JIWANLAL ACHARIYA versus RAMESHWARLAL AGARWALLA

Citation: [1967] 1 S.C.R. 190 · Decided: 26-08-1966 · Supreme Court of India · Bench: K.N. WANCHOO · Disposal: Dismissed

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Judgment (excerpt)

JIWANLAL ACHARIYA 
RAMESHWARLAL AGARWALLA 
August 26, 1966 
(K. N. WANCHOO, ]. C. SHAH AND R. S. BACHAWAT, JJ.) 
Bilrar Money Lenders (Regulation of Transactions) Act, 1939 (Bihar 
No. 7 of 1939), s. 4--Loan, if Includes promisSory note, 
Indian Limitation Act (9 of 1908), s. 20-Handing over post-dated 
Cheque-Date <,/ payment for purpose of /lm!tatlon. 
. The respondent aclvanced a loan to the appellant before be was regis-
tered as money-lender in 1952 under the Bibar Money-Lenders Act, 1939. 
On February 4, I 954 tho appellant executed a promissory note in renewal 
of this loan and on the same day delivered to the respondent a post· 
dated cheque dated February 25, 1954 towards part payment of the debl. 
The cheque was cashed soon after February 25, 1954. 
On February 
22, 1957, the respondent filed a suit for recovery of the sum on the 
basis of the promissory note. 
The appellant contended that (i) the suit 
was not maintainable under s. 4 of the Bihar Money-Lenders Act, because, 
the suit promissory note was not a loan within the meaning of s. 4, 
but was really renewal of a loan advanced when the respondent was not 
legistered as a money-lender under the Act, and (ii) the suit was barred 
by limitation as the part payment was made on February 4, 1954 when 
the poet dated cheque was gh= to the respondent. 
HELD : (i) (Per Full Court) Section 4 of the Bihar Money-Lender. 
Act was not a bar to the maintainability of the suit. [ 195 FJ 
The word 'loan' used in s. 4 has the same meaning as it has In s. 2(f) 
and includes a transaction on a bond bearing interest executed in respect 
of past liability. [195 EJ 
Surendra Prasad Narain Singh v. Sri Gajadhar Prasad Sahu Trust Es/ate 
ond Ors. [1940) F.C.R. 39 and B. S. Lyle v. C/rappe/i, [1932) I K.B. 591, 
relied on. 
A 
B 
c 
D 
E 
The promissory note of February 4, 1954 
was a loan 
within the 
F 
meaning of s. 2(f) and it was made after the respondent had been 
registered. [ 195 FJ 
(ii) (Per Wanchoo and Shah, JJ.) 
The suit was not barred by 
timitation. 
Where a post-dated cheque is accepted conditionally and it is honoured 
the payment for purposes of s. 20 of the Limitation Act can only be 
0 
the dare which the cheque bears and cannot be on the date the cheque 
i• handed over, for the cheque, being post-<lated, can never be paid till 
the date on the cheque anives. [197 HJ 
Commissioner of Income-tax v. Messrs. Ogale Glass Works Ltd. [195SJ 
I S.C.R. 185, Marreco v. Rlc/rardson, L.R. (1908! 2 K.B. 584 and Felix 
Hadley v. Hadley, L.R. [1898) 2 Ch. 680, distinguished. 
Per Baebawat, J.-Tbe suit was barred by limitation. 
H 
190 
A 
B 
c 
D 
E 
F 
G 
H 
JIWANLAL v. RAMESHWARLAL (Wanchoo, I.) 
191 
The doctrine· that the payment take:; effect from the date of the delivery 
of the negotiable instrument is as inuch applicable to a post,dated 
cheque and a. bill payable on a future date as to a cheque and a . bW 
payable on demand. 
During the currency of the post-dated cheque or 
of the bill payable on a future date, the creditor cannot sue to rec:oVer 
the original debt. 
The post dated cheque or the running bill, if it. is 
duly met operates as payment of the debt from the elate of its delivery. 
For the purposes of s. 20 of the Limitation Act, also the date of the 
pa:fment of the debt is the date when the· post-dated cheque was delivered 
lo the creditor and not the date wnicb the cheque bore nor the date· when 
it was cashed. [199 OJ' 
Commissioner of Income-tax, Bombay South Bombay v. Messrs. Ogal• 
Glass Works Ltd. Ogale Wadi, (1955) 1 S.C.R. 196, Marreco v. Ri~hart!­
son, [1908] 2 K.B. 584 and Felix Hadley & Co. v. Hadley [1'898] 2 Ch. 
680, relied on, 
Ked~r Nath Mitra v. Dinabandhu Saha, (1915) I.L.R. 42 Cal. 1043; 
approved. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 606 of 1966. 
Appeal by special leave from the judgment and decree dated 
August 5, 1964 of the Patna High Court in Appeal from Original 
Decree No. 362 of 1959. 
P. K. Chatterjee, for the appellant. 
The respondent did not appear. 
The Judgment of W ANCHOO and SHAH, JJ. was delivered by 
WANCHOO, J. BACHAWAT, J. delivered a dissenting Opinion. 
Wanchoo, J. Two questions of law arise in this appeal by 
special leave against the judgment of the Patna High Court. The 
facts which have been found by the High Court and which are 
necessary for our purposes may be briefly narrated. 
The 
appellant was the defendant in a suit filed by the plaintiff-respon-
dent for recovery of money on the ba

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