MEERASAHIB MUHAMMED KUNJU Vs. PADMANABHA IYER HARIHARA IYER

JUDGEMENT

(1.) This second appeal by the second defendant arises in a suit to recover the balance of consideration under a sale deed Ext. P 5, upon a cheque Ext. P 1, given therefor by the first defendant in favour of the plaintiff being dishonoured. A. charge on the suit property sold under Ext. P 5 was claimed, in addition to a decree against the first defendant personally. Ext. P 5 is dated the 21st February, 1951, and Ext. P l bears the date the 24th March 1951. The second defendant who had taken a simple mortgage, Ext. D 1 dated the 12th December, 1951, for the suit property and others from the first defendant, contested the suit on the ground that Ext. P l was not towards the balance of the consideration for Ext. P 5, that even if it was so, the claim for such balance must be held to be satisfied upon the cheque being accepted and that being a transferee without notice of non payment of the consideration, the property in his hands could not be made liable. The first court held, that the connection between Exts. P 1 and P 5 has not been proved, and that the second defendant was a transferee without notice of non payment, and granted only a personal decree against the first defendant; in appeal by the plaintiff, the Subordinate Judge gave him a decree against the property as well.

(2.) I find little difficulty in holding, that Ext. P 1 was towards part of the sale consideration. The second defendant knew nothing about the circumstances under which Ext. P 1 came to be drawn. The evidence is all one way and is that of the plaintiff, that Ext. P 1 was given as part of the sum of Rs. 1361 odd, recited in Ext. P 5 as made up of a prior payment and of a cash payment on that date. In the reply Ext. P 2, which the first defendant gave on the 18th July, 1951, to the plaintiff's demand, he said that the cheque was drawn on the date of Ext. P 5, but was postdated on the understanding between him and the plaintiff, that the latter would satisfy him as to the extent of the property before the date the cheque bore, but that as this was not fulfilled, the cheque came to be dishonoured. This is at least useful as explaining the difference between the dates of Exts. P l and P 5. There is no other transaction in evidence to which Ext. P 1 could be related; nothing was suggested. These are sufficient to support my conclusion as stated above.

(3.) The second question is whether the acceptance of Ext. P 1 was equivalent to payment or discharge of the liability. Going by the dates, with reference to Ext. P 1, the liability for Rs. 1000/- under Ext. P 5 was a pre existing debt. The presumption of law in such cases is, that the cheque is taken only as a conditional payment, that is, subject to the condition subsequent, that if it was dishonoured the creditor could fall back on the original cause of action. It is unnecessary to refer to decided cases as the law has been summarised in Bashyam & Adiga's Negotiable Instruments Act, 11th edition, appendix C. At page 568 the following passage occurs: