Case law : Specific Performance

In my opinion MOU's are not legally enforceable.  Only agreement of sale or any other agreement can be enforced.  I am not sure about this.  I shall inform you tomorrow the correct position.

MoU is legally enforceable though it is not properly stamped and registered under section 49 of Indian Registration Act. The questing hereis not of the MoU being enforceable or Not as the court has already taken cognigence of the MoU and have already passed entrim orderes.

the question is : Cheque has been given by the buyer the Seller did not encash it. Does it amount ot discharge of obligation on part of the Buyer.

I appriciate your prompt response. I shall be looking forward to your reply tomorrow.

 No one cannot prove in the court that it is obligatory or compulsory on the sellers part to encash it but a cheques is valid for 6 months and so he is liable to encash it whenever he requires.It is not the Buyer`s fault unless it is not a case of cheque Bounce.So You cannot make the court or anyone for that matter compel this seller to encash this cheque..Even if the seller fails to deposit the cheque exceeding 6 months its his fault and you are not liable and that can be prooved by the Bnk statemements

 Even under specific relief Act 1963 there are no provisions..Sorry!

 ‘Specific performance’ means Court will ask the party to perform his part of agreement, instead of asking him to pay damages to other party.and the court has passes interim orders for?

 Only if a clause in the contract says that the seller shal deposit his cheque within stipulated time period can it be obligatory and you can use the specific performance which can lead the court to pass interim injunction ordering the seller to deposit the cheque,,,,

Thank You Madam. As you rightly note in your first reply that Buyers Job is to give the cheque and he by no means can force the seller to encash it. In this particular case the cheque is valid even today and hence he can deposit the same any time he so wishes.

I have argued the caase in the exact fashion as is laid down in your reply. All i need is some case law which might support this theory-wich is practical and lawful.

Once again thanks for your precious time and comments.

Dear Anish Sir

What i mean by dischrge here is that I have performed my part of the obligation casted on me by the MoU by giving the cheque and further doing all those ancillary work which i was requiered to do under the MoU. I have maintained the cheque amount in my bank account through out the relevent period.

I just want a case law to support my theory.

Payment by cheque is payment and is only contingent if dishonoured.  Person discharges his obligation by giving the cheque.

Upon realisation, the payments is to treated as having been made on the date when the cheques were delivered or deposited. Payment by cheque is deemed to have been made on the date of delivery of the cheque and not on the date of encashment when the cheque was honoured.

Dear Sanjeev Jee

Can you provide me with any case law or relevent matterail which backs-up the theory you have propounded in your reply. I shall be grateful to you for the same.

For taking out your precious time and replying to my query I thank you.

In the case of K.Saraswathi Alias K.Kalpana (Dead) by LRS. Vs. P.S.S. Somasundaram Chettiar reported in (1989) 4 Supreme Court Cases 527 it is observed that payment by cheque is an ordinary incident of present day life, whether commercial or private, and if the payment is made by cheque, it should be taken to be due payment if the cheque is subsequently encashed in the ordinary course.

I am thankful to you for the same.

Apex Court in the case of Commissioner of Income Tax, Bombay South, Bombay vs. M/s. Ogale Glass Works Ltd. A.I.R. 1954 S.C. 429 observed that "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."

The Supreme Court further relied upon Benjamin on Sale, 8th Edition, p. 788, wherein it was held that "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." The Apex Court approved the position summarised in Byles on Bills, 20th Edition, p.23, which stated, "A cheque, unless dishonoured, is payment". The Apex Court stated the legal position thus: "The position, therefore, is that in one view of the matter there was, in the circumstances of this case, an implied agreement under which the cheques were accepted unconditionally as payment and on another view, even if the cheques were taken conditionally, the cheques not having been dishonoured but having been cashed, the payment related back to the dates of the receipt of the cheques and in law the dates of payments were the dates of the delivery of the cheques."

Thus, payment by cheque is payment and is only contingent if dishonoured.