2023 (9) TMI 1360 - HC - Indian Laws

Dishonour of Cheque - insufficient funds - discharge of legally enforceable debt or not - HELD THAT - As per Section 18 of the Limitation Act the acknowledgement should be in written within the limitation period but in this case there is no written acknowledgement by the petitioner. Though in the complaint there is an averment that the petitioner repaid a sum of Rs.1,20,000/- on 01.12.2016 no records produced to show that the petitioner had given written acknowledgment. Mere averments in the complaint are not sufficient to hold that there is an acknowledgment. Therefore the averments made in the complaint show that the cheque was issued for time barred debt. In this context the learned counsel appearing for the petitioner relied on various judgments - In M/S. JAGE RAM KARAN SINGH ANR. VERSUS STATE ANR. 2019 (8) TMI 310 - DELHI HIGH COURT where it was held that The Appellate Court has rightly held that the alleged responsibility of the respondent No.2, if any, had already become time-barred as on the date of the issuance of cheque and, therefore, the same cannot be said to be in discharge of a legally enforceable debt or liability. Thus, it is clear that if cheque was issued for time barred debt then the proceedings under Section 138 of the Negotiable Instruments Act would not attract. In this case also cheque was issued for time barred debt, thereby the case laws submitted by the learned counsel for the petitioner are squarely applicable to the present facts of the case. Petition allowed.

Summary

Issues involved:
The issues involved in the judgment are the quashing of proceedings in S.T.C.No.17 of 2020 on the file of the learned Judicial Magistrate No.II, Fast Track Court(Magisterial Level) Madurai under Section 138 of the Negotiable Instruments Act.

Summary:

Issue 1: Allegation of False Complaint
The petitioner approached the respondent for a loan in 2015 and repaid the amount with interest. The respondent alleged that the petitioner borrowed a sum in 2016 and issued a cheque in 2019, which was dishonored. The petitioner claimed the cheque was handed over for security and misused by the respondent, leading to a false complaint under Section 138. The petitioner argued that the cheque was not issued for a legally enforceable debt, as per the complaint itself, and the proceedings should be quashed.

Issue 2: Time-Barred Debt
The petitioner contended that the cheque was issued for a time-barred debt, as per the complaint's averments. The petitioner had repaid a sum in 2016, but there was no written acknowledgment of the debt within the limitation period. The absence of a written acknowledgment rendered the cheque issuance for a time-barred debt. Citing relevant case laws, it was argued that the proceedings under Section 138 would not apply if the cheque was issued for a time-barred debt. The court found merit in this argument and allowed the petition, quashing the proceedings in S.T.C.No.17 of 2020.

Separate Judgment:
The Honorable Mr. Justice P. Dhanabal allowed the Criminal Original Petition and quashed the proceedings in S.T.C.No.17 of 2020 on the file of the learned Judicial Magistrate No.II, Fast Track Court(Magisterial Level) Madurai.