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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
K.K. RAMAKRISHNAN, J
Chandra (Since Deceased) – Appellant
Versus
Veerasamy – Respondent
ORDER :
K.K. Ramakrishnan, J.
This appeal has been filed to set aside the Judgment of the Appellate Court passed by the VI Additional District and Sessions Court, Madurai, Crl.A.No.15 of 2014, dated 15.09.2016, reversing the order of conviction made in S.T.C.No.315 of 2012, dated 13.02.2014 on the file of the Judicial Magistrate Court No.2 (Fast Track Court), Madurai.
2. The appellant is the complainant in S.T.C.No.315 of 2012. She filed the said S.T.C with the following averments:-
The respondent borrowed a sum of Rs.2,75,000/- on 06.12.2004 and also agreed to pay the interest at the rate of 1 % per month. He also handed over the documents as collateral security. Thereafter, he had not repaid the said amount. On 24.04.2009, the respondent along with his son, approached the appellant and received the said original documents to mark the same in a civil suit pending between the respondent and his sister. On that day also, he received a further sum of Rs.25,000/- and also agreed to pay the total amount of Rs.3 lakhs. Thereafter, on 06.01.2011, to discharge the said debt, he issued a cheque bearing No.626533 for a sum of Rs.5 lakhs, which was drawn on the State Bank of India, Srivilliputhu
A cheque issued for a time-barred debt is not legally enforceable under Section 138 of the Negotiable Instruments Act.
The court ruled that a cheque issued to discharge a time-barred debt is not legally enforceable under the Indian Contract Act. A written promise is required to validate such debts.
The nature of the debt must be proven during trial, and there is a presumption in favor of the holder of the cheque.
A cheque issued for a time-barred debt does not constitute a legally enforceable debt under Section 138 of the Negotiable Instruments Act, leading to no offence being committed.
The issue of whether a cheque was issued for a time-barred debt is a matter for evidence and cannot be adjudicated before the court.
The limitation period for enforcing a debt under Section 138 of the N.I. Act is based on the date of demand, not the date when the debt was incurred.
The limitation period for a debt should start from the expiry of the period agreed upon for repayment, and the issue of whether a cheque was issued for a time-barred debt is a matter of evidence.
A debtor's issuance of a cheque acknowledges a debt; questions of enforceability or time-bar must be determined through evidence, not prior to trial.
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