The absence of effects will excuse presentment for payment as against the drawer or an accommodated indorser. Notice of dishonour is unnecessary where the drawee is under no obligation to pay the bill. The liability of an endorser arises only if a notice of dishonour is issued to him. The drawer is liable to compensate the holder in case the cheque is dishonoured by the drawee. Notice of dishonour is imperative to afford an opportunity to the party to protect himself.

George Vadakkel, J.

1. For the price of cement due from the defendant to the plaintiff, the former on 6th March 1973 issued in favour of the latter Ext. A-1 cheque for Rs. 750 drawn on the Syndicate Bank, Sreekariyam. The plaintiff discounted the same with the South Indian Bank Ltd., Trivandrum. On presentment by the second mentioned bank, the Syndicate Bank as per Ext. A-2 Memo dated 12th March 1973 returned the same for the reason: 'Full cover not received'. The South Indian Bank Ltd. in turn returned Ext. A-1 cheque together with Ext. A-2 Memo, to the plaintiff. The plaintiff issued Ext. B-2 notice, dated 9th February 1974 informing the defendant of the dishonour of the cheque, and demanding payment of the sum of Rs. 750, interest thereon from 12th March 1973 and the cost of notice. The defendant did not pay the amount and the plaintiff therefore, on 4th November 1974 instituted the suit for realization of the said amounts. The lower court dismissed the suit on the ground that notice of dishonour was not sent within a reasonable time. The lower court also held that no relief could be granted on the Original Cause of action for the price of cement supplied either, as the notice of dishonour was not sent within a reasonable time. The plaintiff has come up in revision.

2. Ext. B-1 duplicate of defendant's pass book in respect of S.B. Account No. 945 against which Ext. A-1 cheque was drawn shows that during the period 6th March 1973 to 12th March 1973 the credit balance in his favour in that account was only Rs. 13.65. This means that the drawer of the cheque had no sufficient effect in the hands of the drawee bank, sufficient to cover Ext. A-1 cheque.

3. Unlike the drawer of a bill of exchange who is liable thereon as principal debtor only till the drawee accepts the same, the drawer of a cheque is, under S.37 of the Negotiable Instruments Act, 1881, in the absence of a contract to the contrary, always liable thereon as a principal debtor. Under that section, the other parties to the cheque, i.e., the indorsees, are liable thereon only as sureties for the drawer. Though as between the parties so liable as sureties, each prior party is, in the absence of a contract to the contrary, as stated in S.38 of the Act, liable thereon as a principal debtor in respect of each subsequent party, every party thereto, other than the drawer, i.e., every indorsee, remains always a surety for the drawer, and therefore, on an indorsee indemnifying a subsequent indorsee, he is entitled to be compensated by the principal debtor the drawer. Where a person who is an indorsee vis a vis prior parties and an indorser vis a vis subsequent parties to a cheque is sought to be made liable thereon by the holder thereof, on the ground of its dishonour, it is imperative that such person shall not suffer on account of laches on the part of the holder in giving him the information of dishonour and of the holder's intention to make such person liable on the cheque. The object of the notice is, that such person may, if he so chooses, take such steps as against the indorsers prior to him and the drawer, all of whom are, to him, principal debtors in order to protect himself. If by failure to give notice, such person is unable to recover the amount from any of his principal debtors, say, by that debtor becoming insolvent in the meanwhile, he would suffer damages, if he is made liable on the cheque to the holder. This is why law by S.93 of the Act casts a duty upon the holder, or somebody who remains liable thereon to give notice of dishonour to all other parties whom the holder seeks to make severally liable thereon, and to someone of several parties, whom he seeks to make jointly liable thereon, and requires by S.94 thereof, amongst other matters, that such notice is to be given within a reasonable time after dishonour, and further provides in S.98(c) that no such notice is necessary when the party sought to be made liable could not suffer damage for want of noti