The purchaser of a draft has the right to stop payment before it reaches the payee, but once the draft is delivered to the payee or their agent, the purchaser's right to stop payment becomes disputable.

VIMADALAL, J.:- This is a Civil Revision Application filed by the original plaintiff to set aside the order of the learned Civil Judge, Senior Division, Kolhapur, dismissing the plaintiff's suit with costs. The facts necessary for the purpose of disposing of this Revision Application are simple, but it raises an interesting point of law of some importance to the business community which, as far as the learned advocates before us were able to find out, is not covered by any decision of this Court. One Dundage, who carried on business at Shankeshwar, had purchased some gram dal from the plaintiff who carried on business at Kolhapur which, the evidence shows, is at a distance of 38 miles from Shankeshwar. The agreed price of the said goods was Rs. 863.94 P. out of which Dundage had already made a part payment of Rs. 180/- on the 17th of August 1965. On that date, the goods in question were loaded in a truck, but were looted at Kolhapur in the course of some disturbances there, and the balance of Rs. 683.94 P. remained to be paid by Dundage to the plaintiff towards the price of the said goods. On the 19th of August, 1965 Dundage purchased a draft for the said balance of Rs. 683.94 P. from the Shankeshwar Branch of the Belgaum Bank, and it is common ground that it was despatched by him by post to the plaintiff on that very day. The evidence of the plaintiff's son shows that the plaintiff's shop was closed throughout the 20th of August 1965, and the draft came to the plaintiff's hands on the night of the 20th of August 1965. The evidence of Karnik, the Agent of the Kolhapur Branch of the Defendant Bank shows that between 11 a. m. and 12 noon on the 20th of August 1965 instructions were received from Dundage to stop payment of the said draft to the plaintiff. Dundage has stated in his evidence that he issued those instructions because he had come to know on the evening of 19th August 1965 at Shankeshwar from some motor drivers that there had been some commotion at Kolhapur, and grain shops and trucks carrying grains had been looted there.

The said draft was presented for encashment to the Kolhapur Branch of the Defendant Bank on the 22nd of August 1965 or on the 24th of August 1965. The controversy in regard to the date of presentment is however, not material for the purpose of deciding the present Revision Application. The Defendant Bank declined to make payment of the said draft to the plaintiff by reason of the instructions given by Dundage to stop payment thereof, and after a formal notice, the plaintiff, therefore, filed the present suit to recover the amount of that draft from the Defendant Bank.

2. The interesting and important question that arises in this case is, whether the purchaser of a draft from a Bank, which has been made out in favour of a third party, has any right to stop payment of that draft, and if so, till what stage can he do so. Before referring to the authorities, I would prefer to deal with the relevant provisions of the Negotiable Instruments Act. Section 85-A of the Negotiable Instruments Act, 1881, is in the following terms:-

"Where any draft, that is, an order to pay money, drawn by one office of a bank upon another office of the some bank for a sum of money payable to order on demand, purports to be endorsed by or on behalf of the payee, the bank is discharged by payment in due course."

What is "payment in due course" is defined, in the following terms in Section 10 of the said Act:

"payment in due course means payment in accordance with the apparent tenor of the instrument in good faith and without negligence to any person in possession thereof under circumstances which do not afford a reasonable ground for believing that he is not entitled to receive payment of the amount therein mentioned."

The only other sections in the said Act applicable to drafts are Sections 123 to 131 which are expressly made applicable by reason of the provisions of Section 131-A of the Act, but, in so far as it is common g