The limitation period for a suit for money lent by a cheque starts from the date when the cheque is paid. The date of payment, within the meaning of Section 19 of the Limitation Act, is the date of delivery of the cheque or the date which the cheque bears, whichever is later. Article 55 of the Limitation Act applies in cases of loans repayable after a particular date.

Rajiv Sahai Endlaw, J.

1. The appeal impugns the judgment and decree dated 3rd December, 2004 of the Court of the Addl. District Judge, Delhi of dismissal of Suit No.47/03/99 filed by the appellant for recovery of Rs.6,80,000/- from the respondent/defendant.

2. The appeal was, vide order dated 16th February, 2005 admitted for hearing. The appeal was on 22nd May, 2009 dismissed in default of appearance of the appellant/plaintiff but was, on application of the appellant, restored vide order dated 16th September, 2009. The counsel for the appellant/plaintiff was substantially heard on 11th October, 2013 when he sought time to answer the queries raised by this Court. Thereafter it was informed that the respondent/defendant had died and vide order dated 6th November, 2013 his legal heirs were substituted. The counsel for the appellant and the counsel for the legal heirs of the respondent/defenant have been heard.

3. The appellant/plaintiff on 6th January, 1999 instituted the suit from which this appeal arises pleading:-

(a). that the appellant/plaintiff had vide cheque dated 10th December, 1994 advanced a loan of Rs.5 lacs to the respondent/defendant for a period of one year and carrying interest at 12% per annum;

(b). that in the first week of January (1996) the respondent/defendant issued a cheque for Rs.60,000/- in favour of the appellant/plaintiff towards interest of one year; the said amount was credited in the bank account of the appellant/plaintiff on 6th January, 1996;

(c). that the respondent/defendant however failed to re-pay the loan inspite of numerous requests and reminders; and,

(d). that the cause of action for the suit had accrued to the appellant/plaintiff on 10th December, 1994 when the loan was given and again on 6th January, 1996 when the cheque for Rs.60,000/- issued by the respondent/defendant in favour of the appellant/plaintiff towards interest of one year was credited in the bank account of the appellant/plaintiff and yet again on 17th December, 1998 when the appellant/plaintiff issued legal notice demanding the loan.

4. The respondent/defendant contested the suit by filing a written statement, pleading:-

(i). that the suit claim was barred by time;

(ii). that the respondent/defendant did not at all know the appellant/plaintiff though admitting receipt of Rs.5 lacs vide cheque aforesaid but denying that it was on account of loan from the appellant/plaintiff;

(iii). that the respondent/defendant used to purchase and sell stocks through M/s. FTC Investment Services owned by Shri Ashok Kumar Arora and Shri Krishan Kumar Arora;

(iv). that the respondent/defendant had on 6th December, 1994 placed an order on M/s. FTC Investment Services for purchase of certain shares of the value of Rs.5,18,047/-and paid Rs.5 lacs in cash;

(v). however M/s. FTC Investment Services represented to the respondent/defendant that they were required to make payment by cheque only and arranged an entry for Rs.5 lacs from some party and obtained a cheque for Rs.5 lacs from him in favour of the respondent/defendant by making cash payment of Rs.5 lacs and requested the respondent/defendant to encash the said cheque;

(vi). that the respondent/defendant accordingly deposited the said cheque in his bank account and which cheque after being dishonoured once, was encashed on representation;

(vii). denying that any amount of Rs.60,000/- towards interest was paid by the respondent/defendant to the appellant/plaintiff;

(viii). that Mr. Arora of FTC Investment Services had approached the respondent/defendant in January, 1995 (sic for 1996) representing that the appellant/plaintiff who had given the cheque aforesaid and for Income Tax purposes had to show the said amount as loan and if the respondent/defendant issued a cheque for Rs.60,000/- in the name of the appellant/plaintiff, the appellant/plaintiff will return Rs.60,000/- in cash to the respondent/defendant; it was in these circumstances that the cheque for Rs.60,000/- was