Gujarat High Court

Arun Balvantray Gupta Lh Of Shakuntala ... vs State Of Gujarat on 25 June, 2024

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     R/CR.MA/14788/2023                         ORDER DATED: 25/06/2024

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        IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR LEAVE TO APPEAL) NO. 14788
                             of 2023
             In F/CRIMINAL APPEAL NO. 20668 of 2023
                              With
               F/CRIMINAL APPEAL NO. 20668 of 2023
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ARUN BALVANTRAY GUPTA LH OF SHAKUNTALA BALVANTRAY GUPTA
             PROP. OF M/S ANIL ROAD CARRIER
                          Versus
                 STATE OF GUJARAT & ANR.
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Appearance:
MR NARENDRA L JAIN(5647) assisted by MS.SHIVANI for the Applicant(s)
No. 1
for the Respondent(s) No. 2
MR.JAY MEHTA ADDL. PUBLIC PROSECUTOR for the Respondent(s) No. 1
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 CORAM:HONOURABLE MRS. JUSTICE M. K. THAKKER

                            Date : 25/06/2024

                             ORAL ORDER

1. This application is filed seeking leave to prefer an appeal

against the judgment and order of acquittal passed by

the learned Additional Chief Metropolitan Magistrate

Court No.30 (N.I. Act) in Criminal Case No.430 of 2019

dated 11.04.2023.

2. It is the case of the complainant in the complaint that,

complainant is doing business of transport and the

accused is proprietor of M/s. Speed Roadways of India

and they were in the same business, therefore they were

known to each other. It is the case of the complainant

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that for making payment of debt of CITI Bank, an amount

of Rs.4,80,000/- was lent by the complainant to the

accused on 17.04.2004. Up to the year 2009, the

respondent-accused neither paid principle amount nor

paid the interest as agreed, therefore complainant

approached the respondent-accused and demanded the

amount which was borrowed.

2.1. For repayment of the aforesaid amount, cheque

bearing No.875464 dated 03.01.2009 was issued for the

amount of Rs.10,49,184/- which was dishonoured on

depositing and therefore after following the procedure

prescribed under the Negotiable Instruments Act

(hereinafter referred to as the "N.I.Act"), a private

complaint came to be filed. On filing the complaint, the

respondent-accused appeared and has denied the debt,

however he did not produce any evidence in his defence.

3. After considering the cross examination of the

complainant and the other evidence, the learned trial

court has dismissed the complaint on the ground of time

barred debt.

4. Heard learned advocate Mr.Narendra Jain assisted by

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learned advocate Ms.Shivani for the applicant-original

complainant.

4.1. Learned advocate Mr.Narendra Jain submits that no

cross examination was conducted by the respondent-

accused to show that the debt is time barred debt,

However, learned trial court acquitted the respondent-

accused on that ground, without considering the

evidence on record.

4.2. Learned advocate Mr.Narendra Jain submits that the

time barred debt is a mix question of law and fact which

is to be established during the trial by leading the

evidence. However the learned trial court, though

respondent-accused has not laid any evidence has

dismissed the complaint on the ground of time barred

debt.

5. Learned advocate Mr.Narendra Jain relies on the decision

rendered by the Apex Court in the case of K.Hymavathi

Versus The State of Andhra Pradesh & Anr. wherein

the Apex Court has stated that, complaint cannot be

dismissed threshold and the question of time barred debt

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is to be decided by the learned trial court by scrutinizing

the evidence.

6. Learned advocate Mr.Narendra Jain submits that though

signature on the cheque was not disputed, neither the

issuance of cheque was disputed, learned trial court has

acquitted the respondent-accused without any cogent

reasons and therefore this application for seeking leave

to prefer an appeal requires to be allowed and appeal is

required to be admitted.

7. Having considered the judgment of Apex Court and the

record and proceedings of the instant case, it transpires

that the amount was borrowed by the respondent-

accused on 17.04.2004 and for repayment of the

aforesaid amount, cheque was issued on 03.01.2009 i.e.

after a period of three years. It is true that no question

was put during the trial by the respondent-accused to

establish his defence about the time barred debt.

However as this question is a legal question, even though

it was not raised or not established by the respondent-

accused, the court can certainly decide the case on the

provisions of the Limitation Act, Contract Act as well as

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the Negotiable Instruments Act, which are reproduced

herein below:-

Limitation Act

"S. 3 - Bar of limitation

Subject to the provisions contained in sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence."

S. 4 - Expiry of prescribed period when court is closed

Where the prescribed period for any suit, appeal or application expires on a day when the court is closed, the suit, appeal or application may be instituted, preferred or made on the day when the court reopens.

S. 18 - Effect of acknowledgment in writing

(1) Where, before the expiration of the prescribed period for a suit of application in respect of any property or right, an acknowledgment of liability in respect of such 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

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Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received.

S. 19 - Effect of payment on account of debt or of interest on legacy

Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made:

Provided that, save in the case of payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment.

Contract Act

S. 25 - Agreement without consideration, void, unless it is in writing and registered or is a promise to compensate for something done or is a promise to pay a debt barred by limitation law

An agreement made without consideration is void, unless--

(1) it is expressed in writing and registered under the law for the time being in force for the registration of 1 [documents], and is made on account of natural love and affection between parties standing in a near relation to each other ; or unless

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(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 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.

In any of these cases, such an agreement is a contract.

Negotiable Instruments Act

S. 138 Dishonour of cheque for insufficiency, etc., of funds in the account

Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both:

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Provided that nothing contained in this section shall apply unless--

(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

Explanation.-- For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.]

8. This Court has also considered the decision rendered by

the Apex Court in the case of Sasseriyil Joseph vs

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Devassia in S.L.P (Cri.) No. 1785 of 2001 decided

on 10.09.2001 wherein, the Apex Court held as under::-

"6. The only question that arises for consideration in this appeal is whether the respondent who issued the cheque in question in discharge of a time- barred debt is liable under Sec. 138 of the Negotiable Instruments 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 the appellant, the promise made by the accused to repay the time barred debt would come within the purview of Sec. 25(3) of the 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 the Negotiable Instruments 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, wholly or in part, of 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 Sec. 138 reads as under :-

Explanation :- For the purpose of this Section, "debt

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or other liability" means a legally enforceable debt or other liability.

7. Thus, Sec. 138 is attracted only if the cheque is issued for the discharge of a 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 Girdhari Lal Rathi v. 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 under Sec. 138 of the Negotiable Instruments Act simply on the ground that 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."

9. In view of above, this Court is of the view that the cheque

is an acknowledgment and promise to pay debt which is

signed by the accused and have the effect of creating

fresh starting on the limitation. But while the

acknowledgment under section 18 of the act is required

to be made before the expiration of period of limitation.

In view of this, this Court is of the view that cheque which

was issued in the year 2009 to pay the debt of 2004 was

barred by limitation and there was no valid

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