LexSITA RAM JHUNJHUNWALA versus BOMBAY BULLION ASSOCIATION LTD. & ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
I
A
SITA RAM JHUNJHUNWALA
II.
BOMBAY BULLION ASSOCIATION L1D. & ORS.
November 25, 1964
B
[A.
K.
SARKAR,
N.
RA.1AGOPALA
AYYANGU AND
J. Jt
MUDHOLKAR., 11.)
c
D
E
F
BankU., practic~heque-"Certi{i4d as good for payment", Scope
of.
The members of the Bombay Bullion Asaociation, respondent herein,
were permitted under the Forward Contracts Control Act (Bom. Act 64
of 1947) to carry on forward dealings in bullion subject to tbe bye-laws
framed by the Association.
The appellant who was a member of the
Association and was carrying on business as bullion merchant, defaulted
in performing bis obligation to tender silver of which he was the forward
seller, on the settlement day, and so tbe Association, purporting to act
under its bye-laws, purchased a quantity of silver •t the risk of the appellant
and claimed from him the difference in price.
The appellant paid the
amount and challenging the legality of bis being treated as in default
filed a suit for its refund. The suit was dismissed by the High Court. In
appeal to tbe Supreme Court it was contended that tbe Association should
not have made tbe purchase because the purchasers bad not fulfilled tbc
terms of their obligations under tbe bye-laws in making their payments to
the Association. The contentions were that : (i) certain of the purchasers
who had made payments into the Clearing House of the Association by
cheques, dra"ND on their account in the Clearing House, had not had the
cheques certified as good for payment as required by bye-law 137-B,
and (ii) one payment was made by a purchaser, by a cheque drawn,
not on the Clearing House but on a branch of the Clearing House in the
city, and which besides was not certified good for payment as required
by the bye-law.
HELD: (i) Where a payment was made by a cheque drawn on an
account with the Clearing House and the amount represented by that cheque
was transferred to the Clearing House Account of the Association, it is
virtually a payment in cash, though in form a payment by cheque. Si11ce
payment in cash is one of the modes of payment recognised by the byio-
law it satisfied the requirement of a valid payment.
(255 E-F; 262 G-H]
ArS<ne A. Larocque v. Hyacinthia Beauckemin, (1897) A.C. 358, refer-
red to.
(ii) Where the Clearing House had accepted the cheque and credited
G
it to the Association after ascertaining from the branch on which it wu
drawn, that the drawer of the cheque had enough funds at that branch
for meeting of the cheque, the cheque need not be certified as good for
payment.
The position with respect to such a cheque is the same ••
when the cheque is drawn on an account in the same branch, because the
certificate of the banker that i• referred to in the bye-law is the certificate
of a bank different from that into which the cheque i• being paid. In any
event, when the staff of the Clearing House ascertained from the branch
H
that the cheque wa' backed by sufficient funds to the credit of the custo-
mer in the branch on which it was drawn, it satisfied the requirements
of a cheque certified as good for payment within the bye-law.
(260 B;
262 A.C; 263 O·HJ
lJSup .16S-17
250
SUPIU!MB C:OU.T llBPORTS
[1965]2 S.C.R.
CML APPELLATE JURISDICTION : Civil Appeal No. S6 of A
1962.
Appeal by special leave from the judgment and decree dated
March 3, 4, 1958 of the Bombay High Court in Appeal No. 27 of
1957.
Purshottam Tricumdas, I. B. Dadachanjl, 0. C. Mathur and
B
Ravinder Narain, for the appellant. ·
H. N. Sanyal, Solicitor-General, N. P. Nathwani, Atiqur-
Rehman and K. L. Hathi, for respondents Nos. 1-3, 5, 6, 8-17, 19
and 20.
The Judgment of the Court was delivered by
Ayyangar, I. This appeal, by special leave, raises for con"
C
sideration a very short point regarding the proper construction of
bye-law 137-B of the Bombay Bullion Association Ltd., which
will hereafter be referred to as the 'Association' and in particular
whether on the facts established in this case the· requirements of
the said bye-law has been satisfied.
The appellant is a member of the first respondent-the Associa-
tion and carries on business as a bullion merchant. . By a notifica-
tion dated March 14, 1949, the Government of Bombay in exer- ·
cise of the powers conferred by s. 6 of the Bombay Forward Con-
tracts Control Act,' 1947 (Bombay Act LXIV of 1947) sanctioned
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by the bye-laws framed by the Association. Under the said Act
JI:
the members of the AssExcerpt shown. Read the full judgment & AI analysis in Lexace.