Time-barred debt cheques can create enforceable liability, and disputed notice or limitation issues may defeat quashing relief.

A cheque issued towards a time-barred debt can constitute a written promise to pay within Section 25(3) of the Contract Act, making the liability legally enforceable for Section 138 of the Negotiable Instruments Act; the statutory presumptions under Sections 118 and 139 support that the cheque was issued in discharge of a debt or liability. The HC also held that a Section 482 CrPC quashing petition could not succeed on limitation and alleged non-service of notice where the issues involved disputed facts and the relevant material was not conclusive. The complaint and summoning order were upheld, and the criminal proceedings were allowed to continue.

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Issues: (i) Whether issuance of a cheque for repayment of a time barred debt amounts to a written promise to pay the said debt within the meaning of Section 25(3) of the Indian Contract Act, 1872, and whether such promise creates a legally enforceable debt or liability for the purposes of Section 138 of the Negotiable Instruments Act, 1881. (ii) Whether, on the facts of the case, the petition under Section 482 of the Code of Criminal Procedure, 1973 was maintainable for quashing the complaint and summoning order on the plea of limitation and alleged non-service of notice.

Issue (i): Whether issuance of a cheque for repayment of a time barred debt amounts to a written promise to pay the said debt within the meaning of Section 25(3) of the Indian Contract Act, 1872, and whether such promise creates a legally enforceable debt or liability for the purposes of Section 138 of the Negotiable Instruments Act, 1881.

Analysis: A cheque is a written instrument signed by the drawer and promises payment on presentation. Section 25(3) of the Contract Act saves a written and signed promise to pay a debt barred by limitation and treats it as an enforceable contract. Read with the presumptions under Sections 118 and 139 of the Negotiable Instruments Act, a cheque issued towards a time barred debt is not treated as a payment of a non-enforceable liability; instead, it constitutes an enforceable promise and attracts the statutory presumption that it was issued for discharge of a debt or liability. The object of the cheque dishonour provisions and the legislative amendments were also relied upon to support an interpretation that advances cheque credibility and prevents evasion of liability by the drawer.

Conclusion: The issue was answered in favour of the respondent. Issuance of a cheque for a time barred debt amounts to a written promise under Section 25(3) of the Contract Act, and such promise creates a legally enforceable debt or liability for the purposes of Section 138 of the Negotiable Instruments Act.

Issue (ii): Whether, on the facts of the case, the petition under Section 482 of the Code of Criminal Procedure, 1973 was maintainable for quashing the complaint and summoning order on the plea of limitation and alleged non-service of notice.

Analysis: Whether the debt was actually time barred depended on facts, including the starting point of limitation, and was treated as a mixed question of law and fact not fit for quashing at the threshold. The alleged non-service of notice also involved disputed facts, and the relevant documents were not fully placed before the Court. In the absence of conclusive material showing that the statutory notice was invalid or that no enforceable liability existed, the inherent jurisdiction under Section 482 CrPC could not be invoked to terminate the complaint proceedings.

Conclusion: The issue was decided against the petitioner. The petition under Section 482 CrPC was not maintainable for quashing the proceedings on the pleaded grounds.

Final Conclusion: The complaint and summoning order were upheld, and the criminal proceedings were permitted to continue.

Ratio Decidendi: A cheque issued in writing for a debt barred by limitation can operate as an enforceable promise under Section 25(3) of the Contract Act, and disputes as to limitation or service of notice generally cannot be resolved by quashing proceedings under Section 482 CrPC when they involve disputed questions of fact.

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