TaxTMI 
TaxTMI 
TaxTMI 
1966 (8) TMI 85
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....this way. The appellant claimed that no money was in fact advanced on February 4, 1954 and that the promissory note executed on that date was to pay by renewal a loan for ₹ 4,000 which had been taken as far back as October 1946. The sum of ₹ 10,000 included the principal amount of ₹ 4,000 and the remainder was towards interest. The defendant-appellant therefore claimed that the suit was barred by s. 4 of the Bihar Money-Lenders (Regulation of Transactions) Act, No. 7 of 1939 (hereinafter referred to as the 1939-Act) which lays down that "no court shall entertain a suit by a money-lender for the recovery of a loan advanced by him after the commencement of this Act unless such money lender was registered under the Bihar Money-Lenders Act 1938 at the time when such loan was advanced." It appears that the joint family consisting of the respondent and his brother was registered as a money-lender sometime about 1952, and the case of the defendant-appellant was that as the loan was advanced really in 1946 when there was no registration the suit was barred by s. 4 of the 1939-Act. The other main defence was of limitation. The respondent's case on that point ....
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....an acknowledgment of the payment and was in the handwriting of the appellant. The High Court therefore over-ruled both the contentions of the defendant-appellant and after going into the accounts decreed the suit for an amount which was slightly less than that claimed by the plaintiff-respondent. 4. In the present appeal the same two questions of law have been raised before us, namely - (i) whether the suit was not maintainable in view of s. 4 of the 1939-Act, and (ii) whether the suit was barred by the three-year rule of limitation. 5. Re. (i). 6. We have already set out s. 4 of the 1939-Act and it does bar a suit by a money-lender for recovery of a loan advanced by him after the commencement of the 1939-Act unless the money-lender is registered under the Bihar Money-Lenders Act, 3 of 1938. In the present case it is not is dispute that the joint family of which the plaintiff-respondent was a member was registered as a money-lender sometime about 1952. The promissory note on the basis of which the suit was filed was executed in 1954 after the registration and therefore prima facie s. 4 would not bar the suit for the loan was advanced after the plaintiff-respondent's family h....
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....language of the instrument itself must expressly create the obligation." This view of Sulaiman J. was apparently accepted by the other two learned Judges. Therefore all that s. 2(f) requires is that there should be an instrument in writing by which the obligor obliges himself to pay the past liability and the instrument should bear interest. These conditions are satisfied in the present case, for by the promissory note of February 4, 1954 the defendant-appellant obliged himself to the respondent and it was in respect of past liability and bore interest. Clearly therefore this transaction of February 4, 1954 was a loan within the meaning of s. 2(f) of the 1939-Act. 8. But it is urged that when s. 4 speaks of loan, it does not include the inclusive part of the definition given in s. 2(f) of the 1939-Act and only refers to that part of the definition in s. 2(f) which says that a loan means an advance whether of money or in kind on interest made by a money-lender. It is true that definition in s. 2 begin with the words "in this Act, unless there is anything repugnant in the subject or context" and therefore it may be possible to argue that in s. 4 the word "loan&qu....
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....of "advanced". It does not imply that there should have been an actual advance whether of money or in kind. All that it means is that a loan as defined in s. 2(f) should have been made and if it was after the commencement of the 1939-Act the money-lender would have to be registered before he could maintain a suit. We have therefore no hesitation in holding that the word "loan" used in s. 4 has the same meaning as it has in s. 2(f) and includes a transaction on a bond bearing interest executed in respect of past liability. As the promissory note of February 4, 1954 is a loan within the meaning of s. 2(f) and as it was made after the joint family firm of the respondent had been registered s. 4 is not a bar to the maintainability of the suit. We therefore hold accordingly. 9. Re. (ii). 10. This brings us to the question of limitation. The facts are not in dispute now. The promissory note was executed on February 4, 1954. On the same date a post-dated cheque bearing the date February 25, 1954 was given by the defendant-appellant to the plaintiff-respondent, the intention being that on being realised it would be credited towards part payment. It was realised someti....
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.... on February 4, 1954 was the 25th February 1954 if he had presented it on that date and it had been honoured. The fact that he presented it later and was then paid is immaterial for it is the earliest date on which the payment could be made that would be the date where the conditional acceptance of a post-dated cheque becomes actual payment when honoured. We are therefore of opinion that as a post-dated cheque was given on February 4, 1954 and it was dated February 25, 1954 and as this was not a case of unconditional acceptance, the payment for the purpose of s. 20 of the Limitation Act could only be on February 25, 1954 when the cheque could have been presented at the earliest for payment. As in the present case the cheque was honoured it must be held that the payment was made on February 25, 1954. It is not in dispute that the proviso to s. 20 is complied with in this case, for the cheque itself is an acknowledgment of the payment in the handwriting of the person giving the cheque. We are therefore of opinion that a fresh period of limitation began on February 25, 1954 which was the date of the post-dated cheque which was eventually honoured. 11. The decision of this Court in C....
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.... opinion as to what would happen in case there was a bill payable on a future date, for the question does not directly arise in the present appeal. 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 s. 20 of the Limitation Act can only be the date which the cheque bears and cannot be on the date the cheque is handed over, for the cheque, being post-dated, can never be paid till the date on the cheque arrives. In the present case the cheque was dated February 25, 1954 and was honoured soon after and therefore the date of payment for the purpose of s. 20 of the Limitation Act would be the 25th February, 1954. The suit was therefore within time and the second contention raised on behalf of the appellant must also fail. 14. We therefore dismiss the appeal, but as the respondent has not appeared in this Court we make no order as to costs. 15. Bachawat, J. For the reasons given by Wanchoo, J. I agree that the suit is not barred by s. 4 of the Bihar Money-Lenders (Regulation of Transactions) Act No. 7 of 1939, but, in my opinion, the suit is barred by limitation. 16. On February 4, 1954, the ....
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....here, that on May 10, and that was out of time for the purpose of avoiding the operation of the statute." 18. In the last case, the cheque was delivered on May 10, 1900. It was post-dated May 20, 1900. It was agreed that the cheque would not be presented for payment until June 20, 1900 on which day it was presented for payment and was paid by the bankers. It was held that the date of the part payment of the debt was May 10 and not May 20, nor June 20. 19. In The Commissioner of Income-tax, Bombay South Bombay v. Messrs. Ogale Glass Works Ltd. Ogale Wadi [1954] 25 ITR 259 (SC) this Court held : "..even if the cheques were taken conditionally, the cheques not having been dishonoured but having been cashed, the payment related back to the dates of the receipt of the cheques and in law the dates of payment were the dates of the delivery of the cheques." 20. It is to be observed that the Court made no distinction between a cheque bearing the date on which it was delivered and a post-dated cheque. It is immaterial whether the cheque is post-dated or ante-dated or dated the day of the delivery. On the cheque being met, the payment of the debt relates back to the date of....