This is an appeal by The New Central Hall, a firm consisting of two partners, Ismail Ibrahim Sully and Moosa Ibrahim Sully, plaintiffs in O.S. No. 40 of 1952 on the file of the Subordinate Judge, Madurai, against the dismissal of the suit, though without costs. The suit has been filed by them against the United Commercial Bank, Ltd., Madurai, for recovering damages of Rs. 50,000, with interest at 6 per cent. per annum from the date of plaint and costs, for dishonouring 11 cheques of theirs issued on the defendant Bank, in the first week of November, 1951, though the defendant Bank had sufficient funds of theirs in its hands and could have easily paid all the 11 cheques. The indignant plaintiffs withdrew their entire bank balance from this Bank on 10th November, 1951 and closed their accounts despite the Bank’s regret and offer to explain the position to the payees of the cheques. The learned Subordinate Judge accepted the fact of dishonouring the cheques by the Bank, by endorsing on the cheques “Refer to the drawer”, though the Bank had at that time the plaintiffs’ funds enough to meet all the cheques. He held, however, that, on a true construction of section 31 of the Negotiable Instruments Act, the plaintiffs could recover as damages only such loss or damage as was caused by the actual default of the Bank, and that no such loss was proved. He also held that the Bank had not acted maliciously, but only under an honest mistake caused by a clerk not reporting or bringing to account Rs. 4,000 deposited by the plaintiffs on 31st October, 1951, the 11 cheques dishonoured by the Bank aggregating, in all, to a sum less than this Rs. 4,000, and previous cheques of the plaintiffs having been cashed. He also took into account the fact that the Bank had offered to the plaintiffs to write letters to the 11 payees of the dishonoured cheques explaining the mistake. He further observed that if at all the plaintiffs would be only entitled to nominal damages, and remarked, rather curiously, that it was well established that in India, there is no question of awarding nominal damages. In the end, therefore, he dismissed the suit, and directed the plaintiffs to bear their costs, aggregating to Rs. 2,519-14-0 and directed the defendant-Bank to bear its own costs of Rs. 2314-6-4. The plaintiffs have felt highly aggrieved and have filed this appeal.

We have perused the records and heard the learned counsel on both sides. Mr. Venkatadri, the learned counsel for the appellants and Mr. Narasimhachari, the learned counsel for the defendant-respondent, argued the case fully and fairly, Mr. Venkatadri raised three main contentions. The first was that the lower Court went grievously wrong in its interpretation of section 31 of the Negotiable Instruments Act and that it is well established that traders, like the plaintiffs, would be entitled to substantial damages even in India without proof of special loss or damage by the wrongful dishonouring of their cheques, as such loss or damage is presumed. He said that the lower Court went wrong in holding that even traders like the plaintiffs should prove special loss, or otherwise would be entitled only to nominal damages, and in further observing, without any authority, that in India there was no question of awarding nominal damages and so the plaintiffs would be entitled to no damages. He is undoubtedly right in this contention. The House of Lords has held, in Wilson v. United Counties Bank Ltd.1, that in an action against a Bank by a trader customer, there was a right to claim substantial damages in the case of wrongful dishonouring of a cheque, though in the case of a non-trader customer special loss or injury by the dishonouring must be proved, before substantial damages can be claimed, except where there are special circumstances like a man issuing a cheque to a fiancee being dishonoured wrongfully and that fiancee breaking off the engagement in consequence. No doubt, it has been hel