Bangalore District Court
M/S. Sree Gowri Ganeshaa Chits Pvt Ltd vs Nataraju B S on 21 February, 2025
KABC0C0246162021
IN THE COURT OF XXXIV ADDL. CHIEF JUDICIAL MAGISTRATE,
MAYO HALL UNIT, BENGALURU. (ACJM-34)
PRESENT: Smt.PARVEEN A BANKAPUR, B.Com.LLB.
XXXIV ADDL. CHIEF JUDICIAL MAGISTRATE,
Dated : This the 21st day of February, 2025.
C.C.No.57696/2021
COMPLAINANT : M/s. Sree Gowri Ganeshaa Chits Pvt.
Ltd.,
No.307, 1st Floor, 2nd Main, 7th Cross,
Domlur Layout,
Bengaluru -71.
Rep. by its GPA Holder,
Sri Shivakumar S
S/o. Late Subbaiah,
Aged about 31 years
(By Mr. V B Ravishnkar -Advocates)
V/s
ACCUSED : Mr. Nataraju B S
S/o. Late Siddaramaiah B.
Aged about 57 years,
No.42, 9th Main, RPC Layout,
Vijayanagar 2nd Stage,
Bengaluru.
(By Mr.M.N. Raghu - Advocates)
1 Date of Commencement 21.10.2021
of offence
2 Date of report of offence 07.12.2021
3 Presence of accused
3a. Before the Court 22.03.2022
3b. Released on bail 22.03.2022
4 Name of the Complainant M/s.Sree Gowri Ganeshaa Chits
Pvt.Ltd.
5 Date of recording of 07.12.2021
evidence
6 Date of closure of evidence 22.10.2024
7 Offences alleged U/s 138 of the Negotiable
Instruments Act.
8 Opinion of Judge Accused is not found guilty.
2 C.C.No.57696/2021
JUDGEMENT
The Private Complaint is filed under Section 200 of Cr.P.C against the accused alleging that he has committed the offence punishable under Section 138 of Negotiable Instruments Act.
2. The brief facts of the complaint are as follows:
The complainant submits that the Complainant is a company and it is doing chit business. One Mr.Swamy B.S.V. subscribed for a chit bearing No.GGN(4)HSN-
03/18 in Complainant's company for a sum of Rs.10,00,000/-
which is payable at Rs.25,000/- per month in 40 months. The said subscriber participated in the chit auction and declared as price bidder in the said auction draw and the said subscriber received the prize money Rs.6,13,500/- on 16.09.2014 after deducting the bid amount and the Accused has offered guarantor for the due payment of the entire future monthly installment due by the said subscriber and stood as surety to the said subscriber. The Accused has executed required documents in favour of the Complainant company. Such as On Demand Promissory Note and Consideration Receipt, Surety etc., to the satisfaction of the company thereby making liberty to the payment of the future monthly installments.3 C.C.No.57696/2021
It is further submitted by the Complainant that after receiving the prize amount, the said subscriber had been irregular in making in payment of chit installment and thereafter he became defaulter. After several requests and reminder the representative of the Complainant company, the Accused issued a Cheque bearing No.031991 dtd.21.10.2021 for Rs.17,09,125/- drawn on Veerashaiva Sahakari Bank, Vijayanagar branch, Bengaluru towards discharge of said liability with an assurance that the Cheque would be honoured on its presentation for encashment.
It is further submitted that the Complainant presented the Cheque through its banker i.e., Union Bank of India, Domlur branch, Bengaluru on 21.10.2021. But the said Cheque was dishonoured for "funds insufficient" with endorsement dtd.22.10.2021. Thereafter the Complainant got issued Notice through RPAD on 8.11.2021 and the said notice was served on the Accused on 9.11.2021. Therefore, the Complainant submits that inspite of service of notice, the Accused has neither paid the Cheque amount nor replied to the notice. Accordingly, the Complainant has filed present 4 C.C.No.57696/2021 complaint against the Accused for the offencc punishable u/Sec.138 of N.I. Act.
3. Based on the complaint, the sworn statement affidavit, and documents etc., took cognizance of an offence punishable Under Section 138 of N.I. Act by following the guidelines of Apex Court issued in Indian Bank Association case and ordered to be registered a criminal case against the accused for the offence punishable Under Section 138 of N.I. Act.
4. After issuance of summons, accused appeared before the court and enlarged himself on bail. Plea was recorded, read over and explained to the accused, who pleads not guilty and claims to be tried. Hence, the case is posted for complainant's evidence.
5. The GPA Holder of the Complainant got examined himself as PW1 and he got marked 13 documents as Ex.P.1 to Ex.P.13.
6. The statement as required under Section 313 of Cr.P.C. was recorded. The accused denied all the incriminating evidence appeared against him. Thereafter, the learned counsel for Accused submits that, no defence evidence. However Ex.D1 5 C.C.No.57696/2021 to 10 documents came to be marked through confrontation during the cross-examination of PW1.
7. I heard arguments of both sides.
The learned Counsel for Accused has placed the following citations
1. 2000(2) SCC 380
2. 2011(6) KLJ 476
3. Spl Leave Ptn. (Cri) No.9062/2023
8. Upon hearing the arguments and on perusal of the materials placed on record, the following points arise for my consideration.
1) Whether complainant proves beyond all reasonable doubts that accused in discharge of legally recoverable debt has issued a Cheque bearing No.031991 dtd.21.10.2021 for Rs.17,09,125/- drawn on Veerashaiva Sahakari Bank, Vijayanagar branch, Bengaluru in favour of the complainant which came to be dishonoured with an endorsement "funds insufficient" and in spite of service of notice accused has not paid the Cheque amount and thereby committed an offence under Section 138 of N.I.Act?
2) What Order?
9. My findings on the above points is:
Point No.1: In the Negative 6 C.C.No.57696/2021 Point No.2: As per final order for the following:
REASONS Point No.1:-
10. Existence of legally recoverable debt is a sine qua non for prosecuting the case under Section 138 of Negotiable Instruments Act. For convenient purpose the essential ingredients to constitute offence under section 138 of N.I.Act is summarized as below:
(i) That there must be a legally enforceable debt.
(ii) That the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which presupposes the legally enforceable debt.
(iii)That the cheque so issued had been returned due to "insufficient funds".
11. It is the core contention of the complainant that, the Complainant is a company and it is doing chit business. One Mr.Swamy B.S.V. subscribed for a chit bearing No.GGN(4)HSN- 03/18 in Complainant's company for a sum of Rs.10,00,000/- which is payable at Rs.25,000/- per month in 40 months. The said subscriber participated in the chit auction and declared as price bidder in the said auction draw and the said subscriber 7 C.C.No.57696/2021 received the prize money Rs.6,13,500/- on 16.09.2014 after deducting the bid amount and the Accused has offered guarantor for the due payment of the entire future monthly installment due by the said subscriber and stood as surety to the said subscriber. The Accused has executed required documents in favour of the Complainant company. Such as On Demand Promissory Note and Consideration Receipt, Surety etc., to the satisfaction of the company thereby making liberty to the payment of the future monthly installments.
12. It is further submitted by the Complainant that after receiving the prize amount, the said subscriber had been irregular in making in payment of chit installment and thereafter he became defaulter. After several requests and reminder the representative of the Complainant company, the Accused issued a Cheque bearing No.031991 dtd.21.10.2021 for Rs.17,09,125/- drawn on Veerashaiva Sahakari Bank, Vijayanagar branch, Bengaluru towards discharge of said liability, which was dishonoured for "funds insufficient" with endorsement dtd.22.10.2021. Thereafter the Complainant got issued Notice through RPAD on 8.11.2021 and the said notice was served on the Accused on 9.11.2021. Therefore, the 8 C.C.No.57696/2021 Complainant submits that inspite of service of notice, the Accused has neither paid the Cheque amount nor replied to the notice. Accordingly, the Complainant has filed present complaint against the Accused for the offencc punishable u/Sec.138 of N.I. Act.
13. In order to bring home the guilt of the accused, the GPA Holder of the Complainant company got examined as PW1. PW1 reiterated the contents of complaint in his examination-in-chief. He has also placed the original Cheque bearing No.031991 dtd.21.10.2021 at Ex.P1, bank endorsement at Ex.P2, office copy of legal notice issued by the Complainant to Accused through his Counsel on 8.11.2021 at Ex.P3, Ex.P4 is the postal receipt, Ex.P5 is the returned postal cover, Ex.P6 is the payment voucher, Ex.P7 is the consideration form, Ex.P8 is the promissory note, Ex.P9 is the Guarantee Agreement, Ex.P10 is the Surety Proposal Form, Ex.P11 is the account statement and Ex.P12 is the copy of Board Resolution.
14. The documents produced by the complainant of course established that the complainant meets out the procedural requirements of section 138 of Negotiable Instrument Act, but it 9 C.C.No.57696/2021 is to be considered whether all these documents establish the offence committed by the accused.
15. On perusal of the oral and documentary evidence placed by the complainant, it reveals that the present complaint is filed well within time in accordance with the provisions of Negotiable Instruments Act. Moreover, there is no dispute with regard to taking cognizance of the offence punishable under Section 138 of N.I. Act.
16. The Negotiable Instruments Act raises two presumptions. One contained in Section 118 and the other in Sec. 139 thereof. For the sake of convenience Sec 118(1) of the N.I. Act is extracted here below:
118. Presumptions as to negotiable Instruments ---
Until the contrary is proved, the following presumptions shall be made ;--
(a) of consideration that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration.
1. To (g) . . . . . . . . . . . .
10 C.C.No.57696/2021Provided that where the instrument has been obtained from its lawful owner, or from an person in lawful custody thereof, by means of an offence of fraud, or has been obtained from the maker or acceptor thereof by means of an offence of fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him".
17. Further Section 139 of the Negotiable Instruments Act reads as under;
"139, Presumption in favour of holder. It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138, for the discharge, in whole or in part, of any debt or other liability."
18. Scope and ambit and function of the presumption U/s 118(a) and Sec 139 of NI Act came to be considered by the Hon'ble Apex Court of Indian in Krishna Janardhan Bhat Vs Dattatraya G.Hegde (2008 NIAR (Criminal 151) The Supreme Court has laid down the law in the following phraseology.
"D Negotiable Instruments Act 1881, Secs. 139, 138
--Presumption under-same arises in regard to second aspect of the matter provided under Sec 138
--Existence of legally enforceable debt is not a 11 C.C.No.57696/2021 matter of presumption under Sec 139- It merely raises presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability - Merely an application of presumption contemplated under Section 139 of N.I.Act should not lead to injustice or mistaken conviction."
19. Further, said decision was followed by Hon'ble High Court of Karnataka in Kempanarasimhaiah Vs P.Rangaraju & Others (2008 (5) KCCR 3371). Relevant paragraph of the said judgment reads as under: -
"12. As to the provisions of Sections 138 of N.I.Act, the following principles emerge from the above observations of Hon'ble Supreme Court at para Nos. 21, 23, 25, 26 and 34 of its Judgment in the above said case of Krishna Janardhan Bhat Vs Dattatraya G.Hegde, AIR 2008 SC 1325.
(i) Section 139 of the Act merely raises a presumption that the cheque was issued towards discharge in whole or in part in any debt or other liability, which presupposed legally enforceable debt. Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability." (para 21) 12 C.C.No.57696/2021
(ii) The question as to whether the presumption stood rebutted or not, must be determined keeping in view the other evidences on record. Where the chances of false implication cannot be ruled out, the background fact and the conduct of the parties together with their legal requirements are required to be taken into consideration. (para 26)
(iii) An accused, for discharging the burden of proof placed upon him under a statute, need not examine himself. He may discharge his burden on the basis of the materials already brought on records (para 23)
(iv) Standard of proof on the part of an accused and that of the prosecution in a criminal case is different.
Further more where as prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is "preponderance of probabilities'"
(para 23 & 25)
(v) Inference of preponderance of probabilities can be drawn not only from the materials brought on records by the parties but also by reference to the circumstances upon which he relies (para 25)
(vi) Other important principles of legal jurisprudence, namely presumption of innocence as human rights and the doctrine of reverse burden introduced by Section 139 should be deliberately balanced (para 34) 13 C.C.No.57696/2021
20. Thus from the observations extracted above, it is clear that presumption Under Section 139 of the N.I. Act is only to the extent that the cheque was drawn for discharge in full or in part of any debt or other liability and the said presumption do not relate to the existence of legally enforceable debt or liability. Therefore, before drawing the presumption under section 139 of the N.I.Act, it is the duty of the Court to see whether or not the complainant has discharged his initial burden as to existence of legally enforceable debt. No doubt, as per Section 118(a) of the Act, there is a rebuttable presumption that every negotiable instrument, is accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration."
21. Factual matrix of the case is required to be tested on the anvil of principles emerging from the above-referred decisions.
22. The defence taken by the Accused is that, the cheque issued by the Accused for the surety purpose is misused by the Complainant and filed false complaint against him without initiating the proceedings against other surety and subscriber. 14 C.C.No.57696/2021
23. To substantiate the claim the Representative of the Complainant got examined as PW1. In the cross-examination he stated that the Complainant company is doing chit business under the Chit Funds Act and one Mr. Swamy B.S.V. is the subscriber in the Complainant company and entered into chit group ticket No.GGN(4)HSN-03/2018 for chit amount of Rs.10 lakhs which is payable at Rs.25,000/- per month for the period of 40 months. It is further deposed that, the subscriber participating in the chit auction and offered the highest bid for sum of Rs.6,13,500/- as a discount amount on 16.9.2014, the Accused offered surety for the remaining installments, which to be paid by the subscriber and executed requisite documents in favour of Complainant like surety agreement, Promissory Note, Consideration Receipt etc. It is further deposed that, the said subscriber had been irregular and became defaulter. It is further deposed that, after several reminders, request and demands, the Accused has issued cheque as per Ex.P1, which was dishonoured with reason "funds insufficient" as per Ex.P2. It is further deposed that, thereafter, the Complainant got issued legal notice as per Ex.P3, which was returned with a shara 'door lock' as per Ex.P5.
15 C.C.No.57696/2021
24. Considering the oral and documentary evidence, prima facie presumed that, Ex.P1 cheque was issued by the Accused towards discharge of her liability. To rebut the presumption and to prove the cheque amount is a time barred debt, the learned counsel for Accused cross examined the PW1 in full length. In the cross-examination PW1 admits that, Accused is a surety and they have doing the chit business as per the rules and regulations. It is admitted by the PW1 that, Ex.P9 Guarantee agreement the payment of interest amount to the default amount is not mentioned. It is further admitted that in Ex.P8 promissory note, there is a material alteration in date and rate of interest as per Ex.D1 and 2. He further stated hat, at the time of registration of membership they have obtained pay slip, I.T. Return document, property document, copy of Aadhaar Card and PAN Card. He further stated that, the subscriber Mr. Swamy was took membership at Hassan branch and he had paid installments at Hassan branch. He further stated that Mr. Swamy paid 22 installments. He further stated that after registration of Membership, they have obtained pay slip, copy Aadhaar Card and copy of PAN Card for the sureties by name Nataraj, Sumanth and Dharanesh. He further admits that the 16 C.C.No.57696/2021 Complainant company received notice from the Accused on 10.3.2021 as per Ex.D3. He admits that he has not produced chit agreement executed between Complainant company and subscriber. He further stated that, after defaulting from the subscriber the Complainant company has sent notice to the sureties and V.S. Swamy.
25. Considering the oral and documentary evidence placed by the Complainant and cross-examination of PW1, it is clear that one Mr.Swamy was subscriber and Accused is a surety to the prize amount received by the subscriber. It is further clear that, Mr.Swamy was received prize amount Rs.6,13,500/- by executing the payment voucher on 16.9.2014. On the day of execution of payment voucher and receiving the prize amount, the Accused has executed promissory note, guarantee agreement, guarantee proposal form in favour of Complainant. As per Ex.P11 the Ledger Account maintained by the Complainant company with respect of subscriber Mr.Swamy, the Complainant company produced account statement till March 2017 upto 40 installment and as per Ex.P11 due amount is Rs.5,25,000/- including penalty amount the total due amount is Rs.16,38,875/- and cheque amount is 17 C.C.No.57696/2021 Rs.17,09,125/-. Ex.P11 is not tallied with Ex.P1 cheque amount. As per the contention of the complaint, chit amount is Rs.10 lakhs and the subscriber was received prize amount of Rs.16,13,500/-. In the complaint it is not mentioned that how much installment were paid by subscriber and how much installment are due and when the subscriber was defaulter. As per promissory note, it was executed by subscriber and other sureties along with Accused for Rs.7,75,000/-. As per Ex.P9 the guarantee agreement wherein it is mentioned that, guarantor and advancement of Rs.7,75,000/- in accordance with the company rules and regulations, the guarantor hereby agree jointly and severally. As per Ex.P8 and 9 the guarantee amount is Rs.7,75,000/-. Ex.P11 statement of accounts shows that, as on last installment due amount is Rs.5,25,000/- and the imposed penalty is Rs.11,26,125,/- which is more than due amount. Therefore, he documents produced by the Complainant are not tallied with the cheque amount. Therefore, the Complainant not sure about what is the payable amount by the subscriber.
26. Further, as per the notice issued by the Complainant as per Ex.P3, chit amount is Rs.10 lakhs and prize amount is 18 C.C.No.57696/2021 Rs.6,13,500/- and Accused offered guarantor for the due amount which is not mentioned in the notice and it is further mentioned in the notice that, after receiving of prize amount, irregular in paying payment and became defaulter and issued cheque for Rs.17,09,125/-. In this regard, the learned counsel for Accused by arguing that the notice issued by the Complainant was defective and it is not shown the due amount and how the Complainant calculated the cheque amount and what is the cheque amount. It is further argued that, the notice was not disclosed the demand amount. In this regard, relied on decision of Hon'ble Supreme Court of India in the case of Suman Sethi V/s. Ajay K Churiwala and another, wherein the Hon'ble Apex Court held that;
"Sec.138 proviso - B dishonour of cheque - Demand Notice - Notice cannot said to be invalid merely on ground that, in addition to cheque amount . Some other sum by way of interest, cost etc., was separately indicated in it.
Reading of the Sec.138 as a whole words 'said amount of money' in clause (b) & (c) of proviso to Sec.138 refers to the words 'payment of any amount of money' occurring in main section 138, i.e., the cheque amount. So, in notice, under clause (b) to the 19 C.C.No.57696/2021 proviso, demand has to be made for the cheque amount.
It is well settled principle of law that the notice has to be read as a whole. In the notice, demand has to be made for the said amount, i.e., cheque amount. If no such demand is made the notice, no doubt, would fall short of demand its legal requirement. Where, in addition to 'said amount' there is also a claim by way of interest, cost, etc., whether the notice is bad would depend on the language of the notice. If in a notice while giving a break up of the claim the cheque amount, interest, damages, etc., are separately specified, other such claims for interest, costs etc., would be superfluous and these additional claims would be severable and will not invalidate the notice. If, however, in the notice not omnibus demand is made without specifying the what was the due under the dishonoured cheque, notice might well fail to meet the legal requirement and may be regarded as bad. In Sec.138 Legislature stated that for the dishonoured cheque, the drawer shall be liable for conviction if the demand is not made within 15 days from the date of receipt of notice, but this is without prejudice to any other provision of the Act. If the cheque amount is paid within the above period or before complaint is filed the legal liability u/Sec.138 will cease and for recovery of other demands as compensation, costs, interest etc., a 20 C.C.No.57696/2021 civil proceeding will lie. Therefore, if in a notice any other sum is indicated in addition to the 'said amount' the notice cannot be faulted. Negotiable Instrument Act Sec.138 (b), 139 demand notice, holder of cheque claimed in addition to cheque amount incidental and notice charges, said amounts are severable - presumption u/Sec.139 in favour of holder will arise only in respect of cheque amount - Drawer not liable for any criminal liability if he pays cheque amount - Other incidental charges can be claimed by filing civil suit."
27. In the present case also the Ex.P11 due amount is Rs.5,25,000/- and its include penalty of Rs.11,26,125/- and total due is Rs.16,38,875/- and cheque amount is Rs.17,09,125/-. Therefore, the Complainant has not clearly stated in the notice how he calculated penalty and on what basis he impose penalty on the surety and also what is the extra amount of the cheque.
28. Further the learned counsel for Accused relied on order of Hon'ble Supreme Court of India in SLP No.9062 23 in the case of Upasana Mishra Vs. Trex Technology India Pvt. Ltd., wherein the Hon'ble Apex court discussed about above decision.
21 C.C.No.57696/2021
29. Further, as per the averments of the complaint the prize amount was received by the subscriber 16.9.2014. The Accused has executed promissory note, Guarantee Agreement and surety form on 16.9.2014 and entire 40 installments are came to be end in the month of March 2017 and cheque was issued on 21.10.2021. The period of limitation is end in the month of March 2020. The cheque was issued after lapse of 3 years and the claimed cheque amount is also time barred debt. In this regard, it is useful to refer the decision of Hon'ble High Court of Karnataka Kalburagi Bench in Cri.Apl.No.200057/2016 in the case of Bidar Urban Co-op. Bank Ltd., V/s. Mr. Girish S/o. Late Gunderao Kulkarni the Hon'ble High Court observed that;
"Thus, for the purpose of filing within the ambit of Sec.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 present case, as noted earlier, the amounts in question had been paid during the period 1991 to1997, under the circumstances, the period of limitation which is 3 years had clearly expired by the end of the year 2000. Therefore, the Cheques which were issued in the year 22 C.C.No.57696/2021 2002, evidently were issued in respect of time-barred debts. In view of the explanation to Sec.138 of the Act, a debt or liability referred to in Sec.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 Sec.138 of the Act would, therefore, not be attracted in the facts of present case.
Further the Hon'ble Court in para 36 of its judgement referred decision of Hon'ble High Court of Bombay in a case of Chandra Mohan Mehta Vs.William Rosario Fern Andes and Another reported in 2008 SCC Online Bombay 1590 referring to its earlier decisions and decision of Madras High Court in the case of N.Ethirajulu Naidu Vs. K.R. Chinnikrishnan Chettair AIR 1975 Madras 333 held at para No.7 and 8..........
Further the Hon'ble High Court also referred decision of Chacko Varkey Vs. Thommen Thomas AIR 1958 KER 31 of Full Bench of Kerala High Court considered the scope of Sec.25 (3) of the Indian Contract Act which also supports the Accused defence.23 C.C.No.57696/2021
The Hon'ble High Court in para No.39 observed that; in view of the principles stated in the above referred decision and discussion, it is evident that the penal provision of Sec.138 of N.I. Act is applicable only to the Cheques which are issued for the discharge in whole or in part, of any debt or other liability, which according to explanation must be a legally enforceable debt or other liability. A Cheque given in discharge of a time barred debt will not constitute an unconditional undertaking or promise in writing either expressly or impliedly so as to attract the criminal offence u/Sec.138 of N.I. Act. This was elaborated in SASSERIYIL JOSEPH's case (supra) which is affirmed by the Hon'ble Supreme Court as stated above. A Cheque given in discharge of a time- barred debt will not constitute a promise in writing not even an implied promise so as to attract a criminal liability u/Sec.138 of N.I. Act."
30. Further, it is useful to refer another decision of Hon'ble Supreme Court of India in Sasseriyil Joseph V/s. Devassia dtd.10.9.2001 wherein the Hon'ble Supreme Court held that;
"We have heard the learned counsel for petitioner.24 C.C.No.57696/2021
We have pursued the judgment of the Hon'ble High Court of Kerala in Cri.Apl.No.161/1994 confirming the judgement/order of acquittal passed by Additional.
Session Judge, Thalassery in
Cri.Apl.No.212/1992 holding inter alia that the
cheque in questions having been issued by the Accused for due which was barred by limitation the penal provision u/Sec.138 of the Negotiable Instrument Act is not attracted in the case.
On the facts of the case as available on the records and the clear and unambiguous provision in the explanation to Sec.138 of the Negotiable Instrument Act, the judgement of lower appellate court as confirmed by the High Court is unassailed.
Therefore, the Special Leave Petition is dismissed.
31. Further in the judgement of Hon'ble Kerala High court in the case of Sasseriyil Joseph V/s. Devassia dtd.22.9.2000 the Hon'ble Kerala High Court held that; 6 - "The only question that arises for consideration in this application is whether the respondent who issued the cheque in question in discharge of a time barred debt is liable u/Sec.138 of the Negotiable Instrument 25 C.C.No.57696/2021 Act. In this case, the Complainant had admitted that the loan was advanced to the Accused in January 1988 and the cheque was issued in February 1991. Thus, by the time, the cheque was issued, the debt was barred by limitation since there was no valid acknowledgement of the liability within the period of limitation. According to the learned counsel for Appellant, the promised made by the Accused to repay the time barred debt, would come within the purview of Sec.25 (3) of the Indian Contract Act. No doubt, the promise to pay a time barred cheque (debt) is valid and enforceable, if it is made in writing and signed by the person to be charged therewith. But, it is clear from Sec.138 of N.I. Act that in order to attract the penal provisions in the bouncing of a cheque in Chapter XVII, it is essential that the dishonoured cheque should have been issued in discharge in wholly, or in part, or any debt or other liability of the drawer to the payee. The explanation to Sec.138 defines the expression debt or other liability as a legally enforceable debt or other liability. The explanation to the Sec. 138 reads as under; Explanation - For the purpose of this section 'debt or other liability means a legally enforceable debt or other liability'.
26 C.C.No.57696/20217 - Thus, Sec.138 is attracted only if the cheque is issued for the discharge of legally enforceable debt or other liability. In this case, admittedly, the cheque in question was issued in discharge of a time barred debt. It cannot be said that a time barred debt is a legally enforceable debt. In this connection it is also relevant to note the decision of the Andhra Pradesh High Court reported in Giridhari Lal Rathi V/s. P.T.V. Ramanujachari 1997 (2) Crimes 658 it has been held in that case that if a cheque is issued for a time barred debt and it is dishonoured, the Accused cannot be convicted u/Sec.138 of the N.I. Act simply on the ground has the debt was not legally recoverable. I am fully in agreement with the view expressed by the learned Judge in the decision referred to above.
8 - The learned counsel for Appellate placed strong reliance on the decision of Madras High Court reported in S.Krishnamurthy V/s. A.R. Rajan 1996 Cri.L.J.3552. In that case, it was contended for the Accused the cheque in question dtd.23.4.1989 alleged to have been issued in respect of the debts including under the promissory notes dtd.20.3.1985 and 8.4.1985 is not respect of legally enforceable debts and liabilities, within the meaning of Sec.138 of the N.I. Act since the debts under the Pro-notes are barred by limitation on the date of issuance of the cheque dtd.23.4.1989. But, the court found that 27 C.C.No.57696/2021 in respect of alleged two time barred pro-notes, the Accused has paid interest on various dates and thereby the pro-notes have not become time barred. In this case, the Complainant has no case that the Accused has paid interest on the amount borrowed from him in 1987 and there valid acknowledgement of the debt within the period of limitation. As noticed earlier, since there was no acknowledgement of the debt before the expiry of 3 years from the date of loan, the debt was not legally enforceable debt at the time of issuance of the cheque.
9 - For the reasons stated above, I find no reason to the interfere with the order of acquittal passed by Addl. Sessions Judge. I see no infirmity in the judgment of lower court, this appeal is groundless and is liable to be dismissed.
32. The above decisions of the Hon'ble Kerala High Court in the case of Sasseriyil Joseph V/s. Devassia is upheld by the Hon'ble Supreme Court of India as stated supra.
33. In the present case also admittedly the transaction i.e., all documents i.e., surety proposal form, Guarantee Agreement are executed in the year 2014 and cheque was 28 C.C.No.57696/2021 issued and presented in the year 2021. There is a 7 years gap between transaction and issuance of cheque. In between 2014 to 2021 there is no any acknowledgement in writing for the debt amount. Further 40 installments came be end in the year 2017 by calculating this period also the cheque was issued after 4 years. Therefore, the debt is clearly time barred debt which was not enforceable under the law. Therefore, the present debt is not legally enforceable at the time of issuance of Cheque, the time limit for enforcement of cheque was lapsed. Therefore, the Complainant failed to prove that, the Ex.P1 Cheque was issued by the Accused for discharge of legally enforceable liability. On the other hand, the Accused has successfully rebutted that the Ex.P1 cheque was time barred debt and it is not legally enforceable debt.
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34. As observed in the above decisions, it is clear that, the Cheque amount is time barred debt and it is not legally enforceable debt. Therefore, the Accused is not liable to punish u/Sec.138 of N.I. Act. The Complainant has not proved his case as to commission of offence punishable u/Sec.138 of N.I. Act by the Accused. Hence, I answer Point No.1 in the Negative.
29 C.C.No.57696/2021
35. Point No.2 : In view of discussion held in Point No.1, I proceed to pass the following:
ORDER Acting U/S 255(1) of Cr.P.C., the accused is acquitted for the offence punishable Under Section 138 of Negotiable Instrument Act.
His personal bond stands cancelled.
er, transcript computerized by her, revised corrected and then pronounced by me in the open Court on this the 21st day of February, 2025) (PARVEEN A BANKAPUR) XXXIV ACJM, Bengaluru.
ANNEXURE
1. Witnesses examined on behalf of Complainant:
P.W.1 Mr.Shivakumar S.
2. Documents marked on behalf of complainant:
Ex.P.1 Cheque Ex.P.2 Bank endorsement Ex.P.3 Office copy of Legal Notice Ex.P.4 Postal receipt Ex.P.5 Postal cover Ex.P.6 Payment voucher Ex.P.7 Consideration receipt Ex.P.8 Promissory Note Ex.P.9 Guarantee agreement Ex.P.10 Surety Proposal Form Ex.P.11 Account statement Ex.P.12 Notarized copy of Board Resolution Ex.P.13 Notarized copy of GPA
3. Witnesses examined on behalf of Accused:NIL
4. Documents marked on behalf of Accused :
Ex.D.1 & 2 Corrections in Ex.P8 Ex.D.3 Office copy of Legal Notice Ex.P.4 Postal acknowledgement Ex.P.5 Certified Copy of judgment passe din CC 30 C.C.No.57696/2021 No.10108/2021 Ex.P.6 Certified copy of of judgment passe din CC No.8225/2021 Ex.P.7 Certified copy of FIR Ex.P.8 Certified copy of Order sheet in CC No.8625/2022 Ex.P.9 Certified copy of Order sheet in CC No8621/2022 Ex.P10 Certified copy of Order sheet in PCR No.19725/2021 (PARVEEN A BANKAPUR) XXXIV ACJM, Bengaluru.