The issuance of cheques acknowledges a legally enforceable debt, and a promise to pay a time-barred debt revives the original obligation.

JUDGMENT

This appeal has been preferred as against the judgment passed in Crl.A.No.471 of 2023 dated 06.08.2024 on the file of the IV Additional Sessions Judge, City Civil Court, Chennai, thereby setting aside the judgment of conviction and sentence imposed by the learned Special Metropolitan Magistrate / XVI Small Causes Court, Chennai, in STC No.1052 of 2021, for the offence punishable under Section 138 of NI Act.

2. The appellant lodged a complaint as against the respondent for the offence punishable under Section 138 of NI Act alleging that he is a Builder and entered into a Joint Venture Agreement with the respondent for constructing a flat in the vacant land owned by the respondent to an extent of 3390 sq.ft. The appellant had paid a sum of Rs.55,80,000/- to the respondent for the contractual obligations. Thereafter, the respondent breached the agreement without the knowledge of the appellant and mortgaged the said property for loan to the tune of Rs.60,00,000/- to a third party. Therefore the Joint Venture Agreement came to be terminated by the deed of assent dated 06.08.2014. As per the said deed a sum of Rs.15,00,000/- was repaid by the respondent to the appellant through cheque and the balance amount of Rs.40,80,000/- had to be paid as on 06.08.2014. However, the respondent failed to pay the said amount and as such the appellant caused legal notice and also lodged a police complaint. In the enquiry, the respondent agreed to repay the amount which was received by him for a sum of Rs.40,80,000/- by way of three cheques. The first cheque was dated 24.12.2017 and was issued for a sum of Rs.5,00,000/-. It was presented and the same was honoured by the respondent. However, the other two cheques for a sum of Rs.15,00,000/- dated 03.02.2018 and for a sum of Rs.20,00,000/- dated 31.03.2018, respectively, were dishonoured and returned for the reason “Funds insufficient”. Therefore, after causing statutory notice, the appellant lodged a complaint for the offence under of NI Act.

3. In order to prove the complaint, the appellant had examined P.W.1 and marked Exs.P1 to P18. On the side of the respondent he was examined as D.W.1 and marked Ex.D1. On perusal of the oral and documentary evidence, the trial Court found the respondent guilty for the offences punishable under Section 138 of NI Act and sentenced him to undergo simple imprisonment for three months and also awarded compensation to the tune of Rs.35,00,000/-. Aggrieved by the same the respondent preferred an appeal and the same was allowed by the appellate Court by setting aside the order of conviction and sentence imposed by the trial Court. Hence the present appeal.

4. Mr.K.Sivaramalingam, the learned counsel for the appellant, submitted that the respondent never denied his signature and issuance of the cheques. As per the Joint Venture Agreement, the appellant had paid a sum of Rs.55,80,000/-. Thereafter the respondent created encumbrance over the property by mortgage and borrowed loan to the tune of Rs.60,00,000/- from a third party. Therefore, the appellant had executed a deed of assent dated 06.08.2014 with the respondent. Accordingly the respondent had settled a sum of Rs.15,00,000/- and he had promised to pay the balance amount within a period of sixty days. However, the respondent failed to keep up his promise and as such the appellant had issued a legal notice and also lodged a complaint. On the complaint, enquiry was conducted and during enquiry the respondent admitted his liability and issued three cheques for a sum of Rs.5,00,000/-, Rs.15,00,000/- and Rs.20,00,000/- dated 24.12.2017, 03.02.2018 and 31.03.2018, respectively. The firs