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2021 (2) TMI 966 - HC - Indian LawsDishonor of Cheque - time limitation - grounds raised in the petition is that the alleged date of advancement of loan was barred by limitation - complaint averments disclose that the alleged loan transaction is more than four years and the same is barred by limitation - cheque was presented without an endorsement and it is not in dispute that it is a self-cheque - offence is made out under Sections 138 and 139 of the NI Act constituting an offence or not. Whether this Court can quash the proceedings in coming to the conclusion that the issuance of self cheque in respect of the time barred debt? - HELD THAT - The very contention of the petitioner is that it is a time barred transaction; the same has to be decided only after recording the evidence not at the preliminary stage of taking the cognizance. It is settled law that whether it is time barred or not involves disputed facts and the same cannot be determined in a proceeding under Section 482 of Cr.P.C. since it involves mixed question of law and fact. Hence, the very contention that the transaction is time barred cannot be decided while taking the cognizance - The Apex Court also in MMTC LTD. VERSUS MEDCHL CHEMICALS PHARMA (P.) LTD. 2001 (11) TMI 837 - SUPREME COURT , has categorically held that complaint need not allege existing of a subsisting debt or liability 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. In the case on hand also, the Court has only after considering the evidence has to decide whether the liability is in existence or not and the same cannot be decided without recording the evidence. Hence, Section 482 of Cr.P.C. cannot be invoked to quash the proceedings. The Apex Court also in the case of HMT Watches Limited's case, 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 - though the petitioner's counsel referred several judgments of different High Courts, it is settled law that whether the transaction is time barred or not has to be considered only after the trial not at the preliminary stage or at the time of taking cognizance - the question is answered in negative. Whether the self cheque issued by the petitioner attracts Section 138 of the Negotiable Instruments Act, 1881? - HELD THAT - The Kerala High Court in Sarafudheen's case, 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 - Having perused the principles laid down in the Judgment, the very contention that there is no endorsement and the self cheque does not attract Section 138 of the NI Act, cannot be accepted at this juncture. The respondent made out the prima facie case - question raised by this Court is answered as 'affirmative'. Whether both the Courts have committed an error in taking the cognizance and confirming the cognizance by the Revisional Court and it requires an interference of this court exercising the powers under Section 482 of Cr.P.C.? - HELD THAT - The petitioner herein himself admitted in his reply to the demand notice dated 03.05.2019 that the petitioner handed over two self cheques each for ₹ 5 Lakhs. It is also clear that the word bearer has not been struck off. It is further observed that the scope of revision is very limited and the merits of the case cannot be decided in a revision petition. Further observed that the truth or falsity cannot be entered into by the Revisional Court, that too, in the initial stage of the case. There are no error committed by the Revisional Court also in confirming the taking of cognizance. The matter needs a full- fledged trial to decide the issue involved between the parties and the grounds which have been urged before this Court by the petitioner can be raised before the Trial Court during the course of the trial and the sitting under Section 482 of Cr.P.C, the Court cannot quash the same. Hence, there is no merit in the petition. Petition dismissed.
Issues Involved:
1. Whether the issuance of a self-cheque in respect of a time-barred debt can be quashed. 2. Whether the self-cheque issued by the petitioner attracts Section 138 of the Negotiable Instruments Act, 1881. 3. Whether both the Magistrate and the Revisional Court committed an error in taking cognizance and confirming the cognizance, requiring interference under Section 482 of Cr.P.C. Detailed Analysis: Issue 1: Issuance of Self-Cheque in Respect of Time-Barred Debt The petitioner argued that the issuance of a self-cheque for a time-barred debt does not constitute a valid acknowledgment of liability and should not attract criminal liability under Section 138 of the NI Act. The petitioner contended that the transaction occurred four years prior, making it barred by limitation, and that issuing a self-cheque does not revive the debt. The petitioner relied on several judgments, including those from the Apex Court and various High Courts, to support this argument. The Court, however, referred to the Apex Court's judgment in S. Natarajan's case, which held that whether a debt is time-barred involves a mixed question of law and fact that can only be decided after evidence is adduced. It was emphasized that the burden of proving the non-existence of any debt or liability is on the accused, to be discharged at trial. Therefore, the Court concluded that the issue of whether the transaction is time-barred cannot be determined at the preliminary stage of taking cognizance and dismissed the argument for quashing the proceedings under Section 482 of Cr.P.C. Issue 2: Self-Cheque and Section 138 of the NI Act The petitioner contended that a self-cheque without endorsement does not attract Section 138 of the NI Act. The petitioner relied on judgments, including the Gauhati High Court's decision in Dr. Jiten Barkakoti v. Subrata Patangia, which suggested that dishonor of a self-drawn cheque does not constitute a penal offense. Contrarily, the respondent's counsel argued that the cheque, which was not marked "bearer," made the respondent a holder in due course, thus attracting Section 138 of the NI Act. The Court referred to multiple judgments, including those from the Karnataka High Court in B. Sarvothama's case and the Delhi High Court in Adigear International's case, which supported the view that a bearer cheque, if dishonored, would attract the rigors of Section 138 of the NI Act. The Court concluded that the self-cheque issued by the petitioner does attract Section 138 of the NI Act, as the respondent was a holder in due course. Issue 3: Error in Taking Cognizance by Magistrate and Revisional Court The petitioner argued that the Magistrate erred in taking cognizance and that the Revisional Court also committed an error in confirming this cognizance. The petitioner emphasized that the debt was time-barred and that the self-cheque did not attract Section 138 of the NI Act. The Court, however, noted that the Magistrate had rightly taken cognizance based on the material available on record. The Revisional Court had also correctly observed that the scope of revision is limited and that the merits of the case cannot be decided in a revision petition. The Revisional Court had found that the petitioner admitted to issuing two self-cheques, and the word "bearer" had not been struck off, making the respondent a holder in due course. The Court concluded that the matter requires a full-fledged trial to decide the issues involved and that the grounds urged by the petitioner can be raised during the trial. Thus, there was no merit in the petition for quashing the proceedings under Section 482 of Cr.P.C. Order: The petition is dismissed.
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