TaxTMI 
TaxTMI 
2024 (8) TMI 706
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....0,000/- borrowed by the Petitioner in cash and Rs. 4,40,000/- borrowed by way of cheques, thereby totalling the amount of Rs. 5,00,000/-. 3. It is the case of the Petitioner that the Petitioner had issued 12 cheques of Rs.24,000/- each to the Respondent, all drawn on Syndicate Bank, Connought Circus, New Delhi. It is stated that the Petitioner had already repaid a sum of Rs.90,000/- to the Respondent through a few cheques. 4. It is stated that the cheques were deposited by the Respondent on 10.12.2019. It is stated that out of 12 cheques, 3 cheques were honoured and the remaining 9 cheques were dishonoured and the details of the same read as under: S. No. Cheque No. Date Amount (INR) 1. 487260 20.10.2019 Rs.24,000/- 2. 487261 20.10.2019 Rs.24,000/- 3. 487262 20.10.2019 Rs.24,000/- 4. 487266 30.10.2019 Rs.24,000/- 5. 487267 30.10.2019 Rs.24,000/- 6. 487268 30.10.2019 Rs.24,000/- 7. 487269 31.10.2019 Rs.24,000/- 8. 487270 31.10.2019 Rs.24,000/- 9. 487271 31.10.2019 Rs.24,000/- Total Rs. 2,16,000/- 5. A legal notice under Section 138 of the Negotiable Instrument Act, 1881 (hereinafter referred to as "NI Act") was issued by the Respondent to....
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....to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.-For the purposes of this section, "debt of other liability" means a legally enforceable debt or other liability." The explanation appended to Section 138 of the NI Act indicates that a cheque can be issued only for a legally enforceable debt or other liability. 10. It is necessary to keep in mind that a cheque is a promise to pay a certain amount of money to the holder of the cheque. Section 25 (3) of the Indian Contract Act, 1872 stipulates that a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits, is an enforceable contract. 11. The issue as to whether by subsequent conduct did the Pet....
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....een taken into consideration by the High Court for the purpose of counting the limitation. Perhaps what is in the mind of the High Court is that by the time, the cheque in question was issued the debt had become barred by limitation because no acknowledgement was obtained before the expiry of three years from the date of loan. However, as noted above, the understanding was to discharge the liability within a period of seven years. Prima facie, we are of the view that the period of limitation would start reckoning from the expiry of the period of seven years. 8. Once a cheque is issued and upon getting dishonoured a statutory notice is issued, it is for the accused to dislodge the legal presumption available under Sections 118 and 139 reply of the N.I. Act. Whether the cheque in question had been issued for a time barred debt or not, itself prima facie, is a matter of evidence and could not have been adjudicated in an application filed by the accused under Section 482 of the CrPC." (emphasis supplied) 12. The object of the NI Act is to enhance the acceptability of cheques and inculcate faith in the efficiency of negotiable instruments for transaction of business. In the opinion....
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....er liability" must have a meaning of its own, the legislature having used two distinct phrases. The expression "or other liability" has a content which is broader than "a debt" and cannot be equated with the latter. In the present case, the cheque was issued in close proximity with the commencement of power supply. The issuance of the cheque in the context of a commercial transaction must be understood in the context of the business dealings. The issuance of the cheque was followed close on its heels by the supply of power. To hold that the cheque was not issued in the context of a liability which was being assumed by the company to pay for the dues towards power supplied would be to produce an outcome at odds with the business dealings. If the company were to fail to provide a satisfactory LC and yet consume power, the cheques were capable of being presented for the purpose of meeting the outstanding dues." 18. The judgments from Indus Airways [Indus Airways (P) Ltd. v. Magnum Aviation (P) Ltd., (2014) 12 SCC 539 : (2014) 5 SCC (Civ) 138 : (2014) 6 SCC (Cri) 845] to Sunil Todi [Sunil Todi v. State of Gujarat, (2022) 16 SCC 762 : 2021 SCC OnLine SC 1174] indicate that much of the....