Sri. K. Nagarjun vs Sri. N.Vasukinath on 6 January, 2020
Appeal No. 2275/2006 in the case of G.
Muniswamy Vs. H.S.Nagendra Kumar 2)
Crl.Application No. 2933/2007 in the case of Mr.
Dinesh B Choksi Vs. Rahul Vasudeo Bhat 3) ILR
2006 KAR 4242 in the matter of H.Narasimha
Rao Vs. R. Venakataram. In the decision of ILR
2006 KAR 4242 wherein the Hon'ble High Court
44 C.C.No.4242/2018 J
had held that " In case if the time barred debt
is agreed to be paid through a cheque there is
no legal bar for the debtor agreeing to pay time
barred debt and the cheque issued towards
repayment of time barred debt also constitute
offence U/s.138 of the Act . The Hon'ble High
Court of Bombay has also held that, "Sub
section 3 of Sec. 25 of the Contract Act is an
exception to the General Rule that, an
agreement made without consideration is void.
Sub Sec.3 of Sec. 25 of the Contract Act also
applies to a case where there is a promise made
in writing and signed by a person to be charged
there with to pay wholly or in part a debt which
is barred by law of limitation". It is further held
that, a case of promise created by a cheque
issued for discharge of a time barred debt or
liability and once it is held that, a cheque
drawn for a discharge of a time barred debt
creates a promise which becomes enforceable
contract, it cannot be said that, cheque is drawn
in discharge of debt or liability which is not
legally enforceable. The promise in the form of a
cheque drawn in discharge of a time barred debt
45 C.C.No.4242/2018 J
or liability becomes enforceable by virtue of Sub
section 3 of Sec. 25 of the Contract Act. Thus,
such cheque becomes a cheque drawn in
discharge of legally enforceable debt as
contemplated by the explanation to sec. 138 of
the said Act of 1881.