TaxTMI 
TaxTMI 
2021 (2) TMI 966
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....nt herein as a hand loan. When demanded the repayment of the said amount, the petitioner herein has issued a self cheque dated 22.12.2018 for a sum of Rs. 5,00,000/- towards part payment and assured that the same will be honoured upon presentation. But the same was returned with an endorsement as 'account closed' and hence, the proceedings under Section 138 of the NI Act. 3. The learned Magistrate after perusing the materials on record and after recording of sworn statement of the complainant took the cognizance of offence punishable under Section 138 of the NI Act. Being aggrieved by the said order, he had preferred Crl.R.P.No.177/2019 and the Revisional Court also confirmed the order of the Magistrate in coming to the conclusion that the grounds, which have been urged, cannot be adjudicated conclusively at the stage of issuance of process and the scope of revision is also limited. The allegations made in the complaint on the face of the record have to be accepted and falsity cannot be entertained by the Revisional Court. Hence, the present petition is filed. 4. The grounds urged in this petition are that, undisputedly the alleged date of advancement of loan was barr....
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....the same is not an acknowledgement. 7. The other contention of the learned counsel for the petitioner is that the cheque though it is a self-cheque, the respondent was holding the same for a period of two months and it creates the suspicion in the mind of the Court. The third count of argument is that without an endorsement, the same was presented and not in dispute that it is a self-cheque. When such being the case, it does not attract Section 138 of the NI Act. 8. The learned counsel for the petitioner would submit that the respondent is not a holder-in-due course and hence, it requires an interference of this Court exercising the powers under Section 482 of Cr.P.C. 9. Learned counsel for the petitioner in support of his arguments, he relied upon several Judgments and also filed the written submissions in addition to the oral submissions. The learned counsel in the written submissions also extracted several Judgments and mainly pointed out that the question arises before the Court is whether the cheque issued for discharge of time barred debt would still form within the purview of Section 138 of the NI Act. The question raised by the petitioner's Counsel is that whet....
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.... reported in 2003(2) Ker.L.T. 613, he would contend that the question arises in this case is whether the time barred debt within Section 25(3) of the Contract Act and further observed that it is the failure to distinquish Civil Liability from Criminal Liability. 16. The learned counsel also relied upon the Kerala High Court Judgment in the case of Chacko Varkey v. Thommen Thomas reported in AIR 1958 KER 31, referring to this Judgment he would contend that, after the period of limitation expires, nothing short of an express promise will provide a fresh period of limitation; an implied promise is not sufficient. 17. The learned counsel referring to these judgments would contend that the cheque given for discharge of time barred debt will not constitute a promise in writing not even an implied promise but under Section 30 of the NI Act on dishonour give rise to Civil liability and not a Criminal liability under Section 138 of the NI Act. 18. The learned counsel also relied upon the judgment of the Apex Court in the case of A.V. Murthy v. B.S. Nagabasvanna reported in (2002) 2 SCC 642, wherein, the Supreme Court has observed that with regard to about four years back loan was a....
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....endorsement. 24. The learned counsel with regard to the point Nos.3 and 4 raised by him submits that, whether the Magistrate ought to look into both the complaint and accompanying documents together to scrutinize to arrive at a conclusion that offences made out; whether it attracts Section 138 of the NI Act constituting an offence would contend that the Judgments referred by the learned counsel appearing for the respondent in the case of HMT Watches Limited v. M.A.Abida and another reported in (2015) 11 Supreme Court Cases 776, is with regard to High Court had intervened in the matter of disputed facts i.e., cash and carry. In the case of S. Natarajan v. Sama Dharman reported in AIRONLINE 2014 SC 115, there was an admission in the books of accounts and the loan was acknowledged and admitted. In the case of M.M.T.C. Ltd. and another v. Medchl Chemicals and Pharma (P) Limited and another reported in (2002) 1 Supreme Court Cases 234, it was a case where the issue was whether or not the cheques were issued as security. In the case of Pulsive Technologies Private Limited v. State of Gujarat and others reported in (2014) 13 Supreme Court Cases 18, the issue was the accused would be li....
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....rejected in view of the fact and law laid down in The Bidar Urban Co-operative Bank Ltd,'s case, wherein there is no legally recoverable debt and that the cheque in question does not amount to acknowledgement of a debt as has been held in the very same judgment placing reliance on Krishna Janardhan Bhat v. Dattatrey. The learned counsel also would submit that the Trial Court has committed an error in not considering the fact that the cheque did not bear any endorsement at the back to pay amount to the bearer. It was neither an endorsement in Blank or in full. 29. Per contra, learned counsel appearing for the respondent would vehemently contend that this petition is filed under Section 482 of Cr.P.C, and the same has been used sparingly. It is also contended that no grounds was urged in the Revision regarding the same as time barred and for the first time in this petition the said new ground has been urged. 30. The learned counsel also would submit that it is not in dispute that a cheque issued is self-cheque and the word "bearer" is not struck off. The complaint averments clearly constitute an offence invoking under Section 138 of the NI Act. The cheque which was returned....
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.... against which cheque issued. Burden of proving non-existence of any debt or liability is on the accused, to be discharged at the trial. Prior to that complaint cannot be quashed by High Court under Section 482 of Cr.P.C. 34. The learned counsel also relied upon the judgment of the Apex Court in S. Natarajan's case (supra), in this Judgment, the Apex Court held that with regard to legally enforceable debt, the very contention that complaint alleging time barred cheque, it is held, merely because at time of issuance of cheque, debt had become time barred, complaint cannot be quashed. Whether debt was time barred or not can be decided only after evidence is adduced, it being mixed question of law and fact. 35. The learned counsel also relied upon the Judgment in the case of Pulsive Technologies Private Limited's case (supra), referring to this Judgment, he brought to the notice of this Court that paragraph No.10 of the judgment, the Apex Court in this Judgment has held that, when the High Court was dealing with a petition filed under Section 482 of Cr.P.C, for quashing the complaint, considered the factual issue as to whether the complainant had discharged its obligatio....
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....leged self cheque and the same is barred by limitation. 39. The learned counsel in the synopsis filed by him relied upon several judgments of different High Courts and also the Judgment of the Apex Court and mainly argued that there cannot be any valid acknowledgement of liability within the three years period of limitation and also contend that Section 25(3) of the Contract Act and the law laid down by the Division Bench referring to Section 25(3) of the Contract Act is direct conflict in the law laid down by the full bench. It is also contended that when the transaction was taken place four years prior to the issuance of the cheque and by issuing the self cheque it will not be a valid acknowledgement of debt. 40. The learned counsel vehemently contends that a cheque given in discharge of a time barred debt will not constitute a promise in writing not even an implied promise but will under Section 30 of the NI Act on dishonour give rise to a Civil liability and not a Criminal liability under Section 138 of the NI Act. 41. It is pertinent to note that the learned Counsel appearing for the respondent relied upon the Judgment of the Apex Court. The Apex Court in S. Natarajan....
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....has observed that the High Court failed to take note of the most vital caution sounded therein. Whether any money is paid by the accused to the complainant is a matter of evidence. In this case also it is the case of the complainant that he lent an amount of Rs. 35,00,000/- and in part payment towards the liability, two self-cheques are issued and the one was honoured and the present one is the subject matter of the cheque, which is in dispute and the petitioner also did not dispute issuance of two cheques whether the same is towards the liability or not has to be decided only after recording the evidence. 45. The Apex Court also in the case of HMT Watches Limited's case (supra), categorically held that Section 482 of Cr.P.C, can be exercised only to prevent abuse of process and further observed that sometimes on same set of facts, civil and criminal proceedings are also maintainable and further held that the sitting under Section 482 of Cr.P.C, while exercising the powers disputed question of fact cannot be disabled. Only the Trial Court can determine the disputed questions of fact. Having considered the principles laid down in the Judgments referred supra, though the petit....
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....f the word "bearer" is not scored off, he becomes the 'holder in due course' and it attracts Section 138 of the NI Act. The Delhi High Court also in its judgment in Adigear International's case (supra), reiterates the same and discussed the same in paragraph No.13 with regard to 'holder in due course' and so also in paragraphs Nos.23 and 25 discussed in detail and comes to a conclusion that once the issuance of the cheques is admitted and as the words "or bearer" have not been struck off, the complainant is held to be the holder of the said cheques in due course though it was written as self and thus he is entitled to receive the cash and dishonouring of the said cheques, he can very well file the complaint. 49. The Kerala High Court in Sarafudheen's case (supra), discussing the same in paragraph No.11 and in paragraph No.12 held that the cheque is styled as a self cheque and over and above it, the term "or bearer" has not been scored off. The holder of the cheque could be a 'holder in due course', who could maintain a complainant under Section 142 of the NI Act. 50. Having perused the principles laid down in the Judgment, the very contention t....