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Report No. 3

76. Articles 57 & 58-

Articles 57 and 58 relate to money lent by a cheque. In respect of both of them the time of accrual of the cause of action coincides with the time from which the period of limitation begins to run. A cheque is paid when it is cashed by the lender's bankers. It is only then that the money passes from the lender to the borrower, and, therefore, time is made to run from the moment when the cheque is paid. Mere giving of the cheque by the lender to the borrower does not amount to payment.

77. Article 59 is for money lent under an agreement that it shall be payable on demand and the period of three years begins to run when the loan is made. In the absence of a special condition, when money is lent the debt becomes due immediately and the fact that money is payable on demand makes no difference. This was settled very early in Norton v. Ellam, (1837) 2 M&W 461 (See also 20 Hals., 2nd Edn., pp. 604 & 605) The demand is not treated as an essential part of the contract and time is made to run from the date of the loan and not from the date of demand. The Article can, accordingly, be merged with other Articles dealing with contracts.

78. Article 60 relates to deposits of money including of a customer in the hands of his banker and provides a period of 3 years from the date when the demand is made. In the case of deposit, the cause of action arises, when a demand for payment is made. In the case of a current amount it has now been settled by the Court of Appeal in England in Joachimson v. Swiss Bank, 1921 (3) KB 110 that it is a term implied in the relationship of a banker and customer that demand is necessary. The question was also considered by the Privy Council in Mahomed Akbar Khan v. Attar Singh, ILR 17 Lah 557. and Sulaiman Haji v. Haji Abdulla, 1940 Kar 277 and it may, therefore, be taken as settled law that in the case of a customer's current account with a bank, the cause of action does not accrue and the time does not start until the demand is made by him upon the bank (Vide also 20 Hals. 2nd Edn., p. 610), The substantive law, therefore, settles the cause of action and the time from which it accrues coincides with the entry in the third column.

Limitation Act, 1908 Back

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