Law: Negotiable Instruments Act (XXVI of 1881)

Section: 86

Law: Limitation Act (IX of 1908)

Section: 85,57,19

  Negotiable Instruments Act (XXVI of 1881)----S. 86-- "Demand draft" is a bill of exchange-Holder of such draft acquiescing, without consent of drawer, in qualified acceptance of draft by drawee-Drawer discharged thereby and not liable to pay amount mentioned in draft-Remedy of holder to recover amount Lies in suing drawee and not drawer-Transfer of Property Act (IV of 1882), S. 130.   Bhashyam & Adiga on Negotiable Instruments, 11th Edition, p. 424 ref.   Limitation Act (IX of 1908)----Arts. 85 & 57-Account, to attract provision of S. 85-Must not only be current and open but mutual as well i.e., there ought to be item's on either side indepen dent of one another, giving rise to independent obligations on one another-Banking transactions-Account revealing customer never having paid more than what was due to Bank-Account, cannot be held mutual-Article 57 and not Article 85 applicable.   In order to attract the provision of Article 85 of the Limitation Act, 1908, the account must be shown to be not only open and current but to be mutual as well. Mutual, open and current account means a course of dealing where each party furnishes credit to the other so the reliance that on settlement the accounts will be allowed, so that one will reduce the balance due on the other. To be mutual, there must be transactions on each side creating independent obligations on the other, and not merely transactions which created obliga tions on the one side, those on the other being merely complete or partial discharges of such obligations.   In order that an account can be said to be mutual there ought to be items upon either side independent of one another giving rise at one item or another to independent obligation and there must be mutual dealing in the sense that both parties come under liability to each other. In order for such mutuality of account to exist as will arrest the bar of the statute each party to the account must extend credit to the other on the faith of an admitted indebtedness. But where the account reveals that the defendant never paid more than what was due to the plaintiffs the account, though open and current,…