Time-barred debt cannot sustain cheque dishonour liability under Section 138 when no legally enforceable debt exists.

Section 138 of the Negotiable Instruments Act applies only when a cheque is issued towards a legally enforceable debt or other liability. Where the underlying transaction had arisen years earlier and no acknowledgment was made within limitation to extend time under Section 18 of the Limitation Act, the debt had become time-barred before the cheque was issued. A cheque issued for such a time-barred liability cannot satisfy the statutory requirement of enforceability, so the complaint lacked an essential ingredient of Section 138 and the summoning order could not be sustained.

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Issues: Whether a cheque issued towards a time-barred liability can attract penal liability under Section 138 of the Negotiable Instruments Act, 1881, and whether the summoning order could be sustained.

Analysis: Section 138 applies only where the cheque is issued for discharge of a legally enforceable debt or other liability. The underlying transactions were found to relate to the year 2011, while the cheque was issued in 2017. There was no acknowledgement within the limitation period so as to extend limitation under Section 18 of the Limitation Act, 1963. On that factual foundation, the liability had become time-barred before issuance of the cheque. A cheque issued for a time-barred debt does not satisfy the statutory requirement of a legally enforceable debt. The impugned summoning order therefore proceeded on a complaint that did not disclose the essential ingredient of Section 138.

Conclusion: The cheque was not issued in discharge of a legally enforceable debt or liability, and the summoning order could not be sustained.

Ratio Decidendi: Section 138 of the Negotiable Instruments Act, 1881 is attracted only when the cheque is issued towards a legally enforceable debt or other liability, and a cheque issued for a time-barred liability does not satisfy that requirement.

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