The main legal point established in the judgment is that the determination of whether a cheque sent in satisfaction of a larger amount constitutes accord and satisfaction is a question of fact to be determined based on all the circumstances of the case.

1. In this case the plaintiff brought a suit for recovery of damages to the extent of Rs. 425/- from the defendant, the Union of India, for non-delivery of a railway consignment. The consignment was booked on the 14th November, 1954, and the suit was brought by the plaintiff on the 19th December, 1959, in the Small Cause Court The suit was resisted on behalf of the defendant on the ground of limitation. It was also contended on behalf of the defendant that on the 25th July, 1959, the defendant sent a cheque for a sum of Rs. 150.00 to the plaintiff and it was stipulated in the covering letter that the plaintiff may accept the cheque in full satisfaction of his claim or return the cheque. It appears that the plaintiff did not return the cheque but cashed it on the 8tri September 1959. The Small Cause Court Judge rejected the case of the defendant and decreed the suit for a sum of Rs. 425/- as claimed by the plaintiff.

2. On behalf of the defendant, the Union of India, the argument put forward by learned Counsel is that the Small Cause Court Judge has not correctly applied the law in coming to a finding that thecre was no accord and satisfaction between the parties in this case. It was submitted that the cheque for the sum of Rs. 150.00 was sent by the defendant with a covering letter on the 25th July, 1959, and there was an express stipulation in the letter (Ext. B) thai the plaintiff "will be entitled to cash the cheque only if he accepts the payment in full satisfaction of his entire claim" and "in case he was not prepared to accept this he should kindly, return the cheque". In our opinion the argument of learned Counsel for the petitioner is well founded and must be accepted as correct. It is true that the Small Cause Court has come to a finding that there was no accord and satisfaction in this case because ihe plaintiff sent notice under Section 80, Code cf Civil Procedure, on the 3rd September, 1959, and he appropriated the cheque on the 8th September, 1959.

The principle applicable to a case of this description is discussed in Day V/s. Mc.Lea, (1889) 22 QBD 610 in that case the plaintiff had made a claim against the defendants for a sum of money as damages for breach of contract and the defendants sent a cheque for a less amount, stating that it was in full of all demands. The plaintiffs kept the cheque, stating that they did so on account, and brought an action for the balance of their claim. It was held by the English Court of Appeal that keeping the cheque was not, as a matter of law, conclusive that there was an accord and satisfaction of the claim, but that it was a question of fact on what terms the cheque was kept. It was further pointed out by Lord Esher in that case that the fact of keeping the cheque sent in satisfaction of a larger amount could be evidence of sccord and satisfaction, and whether or not it was taken in satisfaction was a question of fact to be determined keeping in view all the circumstances of the case. In cur opinion this case has got to go back on remand to the Small Cause Court for the reason that it has not taken into account all the relevant circumstances of the case before reaching the finding that there has been no accord and satisfaction between the parties.

3. It was also argued on behalf of the petitioner, the Union, of India, that the suit was barred by limitation. In support of this submission learned Counsel referred to the recent decision of the Supreme Court in Boota Mal V/s. Union of India, AIR 1962 SC 1716. It will be open to the petitioner to raise this question of limitation after the case goes back on remand to Small Cause Court which will decide that question in accordance with law.

4. For these reasons we hold that this civil revision application must be allowed, the order of the Small Cause Court Judge, dated the 30th July, 1960, must be set aside and the case must go back on remand to him for being decided in accordance with law. There will be no order as to costs