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GURVINDER SINGH GILL
Sumit Singla – Appellant
Versus
Kala Mandir Sarees And Jewellers – Respondent
JUDGMENT
Gurvinder Singh Gill, J. - The petitioner seeks quashing of complaint dated 26.9.2018 (Annexure P-2) as well as order dated 13.11.2019 (Annexure P-3) vide which he has been ordered to be summoned so as to face trial for offence under Section 138 of the Negotiable Instruments Act (hereinafter referred to as 'the Act').
2. The respondent/complainant Kala Mandir Sarees and Jewellers, through its proprietor Smt. Madhu Bala, instituted a complaint against SGM Steel Private Limited and its Directors Sumit Singla (petitioner) and Tina Singla wherein it is alleged that the complainant, upon being requested by the accused to advance loan, had transferred an amount of Rs. 25 lacs by way of two different bank transactions made on 14.12.2011, as the complainant was having family relations with the accused. It is alleged that the accused had assured that interest on the said amount @ 12% per annum would be paid till return of the principal amount. It has specifically been stated therein that the accused had been paying interest, as had been agreed upon and finally on 6.7.2018, a cheque bearing No. 015973 dated 6.7.2018 drawn on Union Bank of India, Karnal, for an amount of Rs. 25 lacs wa
The main legal point established in the judgment is that the issuance of a cheque for repayment of a time-barred debt creates a legally enforceable liability under Section 138 of the Negotiable Instr....
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 nature of the debt must be proven during trial, and there is a presumption in favor of the holder of the cheque.
Dishonour of cheque – When a cheque is issued towards a time-barred debt and is dishonoured, liability under Section 138 of N.I. Act squarely arises.
A written acknowledgment of debt as a promise to pay under Section 25(3) of the Indian Contract Act can validate a recovery claim even if time-barred, thus distinguishing it from an acknowledgment un....
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.
Issuance of a cheque acknowledges a legally enforceable liability, making the drawer liable under Section 138 of the NI Act, even if the debt is time-barred.
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