Complaint Quashed: Section 138 Inapplicable to Cheques for Time-Barred Debts; No Revival of Liability by Acknowledgment.

The court ruled that the complaint under Section 138 of the Negotiable Instruments Act was not maintainable because the debt was time-barred and no acknowledgment was made within the limitation period to revive the liability. Consequently, the summoning order dated 21.01.2008 was deemed unsustainable based on the Apex Court's precedent that penal provisions under Section 138 do not apply to cheques issued for time-barred debts. The petition was allowed, leading to the quashing of the complaint dated 13.12.2007 and all related proceedings. Applications Crl. M.A. Nos. 6167/2008 and 12878/2008 were disposed of accordingly.

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Issues Involved:
1. Maintainability of the complaint under Section 138 of the Negotiable Instruments Act.
2. Sustainability of the summoning order in light of the Apex Court's judgment in SLP (Crl.) 1785/2001.

Issue-wise Detailed Analysis:

1. Maintainability of the complaint under Section 138 of the Negotiable Instruments Act:

The core issue was whether the complaint dated 13.12.2007 under Section 138 of the N.I. Act was maintainable, given that the cheque in question was issued for a debt that was allegedly not legally recoverable at the time of issuance.

The facts revealed that the accused had borrowed Rs. 6,00,000 from the complainant in January 2002, which was to be repaid within six months. However, the repayment did not occur within the stipulated time, and subsequent cheques issued by the accused were dishonored. The complainant issued a legal notice within the stipulated period after the cheque was dishonored, but the accused failed to comply.

It was noted that neither the complaint, the notice, nor the affidavit mentioned any acknowledgment of the debt within the limitation period to keep the liability alive. The loan had become time-barred as of 31.08.2002, and the cheques issued later were beyond the limitation period.

The court emphasized that under Section 138 of the N.I. Act, an offence is committed only if the dishonored cheque was issued in discharge of a legally recoverable debt. The judgment of the Apex Court in Sasseriyil Joseph v. Devassia was cited, which held that a cheque issued for a time-barred debt does not attract penal provisions under Section 138 of the N.I. Act.

2. Sustainability of the summoning order in light of the Apex Court's judgment in SLP (Crl.) 1785/2001:

The summoning order dated 21.01.2008 was challenged on the grounds that it was not sustainable in view of the Apex Court's judgment in SLP (Crl.) 1785/2001. The Apex Court had affirmed that penal provisions under Section 138 of the N.I. Act are not applicable if the cheque was issued for a debt that was barred by limitation.

The complainant's counsel argued that under Section 25 of the Contract Act, the issuance of a cheque in lieu of an admitted liability constitutes an acknowledgment, thus making the debt legally enforceable. However, the court referred to Section 18 of the Limitation Act, which requires an acknowledgment of liability to be made in writing before the expiration of the limitation period.

The court also referenced a similar judgment by the Bombay High Court in Smt. Ashwini Satish Bhat v. Shri Jeevan Divakar Lolienkar, where it was held that a cheque issued beyond the limitation period does not constitute a legally enforceable debt, and thus, does not attract Section 138 of the N.I. Act.

In conclusion, the court found that the debt in question was time-barred, and no acknowledgment was made within the limitation period to revive the liability. Therefore, the complaint under Section 138 of the N.I. Act was not maintainable, and the summoning order was unsustainable.

Judgment:

The petition was allowed, and the complaint dated 13.12.2007, along with all proceedings emanating from it, was quashed. The applications Crl. M.A. Nos. 6167/2008 and 12878/2008 were disposed of accordingly.

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