de Silva v. Ranasinghe
Present: Slrimane, J., and Alles, J.H. R. DE SILVA, Appellant, and A. P. RANASINGHE, RespondentS. G. 758(64—D. C. Balapitiya, 1174jM
Cheque—Dishonour—Action agonist indorser—Requirement of notice of dishonour—•Excuses for delay in giving notice—Bills of Exchange Act (Cap. 82), ss. 49(Rules 12 and 13), 50 (1), 50 (2) (d) (iii).
When a cheque ia dishonoured, notice of dishonour is a condition precedentto a right of action against an indorser. Excuses for delay in giving notice ofdishonour are limited only to those ■which are set down in section 60 (1) of theBills of Exchange Ordinance.
PEAL from a judgment of the District Court, Balapitiya.
N.8. A. QoonetiUeke, for the defendant-appellant.S. W. Jayasuriya, for the plaintiff-respondent.
Cur. adv. vuti.
SIMMANE, J.—de Silva v. Ranasinghe
November 20, 1966. Sirimane, J.—
The plaintiff alleged that the defendant had borrowed a sum ofRe. 3,500 from him, on the cheque produced at the trial marked PI. Thecheque has been drawn by one Martin Silva, and according to the plaintiffendorsed to him by the defendant.
The cheque was dishonoured (the donor having stopped payment)and the plaintiff filed this action against the endorser (i.e. the defendant)only. He obtained judgment in his favour and the defendant hasappealed.
The main ground urged by Mr. Goonetilleke for the defendant is thatthere has been no notice of dishonour given to the defendant as requiredby section 49, Rule 12, of the Bills of Exchange Act, Cap. 82, which readsas follows:—
49. Notice of dishonour in order to be valid and effectual must be
given in accordance with the following rules :—
(12) The notice may be given as soon as the bill is dishonoured,and must be given within a reasonable time thereafter. In theabsence of special circumstances notice is not deemed to have beengiven within a reasonable time, unless—
(а)where the person giving and the person to receive notice reside
in the same place, the notice is given or sent off in time toreach the latter on the day after the dishonour of the bill ;
(б)where the person giving and the person to receive notice reside
in different places, the notice is sent off on the day after thedishonour of the bill, if there be a post at a convenient houron the day, and if there be no such post on the day, then bythe next post thereafter.
In the prayer the plaintiff averred that he had given notice of dishonouron 6.7.61, and at the trial a copy of a notice sent by his proctor to thedefendant marked P5 bearing that date was produced. The questionthen arises as to the exact date on which the cheque was dishonoured,and the burden was on the plaintiff to prove that date in view of thedefence taken up in the answer. The evidence on the point is not veryclear. According to the plaintiff’s proctor he had sent the cheque tothe Bank (presumably acting as plaintiff’s agent) on 20.6.61 and itwas returned by the Bank a “few days” later. P4 is a communi-cation relating to the dishonour dated 29.6.61 sent by post to theplaintiff’s proctor by the Bank, and one gathers that he received thiscommunication within a “ few days ” of the date on P4.
The plaintiff’s oral evidence on the point which the learned DistrictJudge has accepted is that he met the defendant on the road and toldhim about the dishonour after the cheque had been handed to the proctorto file action. This date is very vague indeed; it was perhaps afterboth P4 and P5.
SIRIMANE, J.—de Silva v. Bana&inghe
In this state of the evidence it was conceded by counsel for theplaintiff that notice of dishonour had not been given as required by Buie12 quoted above or even in accordance with Rule 13 which deals with“ reasonable time ” when a bill is dishonoured in the hands of an agent.
The learned District Judge himself appears to have appreciated this,for he seeks to excuse the delay in the following words :
“ A third party’s signed cheque leaf had been brought for the purposeof being kept as security for money borrowed and the defendant isnot entitled to insist on notice of dishonour reaching him on the dayafter the dishonour.”
Excuses for delay in giving notice of dishonour which may be ac ceptedby a Court are set down in section 50 (1). The delay mustbe “ caused by circumstances beyond the control of the party givingnotice, and not imputable to his default, misconduct or negligence ”.The fact that money had been borrowed by a person on a cheque signedby another is hardly an excuse for delay in giving notice of dishonourto the endorser, and learned counsel for the plaintiff did not seek tosupport this part of the judgment.
Notice of dishonour is a condition precedent to a right of action againstan endorser (see Murugappah Chetti v. Silva1). Respondent’s counselcontended however that this was a case in which notice of dishonourshould be dispensed with under section 50 (2) (d) (iii) of Cap. 82, as PIwas an “ accommodation cheque ”. This position was not pleaded inthe plaint and no issue was raised at the trial, though I must say thatthere is some evidence on the record from which such an inference maybe drawn. This aspect of the matter appears to have escaped the noticeof the lawyers and the learned Judge at the trial.
It would not be fair on the defendant to hold against him in appealon a point which he was not called upon to meet at the trial.
With some reluctance we have decided to grant the application ofcounsel for the plaintiff that the matter be sent back for re-hearing, andin view of the order we propose to make we do not wish to make anycomment on certain other matters referred to by counsel for the appellantin the argument.
The judgment and decree entered in this case are set aside and the casesent back for trial de novo before another judge. The parties may bepermitted to amend their pleadings if they so desire. The defendant-appellant is entitled to costs of this appeal, all other costs will be in thediscretion of the District Judge.
Alles, J.—I agree.
Sent back for fresh trial.
(1916) 2 G. W. R. 33.
B. H. R. DE SILVA, Appellant, and A. P. RANASINGHE, Respondent