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TMI Blog2007 (10) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... Complainant instituted under Section 138 of Negotiable Instruments Act. It is alleged that the accused/applicant had borrowed a sum of Rs.20,000/- from the complainant on 01.03.95 and the accused-applicant issued a cheque in favour of the complainant. The loan was to be repaid within a period of one year but was not, and an extension of one more year was granted. Further extension of yet another one year was sought and it was also granted by the complainant and ultimately time was extended upto the year 1999. The cheque was tendered in the bank thereafter and it was dishonoured. Hence the complaint came to be filed under Section 138 of Negotiable Instruments Act. 5. Accused filed an application for his discharge and dismissal of the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsement on the same document that the contract is renewed. Thus if this acknowledgment is taken into consideration the debt could be recovered even under the civil law within 3 years from 01.03.1997. The time of three years from 01.03.1997 would expire on 01.03.2000. The cheque was tendered in bank on 10.03.1999. Even complaint under Section 138 is filed in April 1999. Obviously even on date of institution of complaint the debt was legally recoverable. The ratio in Mr. Narendra V. Kanekar Vs. The Bardez Taluka Coop. Housing Mortgage Society Ltd. Ano. 2006(3) of All MR 673 cited by Shri Kalar could squarely be applied to this case. Next reason is that, the cheque was issued and renewed from time to time could itself, be treated as an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legally enforceable debt as contemplated by the explanation below Section 138 of the Act. As far as this aspect of the case is concerned, the learned Division Bench observed that to determine as to whether or not a liability is legally enforceable, the provisions of the Contract Act cannot be said to be irrelevant. This can provide a cause for a legal liability. Although the primary question answered by the Division Bench was that a cheque becomes a promise to pay under Section 25(3) of the Contract Act, this view need not be followed by this Court in the light of the Judgment of this Court in the case of Ashwini Satish Bhat Vs. Shrijeevan Divakar Lolienkar (supra) and the other two Judgments referred to hereinabove. Nevertheless, the Divis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in favour of the payee within the meaning of Section 25(3) of the Indian Contract Act. Once it becomes a fresh promise, fresh period of limitation of 3 years would begin to run from the date of cheque. Hence the liability would certainly be a legally enforceable liability. 8. In a case reported in Veera Exports Vs. T. Kalavathy 2002(1) All MR 275 (S. C.), Supreme Court has observed as follows: In our view this reasoning is entirely fallacious. There is no provision in the Negotiable Instruments Act or in any other law which stipulates that a drawer of a negotiable instrument cannot re-validate it. It is always open to a drawer to voluntarily revalidate the negotiable instrument, including a cheque. Thus when a drawer revali ..... X X X X Extracts X X X X X X X X Extracts X X X X
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