Time-barred debt does not support cheque dishonour liability where the debt was not legally enforceable on issuance.

A cheque issued for discharge of a debt already barred by limitation does not, by itself, satisfy the requirement of a legally enforceable debt or liability under Section 138 of the Negotiable Instruments Act. The statutory presumption under Section 139 remains rebuttable, and may be displaced where the admitted facts show a long lapse of time between the underlying transaction and the cheque, and where the claim is not directly supported by the complainant's own version. In such circumstances, continuation of the prosecution may amount to abuse of process, and quashing under Section 482 of the Code of Criminal Procedure may follow.

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Issues: Whether a cheque issued towards a time-barred debt constitutes a cheque issued for discharge of a legally enforceable debt or liability so as to attract Section 138 of the Negotiable Instruments Act, and whether the criminal proceedings were liable to be quashed under Section 482 of the Code of Criminal Procedure, 1973.

Analysis: Liability under Section 138 arises only when the cheque is drawn for discharge of a legally enforceable debt or liability. A cheque issued for a debt already barred by limitation does not, by itself, amount to an acknowledgement making the debt enforceable. The presumption under Section 139 is rebuttable, and on the admitted facts the underlying business transaction was of 2003, while the cheque was issued only in 2010 after a long lapse of time. The record also indicated that, even on the complainant's version, the alleged amount was payable to the complainant's wife and not directly to the complainant. Continuation of the prosecution in these circumstances would amount to abuse of process.

Conclusion: The cheque was issued in respect of a time-barred and unenforceable debt, so Section 138 was not attracted and the proceedings were liable to be quashed.

Ratio Decidendi: A cheque issued for a debt barred by limitation does not attract Section 138 unless the debt is legally enforceable on the date of issuance; the presumption under Section 139 remains rebuttable and may be displaced on the admitted facts.

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