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TMI Blog2024 (8) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... wing of the cheque. The Parliament has used the expression debt or other liability and the explanation appended to Section 138 of the NI Act states that the debt would mean a legally enforceable debt, however, the expression also uses the word other liability. In the opinion of this Court, the word other liability would have to be something other than a legally enforceable debt and must be given a meaning of its own. The legislature has purposely used two distinct phrases i.e., legally enforceable debt and other liability. The issue as to whether the debt is time barred or is legally enforceable or not or as to whether the cheques were deposited after an understanding was reached between the parties regarding payment of liability or as to whether the cheques could have been deposited at any time for repayment of liability or whether it was a part discharge of liability etc. cannot be decided at the time of issuing of summons and the same can be considered only in the trial and not at this stage. This Court is not inclined to quash the present complaint at this juncture. The Ld. Trial Court is requested to proceed with the complaint in accordance with law - Petition disposed off. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner on 01.08.2022. 6. Learned Counsel appearing for the Petitioner contends that the complaint under Section 138 of the NI Act can be instituted only if the cheques are issued for a legally enforceable debt or other liability. He states that the loans were given to the Petitioner in the year 2012 and the cheques have been deposited by the Respondent in the year 2019 and, therefore, the debt cannot be said to be a legally enforceable debt. 7. Per contra, learned Counsel appearing for the Respondent submits that the issue as to whether cheques were issued for a legally enforceable debt or other liability should be decided only at the time of trial and not at this stage. He, therefore, states that the complaint is maintainable. 8. Heard learned Counsel appearing for the Parties and perused the material on record. 9. Section 138 of the NI Act reads as under: 138. Dishonour of cheque for insufficiency, etc., of funds in the account. Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be considered at the initial stage. The Apex Court in the said Judgment has observed as under: 5. The High Court seems to have proceeded on the footing that there is no averment in the entire complaint as regards any kind of acknowledgment of the said debt by the accused within the period of three years i.e. within the limitation period of recovering the debt. 6. It appears prima facie from the materials on record that the loan was advanced sometime in the year 2011. The cheque in question duly issued by the accused for the discharge of the debt is dated 01.11.2018 and complaint for the offence under Section 138 of the N.I. Act was lodged on 14.01.2019. It appears that the High Court has gone by the date of the loan transaction to be precise the year of the loan transaction. If a cheque is issued on 01.11.2018 for the discharge of the debt incurred in the year 2011 then prima facie it could be said to be an acknowledgement of the debt. This aspect needs to be re-considered by the High Court in its true perspective. The High Court in its impugned order1 has observed as under: There is no averment in the entire complaint as regards any kind of acknowledgement of the said debt by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 38 of the NI Act states that the debt would mean a legally enforceable debt, however, the expression also uses the word other liability. In the opinion of this Court, the word other liability would have to be something other than a legally enforceable debt and must be given a meaning of its own. The legislature has purposely used two distinct phrases i.e., legally enforceable debt and other liability. The Apex Court in Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel, (2023) 1 SCC 578 has observed as under: 17. In Sunil Todi v. State of Gujarat [Sunil Todi v. State of Gujarat, (2022) 16 SCC 762 : 2021 SCC OnLine SC 1174], a two-Judge Bench of this Court expounded the meaning of the phrase debt or other liability . It was observed that the phrase takes within its meaning a sum of money promised to be paid on a future day by reason of a present obligation . The Court observed that a post-dated cheque issued after the debt was incurred would be covered within the meaning of debt . The Court held that Section 138 would also include cases where the debt is incurred after the cheque is drawn but before it is presented for encashment. In this context, it was observed : (SCC para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he offence under Section 138, there must have been a debt on the date of issuance of the cheque. However, later judgments adopt a more nuanced position while discussing the validity of proceedings under Section 138 on the dishonour of post-dated cheques. This Court since Sampelly Satyanarayana Rao [Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd., (2016) 10 SCC 458 : (2017) 1 SCC (Civ) 126 : (2017) 1 SCC (Cri) 149] has consistently held that there must be a legally enforceable debt on the date mentioned in the cheque, which is the date of maturity. 19. This Court in NEPC Micon Ltd. v. Magma Leasing Ltd. [NEPC Micon Ltd. v. Magma Leasing Ltd., (1999) 4 SCC 253 : 1999 SCC (Cri) 524 : AIR 1999 SC 1952] held that the courts must interpret Section 138 with reference to the legislative intent to supress the mischief and advance the remedy. The objective of the Act in general and Section 138 specifically is to enhance the acceptability of cheques and to inculcate faith in the efficacy of negotiable instruments for the transaction of business. [ Sunil Todi v. State of Gujarat, (2022) 16 SCC 762 : 2021 SCC OnLine SC 1174] Section 138 criminalises the dishonour o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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