Time-Barred Debts and Effect on Criminal Proceedings For Cheque-Dishonour under S.138 of Negotiable Instruments Act, 1881

Time-Barred Debts and Effect on Criminal Proceedings For Cheque-Dishonour under S.138 of Negotiable Instruments Act, 1881

Section 138 - Time Limit - "Time-barred Debt" - Effect of Acknowledgement - In the instant case, the last business transaction between accused and Complainant took place on 26.7.2005 and thereafter, no other business transaction took place between the parties -  The issue here was whether the debts were time-barred or not - One can refer Section 18 of the Limitation Act, 1963 which deals with the effect of acknowledgement which shows that for analyzing the limitation of a liability beyond a period of three years, the acknowledgment, if any, must be there before the period of limitation is over - Held,  mere giving of a cheque, without anything more, will not revive a time-barred debt, because cheque has to be given, as contemplated by the explanatory, in discharge of a legally enforceable debt - Held that in these circumstances when nothing was done by complainant for 4 years then the cause of action to enforce the said liability, as per law remained in existence only up to July 2008 -  Trial Court has although acknowledged the handwritten copy of the account statement, which had not been disputed by Complainant, to arrive at the conclusion that the cheque dated 12.6.2009, was not against the time-barred liability, but a perusal of the material placed on record revealed that the said document pertains to the account being maintained by Complainant and is about the balance which got forwarded on 1.4.2009 and cash entry of Rs.5000/-, dated 2.6.2009, and even if the said document is deemed to be correct, the said payment of Rs.5000/- on 2.6.2009 does not extend the period of limitation since the cash payment was made after the expiry of the period of limitation - Further, there was no acknowledgment on record, if any at any point of time during the period of limitation regarding the liability against the goods supplied, therefore, it has been rightly held hat the period of limitation also cannot be extended after July 2008 - Alleged responsibility, if any, had already become time-barred as on the date of the issuance of cheque and, therefore, the same cannot be said to be in discharge of a legally enforceable debt or liability - Acquittal of accused is justified.  - Jage Ram Karan Singh v. State [2019] GCtR 3582 (Delhi)

Section 139 - Presumption - Extent of Presumption-  Though, it is correct that once the signatures are admitted on the cheque, existence of legally enforceable debt or liability has to be presumed, but it is to be noted that the said presumption is rebuttable - When accused has been able to rebut the said presumption by showing that the liability for payment against the goods supplied arose in July 2005 and the limitation to file the case on the said liability expired in July 2008 then acquittal would be justified - Presumption, which is contained in Section 139 of the NI Act, only raises the presumption that the cheque has been issued for the discharge of a debt or liability and existence of legally recoverable debt is not a matter of presumption, as per the aforesaid provisions of law - Presumption under S.139 has been successfully rebutted by accused. - Jage Ram Karan Singh v. State [2019] GCtR 3582 (Delhi)