TMI Blog2019 (9) TMI 1610X X X X Extracts X X X X X X X X Extracts X X X X ..... t means legally enforceable debt. It is axiomatic that the cheque should have been issued for a legally enforceable debt. When a cheque is issued for a time barred debt, it does not satisfy this minimum requirement - the cheque which gave birth to a fresh contract resurrects a time barred debt and the dishonour of such a cheque entails prosecution of the drawer under Section 138 of the N.I. Act, is too large a pill for the penal law to swallow. The cheque in this case has been issued after the expiry of three years from the date of the debt and therefore, the debt in this case was not a legally enforceable debt when the cheque was issued. A fortiori the prosecution founded under Section 138 of the N.I. Act on such a cheque is not maintainable and the accused deserves to be acquitted. The Criminal Revision Case is allowed. - Crl. R.C. No.492 of 2014 - - - Dated:- 12-9-2019 - MR. P.N. PRAKASH, J. For Petitioner : Mr.K.S.Karthik Raja For Respondent : M/s.Achari and Antoni Associates ORDER This Criminal Revision Case has been filed to set aside the judgment dated 20.10.2009, passed by the Additional Sessions Judge, Karaikal, in C.A.No.6 of 2009, confirmi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence, the prosecution, which has been founded on a time barred debt is illegal. 8. Per contra, Mr.Achari submitted that the accused had not raised this point either in the trial Court or in the appellate Court and therefore, he is precluded from raising this plea before this Court. 9. Admittedly, the period of limitation for filing a suit is three years from the date of the debt. In this case, the debt was in January 2001 and the period of limitation expired in January 2004. In the opinion of this Court, since a plea of limitation is a legal issue based on proved facts, it can be raised at the revision stage also. 10. To appreciate the rival contentions, it may be necessary to extract the averments in the complaint. 1. The Accused herein borrowed a sum of ₹ 40,000/- on January 2001 from the complainant to start a computer business and the Accused also agreed to repay the loan on demand with interest at the rate of 12% per annum. 2. The complainant submits that after getting the money the accused did not pay either principal nor interest and the interest for 5 years 11 months have accumulated to a sum of ₹ 28,400/- so, the accused is liable to pay to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l fledged trial. Therefore, this Court has not placed reliance on the said judgment. 14. The learned counsel for the complainant placed very strong reliance on the judgment of a Division Bench of the Bombay High Court in Dinesh B. Chokshi (supra), wherein, the following issues were framed and decided. i) Does the issuance of a cheque in repayment of a time barred debt amounts to a written promise to pay the said debt within the meaning of Section 25(3) of the Indian Contract Act, 1872 ? (ii) If it amounts to such a promise, does such a promise, by contemplated by Section 138 of the Negotiable Instruments Act, 1881 ? The Division Bench answered the reference by holding that, a cheque issued for discharge of a debt that was barred by the law of limitation is itself a promise, within the meaning of Section 25(3) of the Contract Act and therefore, the prosecution under Section 138 of the N.I. Act founded on such a cheque is maintainable. The Division Bench of the Bombay High Court has referred to two judgments of the Supreme Court, viz., National Insurance Company Limited v. Seema Malhotra and others [(2001) 3 SCC 151] and A.V.Murthy v. B.S.Nagabasavanna [(2002) 2 SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of law should be borne in mind to decide this issue, viz., Section 18 of the Limitation Act, 1963, Section 25(3) of the Contract Act and Section 138 of the N.I. Act. 20. Under Section 18 of the Limitation Act, 1963, if an acknowledgment of liability is given before the expiry of the period of limitation, the period of limitation will stand further extended. 21. Consideration is an essential pre-requisite for a valid contract. Section 25 of the Contract Act carves out certain exceptions. We are now concerned about Section 25(3) of the Contract Act, which reads as under : ''25. Agreement without consideration, void, unless it is in writing and registered or is a promise to compensate for something done or is a promise to pay a debt barred by limitation law.- An agreement made without consideration is void, unless - ... (3) it is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits.'' Illustration (e) to Section 25 reads as fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Para No.12 of the judgment in J.Shamlal v. G.Manoharan (supra). In Para No.12, the learned Judge has relied upon the order passed by another learned Judge of this Court in K.Kumaravel v. R.P.Rathinam [AIR 2011 Madras 319] and has extracted a passaged therefrom, in which, a passage from A.V.Murthy (supra) has been extracted. In that extracted portion, the following sentence appears : Likewise, a time barred debt is also not legally enforceable debt. However, this sentence is not available in the original judgment of the Supreme Court in A.V.Murthy (supra). Therefore, it is not known as to how this serious error had crept in. In fine, this Court is unable to persuade itself to agree with the Division Bench of the Bombay High Court in Dinesh B. Chokshi v. Rahul Vasudeo Bhatt (supra) and those lines of the judgments relied upon by the learned counsel for the complainant. 24. To sum up, the cheque in this case has been issued after the expiry of three years from the date of the debt and therefore, the debt in this case was not a legally enforceable debt when the cheque was issued. A fortiori the prosecution founded under Section 138 of the N.I. Act on such a cheque is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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