A cheque issued for a time-barred debt constitutes a valid promise, creating a fresh cause of action, and the issue of limitation requires trial unless clearly barred.

ORAL ORDER

The petitioner–defendant, in this civil revision petition, challenges the order dated 04.01.2024 passed by the XIV Additional City Civil and Sessions Judge at Bengaluru (CCH-28) in I.A. No. II in O.S. No. 5557/2017, whereby the application filed under Order VII Rule 11(d) of the Code of Civil Procedure, 1908 (CPC) was rejected. The petitioner seeks rejection of the plaint on the ground that the suit is barred by limitation.

1.1. The petitioner–defendant seeks the rejection of the plaint in a suit instituted for the recovery of monies allegedly invested by the plaintiff in an “Employee Benefit Scheme” upon solicitation by the defendant. The petitioner contends that the suit is based on a time-barred debt and a dishonoured cheque issued by the defendant in respect thereof. It is the specific contention of the petitioner–defendant that the issuance of a cheque in relation to a time-barred debt does not revive the expired period of limitation for the purpose of a suit for the recovery of amounts allegedly received by the defendant for the plaintiff’s use.

2. The plaintiff filed a suit seeking a direction to the defendant to pay a sum of INR 48,00,000 along with interest at 12% per annum, amounting to INR 82,56,000, among other reliefs.

3. In the plaint, the plaintiff averred that the defendant had solicited him to invest in a scheme called the “Employee Benefit Scheme.” Pursuant to this solicitation, the plaintiff transferred an amount of ₹48,00,000 to the defendant’s bank account. Subsequently, the plaintiff, upon receiving reliable information, learned that the defendant had solicited money from several other individuals under the pretext of investing in a knowingly fraudulent scheme, thereby cheating them.

4. The plaintiff lodged a criminal complaint against the defendant for offences punishable under Sections 34, 120B, 409, 418, 420, 468, and 471 of the Indian Penal Code, 1860, alleging criminal breach of trust. After an investigation, the police filed a charge sheet for offences related to criminal breach of trust. Thereafter, in April 2019, the defendant approached the plaintiff, requesting him to withdraw the criminal complaint and assuring him that she would repay the amount along with interest. In furtherance of this assurance, the defendant issued a cheque dated 13.06.2019 for INR 50,00,000/-

5. The defendant entered an appearance and filed an application under Order VII Rule 11(d) of the Code of Civil Procedure, 1908 , contending that the alleged amount was paid by the plaintiff in October 2015. The issuance of the cheque dated 13.06.2019, she argued, would not bring the suit within the limitation period, as the defendant had not acknowledged the time- barred debt as required under Article 18 of the Limitation Act, 1963 . Consequently, the present suit, filed after the expiration of three years from the date of the cause of action, is not maintainable under Article 24 of the Limitation Act, 1963 .

In support, reliance is placed on the following:

i. Sasseriyil Joseph v. Devassia - MANU /KE / 0674 /2000

ii. Mortulo Ramchandra Gad and Ors. v. John Pinto and Ors. - MANU / MH / 0736 / 2006.

iii. KH Hanumanthaiah v. Prakashchand - CRP 77/2023 : DD 27.08.2024 iv. Kotak Mahindra Bank Limited v. Kew Precision Parts Private Limited and Ors. (2022) 9 SCC 364 v. Bombay Dyeing & Manufacturing Co. Ltd. v. The State of Bombay and Co., AIR 1958 SC 328 vi. N Ethiraju Naidu v. K R Chinnikrishnan Chettiar , AIR 1975 Mad 333

6. In response, the learned counsel for the respondent-plaintiff contended that although the cheque was issued after the expiry of the limitation period, it was issued as a promise to pay a time-ba