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CASE NO.:

Appeal (crl.) 206 of 2002

PETITIONER:

A.V. MURTHY

Vs.

RESPONDENT:

B.S. NAGABASAVANNA

DATE OF JUDGMENT: 08/02/2002

BENCH:

R.P. Sethi & K.G. Balakrishnan

JUDGMENT:

K.G. BALAKRISHNAN, J.

Leave granted.

This appeal is directed against the order passed by a learned

Single Judge of the High Court of Karnataka. The appellant herein

filed a complaint before the Magistrate alleging that the respondent

herein had committed an offence punishable under Section 138 of

the Negotiable Instruments Act, 1881 [for short, "the Act"]. The

appellant alleged that he and his two friends had advanced a sum

of Rs.7.5 lakhs to the respondent about four years back

to enable him to start a petrol pump and that the

respondent did not pay back the said amount despite

repeated demands and finally at the request of the

appellant, on 30.3.1998 the respondent issued a cheque in

favour of the appellant. The appellant presented the cheque for

payment, but the cheque was dishonoured by the bank for the

reason "Account closed". Thereafter, the appellant issued a

statutory demand notice and as the respondent failed to pay the

amount, a complaint was filed before the Magistrate by the

appellant. In the complaint, it was alleged that the appellant and

his two friends advanced the said sum of Rs. 7.5 lakhs to the

respondent about four years prior to the date of issue of the

cheque by the respondent. The learned Magistrate issued

summons to the respondent. The respondent filed a Criminal

Revision before the IInd Addl. Sessions Judge, Mysore, alleging that

the complaint was not maintainable as the amount advanced by the

appellant to him was about four years prior to the date of

issue of the cheque, and in view of the ’Explanation’ appended

to Section 138 of the Act, there was no legally enforceable

debt or liability as against the respondent. The Addl. Sessions

Judge accepted this plea and held that even on the basis of the

averments in the complaint and the sworn statement of the

complainant, the alleged borrowing was four years prior to the

issuance of the cheque and hence that debt was not legally

enforceable in view of the bar of limitation and, therefore, the

Magistrate was in error in taking cognizance of the alleged offence

under Section 138 of the Act. As a result, the Addl. Sessions Judge

quashed the entire proceedings and aggrieved thereby, the

appellant filed a Criminal Revision before the High Court of

Karnataka but the learned Single Judge upheld the view of the Addl.

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Sessions Judge. The appeal has now come up before us.

We heard learned counsel for the appellant. Learned counsel

contended that it was incorrect on the part of the Sessions Judge to

hold that there was no legally enforceable debt or liability on the part

of the respondent. He also contended that when a cheque is

issued, under Section 118 of the Act, it has to be presumed that it

was drawn for consideration. It was further contended that even

though the appellant and his friends advanced the loan about four

years back, the respondent had acknowledged this liability in his

balance sheet and that even for the purpose of a civil suit, such debt

or liability is not barred by limitation.

The respondent refused to accept notice and we did not have

the advantage of hearing him. The respondent seems to have

contended that as the loan was advanced four years prior to the

issuance of the cheque, the debt or the liability for which the cheque

was drawn by him had ceased to be legally enforceable and,

therefore, no complaint could have been filed by the complainant

under Section 138 of the Act.

As the complaint has been rejected at the threshold, we do not

propose to expre