2022 (7) TMI 1319 - HC - Indian Laws

Dishonor of cheque - post dated cheque - existence of legally enforceable debt or not - debt becoming time barred - Section 138 of NI Act - HELD THAT - This Court in NARSI DASS VERSUS SURENDER 2014 (11) TMI 1263 - PUNJAB AND HARYANA HIGH COURT has contended that on the date when the post dated cheque was to be encashed, the liability of the petitioner in respect of the sale would have become time barred and hence no proceedings under Section 138 of the Negotiable Instrument Act can be initiated on the basis of the dishonour of the cheque as there would be no legally enforceable debt subsisting on that date. Notice of motion for 20.10.2022.

Summary

Issues: Quashing of complaint under Section 138 of the Negotiable Instrument Act, 1881 and summoning order.

The judgment pertains to a petition filed for quashing a complaint under Section 138 of the Negotiable Instrument Act, 1881, and the summoning order. The respondent alleged that the petitioner purchased a house and issued a cheque which was later dishonored. The petitioner argued that the debt would have become time-barred by the date of encashment of the post-dated cheque, relying on various legal precedents. The court issued a notice of motion for a future date and stayed the proceedings before the trial court.

The key legal issue in this judgment is whether proceedings under Section 138 of the Negotiable Instrument Act can be initiated based on the dishonour of a post-dated cheque when the debt would have become time-barred by the date of encashment. The petitioner's counsel cited decisions of Delhi High Court and a local court to support the argument that no legally enforceable debt existed on the date of cheque dishonour, thus challenging the initiation of proceedings.

The judgment also addresses the procedural aspect of the case, with the court issuing a notice of motion for a future date and staying the proceedings before the trial court. This procedural decision indicates that the court is willing to examine the legal arguments presented by the petitioner's counsel regarding the time-barred nature of the debt in relation to the dishonoured post-dated cheque.

Overall, the judgment reflects a nuanced legal analysis of the issue at hand, considering both the substantive legal arguments regarding the enforceability of the debt at the time of cheque dishonour and the procedural steps to be taken in light of the arguments presented. The court's decision to issue a notice of motion and stay the trial court proceedings demonstrates a cautious approach to ensure a fair and thorough examination of the legal complexities involved in the case.