The main legal point established is that the suit on a dishonoured cheque fell within the relevant time period under Art.78 of the Limitation Act, and an endorsee after notice of dishonour is entitled to the decree as the assignee of the right of the transferor.

1. The defendant had issued a cheque, Ext. P-1, on 311952 to the 1st plaintiff for Rs. 2000/- in repayment of his debt; but the cheque was dishonoured on presentation for payment by the bank on January 18, 1952, for want of funds. This suit was instituted for the amount of the cheque on January 11, 1955. Both the Courts below have decreed the suit.

2. Counsel for appellant-defendant has raised two questions of law, viz., (1) the suit instituted on January 11, 1955, on a cheque dated January 3, 1952, is barred by limitation under Art.58 of the Limitation Act, 1908, and (2) the decree given to the 2nd plaintiff who was an endorsee after notice of dishonour is unwarranted. I am afraid neither of the contentions has any force.

3. Art.58 of the Limitation Act reads:

".... When the lender has given a cheque for the Three years When the cheque money. is paid"

Obviously it relates to a suit on a cheque that has been honoured, and on a cheque that has been dishonoured. The suit under Art.58 is one for return of amount paid by a cheque and not one claiming the amount of a cheque given in repayment of a loan already advanced. Art.58 of the Limitation Act, 1908, has therefore no relevance here. The Article relevant is Art.78 of the Limitation Act, 1908. It reads:

A cheque by the usage of commercial practice can be presented for encashment within a reasonable period - normally within one or three months. The instant cheque was presented for encashment on January 18,1952, when it was not honoured. So the first refusal was only on January 18,1952 which was within three years of the date of the suit. The dishonour of a cheque will have all the legal effects of a non-acceptance of a bill of exchange. The suit is therefore within time.

4. As regards endorsement after notice of dishonour, S.59 of the Negotiable Instruments Act, 1881, provides:

"The holder of a negotiable instrument, who has acquired it after dishonour .... has only, as against the other parties, the rights thereon of his transferor."

It says only that an endorsee after notice of dishonour would be subject to all equities that are available against his transferor. But, no equity against the original payee has been made out in this case. The 2nd plaintiff, being an assignee of the right of the transferor, is entitled to decree.

In the result, the Second Appeal fails and is dismissed with costs. Dismissed.