A.S. Oka, J.

1. On the basis of Judgment and Order dated 23rd December, 2008 passed by learned Single Judge, the Hon’ble the Chief Justice passed an order on the Administrative Side directing that these matters should be placed before a Division Bench. Accordingly, these Applications have been placed before this Court.

2. The reference to Division Bench is for deciding the two questions formulated by the learned Single Judge under his Judgment and Order dated 23rd December, 2008. The said two questions are:-

“(i) Does the issuance of a cheque in repayment of a time barred debt amounts to a written promise to pay the said debt within the meaning of Section 25(3) of the Indian Contract Act, 1872?

(ii) If it amounts to such a promise, does such a promise, by itself, create any legally enforceable debt or other liability as contemplated by Section 138 of the Negotiable Instruments Act, 1881?

3. We have heard Shri A.P. Mundargi, learned Senior Counsel who was appointed as Amicus Curiae to assist the Court, Shri Prakash Naik, Shri S.S. Kulkarni, Shri M.D. Mali, Shri Nitin V. Gangal and Shri S.V. Marwadi, the learned counsel representing the various parties.

SUBMISSIONS:

4. Shri Mundargi, learned Senior Counsel appointed as Amicus Curiae has assisted the Court. He pointed out the decision of the Apex Court in the case of National Insurance Company Limited Vs. Seema Malhotra and Others [(2001)3 SCC 151]. His submission is that in view of what is held by the Apex Court, a cheque issued towards the discharge of time barred debt will be a promise within the meaning of Section 25(3) of the Indian Contract Act, 1872 (hereinafter referred to as “the Contract Act”). He submitted that the answer to the question whether a cheque is issued in discharge of any legally enforceable debt or liability or not depends on factual matrix of every case and no hard and fast rule can be laid down. Learned counsel appearing for the original Complainants in the Complaints alleging offences under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as “the said Act of 1881”) have relied upon various decisions of the learned Single Judges of this Court holding that a cheque issued amounts to promise within the meaning of Section 25(3) of the Contract Act and submitted that a complaint under the provisions of Section 138 of the said Act of 1881 on account of dishonour of such a cheque will be maintainable inasmuch as by virtue of promise contained in the cheque, the time barred debt or liability ceases to be time barred. The submission of the learned counsel appearing for the Accused is that a cheuque issued in discharge of liability of payment of a time barred debt or liability cannot be said to be a cheque issued in discharge of a legally enforceable debt or other liability. The submission is that on the date on which the cheque is issued, there does not exist any legally recovered debt or liability inasmuch as the same is already barred by law of limitation. It is urged that a time barred debt cannot be said to be a legally recoverable debt, and therefore, even assuming that the first question will have to be answered in the affirmative, the second question will have to be answered in the negative. It is urged that even assuming that a cheque issued towards time barred debt becomes a promise within the meaning of Section 25(3) of the Contract Act, the fact remains that on the date of the cheque, it is issued towards the discharge of a debt or liability which is not legally recoverable. Learned counsel appearing for the parties have relied upon various decisions in support of their submissions.

5. It will be necessary to make a reference to the relevant provisions of the Contract Act.

CONSIDERATION OF THE FIRST QUESTION

It will be necessary to make a reference to Section 2 of the Contract Act which is the interpretation clause. It reads thus:-

“2. Interpretation clause.—In this Act the following words and expressions are used in