Courtney-Terrell, C.J.This is a petition for revision of a decree by a Small Cause Court in favour of the plaintiff upon a handnote. Defendant No. I borrowed money from his aunt since deceased. He executed a handnote for the sum borrowed with interest dated May 28, 1930, in favour of defendant No. 2 who was the aunts man of affairs. The aunt in consideration of a sum of money, assigned the handnote (with others of a like nature) to the plaintiff. Defendant No. 2 executed a document acknowledging that the lady was the real beneficiary of this and the other notes and that he had no interest in them and assented to the assignment. Defendants Nos. 1 and 2 gave evidence (which was disbelieved) to the effect that defendant No. 1 had paid the amount of the note to defendant No. 2 and produced a receipt which was held to be collusive. The name of the plaintiff does not appear upon the handnote. The Munsif decreed the suit. Defendant No. 1 takes the point that the plaintiff had-no title to sue on the note. It is contended that he is neither the payee nor a holder in due course, which is certainly true. The note is made payable to defendant No. 2, it is not payable to bearer and therefore any transfer to constitute the transferee a holder in due course must be by indorsement and delivery according to Section 9 and Section 46, Negotiable Instruments Act.

2. There has been some discussion in the Courts as to the right of a person other than the holder in due course to sue on a negotiale instrument. The matter was argued in Subba Narayan v. Ramaswami Aiyar 30 M 88 : 16 M L J 508 : 1 M L T 377, before a Full Banch and it was held that Sections 8 and 78, Negotiable Instruments Act are a reproduction of the English Law merchant. In that case the defendant sought to defend on the ground that the holder of the note sued on was a mere benamindar. The plea was rejected and the Court said:

We cannot find any English case in which an undisclosed principal has attempted to sue on a negotiable instrument, and we think that the decisions clearly establish that an undisclosed principal could not be sued...in the case of instrument intended to be negotiable and to pass from hand to hand, usage and policy alike required that the real contract should appear on the face of the instrument.

3. Towards the close of the judgment, however, the Court said:

We think it unnecessary to discuss the more recent decisions of this Court holding that the assignee of a negotiable instrument to whom it has been assigned otherwise than by indorsement may, when in possession of the instrument, sue in his own name, as there are considerations in such a case which do not arise here.

4. As to the first two passages of this judgment there is, in my opinion, no doubt that the law is correctly stated and that statement has been expressly approved by the Calcutta Court in Harkishore Barua Vs. Gura Mia Chowdhry and Another, . In the latter case defendant-No. 1 had executed promissory note payable to defendant No. 2 but the plaintiff; claimed to have advanced the money and to be the real or beneficial owner of the note and that defendant No. 2 was merely his benamidar, and defendant No. 2 actual-deposed to this effect. It was held that the plaintiff could not recover on the note and reference was made to Section 32 of the Act in which the holder is defined as.

any person entitled in his own name to the possession thereof and to receive or recover the amount due thereon from the parties thereto.

5. On this definition and on the wording of Section 78 (which required that payment to discharge the maker must be made to the holder) and on that of Sections 48 and 50, it was held that the property in the note and the right to recover thereon was vested in the holder and no one else. Patterson, J., said (page 758 Page of 58 C.---[Ed.]).

In my opinion, the plaintiff in the present case is not competent to prosecute the suit, not being the holder of the note, and the fact that the holder of the note has been made a party and has admitted that he is only the plaintiffs benamidar makes no difference. The property in the note, including the right to receive or recover the amount due thereon, is vested in the holder, and cannot be transferred to the plaintiff except by the process prescribed by law, viz., by endorsement and delivery. It may be that the suit would have succeeded if it had been based on the consideration and not on the note, but being based on the note, it is, in my opinion necessarily governed by the provisions of the Negotiable Instruments Act, and under the provisions of that Act, as 1 understand them, only the holder of a pro-nissory note is competent to sue thereon.

6. See also Pattat Ambadi Marar v. Krishnan 11 M 290 . Abboy Chatti v. Ramachandra Rau 17 M 461. Reoti Lal and Another Vs. Manna Kunwar, . It was argued before us that this case differs from that just cited in the fact that the plaintiff is an assignee of the note sued on though by means other than endorsement. Now it may be that the assignee of a debt evidenced by a note may sue: see e.g. Muthu Krishniar v. Veeraraghava Iyer 21 Ind. Cas. 311 : 38 M 297 : 25 MLJ 356 : (1914) M W N 839 : 14 M L T 411 , but Section 137, Transfer of Property Act, expressly excludes negotiable instruments from its purview and the plaintiff cannot be deemed to be the assignee of the note or of the right to sue thereon. Our attention was drawn to some cases in which prior to the decision in Harkishore Barua Vs. Gura Mia Chowdhry and Another, , doubts had been expressed of the soundness of the decision in subba Narayan v. Ramaswami Aiyar 30 M 88 : 16 M L J 508 : 1 M L T 377 , and tae opinion had been advanced that the Negotiable Instruments Act. had not affected the Indian Law of benami so that persons other than the holder or maker might sue or be sued on a note. The first of these was L. Madan Lal Vs. Lal Chand, , but the opinions expressed in that case were specifically stated to be obiter dicta and merely out of deference to the arguments which had been presented in the course of the case. They are in my opinion erroneous and were moreover expressly dissented from in the later case before the same Court which has been above quoted. In Sarjug Singh Vs. Deosaran Singh and Another, , the facts were exactly similar to those m the case reported in Harkishore Barua Vs. Gura Mia Chowdhry and Another, , and Kulwant Sahay, J. sitting singly expressed his approval of the obiter dicta in Brojo Lal Saha Banikya Vs. Budh Nath-Pyari Lal Das, , and decided that the plaintiff could recover and disagreed with the Madras Full Bench decision. He also relied on Gurumurti v. Sivayya 21 M 391 , one of the cases expressly overruled by the Madras Full Bench. For the reasons I have given above, I respectfully disagree with the decision of the learned Judge and would treat it as overruled. The two later cases of Surajman Prasad Misra Vs. Sadanand Misra and Others, . Jibach Mahto Vs. B. Shib Shanker Chaudhry, , are clearly distinguishable and only purport to decide that if a suit is brought nominally by a person other than holder but really on behalf of the holder who is also a party to the suit there is no reason why the suit should not succeed. These were in my opinion rightly decided. In the case before us the real holder (defendant No. 2) alleges that the promissory note has been paid and discharged and is clearly not in the position of a plaintiff.

7. It was argued on behalf of the plaintiff that he was a transferee of the note as a chattel although not an endorsee. But there is a great difference between the position of the owner of a piece of paper and that of a holder in due course with his statutory rights. In Benode Kishore v. Asutosh Mukhopadhya 14 Ind. Cas. 720 : 14 Ind. Cas. 720 : 16 C W N 666, the Court held that such a transferee might be the owner of the piece of paper and might have, as under the English Law, the bright to compel the transferer to complete the transfer by endorsement but they said that they did not purport to answer the question at to how in default of indorsement the transferee was to enforce payment of the note as against the maker. Moreover, even on the matter of the transfer they do not seem to have considered the application of Section 137, Transfer of Property Act although they decided that the transfer was in accordance with that Act. In short, negotiable instruments can be enforced by an assignee only when the assignment has been effected in accordance with the provisions of the Act and transfer of the rights of a party under a note to order to someone else unless effected by operation of law must be effected by indorsement and delivery and not otherwise. Finally, it is clear that the payee of the note, defendant No. 2 has expressly released the maker defendant No. 1 and as no consideration is required for such a release, the fact that it was collusive is immaterial. It may be that the plaintiff may have some cause of action against defendant No. 2 for conduct in granting such release but we need not consider that matter. I would allow the prayer of this petitioner and set aside the decree of the Small Cause Court with costs here and below. Hearing fee two gold mohurs.

Varma, J.

8. I agree.