DIPAK DULICHAND RAMMAIYA v. CHANDRAKANT SHANKARRAO KULKARNI

Judgment

2. Heard learned respective counsel for the parties. This is an application preferred by the applicant/original complainant seeking leave to file appeal challenging the judgment and order of acquittal dated 3.9.2011 rendered by Judicial Magistrate First Class, Court No.2 Ahmednagar in STC No.2238/2009 thereby acquitting the respondent/original accused for the offence p/u/s 138 of Negotiable Instruments Act. [The parties herein after are referred to as per their original status i.e. complainant and accused].

3. I have perused the impugned judgment and order of acquittal dated 3.9.2011 and Record and Proceeding with the

assistance of learned counsel for the parties.

4. Factual matrix of the case is as follows :- 2 The complainant claims to be the resident of Ahmednagar and is carrying business of Engineering, whereas accused is also resident of Ahmednagar since so many years and working as teacher. The construction of the house where the accused resides is completed in the year 1998. Accused has prepared plan of his house from complainant who is a engineer. Due to the work of the complainant, accused was impressed, and so he has given another construction works in the city to the complainant and accordingly, the relationship of friendship, faith and confidence was developed in between the complainant and accused.

5. It is also alleged that on 20.4.2006 the accused was in need of finance for the purpose of his brother-in-law and hence, he requested the complainant to give him Rs.2,00,000/- by way of hand loan. Considering the need of the accused and relationship between both of them, the complainant gave said hand loan to the accused and accused agreed to repay the said amount within the period of three years. Thereafter, in April 2009 when the complainant demanded back his loan amount from accused, the accused requested to give time of further 15 days to repay the said loan. Subsequently, when the complainant demanded back loan amount, the accused issued three cheques i.e. cheque bearing no.0753217 dated 8.5.2009 of Rs. 20,000/-, cheque no.0753218 dated 2.5.2009 of Rs.30,000/- and cheque no. 044132 dated 15.5.2009 for Rs.1,50,000/- to repay the said loan amount. Accordingly, complainant presented said cheques for encashment purpose. However, two cheques bearing nos. 0753217 and 0753218 were dishonoured and returned unpaid with 3 the endorsement ‘insufficient funds’ whereas third cheque bearing no. 044132 was dishonoured with the reason Refer to drawer, on

21.5.2009 alongwith bank return memos thereof respectively. Thereafter, the complainant issued demand notice to the accused on

26.5.2009 by RPAD. Said notice was duly served upon the accused on 27.5.2009. However, inspite of receipt of the said notice, accused failed to repay the cheque amounts to the complainant. Hence, the complainant filed complaint against the accused under section 138 of Negotiable Instruments Act.

6. To prove the guilt of the accused the complainant examined himself as CW 1 and also examined two witnesses namely Makrand Adkar and Sanjay Bhoyar. However, accused neither examined himself on oath nor examined any witness in support/defence, but filed some documents alongwith list Exh.52.

7. At the outset, the complainant has given hand loan to the accused on 20.4.2006 and admittedly, all three disputed cheques in question were issued by the accused to the complainant in the month of May, 2009 i.e. all three cheques were issued after lapse of more than three years of the loan. It is settled legal principle that loan can be legally recovered within the period of three years from the date of advancement of loan. However, in the instant case the aforesaid three disputed cheques in question were issued after expiry of three years from the date of advancement of loan by the complainant to the accused. Pertinently, it is admitted position that there is no acknowledgment receipt obtained by the complainant from the 4 accused within said period of three years from the date of advancement of hand loan. Hence, it is amply clear that the said debt was not legally recoverable/enforceable at the time of issuance of all said disputed cheques in question and therefore, it is apparent that all said three cheques in question have been issued in discharge of time barred debt, which is not legally recoverable debt/liability and observations made by learned trial court in that respect apparently do not appear to be erroneous

8. In the said context, learned counsel for the applicant canvassed that in view of provisions of Section 25 (3) of Indian Contract Act, 1872 and by issuance of aforesaid three cheques in May 2009 which is promise made in writing by the accused, the alleged time barred debt was revived and accordingly, said three disputed cheques in question were towards discharge of legally enforceable debt and observations made by learned trial court and conclusion drawn in that respect are erroneous, and accordingly, learned counsel for the applicant relied on judicial pronouncement in the case of Mr. Narendra V. Kanekar Vs. The Bardez Taluka Co-op. Housing Mortgage Society Ltd and Anr. reported at 2006 (3) ALL MR 673 and in paragraph No.9 it is observed thus :- “ Mere giving a cheque, without anything more, will not revive a barred debt, because cheque has to be given, as contemplated by the explanatory in discharge of a legally enforceable debt. There is no doubt that in terms of the Indian Limitation Act, a signed acknowledgment of liability made in writing before the expiration of the period of limitation, is 1963, 5 enough to start a fresh period of limitation. Likewise, when a debt has become barred by limitation, there is also Section 25 (3) of the Contract Act, by which a written promise to pay furnishes a fresh cause of action. In other words, what clause (3) of the Section 25 of the Indian Contract Act in substance does is not to revive a dead right, for the right is never dead at any time, but to resuscitate the remedy to enforce payment by suit, and if the payment could be enforced by a suit, it means that if still has the character of legally enforceable debt as contemplated by the explanation below Section 138 of the act. As far as this aspect of the case is concerned, the learned Division Bench observed that to determine as to whether or not a liability is legally enforceable, the provisions of the Contract Act cannot be said to be irrelevant. This can provide a cause for legal liability. Although the preliminary question answered by the Division Bench was that a cheque becomes a promise to pay under section 25 (3) of the Contract act, this view need not be followed by this Court in the light of the judgment of this Court in the case of Ashwini Satish Bhat Vs. Shrijeevan Divakar Lolienkar (supra) and the other two judgments referred to herein above. Nevertheless, the Division Bench judgment is relevant to the extent that it holds that a promise to pay in writing as per Section 25 (3) of the Indian Contract Act, 1872 matures into an enforceable contract, which can be enforced by filing a civil suit. If a suit could be filed pursuant to a promise made in writing and singed by the person to be charged therewith, as contemplated by clause (3) of Section 25 of the law of Contract, then, in my view, the debt becomes legally enforceable and if a cheque is given in payment of such debt is dishonoured and subsequently, the statutory notice is not complied with, then the person 6 making the promise in writing and issuing the cheque, would still be liable to be punished under section 138 of the Act.”

9. Learned counsel Mr. Gaware for respondent countered said argument and pointed out that there is no application of section 25 (3) of Indian Contract Act, 1872 in the instant case. It applies for civil liability and for the limitation of the suits and as present complaint has been filed under section 138 of Negotiable Instruments Act, attracting the penal liability, the provisions of section 25 (3) of Indian Contract Act will not come to the rescue of the complainant/applicant and it is also canvassed by learned counsel for respondent that time barred debt which is not legally enforceable/recoverable debt cannot be revived by issuance of cheque, after period of limitation and accordingly, urged that argument canvassed by learned counsel for the applicant bears no substance. Mr. Gaware learned counsel also relied upon judicial pronouncement in the case of Shri Jagadamba Parisar Sahakari Pat Sanstha Maryadit V/s Shravan s/o Ajinath Ukirde and another reported at 2007 (1) LJ SOFT 89 in which it has been observed as :

9. “Reliance has also been placed by the learned advocate for the applicant on the decision of Andhra Pradesh in the case of V. Munikrishnaiah V.C. Janakirama Naidu and another, reported in 2005 ALL MR (Cri) Journal 117, wherein it has been held that, in case of failure of the accused to adduce any evidence to rebut the presumption under section 139 of the Act in favour of the complainant, the court has to presume that the cheque was issued for legally enforceable debt or liability. 7 Thus, the ratio in these cases make it clear that the burden is on the accused/drawer to prove that the cheque has not been issued for debt or liability. This legal position is settled one and cannot be disputed. The accused in the present case put forth a defence that the debt for which this cheque was obtained by the complainant was a time-barred debt. Admittedly, the accused did not enter into witness box to give evidence on this point, nor any other witness is examined. However, the complainant himself found to have concealed material facts. In his complaint, he alleged that the loan was advanced on 12.2.2002, which was to be repaid within two years and the accused issued a cheque on 31.7.2005. However, at the trial, when cross examined, he has admitted that he had advanced loan to the accused on 11.2.2000. It was to be repaid before 11.2.2002. The cheque was issued on 31.7.2005. Thus, the fact of disbursement of loan in the year 2000 was suppressed by this complainant. However, his admisssion proved advance of loan in 2000 and his allegations in the complaint and statement in examination-in- chief that the loan was advanced on 11.2.2002 are found to be false. Admittedly, on the date of issuance of that cheque dated 31.7.2005, the debt was found to be a time-barred debt. In view of explanation to section 138 of the Act, the penal liability under section 138 arises in case the cheque was found to have been issued for discharge of legally enforceable debt orliability. Time-barred debt cannot be said to be a legally enforceable debt or liability. In view of these facts, this liability being found not a debt legally enforceable , the accused came to be acquitted.”

10. Considering the rival submissions advanced by learned counsel for the parties, at the outset section 138 of Negotiable 8 Instruments Act comes under the Chapter XVII of N. I. Act and title of the said chapter is prescribed as ‘Penalties in case of dishonour of certain cheques for insufficiency of funds in the accounts’. Moreover, the very section of 138 of N.I.Act attracts the penal liability and explanation thereof clarifies that “debt or other liability” means a legally enforceable debt or other liability. Accordingly, in section 138 of N.I.Act legislature stated that for the dishonoured cheque the drawer shall be liable for conviction, and accordingly, breach of section 138 of N.I. Act mainly leads to criminal liability, but simultaneously there is no doubt, that the proceeding under section 138 of N.I.Act is a quasi civil/quasi criminal proceeding which relates to the penal liability.

11. Keeping in mind the said legal position and coming to section 25 of the Indian Contract Act, 1872 which prescribes the 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 by limitation law and sub section 3 of said section 25 of the Indian Contract Act, 1872 pertains to a promise, made in writing and singed 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 the suits, and accordingly, the very text of said provision apparently relates to the limitation of the suits i.e. to the civil liability. Hence, there is substance in the argument canvassed by learned counsel for the respondent that there is no application of section 25 (3) of Indian 9 Contract Act, 1872 in the instant case and same is not of any aid and assistance to the case of the applicant/original complainant.

12. After considering the rival submissions advanced by the learned counsel for the parties and judicial pronouncements cited by learned respective counsel and after analyzing the evidence on record, the view adopted by the learned trial court while acquitting the accused is a possible view and same does not appear to be perverse and reasoning given therefor apparently cannot be faulted with and hence, no interference therein is called for in the appellate jurisdiction and therefore, present application deserves to be rejected.

13. In the result, present application which is sans merit stands dismissed. Leave to file appeal is refused. R & P be sent back to the concerned court. Present application is disposed of accordingly. aaa/- ( SHRIHARI P. DAVARE, J. ) ...