable at sight the
acceptance by the drawee is necessary before he can become liable to the holder. Normally, such a hundi is paid by the drawee on demand. If the hundi is paid, the payment implies its oral acceptance by the drawee. Having paid the hundi the drawee need not separately engage to pay it by a written acceptance. But instead of paying the hundi the drawee may accept it. By his acceptance in conformity with Section 7 of the Negotiable Instruments Act the drawee becomes liable to pay the amount of the hundi to the holder. The acceptance is required in order to charge the drawee as acceptor.
14. No other point has been urged by Mr. Roy.
15. I am therefore, satisfied that Manick Chand Bagri by the hand of his agent, Hari Shankar Tewari, duly accepted the bill.
16. It follows that Manick Chand Bagri is liable on the bill as the acceptor thereof.
17. There is no merit in this appeal. I propose that the appeal be dismissed with costs. Certified for two counsel.
18. The order for stay of execution of the decree is vacated.
P. B. Mukharji, J.
19. I agree.
20. Mr. Roy's main argument on behalf of the appellant is that a "sight" hundi does not require any acceptance. According to this argument; a bill of exchange payable at sight must be paid when sighted i.e. when presented for payment. By relying on the language of Section 61 of the Negotiable Instruments Act which speaks of presentment for acceptance in case of a "bill of exchange payable after sight" he wants this Court to draw the conclusion that a bill payable at or" on sight requires no presentment for acceptance, If the Negotiable Instruments Act were a complete code by itself such argument would have acquired considerable force. But the Negotiable Instruments Act is not a complete code as its preamble makes it clear that it is "to define and amend the law relating to promissory notes, bills of exchange, and cheques". This Act is not exhaustive and does not cover either all kinds of negotiable instruments or even all matters relating to them. Wherever therefore the Act is silent, the law merchant including merchantile usage is a relevant consideration. In the law of negotiability and law merchant acceptance of a bill or Hundi by the drawee, is the very foundation of his contract of liability upon the bill or the Hundi or else there is no engagement or contract by the drawee to honour such bill or Hundi. For it takes three parties, the drawer, the payee and the drawee, to make a regular bill of exchange or Hundi i.e., the person who gives the order of payment, the person on whom the order is made and the Person who is to receive the payment. If drawees were to be liable, on Hundis without acceptance then unknown and unacknowledged strange liabilities will fasten upon drawees who know nothing of the bills or Hundis. Common law and law merchant have always insisted and still insist that the drawee must signify his assent to the order of the drawer. That signification of assent is acceptance, and must be on the bill or Hundi. It then becomes the complete tripartite document which a bill really is. That is why the law not only insists on acceptance by the drawee but also gives him the freedom to qualify his terms of acceptance such as in Section 86 of the Negotiable Instruments Act. This is how the drawee becomes the acceptor and by accepting the bill he engages not only to Pay it according to the tenor of his acceptance but also becomes primarily liable on the bill to the holder or payee with the effect of rendering the drawee or the indorsers liable as sureties in case of his default under Section 32 of the Negotiable Instruments Act. On first principles therefore I am unable to accept the argument that there can be a bill of exchange, such as even a bill payable at sight, which can fasten liability upon a drawer (sic) without his accepting it. That acceptance and payment in the case of a bill payable at sight, can be and usually are simultaneous, or that in spot Payment at sight the acceptance by the drawer (sic) of his liability is implicit in his very act of payment, cannot in my judgment, justify the theory that a drawee can incur liability before he accepts any bill of exchange. Whether notionally or in the act of Payment at sight, his acceptance must be posited before his liability upon it can arise. Indeed in this case the Hundi itself contains an express direction "Please accept the Hundi". Therefore by express terms in. this case the drawee is not bound unless fee accepts.
21. Before I conclude this point I must refer to the decision of the Supreme Court in where Venkatarama Ayyar J". a page 556 dealing with this point made the following observations which support the view we are taking :
"But whether the bill is payable after sights or at sight or on demand, acceptance by the drawee is necessary before he can be fixed with liability on it. It is acceptance that establishes privity on the instrument between the payee and the drawee, and we acree with the learned Judges of the High Court that unless there is such acceptance, no action on the bill is maintainable by the payee against the drawee."
22. The third paragraph of Section 7, Negotiable Instruments Act, does not prescribe any particular method or manner of signing the assent. It uses the words "signed his assent". What on the facts of a case is signing the assent may be a question of fact. But it cannot at least be said that this particular paragraph insists that words of acceptance or importing acceptance must be used before the signature can come within the third paragraph of Section 7 of the Act. No such limitation is imposed in the Statute. Signature by itself, on the facts of a particular case, without anything more may be the signing of the assent within the meaning of the Statute. Here the signature is on the bill itself. That is a significant circumstance. Hundis or bills are commercial documents of great importance and of great legal significance. They are negotiable. A signature, if allowed to be put on there without imposing any liability, may revolutionise the whole law of negotiability of a bill. Only persons whose names appear on the bill are liable on the bill. Therefore, it will be a very serious innovation to suggest scope for useless or meaningless signatures on a bill. As at present advised, I think it will be Unwise to approve or encourage a signature to be on the bill or hundi itself without attaching some responsibility for such signature. Of course implicitly or explicitly the signature may be qualified? and whether there is such qualification will depend on the facts of each case. That there can be qualified acceptance or limited acceptance is recognised by Section 86 of the Act.
23. Lord Ellenbbrough about a century, and half ago in Leadbitter v. Farrow (1816) 5 M and Section 345 (349) : 105 ER 1077 made the famous observation :
"Is it not a universal rule that a man who puts his name to a bill of exchange thereby makes himself personally liable, unless he states on the face of the bill that he subscribes for another or by procuration of another which are words of exclusion."
The reason for this salutary rule is not far too seek. For each party who takes a negotiable instrument makes his contract with all the parties who appear on its face to be bound for its Payment and therefore common law and law mer-chant always insist that a negotiable instrument must wear no veil but reveal its character upon its face. In this connection reference may be made to Section 28 of the Negotiable Instruments Act which says that an agent who signs his name on a bill of exchange without indicating thereon that he signs as agent, or without indicating that he does not intend thereby to incur personal responsibility is liable personally on the instrument, except, of course, to those who induced him to sign upon the belief that the principal only would be liable. This shows that a signature appearing on the note or bill is important and it attracts full legal consequence or liability on the note unless the liability is expressly or by necessary implication excluded. To hold any other view will be to introduce strange, unknown and unsuspected defects defeating the tenor of an apparently good bill of exchange and thereby jeopardising negotiability and every innocent endorsee who would subsequently be taking it without knowing anything of such defects on the face of the bill. Besides, Section 27 says that every person capable of binding himself or of be-ing bound, as mentioned in Section 26 of the Act, may so bind himself or be bound by a duly authorised agent acting in his name and Tewari in this case so bound Manick Chand Bagri by signing "For Manick Chand Bagri". The evidence on record leaves no room for doubt that Tewari was an agent of Manick Chand Bagri.
24. The same conclusion can be reached through Section 33 of the Negotiable Instruments Act which provides inter alia that no person with the exceptions mentioned expressly there can bind him self by an acceptance. Section 33 must not be misread as preventing the drawee from accepting through an agent. That result follows by reading Sections 26 and 27 of the Negotiable Instruments Act and that is the drawee can accept a bill through his agent. Finally in this case on the facts there is a clear express written direction on the Hundi, even though payable at sight, to the effect "Please accept the Hundi according to the terms written". Therefore on such a bill with this ex press direction a mere signature by the drawee or his authorised agent, will be enough to mean that the signature itself is the acceptance in terms of the express direction because otherwise the signatory would have signed qualifying and indicating the purpose of his signature.