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2022 Supreme(Mad) 3457

IN THE HIGH COURT OF JUDICATURE AT MADRAS
G. JAYACHANDRAN, J.
S. Sekar - Appellant
Versus
K. Mariasamy - Respondent
Crl.R.C. No. 301 of 2016
Decided On : 14-09-2022

Important Points

The distinction between an acknowledgment of debt and a promise to pay a debt under Section 25(3) of the Indian Contracts Act is of great importance in determining the enforceability of the debt.

Subject

Criminal Law - Negotiable Instruments Act

Act Referred

CONTRACT ACT : S.25, S.25(3)
CRIMINAL PROCEDURE CODE : S.397, S.401
LIMITATION ACT : S.18
NEGOTIABLE INSTRUMENTS ACT : S.138

Headnote

Negotiable Instruments Act - Private Complaint - Section 138 - Section 25 of the Contracts Act - Section 25(3) - Ex.P10 - Ex.P11

Fact of the Case:

The petitioner borrowed a sum of Rs.2,00,000 and promised to repay it within six months with interest. When the cheques were presented for collection, they were returned with an endorsement 'Insufficient Funds'. The complainant initiated a private complaint under Section 138 of the Negotiable Instruments Act.

Finding of the Court:

The trial Court convicted the petitioner to undergo 6 months Simple Imprisonment and pay a compensation of Rs.2,00,000 within one month. The lower appellate Court confirmed the judgment of the trial Court. The High Court modified the sentence to a compensation of Rs.1,30,000 within a period of one month.

Issues: The main issue was whether the cheques issued were for discharge of a legally enforceable debt or a promise for a time-barred debt.

Ratio Decidendi: The Court considered Section 25 and 25(3) of the Indian Contracts Act and held that the cheques were issued after the written acknowledgment of the time-barred debt, as evidenced by Ex.P10 and Ex.P11.

Final Decision: The Criminal Revision Case was partly allowed, modifying the sentence to a compensation of Rs.1,30,000 within a period of one month.

Advocates appeared:
For the Petitioner:K.G. Senthil Kumar, Advocate. For the Respondent:N.S. Suganthan, Government Advocate (Crl.Side).

JUDGMENT

(Prayer: Criminal Revision Case has been filed under Sections 397 read with 401 of Criminal Procedure Code to call for the records in C.A.No.85 of 2013 dated 25.01.2016, on the file of the learned XVI Additional Sessions judge, Chennai and confirming the order/judgment passed in C.C.No.216 of 2012, dated 26.03.2013 on the file of the learned VIII Metropolitan Magistrate, George Town, Chennai and set aside the same.)

1. This Criminal Revision Case is filed against the concurrent findings of the Courts below in a private complaint initiated under Section 138 of Negotiable Instruments Act.

2. The case of the complainant is that he and the petitioner herein are known to each other and for his family expenses, the petitioner borrowed a sum of Rs.2,00,000/- and promised to repay it within six months with interest at the rate of 24% per annum. However, he was evading repayment in spite of repeated requests. At last he has given four cheques bearing Nos.789420 dated 20.08.2011, 789419 dated 27.08.2011, 789418 dated 03.09.2011 and 789417 dated 10.09.2011 for Rs.50,000/- each. When the cheques were presented for collection, it were returned with an endorsement "Insufficient Funds". On receipt of the return memo, statutory notice was caused to the petitioner on 13.12.2011 and it was received by the petitioner on 16.12.2011. But he failed to reply. Hence the complaint.

3. The respondent/complainant has examined his Power of Attorney, Janarthanan as PW.1 and the complainant himself has mounted the witness box as PW.2. 11 Exhibits were marked in support of his complaint.

4. The petitioner has resisted the claim on the ground that the complaint is hopelessly barred by limitation. The cheques dated 20.08.2011, 27.08.2011, 03.09.2011 and 10.03.2011 are the cheques given for the time barred debt. Under Section 25 of the Contracts Act, a promise made without consideration is void. The cheque given is only a promise to pay a time barred debt, so it cannot be equated with acknowledgment of a time barred debt to save the period of limitation prescribed. Therefore, the complaint has to be dismissed.

5. However, the trial Court taking note of the fact that the petitioner/accused has given undertaking letter dated 30.06.2011 marked as Ex.P.10 and deed dated 12.07.2011 marked as Ex.P11 which is an acknowledgment of debt, therefore, under Section 25(3) of the Contracts Act, the promise made in writing and signed by the person to pay the debt of which might have enforced by the creditor for payment but for the law limitation. It may be an agreement without consideration, though it is saved from the rigor of Section 25(1) which say agreement made without consideration is void, since there is written acknowledgment of the debt

6. While holding so, the trial Court convicted the petitioner/accused to undergo 6 months Simple Imprisonment and pay a compensation of Rs.2,00,000/- within one month. Aggrieved by the said conviction and sentence, C.A.No.85 of 2013 was preferred by the petitioner/accused before the XVI Additional City Civil Court, Chennai. The lower appellate Court on re-appreciation of law and the evidence has confirmed the judgment of the trial Court.

7. In this revision case, the learned counsel for the petitioner/accused reinforcing the defence of limitation, circulated a judgment of this Court rendered in Sama Dharman Vs. Natarajan reported in 2012-2- L.W. ( Crl.) 516. According to the learned counsel for the petitioner, in the cross examination of PW.2, the complainant admits that the loan of Rs.2,00,000/- was given to the petitioner during the month of February 2007. After receiving the loan, no payment was made by the accused and thereafter, he gave the letters – Ex.P10 and Ex.P11 and the four cheques which is the subject matter of the complaint. While the complainant himself admitted that for the loan availed in the month of February 2007, the subject cheques dated 20.08.2011, 27.08.2011, 03.09.2011 and 10.03.2011 were given ex facie for a

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