The main legal point established in the judgment is the interpretation and application of the provisions of Article 40 and Article 35 of the Indian Limitation Act in a case involving the dishonor of a cheque, determining the starting point for the limitation for filing the suit for the recovery of the amount.

JUDGMENT

Dharam Chand Chaudhary, J. (Oral) - Defendants are in second Appeal before this Court. They are aggrieved by the judgment and decree dated 2.7.2004 passed by learned District Judge, Kinnaur Civil Division at Rampur Bushahr in Civil Appeal No. 49 of 2003, whereby learned lower appellate court has affirmed the judgment and decree dated 4.11.2003 passed by learned Civil Judge (Senior Division), Kinnaur at Reckong Peo in Civil Suit No. 23-1 of 2001.

2. It is thus the concurrent findings recorded by both Courts below on appraisal of the evidence and pleadings on record have been assailed before this Court on the grounds inter-alia that both Courts below have erred in applying the provisions contained under Article 40 of the Indian Limitation Act to conclude that the suit was filed within the period of limitation. Article 40 of the Act was stated to be not applicable in the given facts and circumstances, but the suit for the purpose of limitation was governed by the provisions contained under Article 35 thereof.

3. The legality and validity of the impugned judgment and decree though has also been assailed on the grounds that the facts of the case and evidence available on record has not been appreciated in its right perspective nor all the issues arisen out of the pleadings of the parties framed properly and also that the goats and sheep taken by the defendants from the plaintiff were agreed to be retuned whereas the cheque he had issued to be not presented for encashment, however, irrespective of the former having returned the sheep and goats, later presented the cheques which according to the defendant was rightly dishonoured. The other grounds raised in the memorandum of Appeal, however, looses significance as the same has been admitted on the following substantial question of law alone:-

1. Whether the period of limitation for a suit based upon a cheque would start from the date of the cheque or the date of knowledge of the cheque having been dishonoured on being presented?

4. Mr. B.B. Vaid, learned counsel representing the appellants-defendants has canvassed that in the matter of limitation, the provisions contained under Article 40 of the Indian Limitation Act were not attracted to the case in hand, however, keeping in view that the suit was filed on the ground of cheques having been dishonoured, it is the provisions contained under Article 35 of the Act were attracted and as per the same, the period of three years started running from the date of cheques and not from the date when it was dishonoured.

5. On the other hand, Mr. Rajiv Jiwan, learned counsel while repelling the arguments addressed on behalf of the appellants-defendants has strenuously contended that it is Article 40 of the Limitation Act applicable to the case in hand and as such, the limitation started running from the date when the cheque was returned by the bankers of the plaintiff after having been dishonoured.

6. On analyzing the rival submissions, it would not be improper to conclude that the cause of action to file the suit could have only been accrued in favour of the plaintiff on refusal of the bankers of the defendants to clear the same. The cheque was to be submitted for clearance by the plaintiff to the bankers of the defendants through his bankers at Reckong Peo. Therefore, the cheque Ext. P-2 when presented by the plaintiff for encashment in Punjab National Bank, Reckong Peo, the same was sent to Oriental Bank of Commerce, Ambala Cantt, the bankers of the defendants for clearance. The same, however, was returned to the bankers of plaintiff i.e. Punjab National Bank, Reckong Peo with the endorsement that ''alteration in date requires drawers full signature''. The cheque, as such, was returned by the bankers of the defendants without its clearance. The Limitation in a situation when the bankers of the drawer refused to clear the cheque for any reasons whatsoever is govered by Article 40 of the Limitation Act and not by Article 35 of the Act. T