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A cheque, unless dishonoured, is payment.” as per Income Tax

Started by bpagrawal, January 23, 2013, 11:25:14 AM

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bpagrawal

A cheque, unless dishonoured, is payment."

...When it is said that a payment by negotiable instrument is a conditional payment what is meant is that such payment is subject to a condition subsequent that if the negotiable instrument is dishonoured on presentation the creditor may consider it as waste paper and resort to his original demand : Stedman v. Gooch (1793) 1 Esp.5. It is said in Benjamin on Sale, 8th Edition, page 788 :-
"The payment takes effect from the delivery of the bill, but is defeated by the happening of the condition, i.e., non-payment at maturity."
In Byles on Bills, 20th Edition, page 23, the position is summarised pithily as follows :
"A cheque, unless dishonoured, is payment."
To the same effect are the passages to be found in Hart on Banking, 4th Edition, Volume I, page 342. In Felix Hadley & Co. v. Hadley (L.R. (1898) 2 Ch.D.680, Byrne J. expressed the same idea in the following passage in his judgment at page 682 :
"In this case I think what took place amounted to a conditional payment of the debt; the condition being that the cheque or bill should be duly met or honoured at the proper date. If that be the true view, then I think the position is exactly as if an agreement had been expressly made that the bill or cheque should operate as payment unless defeated by dishonour or by not being met; and I think that that agreement is implied from giving and taking the cheques and bills in question."
//http://www.lawweb.in/2013/01/a-cheque-unless-dishonoured-is-payment.html