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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

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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

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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

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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

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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