TaxTMI 
TaxTMI 
2009 (10) TMI 965
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.... Prajan Kumar Jain has been arrayed as the accused. 2. The short point raised in this petition is that the two cheques i.e. cheque no.7375535 dated 25.3.2005 for Rs. 5 lakhs and cheque no.7375536 dated 30.4.2005 for Rs. 5 lakhs do not come within the ambit of a 'legally enforceable debt'. The said cheques had been issued for the discharge of a liability arising out of an agreement dated 14.6.2000; and having been issued on 25.3.2005 and 30.4.2005 were for the discharge of debt which had become time barred. The complaint is thus liable to be quashed. 3. To appreciate this submission salient paragraphs of the complaint filed by Ravi Malhotra are reproduced.: "2. That by an agreement dated 14.06.2000, entered into by the complai....
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....s. 5,00,000/-." 4. Learned counsel for the petitioner has placed reliance upon a judgment reported in Vijay Polymers Pvt. Ltd. & Anr. vs. Vinnay Aggarwal 162 (2009) DLT 23 to support his submission that the cheques issued in lieu of a time barred debt does not come within the definition of a 'legally enforceable debt' as is contained in the Explanation of Section 138 of the NI Act. Cheques issued for the discharge of such a time barred debt cannot become the subject matter of a complaint under Section 138 of the NI Act; the agreement in this case having terminated on 14.6.2000 and cheques having been issued almost five years later i.e. on 25.3.2005 and 30.4.2005, there being no enlargement of period of limitation, it is clear that at thi....
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....stion can only be agitated before the Magistrate by way of a defence of the respondent. Reliance has been placed upon A.V.Murthy vs. B.S.Nagabasavanna (2002) 2 SCC 642 as also MMTC Ltd. and Anr. vs. Medical Chemicals and Pharma (P) Ltd. and Anr. IV (2001) CCR 316 (SC) to support this argument. There is also no specific requirement that the complainant must specifically allege in the complaint that there was a subsisting liability; burden of proving that there was no such existing debt or liability is on the respondents which they have to discharge at the stage of trial. It is submitted that in Woods & Ors. Vs. State & Anr. 121 (2005) DLT 314, it has been held that where there is no inherent defect in a complaint under Section 138 of the NI ....
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....at nothing contained in this section shall apply unless- (a).......... (b).......... (c).......... Explanation. - For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability." 8. At this juncture, it would also be appropriate to take note of Section 18 of the Limitation Act which inter alia reads as follows: "18. Effect of acknowledgement in writing-(1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgement of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any perso....
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....y the balance amount in a short time. This acknowledgment even as per the complaint was much after the statutory period of three years which is the prescribed period of limitation for the recovery of an outstanding amount. An acknowledgment to be encompassed within the ambit of Section 18 of the Limitation Act has to be an acknowledgment in writing as also within the prescribed period of limitation. These are the twin requirements which have to be fulfilled in order to be a valid acknowledgment under Section 18 of the Limitation Act which is admittedly not so in the instant case. In this case this acknowledgment to pay the balance amount was in terms of the settlement dated 26.1.2005 i.e. much after the statutory period of three years; it a....