1980 (3) TMI 274 - HC - Indian Laws

Summary

Issues Involved:
1. Territorial jurisdiction of the court.
2. Effect of non-presentment of cheques.
3. Limitation period for filing the suit.
4. Entitlement to interest and other claimed amounts.

Issue-wise Detailed Analysis:

Issue No. 1: Territorial Jurisdiction
The court's jurisdiction to entertain the suit was conceded by the defendants, as the pronote was executed in Delhi and the cheques were drawn on a bank in Delhi. Therefore, the issue was decided in the affirmative.

Issue No. 2: Effect of Non-presentment of Cheques
The court examined whether the non-presentment of the 21 post-dated cheques extended the limitation period under Section 19 of the Limitation Act, 1963. It was concluded that the mere issuance of post-dated cheques does not extend the limitation period unless the cheques are encashed. The court noted that the cheques were not presented due to their seizure by the Income Tax authorities, which was beyond the plaintiff's control. However, it was held that non-presentment and dishonour are mutually exclusive, and the drawer's liability remains if no damage is suffered due to non-presentment.

Issue No. 3: Limitation Period
The court acknowledged the loan and the issuance of post-dated cheques but noted that the suit was filed beyond the extended limitation period. The court held that the issuance of cheques did not constitute part payment under Section 19 of the Limitation Act. Furthermore, the court determined that the cheques issued before June 23, 1973, did not save the limitation for the suit filed on October 29, 1976. However, the court allowed relief based on the 20 cheques that were due within three years of the suit's institution.

Issue No. 4: Entitlement to Interest and Other Amounts
The court held that the plaintiff was entitled to the amount of Rs. 53,500 based on 20 cheques, excluding the first cheque due on September 30, 1973, which was barred by limitation. The court awarded interest at the rate of 6% per annum from the date each cheque was encashable until realization, as per Section 80 of the Negotiable Instruments Act. The plaintiff was also entitled to proportionate costs.

Relief:
The court decreed the suit in favor of the plaintiff for Rs. 53,500 with interest at 6% per annum from the respective dates of the cheques until realization and proportionate costs.