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TMI Blog2019 (9) TMI 1610X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Since the accused did not comply with the demand, the complainant initiated a prosecution in S.T.R.No.1028 of 2007 in the Judicial Magistrate Court No.II, Karaikal, for the offence under Section 138 of the 'Negotiable Instruments Act' ('N.I. Act' for brevity), against the accused. The complainant examined himself as P.W.1 and also examined one Pitchandi as P.W.2. On the side of the complainant, Exhibits P1 to P4 were marked. When the accused was questioned under Section 313 Cr.P.C. on the incriminating circumstances appearing against him, he denied the same. The accused examined himself as D.W.1 and marked Exhibits D1 and D2. After hearing either side and considering the evidence on record, the trial Court, by judgment dated 28.04.2009 in S.T.R.No.1028 of 2007, convicted the accused of the offence under Section 138 of the N.I. Act and sentenced him to undergo two years Simple Imprisonment and to pay a compensation of Rs. 1,00,000/ (Rupees one lakh only) to the complainant, in default, to undergo Simple Imprisonment for six months. 4. The appeal in C.A.No.6 of 2009, filed by the accused, challenging the conviction and sentence, was dismissed by the Additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the debt. 11. Learned counsel for the complainant placed strong reliance on the following rulings in support of his contention that the issuance of the cheque by the accused amounted to acknowledgment of liability and therefore, the prosecution was not illegal. i. Dinesh B. Chokshi v. Rahul Vasudeo Bhatt [2013 (2) Mh.L.J. 130] ii. H.Narasimha Rao v. R.Venkataram [2007 Crl. L.J. 583] iii. S.A.Mamman v. C.P.Gopalan Achari [(Kerala High Court) Crl.A.No.225 of 2002, dated 29.06.2010] iv. Ramakrishnan v. Gangadharan Nair [(Kerala High Court) Crl.R.P.No.2622 of 2006, dated 08.08.2006] v. A.R.M.Nizmathuallah v. Vaduganathan [(Madras High Court) Crl.O.P.(MD) No.22472 of 2004 dated 09.08.2007] Learned counsel for the complainant further placed strong reliance on Section 25(3) of the 'Indian Contract Act, 1872', ('Contract Act' for brevity) and submitted that the issuance of the impugned cheque gave life to the debt. 12. Refuting the aforesaid contention, learned counsel for the accused cited the following rulings : i. S.Kamatchi & others v. M/s.Arkaa Medicament, through its Managing Director, Mr.A.Dhanasekaran [2009 (3) MWN (Cr.) DCC 31] ii. J.Shamlal v. G. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 138 of the N.I. Act. In that case, the insured had entered into an insurance contract on 21.12.1993 and had died in a car accident on 31.12.1993. The cheque issued by the insured towards the premium got dishonoured on 10.01.1994. The Insurance Company repudiated the claim of compensation, that was made by the legal heirs of the insured. This repudiation was upheld by the Supreme Court in that case. 18. Coming to A.V.Murthy (supra), the complaint filed under Section 138 of the N.I. Act was quashed by the Sessions Court on the ground that the cheque impugned therein was issued, four years after the debt, which order was confirmed by the High Court of Karnataka. The Supreme Court reversed the orders passed by the High Court and the Sessions Court on the ground that the prosecution should not have been quashed at the threshold. It may be necessary to extract the relevant passage from that judgment. "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the N.I. Act reads as follows : "Explanation - For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability." While interpreting a penal provision, the normal rule is that, the interpretation that favours the accused would merit consideration. Of course, there are certain exceptions to this rule. The object of Section 138 of the N.I. Act is to protect the interest of diligent payees in commercial transactions. By virtue of the explanation extracted above, the expression "debt" 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. That apart, a cheque is an instruction to the Bank of the payer to make payment to the payee and nothing more. It cannot be construed as a "promise made in writing and signed by the payer" so as to fall within the ambit of Section 25(3) of the Contract Act. Even by an extreme interpretation, if the issuance of a cheque for a time barred debt is construed as a promise in writing within the meaning of Section 25(3) ibid., then too, only a f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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