Judgement

WANCHOO, J. (On behalf of himself and Shah J.) : Two questions of law arise in this appeal by special leave against the judgment of the Patna High Court. The facts which have been found by the High Court and which are necessary for our purposes may be briefly narrated. The appellant was the defendant in a suit filed by the plaintiff-respondent for recovery of money on the basis of a promissory note for Rs. 10,000 executed on February 4, 1954 by the defendant-appellant in favour of the plaintiff-respondent. 12 per cent per annum interest was to run on the promissory note which was payable on demand or to the order of the plaintiff-respondent. The suit was filed on February 22, 1957 and was thus obviously beyond time from February 4, 1954. The plaintiff-respondent relied on a payment by cheque on February 25, 1954 to bring the suit within time.

2. The two questions raised by the defendant-appellant which now survive for decision arose in 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 Rs. 4,000 which had been taken as far back as October 1946. The sum of Rs. 10,000 included the principal amount of Rs. 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, 1988 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 some time 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 was simple, namely, that on February 25, 1954 a cheque for Rs. 1,000 was given in part payment and, therefore, the three years period of limitation would start from that date. The appellant s case on the other hand was that it was on February 4, 1954 that a post-dated cheque for Rs. 1,000 was given and though the cheque might have been cashed on or after February 25, 1954, the payment must be deemed to have been made on February 4, 1954 and, therefore the three years period of limitation ran from that date and the suit was out of time.

3. Thus two main questions arose for decision of the High Court, 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 limitation. On the first question the High Court held that S. 4 was not a bar to the maintainability of the suit. On the facts the High Court held that there was no actual advance of money on February 4, 1954 and that the promissory note for Rs. 10,000 executed on that date was in lieu of an earlier promissory note for Rs. 8,000 executed on February 21, 1951. Even so the High Court held that the suit was maintainable as it was based on a loan alleged to have been advanced in 1954 which was long after the respondent s family was registered as a money-lender. The High Court was of the view that the maintainability of the suit depended upon the pleadings on which the plaintiff came to Court and on the pleadings of the case, S. 4 had no application. On the question of limitation the High Court held that the case of the plaintiff-respondent that the cheque for Rs. 1,000, dated February 25, 1954 was given on that date was not correct. The High Court was of the view that the cheque for Rs. 1,000 was given in fact on February 4, 1954, though it was post-dated to February 25, 1954 and was actually realised sometime after February