Himachal Pradesh High Court
Prem Chand vs Lal Chand on 4 July, 2018
Author: Ajay Mohan Goel
Bench: Ajay Mohan Goel
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Cr. Appeal. No.: 316 of 2010.
Reserved on : 03.05.2018.
.
Decided on: 04.07.2018.
Prem Chand ....Appellant.
Versus
Lal Chand ... Respondent.
_________________________________________________________________ Coram r to The Hon'ble Mr. Justice Ajay Mohan Goel, Judge. Whether approved for reporting?1 Yes _____________________________________________________________ For the appellant : Mr. Rajnish K. Lall, Advocate.
For the respondent : Mr. Hamender Chandel, Advocate.
Ajay Mohan Goel, Judge By way this appeal, appellant has challenged the judgment passed by learned Chief Judicial Magistrate, Kullu, District Kullu, in Criminal complaint No. 196-1/2006 (85- iii/2007), dated 08.03.2010, vide which, learned trial Court dismissed the complaint so filed by the present appellant against the respondent/accused under Section 138 of the Negotiable Instruments Act and acquitted the accused for commission of offence punishable under Section 138 of the ::: Downloaded on - 05/07/2018 23:00:36 :::HCHP Negotiable Instruments Act (hereinafter referred to as 'NI Act').
2. Case of the appellant/complainant (hereinafter .
referred to as 'complainant') was that he and accused were neighbours and were having good relations with each other. According to the complainant, on 31.08.1999, accused made a request to him that he (accused) was in need of some money for the business purpose and demanded a sum of 2,00,000/- in this regard. As per complainant, he could only manage 1,66,000/-, which was accordingly lent by him to the accused on the same day free of interest in lieu of good relations with the accused. Further, as per complainant, accused promised to pay back the said amount within a period of one year and also issued a post dated cheque in lieu of the said liability. Further, as per complainant, before the Cheque could be negotiated, the accused on account of some financial problem took back the same from the complainant and thereafter, issued another post dated cheque in his favour, but the same was also taken back in the same manner by the accused. As per complainant, thereafter finally accused issued cheque bearing No. RXX 553216, dated 28.2.2006, amounting to 1,66,000/- in favour of complainant for repayment of loan, which the accused had ::: Downloaded on - 05/07/2018 23:00:36 :::HCHP taken from him. According to the complainant, when he presented the said cheque for encashment, the same was dishonoured with remarks 'Insufficient Funds" vide memo .
dated 05.05.2006. Pursuant to this, complainant issued a legal notice through registered post to the accused, which was received by the accused, but the accused neither filed reply to the legal notice nor made the payment in terms of cheque in issue. In this background, complainant filed complaint under Section 138 of the NI Act.
3. Vide judgment impugned, the complaint so filed by the complainant stands dismissed by the learned trial Court. It was held by the learned trial Court that the meaning of 'legal debt or other liability' is clear from the explanation appended to Section 138 of the NI Act. It further held that in the case in hand, money was lent by the complainant to accused on 31.08.1999, whereas the cheque, which led to filing of the complaint under Section 138 of the NI Act, bears the date 28.02.2006. Learned trial Court further held that complaint for dishonour of cheque lies only when there is a 'legally enforceable debt or other liability'. It further held that in the case in hand, civil remedy for recovery of the amount was available to the complainant within a period of three years and thereafter the suit was barred by limitation. ::: Downloaded on - 05/07/2018 23:00:36 :::HCHP Learned trial Court further went on to hold that this meant that legal debt or other liability could not thereafter be enforced as barred under law of limitation. On this analogy, .
learned trial Court went on to hold that as loan was lent on 31.08.1999 and the cheque for discharge of said loan was issued by accused on 28.02.2006, then, as on the day, when the cheque was issued, there was no 'legally enforceable debt or liability'. Learned trial Court concluded that the debt in issue was not legally enforceable and moreover there was nothing on record to suggest that accused had acknowledged the debt and cause of action survived till the date of issuance of the cheque in issue. On these basis, learned trial Court dismissed the complaint filed by the present appellant by holding that complainant had failed to prove the most essential ingredient i.e. "legally enforceable debt or liability".
4. Feeling aggrieved by the said judgment of acquittal, the complainant has filed the present appeal.
5. I have heard learned Counsel for the parties and also gone through the records of the case as well as judgment passed by the learned trial Court.
6. As is evident from the judgment under challenge, the complaint filed by the present appellant under Section ::: Downloaded on - 05/07/2018 23:00:36 :::HCHP 138 of the NI Act was dismissed by the learned trial Court on the ground that as on the date when the cheque in issue i.e. cheque which was dishonoured by the bank concerned, was .
issued by the accused in favour of the complainant, there was no legally enforceable debt. This reasoning was returned by the learned trial Court on the analogy that as the suit for recovery of an amount which was lent by the complainant to the accused could have been filed within a period of three years as from the date when the cause of action accrued, the date of issuance of cheque being beyond the stipulated period of limitation, there was no legally enforceable debt and as there was no legally enforceable debt, the accused was not liable to be punished under Section 138 of the NI Act, even if the cheque which was so given by the accused stood returned back as dishonoured.
7. In my considered view, the judgment which has been so passed by the learned trial Court is perverse and not sustainable in the eyes of law.
8. In the present case, undoubtedly the alleged loan was lent to the accused on 31.08.1999 but it is a matter of record that in lieu of discharge of the said debt, accused had handed over a cheque to the complainant on 28.02.2006. In ::: Downloaded on - 05/07/2018 23:00:36 :::HCHP fact, in my considered view, when in lieu of the loan which was so advanced by the complainant to the accused in the year 1999, as cheque was issued by the accused to the .
complainant in the year 2006, the same amounted to the accused having acknowledged the said debt and in fact, a fresh cause of action accrued from that particular date in favour of the complainant to recover the said amount from the accused. This very important aspect of the matter has not been correctly appreciated by the learned trial Court because it is not understandable as to how issuance of cheque in lieu of that debt was not to be construed as acknowledgment of debt.
9. In A.V. Murthy Versus B/S. Nagabasaanna, (2002) 2 Supreme Court Cases 642, Hon'ble Supreme Court, while dealing with the fact situation which was almost akin to the facts of this case, has held as under:-
"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 in error in quashing the complaint proceedings. Under Section 118 of the Act, there is a presumption that until the contrary is proved, every negotiable instrument was drawn for consideration. Even under Section 139 of the Act, it is ::: Downloaded on - 05/07/2018 23:00:36 :::HCHP specifically stated that 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 discharge, in whole or in part, of any debt or other .
liability. It is also pertinent to note that under sub- section (3) of Section 25 of the Indian Contract Act, 1872, 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, is a valid contract. Moreover, in the instant, the appellant has submitted before us that the respondent, in his balance sheet prepared for every year subsequent to the loan advanced by the appellant, had shown the amount as deposits from friends. A copy of the balance sheet as on 31st March 1997 is also produced before us. If the amount borrowed by the respondent is shown in the balance sheet, it may amount to acknowledgement and the creditor might have a fresh period of limitation from the date on which the acknowledgement was made. However, we do not express any final opinion on all these aspects, as these are matters to be agitated before the Magistrate by way of defence of the respondent.
6. This is not a case where the cheque was drawn in respect of a debt or liability, which was completely barred from being enforced under law. If for example, the cheque was drawn in respect of a debt or liability payable under a wagering contract, it could have been said that that debt or liability is not legally enforceable as it is a claim, which is prohibited under law. This case is not a case of that type. But we are certain that at this stage of the proceedings, to say that the cheque drawn ::: Downloaded on - 05/07/2018 23:00:36 :::HCHP by the respondent was in respect of a debt or liability, which was not legally enforceable, was clearly illegal and erroneous.
7. Therefore, we set aside the order passed by the .
learned Single Judge of the High Court, allow this appeal and remand the matter to the Magistrate to proceed with the complaint in accordance with law. We make it clear that whatever has been stated by us regarding enforceability of the debt or liability is for the purpose of these proceedings and the respondent would be at liberty to set up all legally available defences."
10. Similarly, r Hon'ble High Court of Kerla, in Ramkrishanan v. Gangadharan Nair and anr., 2007 Cri. L. J. 1486, has held as under:-
"8. I shall assume that the liability, to discharge which the cheque is issued, is time barred. But even then the drawing of a cheque involves the acts of writing the cheque, signing the same and delivering the same. The act of drawal of the cheque - Section 138 applies to a cheque drawn only - does include writing the cheque, signing the same and delivery of the written and signed cheque. By the time the third conduct of delivery takes place and the drawal of the cheque becomes complete, there is significantly a promise in writing to discharge the time barred liability which squarely brings the case within the purview of Section 25(3) of the Contract Act. It is thereafter that the delivery of the cheque takes place and the drawal becomes complete attracting the play of Section 138 of the N.I. Act. The Division Bench had considered this aspect elaborately in paragraphs 11 to 19 in Ramakrishnan's case (supra). I am not, in these circumstances, persuaded to doubt any aspect in the ::: Downloaded on - 05/07/2018 23:00:36 :::HCHP decision in Ramakrishnan's case and consequently refer the matter for consideration to a larger Bench. The dictum in Ramakrishnan is not founded on any acknowledgment under Section 18 of the Limitation Act. It is founded on .
the reasoning that a promise in writing to pay an amount, the consideration of which is a time barred liability, is valid and is not bad for want of consideration under Section 25(3) of the Contract Act. Before the act of drawing the cheque becomes complete by delivery of the cheque as insisted by Section 46 of the N.I. Act, there is a valid promise in writing (in the cheque) to pay such amount. When the cheque is delivered it must hence be held to be for the discharge of a legally enforcible debt or liability. In as much as the decision by the Division Bench does not rest on any acknowledgment under Section 18 of the Limitation Act, the precedents referred above in paragraph 6 cannot persuade this court to hold that there is any conflict between the dictum in Ramakrishnan and those decisions. The challenge raised on merits must, in these circumstances, fail."
11. In my considered view, it is evident and apparent from the material on record that there was a legal and enforceable debt or liability in favour of the complainant, in lieu of which, the cheque in question was issued by the accused to the complainant, dishonouring of which led to filing of the complaint under Section 138 of the Negotiable Instruments Act. Findings to the contrary returned by learned trial Court are perverse being contrary to the records and further being based on conjectures and surmises. This is ::: Downloaded on - 05/07/2018 23:00:36 :::HCHP especially more so when the factum of issuance of cheque in favour of the complainant by the accused is not in dispute. In fact, in my considered view, the approach adopted by learned .
trial Court is not only hyper technical but the same also does violence with the spirit of the Negotiable Instruments Act.
12. In view of discussion held herein above as also the law cited above, impugned judgment is not sustainable in the eyes of law. Accordingly, this appeal is allowed and judgment dated 08.03.2010, passed in Criminal Complaint No. 196- 1/2006 (85-iii/2007) passed by learned trial Court is ordered to be quashed and set aside and the case is remanded back to the learned trial Court with a direction that the same be adjudicated afresh on merit. Parties through their learned Counsel are directed to appear before the learned trial Court on 06.08.2018. Pending miscellaneous application(s), if any, also stands disposed of.
(Ajay Mohan Goel) Judge July 04, 2018.
(narender) ::: Downloaded on - 05/07/2018 23:00:36 :::HCHP