1997 (1) TMI 550 - HC - Indian Laws

Appeal Dismissed in Debt Recovery Case: Lack of Evidence and Statute of Limitations

The appeal against the acquittal under section 138 of the Negotiable Instruments Act was dismissed. The court found that the lack of evidence establishing ... - Issues involved: Appeal against acquittal u/s 138 of Negotiable Instruments Act.Summary:The appellant, engaged in general merchandise manufacturing, had business dealings with the first respondent who issued a cheque of &8377; 5,45,000 to settle a debt. The cheque was dishonored, leading to a legal dispute under section 138 of the Negotiable Instruments Act. The trial court acquitted the first respondent due to lack of evidence establishing the debt and the timing of the cheque issuance in relation to the closure of the bank account.The appellant contended that the first respondent had borrowed amounts totaling &8377; 3,00,000, but the complaint only mentioned business dealings and the cheque issuance. The absence of these details in the complaint raised doubts about the credibility of the appellant's claims. Additionally, the lack of original receipts and discrepancies in the evidence further weakened the case.The debt in question was from 1985, and the cheque was issued in 1990, potentially exceeding the legal limitation period for debt recovery. As per the Explanation to section 138 of the Act, a debt must be legally recoverable for liability under section 138 to apply. Issuing a cheque for a time-barred debt does not automatically result in conviction under the Act.The court found no merit in the appellant's argument that the cheque issuance extended the debt recovery period. Ultimately, the appeal against the acquittal was dismissed as the lower court's decision was deemed appropriate based on the lack of evidence supporting the debt claim and the timing of the cheque issuance in relation to the account closure.