TMI Blog2021 (9) TMI 1424X X X X Extracts X X X X X X X X Extracts X X X X ..... there is a non obstante clause in the same, nor there is any negative terminology used so as to oust the provision of the Section 25(3) of the Contract Act - The provisions of the Negotiable Instruments Act, more so, Sections 118 and 139, raise a presumption, though rebuttable, in favour of the Negotiable Instrument itself, as to several factors, including the factor of consideration etc. and also the fact that the holder of the cheque is a holder in due course and holds the cheque for the discharge of any debt or other liability, in whole or in part. To hold in favour of a person who has consciously issued a cheque after the debt has become time barred, would amount to doing injustice to the person in whose favour the cheque has been issued and would also defeat/frustrate the intent and object of the provisions of the Negotiable Instruments Act and the Contract Act. After a debt has become time barred, any person issuing a cheque subsequent to that, makes a promise to the person in whose favour the cheque is issued, that the said cheque would be honoured. On dishonor, the person to whom the cheque has been issued, would then have the right to pursue the remedy under Section 138 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present petition under Section 482 Cr.P.C. cannot be allowed and the same point can be agitated before the trial Court after the evidence have been led. Thus, the second argument of learned counsel for the petitioner also stands rejected. Petition dismissed. - CRM-M-39414-2021 - - - Dated:- 21-9-2021 - HON'BLE MR. JUSTICE VIKAS BAHL For the Appellant : M.S. Kathuria, Advocate JUDGMENT VIKAS BAHL, J. (ORAL) 1. This is a petition under Section 482 of the Code of Criminal Procedure, 1973 for quashing of criminal complaint under Sections 138/142 of the Negotiable Instruments Act, 1881 (in short 'the Negotiable Instruments Act') read with Section 420 IPC titled as Tej Partap vs. Sultan Singh pending in the Court of Judicial Magistrate Ist Class, Kurukshetra, as well as the summoning order dated 06.09.2019 passed by the Judicial Magistrate Ist Class, Kurukshetra and all the subsequent proceedings arising therefrom. 2. Brief facts of the case are that respondent Tej Partap had filed the abovesaid complaint against the present petitioner on account of dishonour of cheque bearing No. 811255 dated 02.08.2019 for an amount of Rs. 4 lacs drawn on O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no legally enforceable debt on the date of the issuance of the cheque, thus this petition under section 482 CrPC for quashing the complaint and the summoning order should be allowed. To answer the said argument, the following issues would arise and would require to be considered by this Court: i) Whether issuance of a cheque for repayment of a time barred debt would amount to a written promise to pay the said debt within the meaning of Section 25(3) of the Indian Contract Act, 1872? ii) In case, answer to the first question is in favour of the person in whose favour the cheque has been issued, then would the said promise, by itself, create any legally enforceable debt , as stated in Section 138 of the Negotiable Instruments Act, 1881? iii) Whether in the facts and circumstances of the present case, the present petition under Section 482 CrPC would be maintainable? iv) Whether in the present case, the petitioner has been able to prove as to what would be the starting point of the period of limitation, so as to establish that the cheque was issued after the expiry of the period of limitation? Consideration of issues No. (i) (ii): 8. The issues No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red under the law for the time being in force for registration of [documents], and is made on account of natural love and affection between parties standing in a near relation to each other; or unless (2) it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do; or 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 authorised 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. In any of these cases, such an agreement is a contract. 10. Sections 6, 13, 118, 138 and 139 of the Negotiable Instruments Act are reproduced hereinbelow:- 6. Cheque . - A cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form. Explanation I. - For the purposes of this section, the expressions - (a) a cheque in the electronic form means a ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; (b) as to date: that every negotiable instrument bearing a date was made or drawn on such date; (c) as to time of acceptance: that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity; (d) as to time of transfer: that every transfer of negotiable instrument was made before its maturity; (e) as to order of indorsements: that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon; (f) as to stamp: that a lost promissory note, bill of exchange or cheque was duly stamped; (g) that holder is a holder in due course: that the holder of a negotiable instrument is a holder in due course: provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. (2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received. Explanation.--For the purposes of this section,-- (a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set off, or is addressed to a person other than a person entitled to the property or right, (b) the word signed means signed either personally or by an agent duly authorised in this behalf, and (c) an application for the execution of a decree or order shall not be deemed to be an application in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 3 of Section 25 of the Contract Act would become an enforceable agreement even in case the same was a promise to pay a debt which is already barred by law of limitation. Thus, Section 25(3) of the Contract Act would apply to a promise made in writing, which is signed by a person to pay a debt, which cannot be recovered by the reason of expiry of the period of limitation for filing a suit for recovery. Thus, if a debtor after expiry of the period of limitation makes a promise in writing, which is signed by him, to pay the debt, wholly or in part, the said promise becomes an agreement, which is enforceable in law. Section 25(3) of the Contract Act would make a time barred debt enforceable in case the ingredients mentioned in the same are fulfilled. The said sub-section would not apply to the other categories of debts which are not enforceable in law and only apply to a debt which is not recoverable in law on the ground that the same is barred by the law of limitation. To exemplify, if under a promise, an amount is advanced for immoral purposes, then the same would be hit by Section 23 of the Contract Act and would not be covered by the provisions of Section 25(3). In the said judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been received by the holder for discharge of any debt or liability, in whole or in part. It was observed that there are several categories of debts or liabilities which are not legally enforceable and the debt which has become time barred cannot be said to be a legally enforceable debt. But in view of Section 25(3) of the Contract Act, once it has been established that a cheque has been drawn for discharge of a time barred debt, it creates a promise which becomes enforceable. It, then, cannot be said that the cheque is drawn in discharge of a debt or liability which is not legally enforceable. The relevant portions of the said judgment i.e. in the case of Dinesh B. Chokshi's case (Supra) are reproduced hereinbelow:- On the basis of Judgment and Order dated 23rd December, 2008 passed by learned Single Judge, the Hon'ble the Chief Justice passed an order on the Administrative Side directing that these matters should be placed before a Division Bench. Accordingly, these Applications have been placed before this Court. 2. The reference to Division Bench is for deciding the two questions formulated by the learned Single Judge under his Judgment and Order dated 23rd Decemb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the promisor to pay a debt which is barred by limitation. xx xx xx xx xx 15. On plain reading of Section 13 of the said Act of 1881, a negotiable instrument does contain a promise to pay the amount mentioned therein. The promise is given by the drawer. Under Section 6 of the said Act of 1881, a cheque is a bill of exchange drawn on a specified banker. The drawer of a cheque promises to the person in whose name the cheque is drawn or to whom the cheque is endorsed, that the cheque on its presentation, would yield the amount specified therein. Hence, it will have to be held that a cheque is a promise within the meaning of Sub-section (3) of Section 25 of the Contract Act. What follows is that when a cheque is drawn to pay wholly or in part, a debt which is not enforceable only by reason of bar of limitation, the cheque amounts to a promise governed by the Sub-section (3) of Section 25 of the Contract Act. Such promise which is an agreement becomes exception to the general rule that an agreement without consideration is void. Though on the date of making such promise by issuing a cheque, the debt which is promised to be paid may be already time barred, in view of Sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw. Reference answered. 14. To similar effect is the Division Bench judgment of Kerala High Court in the case of Ramakrishnan vs. Parthasardhy reported as 2003 (3) RCR (Criminal) 711, decided on 5.03.2003. The relevant portion of the said judgment is reproduced hereinbelow:- 1. Is the plea of limitation available to the accused in a case under Section 138 of the Negotiable Instruments Act, 1881? This is the short question that arises for consideration in this Revision Petition, which has been referred to a Division Bench. A few facts may be noticed. xx xx xx xx xx 5. The matter was posted before a learned single Judge. It was contended that on the date of issue of the cheque, the accused was not under a legally enforceable debt or liability. Even if there was any claim for recovery of money it was barred by limitation. Thus, he could not have been found guilty of an offence punishable under Section 138 of the Act. In support of this contention, reliance was placed on a single Bench decision of this Court in Joseph v. Devassia 2000 (4) RCR (Criminal) 686 (Kerala) : (2000 (3) KLT 533). xx xx xx xx xx 13. Mr. Benny Gervacis was at pains to point out that a cheq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2001 (1) RCR (Criminal) 829 (Bombay) : (1999 DCR 470) and Joseph v. Devassia 2000 (4) RCR (Criminal) 686 (Kerala) : (2000 (3) KLT 533). 19. We have examined these decisions. Regretfully, though respectfully, we are unable to concur with the view taken by the Andhra Pradesh and the Bombay High Courts. The decision of the learned single Judge of this Court basically rests upon the view of the Andhra Pradesh High Court. We find that the relevant provisions like Section 25(3) of the Contract Act and Section 46 of the Negotiable Instruments Act, were not brought to the notice of the learned single Judge. 20. In this context, it deserves mention that Section 138 was incorporated into the statute book primarily with the object of enhancing the acceptability of cheque in settlement of liabilities. It was with this object in view that the drawer of a cheque was said to be made liable for penalties in case of bouncing of cheque due to insufficiency of funds in the accounts ...... If this object of the statute is kept in view the explanation cannot be liberally construed. It would only mean that the liability or debt should not arise out of a transaction which is illegal. It should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d facts, the amount was handed over to the appellant-defendant in January, 2001 by the respondent-plaintiff on the assertion that he was a Travel Agent and had promised to send the plaintiff's son abroad which he failed and thereafter, to discharge his debt, the appellant-defendant had issued cheque of 8,00,000/- bearing No. 279096, dated 17.10.2007, from his Account No. SB-7325, drawn on Bank of Punjab, Branch Nawanshahar. He contends that since the amount has been given to the appellant-defendant in the year 2001, the suit could have been filed within a period of three years as per Section 18 of the Limitation Act. The suit has been filed on 16.11.2009 which is barred by time, could not have been entertained and should have been dismissed as barred by limitation. xx xx xx xx xx It is correct that as per the assertion of the respondent-plaintiff, the amount was handed over to the appellant-defendant in January, 2001 but the fact remains that as per the case of the respondent-plaintiff, as the appellant-defendant failed to send his son abroad, he, in acknowledgment of his debt, has issued a cheque on 17.10.2007. As per the provision of Section 25(3) of the Indian Contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf, 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, is valid contract ...... 17. Further, with respect to the proposition that the drawer of a cheque promises the holder of the cheque that on presentation, the said cheque would yield the amount in cash, reference can be made to the judgment of the Hon'ble Supreme Court in the case of National Insurance Company Limited (supra). Paragraph 17 of the said judgment is reproduced hereinbelow:- 17. In a contract of insurance when the insured gives a cheque towards payment of premium or part of the premium, such a contract consists of reciprocal promise. The drawer of the cheque promises the insurer that the cheque, on presentation, would yield the amount in cash. It cannot be forgotten that a cheque is a bill of exchange drawn on a specified banker. A bill of exchange is an instrument in writing containing an unconditional order directing a certain person to pay a certain sum of money to a certain person. It involves a promise that such money would be paid. 18. Bombay High Court (Nagpur Bench), in the case of Vijay Ganesh Gondhlekar Vs. Indranil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d upon by the learned counsel for the petitioner, that is the judgment of Andhra Pradesh High Court passed in Girdhari Lal Rathi's case (supra), it would be relevant to take note that the same was considered by the Division Bench of Kerala High Court in Ramakrishnan's case (supra) and did not agree with the view taken therein. Moreover, in the said judgment, neither the provisions of Section 25(3), nor other relevant provisions of the Contract Act were considered. Thus, the said judgment cannot be considered to be an authority on the proposition in question, as the relevant provisions have not been considered in the same. The other aspects of the said judgment which also make the said judgment irrelevant for the purpose of determination of the present petition filed under Section 482 CrPC, also need to be taken note of. A perusal of the aforementioned case would show that the said judgment was passed by the High Court in an appeal against acquittal and thus the entire trial had already been completed. As is apparent from para 4 of the said judgment, the trial Court in the said case had found that the appellant had failed to establish that the accused had issued the cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sum was paid under the agreement dated 13.06.1991 but the time bar of one year had been stipulated, within which the amount had to be repaid. Thus, the starting point of limitation was clear in the said case. Moreover, the said case was not a case under Section 482 Cr.P.C. 24. With respect to the judgment of the Single Bench of Bombay High Court at Goa in Narendra V. Kanekar's case (supra), relied upon by the learned counsel of the petitioner, it would be relevant to note that a subsequent Division Bench of the Bombay High Court in Dinesh B. Chokshi's case (supra) after considering the relevant provisions, took a view contrary to the view taken in Narendra V. Kanekar's case (supra). In the said judgment, although the provisions of Section 25(3) of the Contract Act have been considered but the other relevant provisions of the Contract Act and the Negotiable Instruments Act have not been considered and the consideration with respect to Section 25(3) is neither in detail nor in the right perspective. The other factors to show that the present judgment would not further the case of the present petitioner also need to be taken note of. Even the said case was not a pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion, a debt which has become time barred can be enforced in case the ingredients of Section 25(3) of the Contract Act are fulfilled. In the case of a cheque, the drawer of a cheque in fact, makes a promise to the person in whose favour the cheque is drawn that on presentation, the same would be honoured and the person in whose favour the cheque is issued, would get the benefit of the cash amount which has been mentioned in the cheque. Thus, a cheque in writing, which is signed by the person issuing it, would come squarely within the ambit of Section 25(3) of the Contract Act so as to make the debt legally enforceable on the date on which the cheque is drawn. Thus, even in case the date on which the cheque has been drawn, is subsequent to the date when the debt has become time barred, in view of the provisions of Section 25(3) of the Contract Act, the said cheque would, by itself, create a promise which would become a legally enforceable contract and it cannot be then said that the cheque is drawn in discharge of a debt or liability, which is not legally enforceable. Reference in this regard may be made to the view taken by the Division Bench of the Bombay High Court in Dinesh B Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Act shall affect Section 25 of the Contract Act. Section 29(1) of the Limitation Act is reproduced hereinbelow: 29. Savings.--(1) Nothing in this Act shall affect section 25 of the Indian Contract Act, 1872 (9 of 1872). 28. The provisions of the Negotiable Instruments Act, more so, Sections 118 and 139, raise a presumption, though rebuttable, in favour of the Negotiable Instrument itself, as to several factors, including the factor of consideration etc. and also the fact that the holder of the cheque is a holder in due course and holds the cheque for the discharge of any debt or other liability, in whole or in part. It would further be relevant to note that the provisions of the Negotiable Instruments Act have been amended and Sections 143A and 148 have been added. The said provisions have been reproduced hereinbelow: 143A. Power to direct interim compensation.--(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the Court trying an offence under section 138 may order the drawer of the cheque to pay interim compensation to the complainant-- (a) in a summary trial or a summons case, where he pleads not guilty to the accusa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complainant to repay to the appellant the amount so released, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant. 29. A perusal of the above mentioned provisions would show that as per Section 143A of the Negotiable Instruments Act, the Court can require the accused to deposit an interim compensation even before the accused has been convicted and in case of Section 148, even before the appeal is decided. Thus, the intent of the Legislature is very clear, which is to instil confidence in a person who has a cheque issued in his favour, that the person who has issued the said cheque, would not be able to avoid/evade his liability. Thus, while considering issue No. (i) and (ii), the whole object of the Negotiable Instruments Act, including the amendments made therein, have to be kept in mind and the interpretation which subserves the object of the Act, needs to be given. 30. To hold in favour of a person who has con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25.07.2012 and a co-ordinate bench of this Court in judgment reported as 2015(8) RCR (Criminal) 599 titled as Som Nath vs. Mukesh Kumar decided on 11.09.2015 have held that whether a debt was time barred or not can only be decided after the evidence is adduced since it is a mixed question of law and fact. Thus, even in case, issue No. (i) and (ii) were to be held in favour of the petitioner, then also, the present petition under section 482 CrPC, with respect to the first argument, would be dismissed on account of the proposition of law propounded in the above said two judgments. The relevant portion of the judgment of the Hon'ble Supreme Court in S. Natarajan's case (supra) is reproduced hereinbelow: 1. Leave granted. The appellant is the complainant in C.C. No. 250 of 2011. It is his case that on 6/5/2006, the respondents/accused had received a sum of Rs. 49,000/- from him. On 4/7/2006, they have received a further sum of Rs. 1,00,000/-. On the same day, they received another sum of Rs. 1,00,000/-. It is further the case of the appellant that on 11/1/2007, the accused have received Rs. 50,000/- and subsequently they have received Rs. 1,000/-. Thus, according to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a legally enforceable debt or liability. However, the said presumption is rebuttable and the same can be rebutted by the petitioner by leading evidence. At this stage, without there being any evidence on record, it cannot be held that the cheque drawn by the petitioner was in respect of a debt or liability which was not legally enforceable. The plea raised by the petitioner that the cheque in question was issued on account of a time barred debt can be gone into by the Trial Court after the parties lead their evidence with regard to their respective pleas. However, at this stage, it would not be just and expedient to quash the criminal proceedings at the very threshold by presuming that the cheque in question had been issued qua a time barred debt. Complainant is yet to lead his evidence in support of his case. In case the complainant fails to establish his case, petitioner will be acquitted by the Trial Court but it would not be in the interest of justice to scuttle the criminal proceedings at the very threshold. 7. Hon'ble Apex Court in 'S. Natarajan vs. Sama Dharman 2015 (2) R.C.R. (Criminal) 854', has held as under:- 7. In our opinion, the High Court erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Court need not delve in detail with respect to issue No. (iv). 39. With respect to the second plea of learned counsel for the petitioner regarding non-service of legal notice to the petitioner under Section 138 of the Act, it is relevant to mention that a perusal of the summoning order would show that documents Ex. C1 to Ex. C6 were produced by the complainant/respondent in addition to his affidavit Ex. CW1/A. All the said documents have not been produced on record. Even the legal notice which is stated to be Ex. C3 has not been produced on record. In fact, on a specific query raised by this Court, learned counsel for the petitioner was not able to state as to what Ex. C6 is. Even the affidavit of the complainant has not been produced on record. In the absence of the entire material which had been produced by the complainant, having not been produced by the petitioner before this Court, it is not possible for this Court to hold that the petitioner was never served with the notice under Section 138 of the Negotiable Instruments Act. The legal notice Ex. C3 would have been very relevant in order to ascertain as to what address had been mentioned in the same. However, a perusal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereby the Appellate Court has dismissed the appeal of the petitioner impugning order on conviction dated 10.03.2017 and order on sentence dated 20.03.2017 convicting the petitioner of an offence under Section 138 of the Negotiable Instruments Act. 2. Petitioner who appears in person inter-alia contends that from the record it is clear that the statutory notice under Section 138 of the Negotiable Instruments Act was neither addressed to the correct address nor served to the petitioner. 3. It is submitted that the complainant had relied on an alleged acknowledgement of debt as on 31.03.2009 by an undated letter which was exhibited as Exh. CW1/2. It is submitted that in the said acknowledgement it was clearly mentioned that the correspondence address was A-123, Friends Colony (East), New Delhi. 4. He submits that the statutory notice exhibit CW-1/5 was not addressed to the correspondence address mentioned in the said alleged acknowledgement (Exh. CW1/2) but was sent to Dr. Gopal Das Building, 28, Barakhamba Road, New Delhi. He submits that the said building was a building promoted by the family of the petitioner, however, as on the date of the statutory notice there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said address. 21. Perusal of the record clearly shows that the complainant even in the complaint had stated that the statutory notice was not delivered and had accordingly annexed with the complaint the returned envelope containing the statutory notice. 22. Legal presumption of service of notice can only arise in case the notice is correctly addressed. If the notice is incorrectly addressed no legal presumption can arise. In the present case, the complainant had annexed the letterhead of the petitioner containing the address mentioned in the statutory notice but specifically mentioning there in the correspondence address as that of New Friends Colony. 23. It is not the case of the complainant that the petitioner was having an office or was ever found at Barakhamba Road, the address mentioned in the statutory notice. xx xx xx xx xx 25. As noted above, in the present case there was admittedly no service of statutory notice and the presumption of service of the statutory notice also does not arise in the facts of the present case as the notice was not correctly addressed. 44. A perusal of said judgment would show that in fact the said judgment is more against the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
