Patna High Court
Arjunlal Dhanji Rathod vs Dayaram Premji Padhiar on 6 August, 1969
Equivalent citations: AIR1971PAT278, AIR 1971 PATNA 278
JUDGMENT Tarkeshwar Nath, J.
1. This appeal by the defendant arises out of a suit for recovery of a sum of Rs. 2000. The case of the plaintiff was that he advanced a loan of Rs. 6250 to the defendant on 20-12-1959 and the latter promised to return the entire amount of loan in the month of June 1960. The said advance of loan was, however, not supported by any handnote, but the defendant in token of the receipt of the said sum issued four post-dated cheques on the same date (20-12-1959) in favour of the plaintiff. It was mutually agreed between the plaintiff and the defendant that the former would present those four cheques to his bankers for encashment in the month of June 1960 with the condition that in case of necessity the former could present the cheques on the dates mentioned in those four cheques. Those cheques were, however, dishonoured and then the plaintiff approached the defendant several times for the repayment of the loan, but the defendant did not pay any heed to it. Later on, the defendant paid a sum of Rs. 4250 to the plaintiff in the month of November or December 1962 and promised to pay the balance of Rs. 2000 within one month. The said balance was never paid by the defendant, and hence the plaintiff instituted the money suit on 19-4-1963 for the relief indicated above.
2. The case of the defendant, on the other hand, was that he paid a sum of Rs. 4250 to the plaintiff on 29-11-1962 and a sum of Rs. 1500 on 3-3-1961 through cheque No. 143257 dated 28-2-1961 and a further sum of Rs. 500 in cash on 17-12-1962. After these payments nothing was due and the claim of the plaintiff was false. The other plea was that the suit was barred by limitation.
3. The learned Munsif held that the entire claim of the plaintiff was satisfied and the plea of payment raised by the defendant was correct. He further held that the claim of the plaintiff was barred by limitation. In view of these findings he dismissed the suit. The plaintiff being aggrieved by the dismissal of the suit filed an appeal. The learned Subordinate Judge held that the plea of payment in respect of the sum of Rs. 1500 was correct but the other plea in respect of Rs. 500 was not correct. In view of that conclusion he allowed the appeal in part and decreed the suit of the plaintiff in respect of Rs 500, with corresponding cost and pleader's fee at the minimum contested scale. Being aggrieved by this decree the defendant has filed this second appeal.
4. Learned counsel for the appellant submitted, in the first instance, that the suit of the plaintiff ought to have been dismissed on the ground that it was barred by limitation. He adopted this course in the appeal, inasmuch as the finding of the learned Subordinate Judge that the plea of payment in respect of Rs. 500 was incorrect could not be challenged in this second appeal. He contended that the learned Subordinate Judge had erred in holding that the limitation for the suit was saved on account of the issuance of the cheque (Ext. 1) dated 20-1-1960 for the sum of Rs. 1250. This cheque (Ext. 1) was made over to the plaintiff on 20-12- 1959 itself, but it was a post-dated cheque, as it bore the date 20-4-1960. This cheque was dishonoured on presentation, but the learned Subordinate Judge took the view that this cheque saved the period of limitation, inasmuch as the plaintiff got a cause of action after 20-4- 1960 when the said cheque was dishonoured. Learned counsel for the appellant submitted that the said cheque having been dishonoured there was in fact no payment at all and the period of limitation could not in any event be counted from 20-4-1960. He relied on Chintaman Dhundiraj v. Sadguru Narayan Maharaj Datta Sansthan, (AIR 1956 Bom 553). A Division Bench of the Bombay High Court held as follows in that case:
"There is no acknowledgment of liability merely by giving a cheque which is dishonoured, and a cheque which is dishonoured cannot be regarded as part payment within the meaning of Section 20, Limitation Act.
Learned counsel relied on Jiwanlal Achariya v. Rameshwarlal Agarwalla 1967 BLJR 189 = (AIR 1967 SC 1118). The majority view in that case was expressed in these terms:
"But there can in our opinion be no doubt that where a post-dated cheque is accepted conditionally and it is honoured, the payment for purposes of Section 20 of the Limitation Act can only be the date which the cheque bears and cannot be on the date the cheque is banded over, for the cheque being post-dated, can never be paid till the date on(?) the cheque arrives."
In that case the cheque was dated February 25, 1954 and was honoured soon after and, therefore, the date of payment for the purpose of Section 20 of the Limitation Act was held to be 25th February, 1954. It is true that in the said case the question of considering the effect of a cheque which is dishonoured did not arise, but this much is clear that in the event of a cheque being honoured the date of payment for the purpose of Section 20 would be the date which the cheque in question bore and not the date when that cheque might have been made over by one party to the other. This reasoning can be easily appreciated, inasmuch as in the event of the cheque being dishonoured there is no payment at all either of the part of the debt or the whole of it with the result that the debt in question continues to exist. The opening words of Section 20 themselves indicate that there must be a payment and then only the eifect of it has to be taken into account for the purpose of determining the period of limitation, I am accordingly of the view that the learned Subordinate Judge has erred in holding that the plaintiff could take in aid the aforesaid cheque (Ext. 1) in order to bring his claim within the period of limitation. The position is this that the period of limitation could not be counted from 20-4-1960, and the suit having been instituted beyond three years of the date of advance must be held to be barred by limitation.
5. Learned counsel for the appellant further submitted that although the cheque (Ext. 1) was dated 20-4-1960, yet it was made over to the plaintiff on 20-12-1959 (which was the date of advance of the loan) and as such even if the plaintiff wanted to take some assistance from, that cheque, the period of limitation should be counted from 20-12-1959. This contention, however, was not subsequently pressed, inasmuch as he noticed that the decision of the Supreme Court in the case of Jiwanlal Achariya, 1967 BLJR 189 = (AIR 1967 SC 1118), already referred to above, would be of help to him in support of the other contention (already dealt with above) that there was no payment at all for the simple reason that the cheque dated 20-4-1960 was dishonoured.
6. Learned counsel for the respondent submitted that even if the aforesaid cheque (Ext. 1) did not save the period of limitation, it was clear from the case of the defendant himself that he had issued a cheque dated 28-2-1961 for a sum of Rs. 1500 and the said cheque was cashed cither on the 3rd or on the 8th of March, 1961. He pointed out that by the payment of Rs. 1500 out of the claim of Rs. 2000 the debt was satisfied in part, according to the defendant, and the suit had been rightly instituted within three years from the 3rd or the 8th of March, 1961. To begin with, it was not the case of the plaintiff that this payment of Rs. 1500 extended the period of limitation and, on the other hand, his case was that this sum was paid in respect of another debt. The cheque in respect of the said sum of Rs. 1500 has not been produced, but learned counsel for the plaintiff respondent relied on the letter (Ext. A) dated 6-7-1966 from the Manager, the Bank of Bihar Ltd., addressed to Shri A. D. Rathod (the defendant). This letter was in connection with cheque No. 143257 of 28-2-1961 for Rs. 1500. The Manager of the Bank of Bihar informed the defendant that the amount of that cheque was credited in favour of P. S. Padhiar & Co. He urged that although the cheque in respect of the sum of Rs. 1500 was not produced yet the aforesaid letter (Ext, A) sufficiently indicated that the defendant had paid a sum of Rs. 1500 to the plaintiff and this payment saved the period of limitation. It is difficult to accept this contention inasmuch as Section 20 reads thus:
"20. (1) Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy, or by his duly authorised agent, a fresh period of limitation shall be computed from the time when the payment was made:
Provided that, save in the case of a payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment.
(2) * * *".
According to this proviso, the acknow ledgment of the payment has to be in the handwriting of or in the writing sign ed by the person making the payment. In the present case, there is nothing in the writing of the defendant so as to amount to an acknowledgment. In Sant Lal Mahton v. Kamla Prasad, AIR 1951 SC 477 the provisions of Section 20 were con sidered by their Lordships and the rele vant observations are these;
"It would be clear, we think, from the language of Section 20, Limitation Act, that to attract its operations two conditions are essential: first, the payment must be made within the prescribed period of limitation and secondly, it must be acknowledged by some form of writing either in the handwriting of the payer himself or signed by him. We agree with the Subordinate Judge that it is the payment which really extends the period of limitation under Section 20. Limitation Act; but the payment has got to be proved in a particular way and for reasons of policy the legislature insists on a written or signed acknowledgment as the only proof of payment and excludes oral testimony. Unless, therefore, there is acknowledgment in the required form, the payment by itself is of no avail."
In view of the principles laid down in the aforesaid decision it cannot be held in the present case that there was any acknowledgment which could come within the purview of Section 20 of the Indian Limitation Act, There is thus no merit in the contention raised that the said payment of Rs. 1500 by the defendant extended the period of limitation.
7. For the reasons given above the appeal is allowed, the judgment and decree of the lower appellate Court are set aside to this extent that the plaintiff is not entitled to a decree even for a sum of Rs. 500 and the judgment and decree of the trial Court dismissing the suit on the ground of limitation are restored. In the circumstances of the present case, the parties will bear their own costs throughout.