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TMI Blog2021 (2) TMI 961X X X X Extracts X X X X X X X X Extracts X X X X ..... 1881 (Hereinafter referred for short as "N.I Act".) 4. It is the case of the complainant that, the complainant is co-operative Bank involved in Banking business. The accused is a member of complainant- Bank and availed loan from the Bank, but failed to repay the same. When the complainant-Bank approached accused and insisted for payment of dues, he issued cheque bearing No.022627 dated: 24-05-2007 for Rs. 3,28,000/- drawn in favour of the Bank. The said cheque was presented through its banker D.C.C Bank Bidar, but it was returned dishonoured with endorsement that funds "insufficient". An intimation in this regard was received on 10-07-2007. Then the complainant-Bank issued demand notice on 30-07- 2007. The accused did not reply the aforesaid notice, nor repaid the amount. Hence the complaint was lodged. 5. The accused appeared before the trial court. The trial court put the substance of accusation to accused and recorded the plea of accused. The accused pleaded not guilty and claimed to be tried. 6. The complainant-Bank got examined its Manager Mr. Kalyan Rao Malge as PW.1 and also got examined another witness as PW.2 and got marked five documents as per Ex.P.1 to Ex.P.05 and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved on accused. The availment of loan by the father of the accused is admitted. So for future liability the said cheque is issued. Accused has undertaken to discharge all the liability of his father. Now accused cannot contend that, his liability is only to the extent of his 1/3rd share of Rs. 1,50,000/- i.e., only Rs. 50,000/- as there were three legal heirs. Such a contention is not permissible now. The accused is educated person, he himself has voluntarily issued cheque. There is no force or undue influence on him for issuance of the cheque. Now accused is estopped from contending contrary to what has been stated by him once cheque is issued knowing fully its consequence. The offence under section 138 of N.I Act is committed if the cheque is returned with endorsement as funds "insufficient" or "exceed arrangements". The accused cannot contend that, the other legal heirs are also liable, when once he has issued cheque. The cross-examination of PW.1 does not take away the right of the Bank to recover the said amount. The president of the Bank is also examined as PW.2 wherein his evidence indicates that, it is the legally enforceable debt. Even otherwise as per Section 25(3) of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any such oral or documentary evidence in support of the complainant's case, the trial court has rightly appreciated the evidence in a proper perspective and acquitted the accused. There is no error or illegality in the Judgment of the trial court. The learned counsel supports the Judgment of the trial court and prays to dismiss the appeal. 13. I have perused the Judgment, records of the trial court and appeal Memo and the decision relied on by the learned counsel for the appellant/complainant. 14. From the above materials, evidence and arguments the point that would arise for my consideration are as under:- 01. Whether the impugned Judgment is perverse, illegal and not based on well settled principles regarding appreciation of evidence in cases arising out of dishonour of cheque commonly known as "Cheque Bounce case" under section 138 Negotiable Instrument Act 1881? 15. My answer to the above point is in negative for the following reasons. 16. The complainant in his written complaint filed before the Trial court has mentioned that, the accused being a member of the complainant-Bank availed loan, from the complainant-Bank. But he failed to repay the same. It is further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir knowledge. PW.1 has also admitted that, Ex.P.1 cheque is related to accused father loan. PW.1 has also stated that, he do not know how many legal heirs to the accused father. He has also admitted that, Bank has not produced any Bank statement or record to show that the accused father was due a sum of Rs. 3,28,000/- PW.1 has admitted that the documents executed by the father of the accused were in the Bank. But they are not produced before Court. He has admitted that, complainant has sent legal notices to accused, one Rajesh and another Dr. Geeta. PW.1 has also stated that said notice were issued more than three years after the death of the father of the complainant. PW.1 has admitted that, the accused after receipt of the notice came to the Bank and met them. But complainant Bank has not taken any document in writing from the accused stating that, accused is liable for the loan of his father. PW.1 has no documents to show that, accused and others have come to the Bank and admitted the loan of their father and their liability. PW.1 do not know when the father of the accused died. PW.1 has also admitted that, the accused has not given cheque in his hand and he do not know how th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inant has examined one more witness Mr. Mohammed Salim as PW.2. He has given totally new version contrary to the written complainant contents and evidence of PW.1 before the trial court. It appears that, the complainant-Bank came to know that the averments in the complaint, evidence of PW.1 and notice are not true when the PW.1 was cross-examined by the accused side. In order to make out some case and fill up lacuna in their case this PW.2 is examined. PW.2 has stated in his evidence that, the accused and his family members voluntarily agreed to make the payment. He states that, the accused personally came to the Bank when the notice was issued in the year 2007 and issued cheque in favour of the Bank. In his cross-examination PW.2 admitted that, the accused father was a leader and he was financially sound person. PW.2 clearly admitted that, he do not know which type of loan was given to the father of the accused. PW.2 does not know whether in the complainant legal notice and in the evidence of the complainant /PW.1 whether it was stated that the accused had borrowed the loan. PW.2 also stated that, the accused has not at all admitted that, he will pay the entire amount of his fathe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence of the Manager of the Bank /PW.1 is also to that effect which is admittedly not true. Now complainant Bank has totally given 'U' turn to the contents of the complaint and legal notice, in cross-examination of PW.1 stating that the accused being a Karta of the family has admitted the loan borrowed by his father and for discharge of that loan he has issued the cheque which is not their case at all. The party cannot be permitted to plead one case in complaint evidence and document and try to take shelter in cross-examination taking totally new stand which is not pleaded. No Bank statements or account extract in respect of loan was produced to show that, what was the loan borrowed by accused father, what was the amount due, what is the basis for arriving at a figure of Rs. 3,28,000/- as amount due, is not forthcoming. In fact according to the complainant/PW.1 the loan was of the year 2001. So it has already become time barred long back. The father of the accused died in the year 2004. If at all there was any such loan it has become time barred during his life time only. Defense evidence of accused totally falsify the case of the complainant. The slightest presumption eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f on the date of the cheque liability or debt exists or the amount has become legally recoverable, the Section is attracted and not otherwise." Hence, it is proved that as on the date of issuance of the blank cheque, there was no legal liability of the accused to pay any amount to the complainant, which is evident from the evidence of PW-1 the Manager of the bank himself. Further, the complainant - Bank has also not produced any account extract relating to the loan account of the accused." 24. The learned counsel for the complainant tried to make out a case under section 25 (3) of the Indian Contract Act 1872 stating that as the accused issued the cheque it amounts to admission on the part of the accused to pay the time barred debt. But such a contention is not legally tenable. It is not the case of the complainant or the evidence of PW.1 or contents of the legal notice that the cheque was issued in discharge of father's debt or liability. There is no undertaking or document executed by accused promising to pay time barred debt or liability of his father. The learned counsel also argued that, it is also the pious obligation on the part of the accused to pay the debt of his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of rupees ten lakhs from the complainant in connection with the agreement executed between the two. It is also not in dispute that upon termination of the agreement, the amount paid to Nazimul Islam was refundable to the complainant and that Nazimul Islam had agreed to refund the same within one month. The promissory note executed by Nazimul Islam contained an unequivocal acknowledgment of not only the debt/liability aforementioned but promised to liquidate the same within one month with interest at the bank rate. Five cheques handed over were to be returned but only upon payment of the amount in question. Such being the fact situation, it cannot be said that the cheques had nothing to do with any debt or other liability. As a matter of fact, the existence of the debt or liability was never in dispute. On the contrary, it was acknowledged by Nazimul Islam who simply sought one month's time to pay up the amount. The cheques were post dated, only to give to the drawer the specified one month's time to pay the amount. There is thus a direct relationship between the liability and the cheques issued in connection therewith. Thus far there is no difficulty. 27. The fact of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existence of any debt or any other liability by the accused when the said contention is neither pleaded in the complaint and notice, nor the evidence is led. Therefore the said decisions are also not helpful to the complainant argument. 29. The contention of learned counsel for complainant that, there is no bar under law to repay the time barred debt and it is not open to the drawer of the cheque to contend that he is not liable as the debt was time barred is also not tenable as such contention is either pleader or any legally admissible evidence was led by complainant-Bank. Such time barred debt cannot be called as legally recoverable debt so as to attract penal provision under section 138 of N.I Act. In this regard it is necessary to refer the principles of law stated by Hon'ble Supreme Court and other High Courts. 30. The Kerala High Court in a decision reported in 2001 Crl.L.J 24 in case of Sasseriyal Joseph Vs Devassia, held that section 138 of the Act is attracted only if there is legally recoverable debt and it cannot be said that time barred debt is legally recoverable debt. The said Judgment rendered by Kerala High Court in Sasseriyil Joseph's case was challenge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dhan Bhat Vs Dattatraya G Hegde reported in 2008 (4) SCC 54 wherein at para No.13 it is held as under: Thus, for the purpose of falling within the ambit of Section 138 of the Act, one of the ingredients which is required to be satisfied is that there is legally enforceable debt. In the facts of the present case, as noted earlier, the amounts in question had been paid during the period 1991 to 1997, under the circumstances, the period of limitation which is three years had clearly expired by the end of the year 2000. Therefore, the cheques which were issued in the year 2002, evidently were issued in respect of time barred-debts. In view of the explanation to section 138 of the Act, a debt or liability referred to in section 138 of the Act means a legally enforceable debt. Under the circumstances, even if the case of the complainant is accepted that such cheques had, in fact, been issued by the accused towards a debt of Rs. 42 lakhs, even then, the same would be relatable to a time barred debt and, therefore, cannot be said to have been issued in respect of a legally enforceable debt. The provisions of section 138 of the Act would, therefore, not be attracted in the facts of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rceable debt. In this regard, it may be relevant to take note of the order dated 10.9.2001 relied upon by the learned counsel for the respondent No.2 titled Sasseriyil Joseph v. Devassia (supra) wherein, in a similar case, it has been held by the Supreme Court that, a cheque which has been issued by the accused for a due which was barred by limitation, the penal provision under Section 138 of the NI Act is not attracted. The relevant observations made in this regard in the aforesaid judgment are reproduced hereunder: - "We have heard ....... 27. In Vijay Polymers Pvt. Ltd. & Anr. v. Vinnay Aggarwal (supra), relying upon the judgment of the Supreme Court in Sasseriyil Joseph (supra), it has been observed that, cheques issued for a time-barred debt would not fall within the definition of 'legally enforceable debt', which is the essential requirement for a complaint under Section 138 of the NI Act; the extended meaning of debt or liability has been explained in the Explanation to the Section which means a legally enforceable debt or liability. 36. The High Court of Bombay in a decision in case of Chander Mohan Mehta Vs William Rosario Fern Andes and another reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Indian Contract Act, 1872 is not applicable to the facts and evidence in this case. 37. Further as per section 13 of N.I Act "negotiable instrument" means a "promissory note" "bill of exchange", or "cheque" payable either to order or to bearer. The definition of promissory note as stated in section 4 of the N.I Act indicates that, it contains an unconditional undertaking signed by the maker, to pay a sum of money only to, or to the order of, a certain person, or to the bearer of instrument. The definition of "bill of exchange" as stated in Section 5 and the definition of cheque contain only an unconditional order which clearly distinguish them from the definition of promissory note. In promissory note there must be an express undertaking upon the face of instrument to pay the money. Therefore in promissory there is unconditional undertaking i.e., promise to pay, but the definition of bill of exchange and cheque contain only an unconditional order. This distinction needs to be kept in mind while considering whether the cheque itself constitutes a promise in writing by the accused so as to bring that cheque within the ambit of section 25 (3) of the Indian Contract Act 1872 an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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