Appeal allowed; order set aside, complaint under Section 482 CrPC not quashed; Section 139 NI Act presumption requires evidence

SC allowed the appeal, set aside the impugned order and refused to quash the complaint under Section 482 CrPC. The Court held the cheque dated 28.04.2017 was within the three-year limitation period (limitation running from December 2016) and that the amount reflected a legally recoverable debt on the face of the instrument. Issues of limitation and rebuttal of the presumption under Section 139 of the NI Act require evidence and are mixed questions of law and fact, so early quashing before evidence was not justified.

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Issues Involved:
1. Whether the complaint under Section 138 of the NI Act was maintainable despite the debt being time-barred.
2. Whether the High Court was justified in quashing the criminal proceedings under Section 482 CrPC.

Issue 1: Maintainability of Complaint under Section 138 of NI Act

The appellant argued that the promissory note executed by respondent No.2 has the binding effect of a contract and hence the complaint under Section 138 of NI Act is maintainable. The appellant contended that the cheque amounts to a promise governed by Section 25(3) of the Indian Contract Act, 1872, which allows for the enforcement of a time-barred debt if promised in writing. The appellant relied on the decisions in S. Natarajan v. Sama Dharman and A.V. Murthy v. B.S. Nagabasavanna, which held that whether a debt is time-barred is a mixed question of law and fact and should be decided based on evidence.

Issue 2: Justification of High Court's Quashing of Proceedings

The High Court quashed the criminal proceedings under Section 482 CrPC, noting that the limitation for enforcing the promissory notes had expired before the issuance of the cheques. The High Court concluded that the complaint was not in respect of a legally recoverable debt. However, the Supreme Court found that the High Court misdirected itself by not considering that the promissory note indicated repayment by December 2016, making the debt recoverable within three years from that date, i.e., until December 2019. The cheque issued on 28.04.2017 was within this limitation period.

Judgment Summary:

The Supreme Court held that the High Court erred in quashing the complaint on the ground that the debt was time-barred. The Court emphasized that the limitation period for the promissory note began in December 2016, making the cheque issued in April 2017 within the limitation period. The complaint filed in July 2017 was therefore timely and the debt legally recoverable.

The Supreme Court set aside the High Court's order and restored the complaints to the file of the Chief Metropolitan Magistrate, Visakhapatnam, directing the trial to proceed expeditiously and be disposed of within six months. The appeals were allowed with no order as to costs.

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