Notice of dishonour is unnecessary when a cheque is dishonoured on presentation, as per S.98(c) of the Negotiable Instruments Act.

1. Plaintiff is the appellant Plaintiff discounted cheque dated 20-8-1977 for Rs.10,000/- drawn by K. J. Mathai on Canara Bank, Kothamangalam through the 8th defendant. The cheque was presented by the plaintiff to the Canara Bank, on 12-10-1977. It was dishonoured. Defendants 1 to 7 are the legal representatives of Mathai. Additional defendants 9 to 12 are the legal representatives of the 8th defendant.

2. Defendants 1 to 7 contended interalia that the plaintiff did not advance Rs. 10,000/- to Mathai through the 8th defendant. All the findings by the trial Court were in favour of the plaintiff except the one that the suit is not maintainable as no notice of dishonour under S.93 of the Negotiable Instruments Act was given to the defendants.

3. The question that arises for consideration is as to whether a notice of dishonour is mandatory to the drawer of a cheque in a case where the cheque was dishonoured on presentation. The Court below obviously overlooked S.98(c) of the Negotiable Instruments Act. It is in evidence that, the cheque when presented by the plaintiff was returned with the endorsement "refer to drawer". What is meant by "refer to drawer" is stated in Parthasarathy's "Cheques in Law and Practice" thus:

"This is used generally while returning cheques for want of funds in the drawer's account, or because of service of a garnishee order":

In Tannan's Banking Law and Practice page 313 (18th Edition) meaning of "refer to drawer" is stated as below:

"It is generally meant to convey to the holder that he should refer to the drawer for payment, that is, the banker has not sufficient funds at his disposal to honour the cheque."

Ext.A3 cheque was returned with the endorsement "refer to drawer". Hence it is obvious that there was no fund in the bank in the drawer's account for payment of the cheque. S.98 of the Negotiable Instruments Act states the circumstances under which a notice of dishonour is dispensed with.

4. S.98(c) of the Act provides that when the party charged could not suffer damage for want of notice, notice of dishonour-is unnecessary. As Ext. A3 cheque could not be encashed for want of funds, it cannot be said that defendants 1 to 7 who are the legal representatives of the drawer of the cheque had suffered any damage for want of notice. So far as the 8th defendant is concerned the position is different. Under the provisions of the Act the liability of an endorser is not that of a principal debtor and the liability of endorser can arise only if a notice of dishonour is issued to him and not otherwise. [See John Chandy v. State Bank of Travancore (1973 KLJ 450). As the 8th defendant was not given the notice of dishonour, he cannot be held liable for the plaint claim.

5. Along with the plaint Ext. A3 cheque and the endorsement by the bank were produced. A document produced along with the plaint under 0.7 R.14 should be treated as part of the pleadings. In Janki Das v. Kushalya Devi (AIR 1943 Lahore 207) the Court held that the list of documents mentioned in 0.7 R.14(2) should be treated as part of plaint. Therefore there is no force in the defence contention that there is lack of pleading regarding dispensing with notice of dishonour. As Ext.A3 cheque with the endorsement showing that it was dishonoured was produced along with plaint, there is no need for a further pleading that notice of dishonour is not necessary. As there is evidence in the case that Ext. A3 cheque was returned without payment as there was no necessary fund to meet the cheque it is a case where S.98(c) applies and so no notice of dishonour is legally necessary.

6. So far as defendants 1 to 7 are concerned it cannot be held that the suit against them is bad for want of notice of dishonour. So far as the 8th defendant is concerned he being an endorsee notice of dishonour was necessary. That being the position, there cannot be a decree against the 8th defendant. The trial Court was not justified in dismissing the suit as against defendants 1 t