JUDGMENT

1. Leave granted.

2. The appellant is the complainant in C.C. No.250 of 2011. It is his case that on 6/5/2006, the respondents/accused had received a sum of Rs. 49,000/- from him. On 4/7/2006, they have received a further sum of Rs. 1,00,000/-. On the same day, they received another sum of Rs. 1,00,000/-. It is further the case of the appellant that on 11/1/2007, the accused have received Rs. 50,000/- and subsequently they have received Rs. 1,000/-. Thus, according to the complainant, a total sum of Rs. 3,00,000/- has been received by the accused. According to the appellant, to discharge the said debt, accused No.1 gave a cheque dated 1/2/2011. The appellant presented the said cheque for payment through his bank on 2/2/2011. The said cheque was dishonoured on the ground that the accused did not have sufficient funds in their account. A copy of the Memorandum dated 12/2/2011 issued by the Karur Vysya Bank Limited is on record at Annexure P-1.

3. Inasmuch as the said cheque was dishonoured, the appellant issued Notice dated 2/3/2011 to the accused calling upon them to pay the cheque amount of Rs. 3,00,000/- within 15 days. The accused replied to the said notice contending that the appellant and his son were working as partners with the accused; that the accused had signed blank cheques which had been stolen by the appellant and his son; that the business of the accused ran into loss and was closed in the year 2008; that upon closure of the business, there were no business relations between them; and that by misusing the stolen cheque, a false claim was being made by the appellant. Since the accused failed to comply with the demand made in the Notice dated 2/3/2011, the appellant filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 (`the NI Act') being C.C. No.250 of 2011 in the Court of learned Judicial Magistrate, Musiri.

4. The accused moved an application under Section 482 of the Code of Criminal Procedure ("the Code") in the Madras High Court for quashing of the said complaint. The accused inter alia pleaded that no amount had been borrowed by the accused; that the dishonoured cheque had not been issued for a legally enforceable debt and that the complaint was barred by time. By the impugned order, the High Court quashed the proceedings in Criminal O.P. (MD) No.3824 of 2012 and M.P.(MD) Nos.1 and 2 of 2012 holding that the complaint was time barred. The said order is challenged in this appeal.

5. We have heard learned counsel for the appellant and learned counsel for the respondents.

6. The High Court referred to Section 25(3) of the Indian Contract Act, 1872 on which reliance was placed by the complainant and observed that with regard to payment of time barred debt, there must be a distinct promise to pay either whole or in part the debt; that the promise must be in writing either signed by the person concerned or by his duly appointed agent. The High Court then observed that unless a specific direction in the form of novation is created with regard to payment of the time barred debt, Section 25(3) of the Contract Act cannot be invoked. The High Court then went into the question whether issuance of cheque itself is a promise to pay time barred debt and referred to Sections 4 and 6 of the NI Act. After referring to certain judgments on the question of legally enforceable debt, the High Court stated that for the purpose of invoking Section 138 read with Section 142 of the NI Act, the cheque in question must be issued in respect of legally enforceable debt or other liability. The High Court then observed that since at the time of issuance of cheque i.e., on 1/2/2011, the alleged debt of the accused had become time barred, the proceedings deserve to be quashed.

7. In our opinion, the High Court erred in quashing the complaint on the ground that the debt or liability was barred by limitation and, therefore, there was no legally enforceable debt or liability against the accused. The case before the High C