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IN THE HIGH COURT OF CALCUTTA
KANCHAN CHAKRABORTY, J.
Ram Chandra Singh Chouhan – Appellant
Vs.
Ram Gopal Sharma – Respondent
C.R.R. No. 870 of 2010
Decided On: 19.08.2011
NEGOTIABLE INSTRUMENTS ACT - ISSUANCE OF CHEQUE - SECTION 138 - SECTION 142 - A time-barred debt can be revived by the issuance of a cheque, creating a fresh cause of action for proceedings under Section 138 of the Negotiable Instruments Act. The complaint under Section 142 must be filed within one month from the expiry of the 15-day period for payment after receiving the notice.
Fact of the Case:
The petitioner issued a cheque for Rs. 50,000 to the complainant in discharge of a loan taken five years prior. The cheque was dishonored due to insufficient funds, and the complainant initiated criminal proceedings under Section 138 of the Negotiable Instruments Act. The petitioner challenged the legality and validity of the proceedings, arguing that the debt was time-barred and that the complaint was filed in violation of Section 142(b) of the Act.
Finding of the Court:
The court held that the issuance of the cheque revived the time-barred debt, creating a fresh cause of action for proceedings under Section 138 of the Negotiable Instruments Act. The court also held that the complaint was filed within the one-month limitation period prescribed under Section 142(b) of the Act.
Issues: 1. Whether a time-barred debt can be revived by the issuance of a cheque, creating a fresh cause of action for proceedings under Section 138 of the Negotiable Instruments Act? 2. Whether the complaint under Section 142 must be filed within one month from the expiry of the 15-day period for payment after receiving the notice?
Ratio Decidendi: 1. A time-barred debt can be revived by the issuance of a cheque, creating a fresh cause of action for proceedings under Section 138 of the Negotiable Instruments Act. This is supported by the presumption under Section 139 of the Act that a cheque is issued for the discharge of a debt or liability, as well as the principle that limitation only bars the remedy but does not destroy the right to which the remedy relates. 2. The complaint under Section 142 must be filed within one month from the expiry of the 15-day period for payment after receiving the notice. This is the clear requirement under Section 142(b) of the Act, and there is no ambiguity in the language used.
Final Decision: The court dismissed the petitioner's revisional application, upholding the concurrent findings of fact by the trial court and the appellate court.
Kanchan Chakraborty, J.
1. The legality, validity and propriety of a concurrent finding of fact has been challenged in this revisional application, mainly, on the following two-fold grounds:--
(a) That in view of explanation to section 138 of the N.I. Act, 'debt or other liability', for the purpose of section 138 of the N.I. Act, should be a legally enforceable debt or liability, which is not in the case in hand because the alleged debt was a time barred one;
(b) That the criminal action was initiated by the opposite party against the petitioner under section 138 of the N.I. Act in violation of mandatory provisions of section 142(b) of the Act.
The opposite party No. 1 Ram Gopal Sharma lodged a complaint being No. C/226/02 against the petitioner in the Court of the learned Additional Chief Metropolitan Magistrate, Calcutta under section 138 of the Negotiable Instruments Act on 15.02.2002 alleging therein that a cheque of Rs. 50,000/- drawn by the petitioner in favour of the opposite party in discharge of monetary liability arose out of business transaction between them. The cheque was dishonoured on presentation by the banker of the opposite party No. 1 for insufficiency of fund in the account. The information was received by the opposite party No. 1 from the bank on 10.01.2002, Without delay, on 17.01.02, the opposite party No. 1 sent a demand notice to the petitioner which he received on 04.02.2002. The petitioner failed to pay the money as demanded through notice by the opposite party No. 1 within a period of 15 days from the date of the receipt of the notice. The opposite party No. 1 filed the complaint in the Court against the petitioner on 15.02.2002.
2. The learned Trial Court upon consideration of evidence on record, oral and documentary, found the petitioner guilty of offence under section 138 of the N.I. Act and sentenced him to pay a fine of Rs. One lakh, in default, to suffer simple imprisonment for one year. It was also directed that the amount of fine to be paid to the complainant as compensation. The order was appealed against and the Criminal Appeal being No. 58/09 was dismissed by the learned Appellate Court whereby the order of the learned Metropolitan Magistrate was affirmed.
3. That the petitioner has come up with this revisional application against the judgment and order dated 06.02.2010 passed by the learned Appellate Court on the above-mentioned ground's.
4. The question is whether under the facts and circumstances of the case and evidence on record, the learned Appellate Court made any error of fundamental principles of law resulting in gross miscarriage of justice requiring or necessitating any interference of this Court in exercising its revisional jurisdiction.
5. Mr. Sarkar, learned Advocate appearing on behalf of the petitioner contended that the money due out of the alleged business transaction was Rs. 90,000/- and that transaction took place in the year 1996. The cheque in question i.e. cheque of Rs. 50,000/- dated 15.12.2001 was drawn by the petitioner in favour of the opposite party No. 1 was placed before the bank by the opposite party No. 1. Since the loan transaction had taken place on 20.12.1996, that particular loan became a time barred loan on 15.12.2001 i.e., the date when the cheque was drawn in favour of the opposite party No. 1 by the petitioner. So, being a time barred debt, it was not legally enforceable in view of the explanation to section 138 of the Negotiable Instruments Act.
6. Mr. Sarkar, learned Advocate for the petitioner refers to a decision of Himachal Pradesh High Court in Narinder Kumar vs. Harnam Singh, reported in 2000 Cr. LJ 257 in support of his contention.
7. In that case before the Himachal Pradesh High Court it was found that there was no subsisting debt or other liability was existing which accused was legally bound to discharge. It was also not established in that case that the cheque in question was issued with a view to discharge any such debt/liability. The Him
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