Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2018 (7) TMI 443

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... t to recover the said amount from the accused - This very important aspect of the matter has not been correctly appreciated by the learned trial Court because it is not understandable as to how issuance of cheque in lieu of that debt was not to be construed as acknowledgment of debt. It is evident and apparent from the material on record that there was a legal and enforceable debt or liability in favour of the complainant, in lieu of which, the cheque in question was issued by the accused to the complainant, dishonouring of which led to filing of the complaint under Section 138 of the Negotiable Instruments Act. Findings to the contrary returned by learned trial Court are perverse being contrary to the records and further being based on conjectures and surmises. The case is remanded back to the learned trial Court with a direction that the same be adjudicated afresh on merit - appeal allowed. - Cr. Appeal. No. 316 of 2010 - - - Dated:- 4-7-2018 - Ajay Mohan Goel, J. For the Appellant : Mr. Rajnish K. Lall, Advocate For the Respondent : Mr. Hamender Chandel, Advocate ORDER Ajay Mohan Goel, Judge By way this appeal, appellant has challenged the judgme .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... appended to Section 138 of the NI Act. It further held that in the case in hand, money was lent by the complainant to accused on 31.08.1999, whereas the cheque, which led to filing of the complaint under Section 138 of the NI Act, bears the date 28.02.2006. Learned trial Court further held that complaint for dishonour of cheque lies only when there is a legally enforceable debt or other liability . It further held that in the case in hand, civil remedy for recovery of the amount was available to the complainant within a period of three years and thereafter the suit was barred by limitation. Learned trial Court further went on to hold that this meant that legal debt or other liability could not thereafter be enforced as barred under law of limitation. On this analogy, learned trial Court went on to hold that as loan was lent on 31.08.1999 and the cheque for discharge of said loan was issued by accused on 28.02.2006, then, as on the day, when the cheque was issued, there was no legally enforceable debt or liability . Learned trial Court concluded that the debt in issue was not legally enforceable and moreover there was nothing on record to suggest that accused had acknowledged the .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... eciated by the learned trial Court because it is not understandable as to how issuance of cheque in lieu of that debt was not to be construed as acknowledgment of debt. 9. In A.V. Murthy Versus B/S. Nagabasaanna, (2002) 2 Supreme Court Cases 642, Hon ble Supreme Court, while dealing with the fact situation which was almost akin to the facts of this case, has held as under:- 5. As the complaint has been rejected at the threshold, we do not propose to express any opinion on this question as the matter is yet to be agitated by the parties. But, we are of the view that the learned Sessions Judge and the learned Single Judge of the High Court were clearly in error in quashing the complaint proceedings. Under Section 118 of the Act, there is a presumption that until the contrary is proved, every negotiable instrument was drawn for consideration. Even under Section 139 of the Act, it is specifically stated that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for discharge, in whole or in part, of any debt or other liability. It is also pertinent to note that under subsection (3) of Sectio .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ning the same and delivering the same. The act of drawal of the cheque - Section 138 applies to a cheque drawn only - does include writing the cheque, signing the same and delivery of the written and signed cheque. By the time the third conduct of delivery takes place and the drawal of the cheque becomes complete, there is significantly a promise in writing to discharge the time barred liability which squarely brings the case within the purview of Section 25(3) of the Contract Act. It is thereafter that the delivery of the cheque takes place and the drawal becomes complete attracting the play of Section 138 of the N.I. Act. The Division Bench had considered this aspect elaborately in paragraphs 11 to 19 in Ramakrishnan's case (supra). I am not, in these circumstances, persuaded to doubt any aspect in the decision in Ramakrishnan's case and consequently refer the matter for consideration to a larger Bench. The dictum in Ramakrishnan is not founded on any acknowledgment under Section 18 of the Limitation Act. It is founded on the reasoning that a promise in writing to pay an amount, the consideration of which is a time barred liability, is valid and is not bad for want of con .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates