A time-barred debt is not revived by the mere issuance of a cheque unless the payment is voluntary; where a specific defense is provided and liability is denied, the cheque does not constitute a legally enforceable debt under Section 138 of the NI Act.

ORAL JUDGMENT

This appeal is by the complainant of a case involving alleged offences punishable under Sections 138 and 139 of the Negotiable Instruments Act, 1881.

2. Being aggrieved by the order dated 26.02.2024 passed in Crl.A.No.35/2023 on the file of VI Additional District & Sessions Judge, Bengaluru, Rural District, Bengaluru, by which the appeal filed by the accused/respondent under Section 374(3) of Cr.P.C challenging the validity and legality of the judgment of conviction order passed by the Chief Judicial Magistrate, Rural District, Bengaluru in CC.No.9639/2021 dated 12.04.2023 has been allowed acquitting him of the offence punishable under Section 138 of Negotiable Instruments Act.

3. The case of the complainant/appellant is that he had advanced a loan of Rs.4,50,000/- to the accused/respondent on 05.08.2017 and in repayment of the said loan, accused/respondent had issued subject cheque on 04.02.2021 that when the said cheque was presented for encashment, the same was returned with an endorsement 'insufficient funds'. Complainant/appellant had issued a notice on 02.03.2021 calling upon him to make the payment as contemplated under the law. Non- compliance with the said notice has given rise to cause of action and constrained him to file the complaint under Section 138 of N.I. Act.

4. The complainant examined himself as PW1 and produced five documents as Ex.P1 to Ex.P5. Accused/respondent pleaded not guilty and examined himself as DW1 and another witness as DW2 and got marked 8 documents as Ex.D1 to Ex.D8. Magistrate framed the following points for consideration:

1. Whether the complainant proves that, accused, in order to discharge the legally recoverable debt owed towards the complainant, issued the cheque bearing No.698093, 04.02.2021 for Rs.4,50,000/-, drawn on Indian Overseas Bank, Machohalli Branch, Bengaluru.. When said cheque was presented by the complainant for encashment, it was dishonored for "Funds Insufficient" on 05.02.2021. Thereafter, complainant issued the notice to accused on 02.03.2021 intimating about dishonour of said cheque. Said notice was served on the accused. Thereafter, accused has not made any effort to make payment of the cheque amount. Accordingly, accused has committed offence punishable U/Sec.

138 of NI Act?

2. What order?"

5. On appreciation of evidence, passed the Judgment of Conviction and sentence dated 12.04.2023, convicting and sentencing the accused/respondent for the offence punishable under Section 138 of Negotiable Instruments Act, sentencing him to pay the fine of Rs.4,55,000/- and in default to undergo imprisonment for

3 months.

6. Being aggrieved, accused/respondent preferred an appeal in Crl.A.No.35/2023, following points were framed for consideration:

"1) Whether the cheque was issued towards a time barred debt and the same would not fall within the definition of legally enforceable debt as contended by the appellant?

2) Whether the judgment of conviction and sentence passed by the trial Court in C.C.No.9639/2021 dated 12.04.2023 is perverse, improper and deserves to be set aside?"

3) What order?"

On re-appreciation of the matter, the First Appellate Court answered point Nos.1 and 2 in the affirmative. The First Appellate Court having found the debt being time barred and relying upon the judgment of the Apex Court in the case of SASSERIYIL JOSEPH vs DEVASSIA reported in 2001 SCC ONLINE SC 1513 and the order of the Co- ordinate Bench of this Court in the case of THE BIDAR URBAN CO-OPERATIVE BANK LTD. VS. Mr.GIRISH reported in 2021 AIR(kar)(R) 600