TaxTMI 
TaxTMI 
2025 (7) TMI 1946
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....he present appeal are that the complainant filed a complaint before the learned Trial Court against the accused for the commission of an offence punishable under Section 138 of the NI Act. It was asserted that the complainant is running a Social Leasing (India) Ltd. and Social Finance Company at Paonta Sahib. The accused borrowed a sum of Rs.2,09,000/- on 10.4.1996 from the complainant-company. He agreed to repay the amount in instalments. He defaulted in the payment of the instalments, and an amount of Rs.3,73,000/- became due. He issued a cheque of Rs.3,73,000/- on 18.10.1999 to discharge his liability. The complainant presented the cheque to the Bank, but it was dishonoured with an endorsement 'account closed'. The complainant issued a legal notice to the accused asking him to repay the money, but the accused failed to do so. Hence, the complaint was filed before the learned Trial Court to take action as per law. 3. The learned Trial Court recorded the preliminary evidence and found sufficient reasons to summon the accused. When the accused appeared before the Court, notice of accusation was put to him, to which he pleaded not guilty and claimed to be tried. 4. The complai....
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....judgment passed by the learned Trial Court be set aside. 8. I have heard Mr. Karan Singh Kanwar, learned counsel for the appellant/complainant, Ms. Divyani Sharma, learned Senior Counsel, assisted by M/s Shivam Sharma and Shrishti Negi, learned counsel for the respondent/accused. 9. Mr. Karan Singh Kanwar, learned counsel for the appellant/complainant, submitted that the learned Trial Court erred in appreciating the material on record. It was duly proved by the statement of the complainant and his witnesses that the accused had issued a cheque in discharge of his legal liability. Learned Trial Court erred in holding that the cheque issued for the repayment of a time-barred debt will not attract the provisions of Section 138 of the NI Act. There is a presumption that the cheque was issued for consideration in discharge of the legal liability, and the burden is upon the accused to rebut this presumption; however, the accused failed to produce any evidence to rebut the presumption. Learned Trial Court erred in holding that the complainant-Company was required to prove the documents showing the advancement of the loan. There is a presumption under Section 27 of the General Clause....
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.... Co. Ltd. Vs. State of Gujarat and another, 2024:GUJHC:70578; (vi) Muralilal Birdhichand Rawat, Partner of the Ratnamani Foods Vs. State of Gujarat & Anr. R/Criminal Misc. Application (for Leave to Appeal) No. 2764 of 2021; (vii) Rajaram through LRs Vs. Maruthachalam (since deceased) 2023 SCC OnLine SC 48; (viii) A. Yesubabu Vs. D. Appala Swami & Anr. 2003 (3) APLJ 371 (HC); (ix) Sasseriyil Joseph Vs. Devassia 2001CRILJ24; (x) Vijay Polymers Pvt. Ltd. and Anr. Vs. Vinnay Aggarwal 2009(110) DRJ 592; (xi) Kiran Finance Company Vs. H. Sukhdev Kishan, Cr. Appeal No. 181/SBA of 2003, decided on 3.10.2005; (xii) Shri Sujies Benefits Fund Ltd. Vs. Sultan 2016 SCC OnLine Mad 8371; (xiii) S. Kamatchi & Others Vs. M/s Arkaa Medicament 2009 (3) MWN (Cr.) DCC 31; (xiv) Om Prakash Vs. Manoj Kumar and another 2024 SCC OnLine HP 2595; (xv) Prakash Chimanlal Sheth vs. T. Ramalingam Nadar and others 2022 SCC OnLine Bom 10161; and (xvi) Atma Ram and others Vs. State of Rajasthan (2019) 20 SCC 481; 11. I have given considerable thought to the submissions made at the bar and have gone through the reco....
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.... "good and sufficient grounds", "very strong circumstances", "distorted conclusions", "glaring mistakes", etc., are not intended to curtail the extensive powers of an appellate court in an appeal against acquittal. Such phraseologies are more in the nature of "flourishes of language" to emphasise the reluctance of an appellate court to interfere with an acquittal than to curtail the power of the court to review the evidence and to come to its own conclusion. (4) An appellate court, however, must bear in mind that in case of acquittal, there is a double presumption in favour of the accused. Firstly, the presumption of innocence is available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, the accused, having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed, and strengthened by the trial court. (5) If two reasonable conclusions are possible on the basis of the evidence on record, the appellate court should not disturb the finding of acquittal recorded by the trial court." 40. Further, i....
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....e on record." 13. A similar view was taken in Bhupatbhai Bachubhai Chavda v. State of Gujarat, 2024 SCC OnLine SC 523, wherein it was observed: - "6. It is true that while deciding an appeal against acquittal, the Appellate Court has to re-appreciate the evidence. After re-appreciating the evidence, the first question that needs to be answered by the Appellate Court is whether the view taken by the Trial Court was a plausible view that could have been taken based on the evidence on record. Perusal of the impugned judgment of the High Court shows that this question has not been adverted to. The Appellate Court can interfere with the order of acquittal only if it is satisfied after re-appreciating the evidence that the only possible conclusion was that the guilt of the accused had been established beyond a reasonable doubt. The Appellate Court cannot overturn the order of acquittal only on the ground that another view is possible. In other words, the judgment of acquittal must be found to be perverse. Unless the Appellate Court records such a finding, no interference can be made with the order of acquittal. The High Court has ignored the well-settled principle that an ord....
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.... 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 or other liability" means a legally enforceable debt or other liability.] 17. It is apparent from the explanation that the cheque has to be issued for repayment towards the legally enforceable debt or other liability. An amount barred by limitation is not a legally enforceable debt, and a cheque issued towards the repayment of such a loan will not fall within the definition of Section 138 of the NI Act. 18. It was laid down in Girdhari Lal Rath v. P.T.V. Ramanujachari, (1998) 94 Comp Cas 139 that when the loan was taken in the year 1995 and the cheque was issued in 1999, the cheque was issued for a debt which had become barred by limitation and it does not fall within the purview of Section 138 of the NI Act. It was observed: - "7. The alleged loan was advanced in the year 1985, and the cheque was issued in the year 1990. By the time the cheque was issued, the debt appears to have been barred by limitation because no acknowledgement is alleged to have been obtained by the appellant from the first respondent-acc....
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....imilar to the second was rejected by this Court vide Judgment dated 20.4.2006 in Narendra V. Kanekar v. The Bardez Taluka Co-op. Housing Mortgage Society Ltd., Criminal Revision Application No. 3/2006, observing that: "Mere giving a cheque, without anything more, will not revive a barred debt, because a cheque has to be given, as contemplated by the explanation to Section 138 of the Act, in discharge of a legally enforceable debt." 20. Punjab and Haryana High Court also held in Manjit Kaur v. Vanita, 2009 SCC OnLine P&H 10337: (2010) 3 RCR (Civil) 693: (2010) 3 RCR (Cri) 574 that a cheque issued to discharge a time barred debt does not attract the provisions of section 138 of the NI Act. It was observed at page 695: "8 ...It emanates from this evidence that when the alleged cheque Ex. P.1 was issued at that point in time, a period of more than four years had already elapsed since the day of advancement of the disputed amount as a loan. In re: Ashwini Satish Bhat (Mrs.) v. Jeevan Divakar Lolienkar, 2000 (1) R.C.R. (Rent) 214: 2000 (1) Recent Criminal Reports (Criminal) 829, it has been observed as under: - "The ruling upon which reliance has been placed....
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....he matter is viewed in the background of the observations rendered in re: Ashwini Satish Bhat (Mrs.) (supra), it turns out that the accused-respondent had issued the cheque in 2003 when the debt had already become time-barred. The acknowledgement of the alleged amount in 2003 was not a valid acknowledgement under Section 18 of the Limitation Act, and consequently, it was not a legally enforceable debt. 21. Gauhati High Court held in Amulya Patowary v. Amarendra Choudhury, 2013 SCC OnLine Gau 519: (2014) 5 Gau LR 28: (2014) 1 BC 705 that the cheque for issuing time-barred debt does not attract the provisions of Section 138 of the NI Act. It was observed: "37. A careful-reading of section-138 shows that though section 138 makes/it an offence if a chequers dishonoured for insufficiency of fund by the bank provided that the cheque has been issued for discharge, in whole or in part, of the debt or other liability, the Explanation to section 138 makes it abundantly clear that the expression "debt or other liability", appearing in the body of section 138, means "a legally enforceable debt or other liability". 38. To put it a little differently, in order to attract the....
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....the registration of documents, and is made on account of natural love and affection between parties standing in a near relation to each other, or unless (2) it is a promise, to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do; or unless (3) it is a promise, made in writing and signed by the person to be charged therewith or by his agent generally or specially authorised 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." 23. From a cautious and careful reading of the provisions of section 25 of the Contract Act, 1872, as a whole, and, particularly, clause (3) thereof, it becomes clear that the law does not prohibit a person to make a promise, in writing and signed by him, to pay wholly, or in part, a debt, which his creditor might have enforced payment of, but for the law of limitation in instituting a suit for recovery of money, meaning thereby that even if a debt becomes time-barred and a suit cannot be instituted for recovery of such a debt by the cr....
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....orrectly appreciate the submissions made on behalf of the appellant, let me point out that a cheque, as defined by section 6 of the NI Act, means, in substance, a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. 28. From a bare reading of the definition of the cheque, what clearly transpires is that it is a bill of exchange, which is drawn on a specified bank, making the bearer of the cheque entitled to receive. On demand, payment of the sum of money mentioned in the cheque. A cheque can, at best, be construed to mean an acknowledgement, in writing, of a debtor's liability/which may or may not have remained legally enforceable. 29. Coupled with the above, section 18 of the Limitation Act, 1963, which embodies the provisions, as regards extension of liability, lays down as follows: "18. Effect of acknowledgement in writing.- (1) Where before the expiration of the prescribed period for a suit or application in respect or 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 ....
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....refers to, and relies upon, it may be noted that any agreement made without consideration is void unless, in the light of section 25(3), it is a promise made in writing and signed by the person to be charged therewith or by his agent generally and specially authorized in that behalf to pay, wholly or in part, the debt of which the creditor might have enforced payment, but for the law for the limitation of suits. 32. In other, words, in order to take recourse to section 25(3), one has to show that a person, who would have been liable to repay a debt, but because of the period of limitation prescribed for institution of the suit, has made a promise, in writing, and signed the same. If such a 'promise', as contemplated by section 25(3), is made, it would make the 'promise' a contract and would, therefore, be legally enforceable. 33. It is, thus, clear that unless there is 'a promise' made, in writing, and signed by the person to be charged therewith, the writing would not lead to an enforceable contract. A cheque can, by no means, be treated as a 'promise' made, in writing, to make payment of a debt, which is, otherwise, not enforceable by law; more so, in the facts ....
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....have had also proved that the said cheque was issued in respect of an existing or legally enforceable or recoverable debt. Later part of the requirement of section 138 of the NI Act has not, however, been proved or satisfied by the appellant. 48. Because of the failure of the appellant to prove that the debt or liability, which the respondent sought to discharge, was a legally enforceable debt or liability, no offence, under section 138 of the N1 Act, could have been said to have been made out. The learned appellate court was, therefore, wholly correct in pointing out that when the debt or liability, in question, was time-barred and not recoverable by institution of appropriate suit, the mere dishonour of the cheque, for insufficiency of fund, would not give rise to the commission of an offence punishable under section 138 if the debt or liability, which is sought to be discharged, in whole or in part, is not legally enforceable. xxxx 53. What crystallises from the above discussion is that when the cheque, dated 3.7.2006, was issued, the debt or liability, which the respondent had incurred, already stood barred by limitation. Since the debt or liability h....
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....ion. -For the purposes of this section, - (a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set off, or is addressed to a person other than a person entitled to the property or right, (b) the word "signed" means signed either personally or by an agent duly authorised in this behalf, and (c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right." 25. A bare perusal of the aforesaid provision clearly goes on to show that for analysing the limitation of a liability beyond a period of three years, the acknowledgement, if any, must be there before the period of limitation is over, which is not the case in hand. 26. Further, it has been held time and again by the Apex Court as well as by the various High Courts that mere giving of a cheque, without anything more, will not revive a time-barred debt, because cheque has t....
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....ed in order to be a valid acknowledgement under Section 18 of the Limitation Act. Relevant portion of the aforesaid judgment is reproduced hereunder: "10.... This acknowledgement, 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 acknowledgement to be encompassed within the ambit of Section 18 of the Limitation Act has to be an acknowledgement 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 acknowledgement under Section 18 of the Limitation Act, which is admittedly not so in the instant case. In this case, this acknowledgement 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 also does not speak of the acknowledgement being in writing. It was thus not a valid acknowledgement." 29. A perusal of the record reveals that, in the instant case, the last business transaction between the parties took place on 26.7.2005 and thereafter, no other business transaction took place betw....
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.... 138 of the Negotiable Instruments Act, the judgment of the lower appellate Court as confirmed by the High Court is unassailed. Therefore, the special leave petition is dismissed. (underlined by me) 31. The said decision of Kerala High Court was confirmed by the Hon'ble Supreme Court in Special Criminal Appeal No. 1785/2001 dated: 10.09.2001 was referred by the Learned single Judge of this High Court in case of K.V. Subba Reddy v. N. Raghava Reddy [Criminal Appeal No. 545/2010 dated: 28-02-2014.], and considering the material discrepancies in the evidence adduced by the complainant and also having regard to the question of limitation held that, the complainant has failed to prove the case and acquittal of the accused for offence under Section 138 of N. The I Act was confirmed. In the above case, also dishonour of a cheque issued to discharge time-barred debt was in question. 32. Further the High Court of Andhra Pradesh in case of Girdharilal Rathi v. P.T.V. Ramanujachari [(1997) 2 Crimes 658.], held that, in the case of cheque issued for time barred debt was dishonoured, the accused cannot be convicted under Section 13 8 of Negotiable Instrument Act o....
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.... his duly appointed agent. To put it in short, unless a specific contract in the form of novation is created with regard to payment of time-barred debt, Section 25(3) of the Indian Contract Act cannot be invoked. Therefore, in view of the principles stated in those decisions, the argument of the Learned Counsel for the appellant that the said cheque can be construed as a promise to pay time-barred debt is also not tenable. 35. The High Court of Delhi in a case of Jage Ram Karan Singh v. State [SCC Online Del 9486], in Criminal Revision No. 82/2013, dated: 31.07.2019, relying on the Judgment of Vijay Polymers Pvt. Ltd. v. Vijay Aggarwal [2009 (110) DRJ], and the Judgment of Hon'ble Supreme Court in case of Sasseriyal Joseph, (supra) held that, the responsibility of the accused was time barred on the date of issuance of cheque. Relying on the Judgment of the Bombay High Court in the case of Kamalaksha Laxman Prabhu v. S.G. Mayekar [(2009) 1 Crimes 195 (Bom.)], at para Nos. 25, 26 & 27, it is held as under: 25. A bare perusal of the aforesaid provision clearly goes on to show that for analysing the limitation of a liability beyond a period of three years....
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....chari (1997) 2 Crimes 658, then by this Court in the case of Smt. Ashwini Satish Bhat v. Shrijeevan Divakar Lolienkar, (1999) 1 GLT 408) and Joseph v. Devassia, (2003 K.L.T. (3) 533), and it appears that the last Judgment also has the imprimatur of the Apex Court in Special Leave to Appeal (Cri) No. 1785/2001, which was dismissed by Order dated 10.09.2001." 8. The same is the view in Jagadamba Parishar Sahakari Pat Sanstha Maryadit, (supra), this Court had also observed that mere giving of a cheque without anything more will not revive a barred debt, because cheque has to be given, as contemplated by the explanation in discharge of a legally enforceable debt. In this context, reference to the Judgment of the learned Division Bench in N. Ethirajulu Naidu v. K.R. Chinnikrishnan Chettiar (supra) can again be made. The learned Division Bench has stated that what Section 25(3) of the Contract Act requires is an express promise made in writing and signed by the person to be charged therewith. Nothing short of an express promise, therefore, will provide a fresh period of limitation. It is settled law that an implied promise is not sufficient. The learned Division Bench also noted....
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....nconditional undertaking or promise in writing, either expressly or impliedly, so as to attract the criminal offence under Section 138 of N.I Act. This was elaborated in Sasseriyil Joseph's case (supra), which is affirmed by the Hon'ble Supreme Court as stated above. A cheque given in discharge of a time-barred debt will not constitute a promise in writing, not even an implied promise, so as to attract a criminal liability under Section 13 8 of N.I Act. 26. A similar view was taken by the Gujarat High Court in Dilipkumar Manharlal Vyas, since deceased through Legal heirs And Ors Vs. Girdliarlal Hirajibhai and ors 2023(2) Crimes 366 (Guj.) wherein it was observed: 9. On the "Second issue" of "time-barred debt" is concerned: 9.1 According to learned advocate Mr. J.R. Shah, appearing for the appellants-original complainant, the date of issuance of the cheque is 31.12.2004. As per his submission, once the cheque was drawn there was acknowledgment of the debt and unless contrary is proved by the accused, the presumption arose with regard to the fact that the cheque has been given or drawn for consideration as provided under Section 118(a) and the co....
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....nt to show that within the prescribed period of limitation, the debt was acknowledged by the accused in writing, which is required under Sub-Section (3) of Section 25 of the Indian Contract Act. As noticed at Paragraph No.5.3 in the case of Sasseriyil Joseph (supra), wherein the Hon'ble Supreme Court, in no uncertain terms, after perusing the decision of the Kerala High Court in Criminal Appeal No.161 of 1994 and after finding that the language in Section 138 of the N.I. Act was clear and unambiguous, confirmed the judgment of the Kerala High Court. In the said judgment of the Kerala High Court in Paragraph Nos. 6 and 7, it is held as under: "6. The only question that arises for consideration in this appeal is whether the respondent who issued the cheque in question in discharge of a time-barred debt is liable under Section 138 of the Negotiable Instruments Act. In this case, the complainant had admitted that the loan was advanced to the accused in January 1988, and the cheque was issued in February 1991. Thus, by the time the cheque was issued, the debt was barred by limitation since there was no valid acknowledgement of the liability within the period of limitation. ....
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....oan was advanced makes the present transaction time-barred as of 31.12.2004. Admittedly, the date of loan as emerged on record is 15.12.1998, and by applying the prescribed period of three years, as per Article 19 of the Limitation Act, would come to an end on 15.12.2001, whereas the disputed cheque bears the date 31.12.2004. In the absence of any document being brought on record by the complainant that the debt was acknowledged during the prescribed period of limitation, the cheque was time-barred. In light of the decision of the Hon'ble Supreme Court in the case of Sasseriyil Joseph (supra), the same cannot be treated "as legally enforceable debt" or other "liability" as appeared in the Explanation attached to Section 138 of the N.I. Act." 27. It was held in Shriram Transport Finance Co. Limited vs. State of Gujarat and Ors. (27.09.2024 - GUJHC): MANU/GJ/1613/2024 that a cheque issued to repay the time-barred debt is not towards the legally enforceable debt. It was observed: - "10. It appears that the trial Court has rightly dealt with the aforesaid two issues and after considering the oral as well as documentary evidence in light of the issues framed by the trial....
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.... High Court has held that a cheque which was issued after the expiry of three years from the date of the loan was in respect of a time-barred debt and dishonour of the said cheque would not attract section 138 of the Act. 12. In Krishna Janardhan Bhat v. Dattatraya G. Hegde, MANU/SC/0503/2008: 2008:INSC:44 : (2008) 4 SCC 54, the Supreme Court has held that section 138 of the Act has three ingredients viz. (i) that there is a legally enforceable debt; (ii) that the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which presupposes a legally enforceable debt; and (iii) that the cheque so issued had been returned due to insufficiency of funds. The proviso appended to the said section provides for compliance with legal requirements before a petition can be acted upon by a court of law. Section 139 of the Act merely raises a presumption regarding the second aspect of the matter. The existence of legally recoverable debt is not a matter of presumption under section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for the discharge of any debt or other liabili....
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.... 12. In the impugned judgment and order, the trial Court has discussed the evidence in great length and detail and has given reasons in support of each of the findings recorded by it. On behalf of the appellant, nothing has been pointed out to show that the findings recorded by the learned Magistrate are, in any manner, perverse. 13. The trial Court has also observed that the debt in question was time-barred. Further, it reveals that from 2016, the respondent accused has not paid the installments regularly and if the cause was to be considered from 2016 then the complaint was required to be filed within period of three years i.e. 2019 and instead of that the complaint was filed in 2022 and therefore, after considering the sufficient evidence on record and after considering the submissions made by and on behalf of all the concerned before the trial Court and after evaluating the evidence in proper manner, the trial Court has rightly acquitted the present respondent accused.. 14. In view of the above facts and view of the observations made by the Coordinate Bench of this Court in the abovereferred decision, I am of the opinion that the complainant has not prov....
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....s. 5 lakhs, on 19.08.2011 partner Shashikant withdrew Rs. 4,50,000/-. The account was operated with the joint signature of my and Bhavesh Bhai. The complainant has produced the reply to the demand notice below Exh . 13 wherein, the accused has contended that within 1 year, the firm was dissolved and to settle the accounts as per the understanding, undated Bank cheques were given to show in the books of accounts. The share of the partners was misused by the complainant with a view to evading the payment of his share as per the partnership deed. It is further contended that though the profit was made by the partnership firm, two persons have misappropriated the amount, and therefore, the partnership firm was dissolved. Statement of account of the partnership firm is produced below, Exh. 17 of the Kalupur Co-operative Commercial Bank suggests that there is an entry with regard to the clearing of the cheque on 12.01.2011 in the account of the respondent-accused of Rs. 5,00,000/-. Undisputedly, the cheque which was dishonoured was of 2015, which is after 4 years of lending of the amount." 6. At this stage, the judgment of the Apex court reported in the case of Sasseriy....
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....y in agreement with the view expressed by the learned Judge in the decision referred to above." 7. Considering the overall facts and the law laid down by the Apex Court in the case of Sasseriyil Joseph (supra), it transpires that the amount was lent by the complainant through bank to the respondent-accused in the year 2011 and for repayment of the aforesaid debt, cheque was issued in the year 2015 i.e after three years of the limitation period. During this period, there was no acknowledgement given by the respondent-accused acknowledging his liability towards the debt. 8. In view of the above, the learned appellate court was justified in reversing the judgment and order of conviction and acquitting the respondent-accused of the offence punishable under section 138 of the N.I. Act. 29. A similar view was taken by Kerala High Court in Laxmi Finance & Investments v. B. Mahalinga Shetty, 2024 SCC OnLine Kar 240, wherein it was observed: "10. The complainant in the entire complaint averments did not plead anything about the loan borrowed by the accused on the executed on-demand promissory note. However, during his evidence, he produced the loan application ....
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....on the date of issuance of the cheque dated 19-4-2007, there was no legally enforceable debt. 12. Learned counsel for the complainant has argued that issuance of cheque Ext. P-1 itself is an acknowledgement of debt, and the years commences from the date of issuance of the cheque. In support of such contention, reliance is placed on the judgment of the Hon'ble Apex Court in K. Hymavathi v. State of Andhra Pradesh, AIR 2023 Supreme Court 4369, wherein it has been observed and held that: "In respect of a promissory note payable at a fixed time, the period of limitation, being 3 years, would begin to run when the fixed time expires" 13. In the said case before the Hon'ble Apex Court, the cheque was issued within a period of three years. Therefore, the principles enunciated in this judgment have no application to the facts of the present case. 14. Learned counsel for the accused in support of his contention that time-barred debt cannot be enforced as it is not legally recoverable debt as on the date of issuance of the cheque, Ext. P-1 relied on the Coordinate Bench Judgment of this Court in Sri Nandi Greens Agro Farms and Developers(Private) L....
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....e years. If no such documents are executed by the accused acknowledging the debt, then the claim of the complainant based on Ext. P-1 is seeking to enforce that the time-barred debt cannot be legally sustained. The claim of the complainant is based on a time-barred debt. Therefore, the contention of learned counsel for the complainant that issuance of cheque Ext. P-1 itself amounts to an acknowledgement that time-barred debt cannot be accepted in view of the principles enunciated in the aforementioned judgment. 30. A similar view was taken by the Andhra Pradesh High Court in Padala Veera Venkata Satyanarayana Reddy v. State of Andhra Pradesh, 2019 SCC OnLine AP 8, wherein it was observed: 8. The proposition laid down by the Apex Court that by virtue of Section 25(3), the purpose for which the cheque is issued becomes a promise on the part of the drawer of the cheque will hold good only if there is a reciprocal promise. The failure of the drawer of the cheque towards premium, to fulfil the promise of paying the premium, would relieve the promisee from the obligation that underlies the insurance of the cheque, but does not become a basis for prosecution or action. Such a ....
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....'s case (supra), this Court held that if any cheque is issued by the accused after expiry of the limitation for releasing the debt, it cannot be said that it was issued for a legally enforceable debt. In the said case, the cheque was issued on 25.8.1994, nearly 7 years after the taking of the amount from the complainant. The Court considered the earlier ruling of this Court in Giridhar Lai Rathi v. P.T.V. Ramanujachar, 1997 (2) Crimes 658, wherein the loan was advanced in the year 1985 and the cheque was issued in the year 1990. It was held therein that by the time the cheque was issued, the debt appears to have been barred by limitation because there is no acknowledgement alleged to have been obtained by the appellant from R1-accused, before expiry of three years from the date of the loan. It was held that the debt was not legally enforceable at the time of issuance of the cheque and, therefore, vide explanation to Section 138 of N.I. Act, which reads as under: "Explanation. -Until the debt is legally recoverable, the drawer of the cheque cannot be fastened with liability under Section 138 of N.I. Act" the cheque cannot be said to have been issued towards discharge of....
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....e cheque which was dishonoured cannot be construed as time-barred and as such it cannot be classified as a debt which was not legally recoverable, the details of which we would advert to here below. In that view, we have chosen not to refer to the cases provided as a compilation, as it would be unnecessary to refer to the same. xxxxx 6. The provision would indicate that in respect of a promissory note payable at a fixed time, the period of limitation, being three years, would begin to run when the fixed time expires. Therefore, in the instant case, the time would begin to run from the month of December 2016, and the period of limitation would expire at the end of three years thereto, i.e. during December 2019. In that light, the cheque issued for Rs. 10,00,000/-, which is the subject matter herein, is dated 28.04.2017, which is well within the period of limitation. The complaint in CC No. 681 of 2017 was filed in the Court of the Chief Metropolitan Magistrate on 11.07.2017. So is the case in the analogous complaints. Therefore, in the instant case, not only the amount was a legally recoverable debt, which is evident on the face of it, but the complaint was also fi....