The issuance of a post-dated cheque in lieu of a debt constitutes acknowledgment of the debt, creating a fresh cause of action for the creditor under Section 138 of the Negotiable Instruments Act.

Ajay Mohan Goel, J.

By way this appeal, appellant has challenged the judgment passed by learned Chief Judicial Magistrate, Kullu, District Kullu, in Criminal complaint No. 196-1/2006 (85-iii/2007), dated 08.03.2010, vide which, learned trial Court dismissed the complaint so filed by the present appellant against the respondent/accused under Section 138 of the Negotiable Instruments Act and acquitted the accused for commission of offence punishable under Section 138 of the Negotiable Instruments Act (hereinafter referred to as ‘NI Act’).

2. Case of the appellant/complainant (hereinafter referred to as ‘complainant’) was that he and accused were neighbours and were having good relations with each other. According to the complainant, on 31.08.1999, accused made a request to him that he (accused) was in need of some money for the business purpose and demanded a sum of Rs.2,00,000/- in this regard. As per complainant, he could only manage Rs.1,66,000/-, which was accordingly lent by him to the accused on the same day free of interest in lieu of good relations with the accused. Further, as per complainant, accused promised to pay back the said amount within a period of one year and also issued a post dated cheque in lieu of the said liability. Further, as per complainant, before the Cheque could be negotiated, the accused on account of some financial problem took back the same from the complainant and thereafter, issued another post dated cheque in his favour, but the same was also taken back in the same manner by the accused. As per complainant, thereafter finally accused issued cheque bearing No. RXX 553216, dated 28.2.2006, amounting to Rs.1,66,000/- in favour of complainant for repayment of loan, which the accused had taken from him. According to the complainant, when he presented the said cheque for encashment, the same was dishonoured with remarks ‘Insufficient Funds” vide memo dated 05.05.2006. Pursuant to this, complainant issued a legal notice through registered post to the accused, which was received by the accused, but the accused neither filed reply to the legal notice nor made the payment in terms of cheque in issue. In this background, complainant filed complaint under Section 138 of the NI Act.

3. Vide judgment impugned, the complaint so filed by the complainant stands dismissed by the learned trial Court. It was held by the learned trial Court that the meaning of ‘legal debt or other liability’ is clear from the explanation appended to Section 138 of the NI Act. It further held that in the case in hand, money was lent by the complainant to accused on 31.08.1999, whereas the cheque, which led to filing of the complaint under Section 138 of the NI Act, bears the date 28.02.2006. Learned trial Court further held that complaint for dishonour of cheque lies only when there is a ‘legally enforceable debt or other liability’. It further held that in the case in hand, civil remedy for recovery of the amount was available to the complainant within a period of three years and thereafter the suit was barred by limitation. Learned trial Court further went on to hold that this meant that legal debt or other liability could not thereafter be enforced as barred under law of limitation. On this analogy, learned trial Court went on to hold that as loan was lent on 31.08.1999 and the cheque for discharge of said loan was issued by accused on 28.02.2006, then, as on the day, when the cheque was issued, there was no ‘legally enforceable debt or liability’. Learned trial Court concluded that the debt in issue was not legally enforceable and moreover there was nothing on record to suggest that accused had acknowledged the debt and cause of action survived till the date of issuance of the cheque in issue. On these basis, learned trial Court dismissed the complaint filed by the present appellant by holding that complainant had failed to prove the most essential ingredient i.e. “legally enforceable debt or liability”.

4. Feeling aggrie