A dishonored cheque does not constitute payment for the purpose of extending the period of limitation under Section 20 of the Limitation Act, 1963.

Tarkeshwar Nath, J.

1. This appeal by the defendant arises out of a suit for recovery of a sum of Rs. 2000. The case of the plaintiff was that he advanced a loan of Rs. 6250 to the defendant on 20-12-1959 and the latter promised to return the entire amount of loan in the month of June 1960. The said advance of loan was, however, not supported by any handnote, but the defendant in token of the receipt of the said sum issued four post-dated cheques on the same date (20-12-1959) in favour of the plaintiff. It was mutually agreed between the plaintiff and the defendant that the former would present those four cheques to his bankers for encashment in the month of June 1960 with the condition that in case of necessity the former could present the cheques on the dates mentioned in those four cheques.

Those cheques were, however, dishonoured and then the plaintiff approached the defendant several times for the repayment of the loan, but the defendant did not pay any heed to it. Later on, the defendant paid a sum of Rs. 4250 to the plaintiff in the month of November or December 1962 and promised to pay the balance of Rs. 2000 within one month. The said balance was never paid by the defendant, and hence the plaintiff instituted the money suit on 19-4-1963 for the relief indicated above.

2. The case of the defendant, on the other hand, was that he paid a sum of Rs. 4250 to the plaintiff on 29-11-1962 and a sum of Rs. 1500 on 3-3-1961 through cheque No. 143257 dated 28-2-1961 and a further sum of Rs. 500 in cash on 17-12-1962. After these payments nothing was due and the claim of the plaintiff was false. The other plea was that the suit was barred by limitation.

3. The learned Munsif held that the entire claim of the plaintiff was satisfied and the plea of payment raised by the defendant was correct. He further held that the claim of the plaintiff was barred by limitation. In view of these findings he dismissed the suit. The plaintiff being aggrieved by the dismissal of the suit filed an appeal. The learned Subordinate Judge held that the plea of payment in respect of the sum of Rs. 1500 was correct but the other plea in respect of Rs. 500 was not correct. In view of that conclusion he allowed the appeal in part and decreed the suit of the plaintiff in respect of Rs 500, with corresponding cost and pleaders fee at the minimum contested scale. Being aggrieved by this decree the defendant has filed this second appeal.

4. Learned counsel for the appellant submitted, in the first instance, that the suit of the plaintiff ought to have been dismissed on the ground that it was barred by limitation. He adopted this course in the appeal, inasmuch as the finding of the learned Subordinate Judge that the plea of payment in respect of Rs. 500 was incorrect could not be challenged in this second appeal. He contended that the learned Subordinate Judge had erred in holding that the limitation for the suit was saved on account of the issuance of the cheque (Ext. 1) dated 20-1-1960 for the sum of Rs. 1250. This cheque (Ext. 1) was made over to the plaintiff on 20-12- 1959 itself, but it was a post-dated cheque, as it bore the date 20-4-1960. This cheque was dishonoured on presentation, but the learned Subordinate Judge took the view that this cheque saved the period of limitation, inasmuch as the plaintiff got a cause of action after 20-4- 1960 when the said cheque was dishonoured. Learned counsel for the appellant submitted that the said cheque having been dishonoured there was in fact no payment at all and the period of limitation could not in any event be counted from 20-4-1960. He relied on Chintaman Dhundiraj V/s. Sadguru Narayan Maharaj Datta Sansthan, (AIR 1956 Bom 553). A Division Bench of the Bombay High Court held as follows in that case:

"There is no acknowledgment of liability merely by giving a cheque which is dishonoured, and a cheque which is dishonoured cannot be regarded as part payment within the meaning of Sec.20, Limitation Act