TaxTMI 
TaxTMI 
2002 (2) TMI 1214
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....committed an offence punishable under section 138 of the Negotiable Instruments Act, 1881 ('the Act'). The appellant alleged that he and his two friends had advanced a sum of Rs. 7.5 lakhs to the respondent about four years back to enable him to start a petrol pump and that the respondent did not pay back the said amount, despite repeated demands and finally at the request of the appellant, on 30-3-1998, the respondent issued a cheque in favour of the appellant. The appellant presented the cheque for payment, but the cheque was dishonoured by the bank for the reason 'account closed'. Thereafter, the appellant issued a statutory demand notice and as the respondent failed to pay the amount, a complaint was filed before the Magistrate by the a....
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....e part of the respondent. He also contended that when a cheque is issued, under section 118 of the Act, it has to be presumed that it was drawn for consideration. It was further contended that even though the appellant and his friends advanced the loan about four years back, the respondent had acknowledged this liability in his balance-sheet and that, even for the purpose of a civil suit, suit debt or liability is not barred by limitation. 4. The respondent refused to accept notice, and we did not have the advantage of hearing him. The respondent seems to have contended that as the loan was advanced four years prior to the issuance of the cheque, the debt or the liability for which the cheque was drawn by him had ceased to be legally enfor....
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....1-3-1997, is also produced before us. If the amount borrowed by the respondent is shown in the balance sheet, it may amount to acknowledgement and the creditor might have a fresh period of limitation from the date on which the acknowledgement was made. However, we do not express any final opinion on all these aspects, as these are matters to be agitated before the Magistrate by way of defence of the respondent. 6. This is not a case where the cheque was drawn in respect of a debt or liability, which was completely barred from being enforced under law. If, for example, the cheque was drawn in respect of a debt or liability payable under a wagering contract, it could have been said that debt or liability is not legally enforceable as it is a....