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Sitaram Laxminarayan Rathi Versus Sitaram Kashiram Koli and Ors.

1984 (3) TMI 428 - BOMBAY HIGH COURT

Civil Revision Application No. 633 of 1981 - Dated:- 29-3-1984 - S.G. Manohar, J. For Appellant: R.D. Soni, Adv. For Respondents: S.M. Dandekar, Adv. for respondent Nos. 1 to 3 JUDGMENT S.G. Manohar, 1. The short question that arises in this revision application is whether a post dated cheque is a negotiable instrument within the meaning of the Bombay Money Lenders Act. 2. The relevant facts are as follows :- On 19-5-1973, a sum of ₹ 1,500/- was purported to be advanced by the petitioner ( .....

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me for the petitioner that this was in fact a deduction of interest in advance. But his explanation is meaningless because if the interest was deducted even before the advance was made it only means that the sum advanced was the lesser amount. Mr. Soni conceded this position and the entire petition was argued on the basis that what was advanced by the plaintiff to the defendants against the three post-dated cheques was a sum of ₹ 1,410/- and not ₹ 1,500/-. The exact dates of the thr .....

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the year 1976 for the recovery of ₹ 1,500/- as principal sum and for the interest on the same. 3. The defence of the defendants was that out of the sum of ₹ 1500/- only a sum of ₹ 750/- was received by them and further that even that amount was repaid by him. It was also contended by defendant No. 1 that he was a debtor within the meaning of Maharashtra Debt reliefs Act and that the debt was extinguished. There were other defences raised which need not be discussed here. 4. On .....

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him as against the three post dated cheques issued by defendant No. 1 on behalf of the defendants for the sum of ₹ 1500/-. In the cross-examination it was suggested that a sum of ₹ 90/- was deducted by him while giving advance of a sum of ₹ 1500/- and this fact was admitted by him. However, nothing in the cross-examination went to suggest that only a sum of ₹ 750/- was paid by him to the defendant or that the balance of amount of ₹ 750/- was repaid by them to the p .....

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ecision of the trial Court was as to whether the plaintiff was a money lender within the meaning of the Bombay Money Lenders Act and whether the transaction in question was hit by any of the provisions of the said Act. In this connection the question to be decided by the Court was as to whether the advance made by the plaintiffs to the defendant was "a loan" within the meaning of Bombay Money Lenders Act. The learned Judge in this connection held that the plaintiffs have charged intere .....

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n Mr. Soni, the learned advocate appearing for the petitioner-plaintiff has rightly pointed out that the learned Judge has committed a manifest error in assuming that the plaintiff was money lender or that the suit transaction was a transaction of loan within the meaning of the Act. This is so because, in the first place, no such plea was raised in the written statement by the defendants and in the second place the loan was admittedly against the three post-dated cheques issued by the defendants .....

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it based upon the advance made as against the cheques. However, a small ticklish question arises as to whether a post-dated cheque can be said to be a cheques within the meaning of the Negotiable Instruments Act. Section 2(9)(f) of the Act takes the transaction out of the purview of the concept of loan only, if the loan is advanced as against the cheques. But the 'cheque' has been defined in section 6 of the Negotiable Instruments Act to mean a bill of exchange draws on a specific banker .....

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mediately on demand. In fact, he conceded that until the date mentioned in the cheque had arrived, no demand in respect of cheques could be made at all and in that limited sense, it was not a negotiable instrument payable on demand; he conceded that it was only after the date had arrived, that the instrument becomes a cheque. But he contended, with evident force that till that it was a bill of exchange drawn o a banker and as such was a negotiable instrument which is all that section 2(9)(f) dem .....

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the most common methods of financing commercial operations would be suddenly put an end to." The learned Judge further observed that the cheque was after all under section 6 of the Act, a bill of exchange drawn in a special manner but was a bill of exchange nonetheless and as a bill of exchange it was negotiable. The learned Judge was, therefore, of the view that even a post dated cheque was a negotiable instrument. 11. Mr. Soni also relied upon the judgment of the Calcutta High Court repo .....

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aves no room for doubt that a bill of exchange is a negotiable instrument even cases where the payment was to be made at a future date. If the cheque is a post-dated cheque and if it otherwise satisfies the condition of a bill of exchange, the fact that it is a post-dated cheque would not, therefore, make it less of a bill of exchange. A post-dated cheque, therefore, is as much as negotiable instrument as contemplated by the Negotiable Instruments Act. 12. This being the legal position, there is .....

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