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.

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, Srivilliputhur Branch, and the same was presented by the appellant in her bank namely, Karur Vysya Bank, Gnanaolivupuram Branch and the same was returned on 17.02.2011 with an endorsement “funds in-sufficient”. Hence, the appellant issued legal notice on 09.03.2011. Even though, the respondent received the notice, did not send any reply notice. In such circumstances, the appellant filed a complaint under Section 200 Cr.P.C., r/w Sections 138 Negotiable Instrument Act before the Judicial Magistrate Court No.2 (Fast Track Court), Madurai. The learned Judicial Magistrate took the complaint on file in S.T.C.No.315 of 2012.

3. Thereafter, the petitioner to prove her case, examined herself as P.W.1 and marked Ex.P.1 to Ex.P.6. On the side of the respondent, the father of the respondent was examined as D.W.1 and marked Ex.D.1 to Ex.D.7.

4. The learned trial Judge has not accepted the case of the respondent that the debt was time barred one and also he invoked the presumption under Section 138 of Negotiable Instrument Act and convicted the respondent by the judgment dated 13.02.2014 and directed him to undergo 1 year Simple Imprisonment and also directed to pay an amount of Rs.5,00, 000/- as compensation.

5. Aggrieved over the same, the respondent filed an Appeal in Crl.A.No.15 of 2014, before the file of the VI Additional District and Sessions Court, Madurai.

6. The learned Appellate Judge considering both oral and documentary evidence held that the alleged transaction of issuance of cheque for the debt amount is time barred one and does not satisfy the ingredients of Section 25(3) of the CONTRACT ACT , and the cheque was not legally enforceable. The learned Appellate Judge after considering the case of the respondent and the number of precedents, held that there was no legally enforceable debt and the debt was barred by limitation. Further, held that there was no relationship between the complainant and the respondent. Therefore, he acquitted the respondent from the offence under Section 138 of Negotiable Instruments Act. Hence, the appellant/complainant preferred this appeal before this Court.

7. The learned counsel for the appellant submitted that there is no bar to receive the cheque for the time barre