PETITIONER:
K. SARASWATHY ALIAS K. KALPANA (DEAD) BY LRS.
Vs.
RESPONDENT:
P.S.S. SOMASUNDARAM CHETTIAR
DATE OF JUDGMENT01/05/1989
BENCH:
PATHAK, R.S. (CJ)
BENCH:
PATHAK, R.S. (CJ)
MUKHARJI, SABYASACHI (J)
MISRA RANGNATH
CITATION:
1989 AIR 1553 1989 SCR (2) 819
1989 SCC (4) 527 JT 1989 (2) 480
1989 SCALE (1)1179
ACT:
Practice and Procedure: Court order providing for depos-
it of amount--Payment by cheque whether valid.
Original Side Rules--Madras High Court: Order XXXI Rules
1-6--Depositing Money into Court--Payment of money by
cheque--Whether due compliance.
HEADNOTE:
The appellant filed a civil suit in the High Court for
specific performance of a contract to sell the suit property
by the respondents to her. The High Court held the appellant
liable to discharge the mortgage and directed her to deposit
in Court a sum of Rs.3.5 lakhs with interest for the pur-
pose. The appellant paid the amount direct to the mortgagee,
which the High Court refused to accept as due compliance
with its decree.
The appellant preferred appeals to this Court, which
were disposed of on 29th November, 1979 with the direction
that the appellant was to deposit within six months from the
date of the order, the entire sum of Rs.3.15 lakhs together
with interest.
Purporting to comply with the aforesaid order of this
Court, appellant deposited a sum of Rs.2,42,822.19 on 11
April, 7980 and filed two Civil Misc. Petitions in the High
Court for a declaration that the payment was in compliance
with the order of this Court and claimed as set off of the
amount of Rs.5,96,687.19 paid by her earlier to the South
Indian Bank, which she was entitled to recover from the
respondent.
The time limit fixed for fulfilling the two conditions
set out in this Court's order dated 29th November, 1979
having fallen on 29th May, 1980 and the High Court not
having passed orders on the appellant's two CMP's the appel-
lant paid into the High Court a sum of Rs.6.02 lakhs on 29th
May, 1980 by cheque purporting to comply with the first
condition of this Court's order.
820
The High Court dismissed the appellant's CMP and refused
to grant the declaration that the appellant had complied
with the order of this Court dated 29th November. 1979, on
the ground that the appellant was bound to comply with the
Original Side Rules of the High Court which prescribed the
procedure to be followed in depositing money into Court
particularly Order XXXI Rules 1 to 6 which aimed at securing
the deposit of the money in the Reserve Bank of India to the
credit of a particular proceeding, on or before the speci-
fied date.
In the appeal to this Court, on the question; whether
payment made by the appellant on 29th May, 1980 by cheque of
the amount of Rs.6.02 lakhs together with the amount depos-
ited earlier on 11th May, 1980 was in due compliance with
this Court's order dated 29th November, 1979.
Allowing the Appeal and setting aside the order of the
High Court, this Court
HELD: 1. Payment by cheque is an ordinary incident of
present day life, whether commercial or private, and unless
it is specifically mentioned that payment must be in cash
there is no reason why payment by cheque should not be taken
to be due payment if the cheque is subsequently encashed in
the ordinary course. [823D-E]
In the instant case, there is nothing in the order of
this Court providing that the deposit by the appellant was
to be in cash. The terms of the order dated November 29,
1979 are conclusive in this respect and it is the intent of
that order which will determine whether payment by cheque
within the period stipulated in that order was excluded as a
mode in satisfaction of the terms of that order. The time
for payment of governed by the order of this Court. [823E-F]
2. Payment on the cheque being honoured and encashed
relates back to the date of the receipt of the cheque, and
in law the date of payment is the date of delivery of the
cheque. [823F]
Commissioner of Income Tax, Bombay South, Bombay v.
Messrs Ogale Glass Works Ltd. Ogale Wadi, A.I.R. 1954 S.C.
429 referred to.
In the instant case, there is nothing to suggest that
the cheque was not honoured in due course and that the Bank
had at any time declined to honour it for want of funds in
the ordinary cause. [823G]
821
3. The conditions set forth in the order of this Court
dated 29th November, 1979 have been complied with by the
appellant substantially and she is entitled to the benefit
of that order. [824C-D]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No.
111(N) of 1981.
From the Judgment and Order dated 21.10.1980 of the
Madras High Court in Application No. 2875 of 1980.
Abdul Kareem, A.T.M. Sampath and P.N. Ramalingam for the
Appellant.
S. Govind Swaminathan, Rajendra Chowdhary, N.S. Sivam
and K. Madhavan for the Respondents.
T.S. Krishnamoorthi Iyer, S. Balakrishnan and
M.K.D. Namboodiri for the Intervener.
The Judgment of the Court was delivered by
PATHAK, C J: The appellant herein filed Civil Suit No.
18 of 1968 in the High Court for specific performance of a
contract to sell the suit property by the respondent herein
to her. A question which arose for decision was whether the
appellant should discharge the mortgage of the suit property
created by the respondent in favour of the South Indian
Bank. The High Court held that the appellant was liable to
discharge the mortgage and directed her to deposit in Court
a sum of Rs.3,50,000 with interest for the purpose. The
appellant paid the amount direct to the mortgagee. The High
Court refused to accept the payment made directly to the
mortgagee as due compliance with its decree and against that
order of the High Court the appellant preferred civil Ap-
peals Nos. 1993-1994 of 1977. This Court disposed of the
said appeals by the following order dated 29 November, 1979:
“We direct that a decree be passed that the
plaintiff-Appellant do deposit within six
months from today the entire sum of
Rs.3,45,000 together with interest due upto
date at the rate of 11 per cent, together with
an undertaking that she would give up all her
rights under the mortgage decree passed in her
favour in C.S. No. 154 of 1968 except to the
extent of the amount actually paid to the
South Indian Bank for taking the assignment.
If these two
822
conditions are fulfilled, the appeals will
stand allowed and a final decree for specific
performance passed. In the event of non-com-
pliance with either of these conditions the
appeals will stand dismissed with costs.”
Purporting to comply with the above order of this Court,
the appellant deposited a sum of Rs.2,42.822.19 on 11 April,
1980 in the High Court with the undertaking to give up all
her rights decreed in C.S. No, 15 of 1968 and filed C.M.P
Nos. 2424 and 2425 of 1980 in the High Court for a declara-
tion that the payment as mentioned above was in compliance
with the order of this Court and she claimed a set off of
the amount of Rs.5,96,687.19 paid by her earlier to the
South Indian Bank which she was entitled to recover from the
respondent in accordance with the second condition of the
order of this Court dated 29 November, 1979. The time limit
fixed for fulfilling the two conditions set out in this
Court’s order dated 20 November, 1979 having fallen on 29
May, 1980 and the High Court not having passed orders on her
C.M.Ps. Nos. 2424-2425 of 1980 till then, she paid into the
High Court a sum of Rs.6,02,000 on 29 May, 1980 by cheque
purporting to comply with the first condition set out in
this Court’s order aforesaid.
C.M.Ps. Nos. 2424 and 2425 of 1980 filed by the appel-
lant in the High Court were dismissed by a Single Judge by
an order dated 6 June, 1980 against which the appellant
preferred Petitions for Special Leave to Appeal Nos. 947-48
of 1981. The appellant also filed another C.M.P. No. 2875 of
1980 in the High Court for a declaration that she had com-
plied with the aforesaid order of this Court dated 29 Novem-
ber. 1979 which was dismissed by the High Court. Civil
Appeal No. 111 of 1981 has been preferred against the judg-
ment and order of the High Court in C.M.P. No. 2875 of 1980.
The only question decided against the appellant by the
High Court in C.M.P. No. 2875 of 1980 was with regard to the
deposit of the amount stipulated in the first condition of
the order of this Court dated 29 November, 1979. The crucial
issue was whether the payment made by the appellant on 29
May, 1980 by cheque of the amount of Rs.6,02,009 together
with the amount deposited earlier on 11 April, 1980 was in
due compliance of the first condition of this Court’s Order
dated 29 November, 1979. The High Court found that the
simple delivery of the cheque on 29 May, 1980 could not be
deemed to be deposit of the specified sum of 29 May, 1980 in
satisfaction of the order of this Court when the amount of
the cheque had been realised only on 16 June, 1980. The High
Court held that the appellant was bound to
823
comply with the Original Side rules of the High Court which
prescribed the procedure to be followed in depositing the
money in Court, and in particular, Order 31, rules 1 to 6
thereof which were aimed at securing the deposit of the
money in the Reserve Bank of India to the credit of a par-
ticular proceeding on or before the specified date. Accord-
ingly, the High Court refused to grant the declaration that
the appellant had complied with the order of this Court
dated 29 November, 1979.
It is contended before us on behalf of the appellant
that the cheque for Rs.6,02,000 was tendered in Court on 29
May, 1980 and that it was duly honoured by the Bank and
money was realised under the cheque, and therefore it must
be taken that payment had been effected by the appellant on
29 May, 1980 within the time stipulated by this Court in its
order dated 29 November, 1979. In Commissioner of Income
Tax, Bombay South, Bombay v. Messrs Ogale Glass Works Ltd.
Ogale Wadi, A.I.R. 1954 S.C. 429 it was laid down by this
Court that payment by cheque realised subsequently on the
cheque being honoured and encashed relates back to the date
of the receipt of the cheque, and in law the date of payment
is the date of delivery of the cheque. Payment by cheque is
an ordinary incident of present-day life, whether commercial
or private, and unless it is specifically mentioned that
payment must be in cash there is no reason why payment by
cheque should not be taken to be due payment if the cheque
is subsequently encashed in the ordinary course. There is
nothing in the order of this Court providing that the depos-
it by the appellant was to be in cash. The terms of the
order dated 29 November, 1979 are conclusive in this respect
and it is the intent of that order which will determine
whether payment by cheque within the period stipulated in
that order was excluded as a mode in satisfaction of the
terms of that order. The time for payment is governed by the
order of this Court.
It is alleged on behalf of the respondent that there was
no money on the date of delivery of the cheque to support
payment of it and that it was subsequently when arrangements
were made that the cheque was realised. Now, the High Court
has not found that if the cheque was presented for encash-
ment on the date it was delivered the cheque would not have
been encashed. There is nothing to suggest also that the
cheque was not honoured in due course and that the Bank had
at any time declined to honour it for want of funds in the
ordinary course. In any event, there is nothing to suggest
that, under the arrangements made for payment of the cheque,
even if it had been encashed on the date it was delivered
the cheque would not have been encashed. There
824
is no finding by the High Court that on 29 May, 1980 the
cheque would not have been realised. That being so, the
question whether the appellant had wrongly stated that her
counsel had offered to pay cash to the High Court office on
29 May, 1980 ceases to be relevant. We also see no substance
in the objection taken before the High Court that in the
letter dated 29 May, 1980 addressed by counsel for the
appellant forwarding the cheque for Rs.6,02,000 there was a
request for the return of the cheque in case it was found
that the appellant was entitled to the set-off claimed by
her. The application of the appellant claiming adjustment
was pending in Court, and no conclusion can be drawn against
her on the ground that she had requested a return of the
cheque in the event of the adjustment being allowed by the
Court.
We are of the view that the conditions set forth in the
order of this Court dated 29 November, 1979 in the facts and
the circumstances of the case have been complied with by the
appellant substantially and she is entitled to the benefit
of that order.
The appeal is allowed, the order dated 21 October, 1980
of the High Court is set aside and the application by the
appellant for a direction to the respondent to execute the
sale deed in her favour is allowed. In the circumstances of
the case, there is no order as to costs.
N.V.K. Appeal allowed.
?
825