CASE TITLE:
Yogesh Jain Vs. Sumesh Chadha
DATE OF ORDER:
10 October 2022
JUDGES:
Justice S. Abdul Nazeer and Justice J.B. Pardiwala
PARTIES:
Appellant: Yogesh Jain
Respondent: Sumesh Chadha
SUBJECT
The Supreme Court stated that a petition under Section 482 CrPC cannot be used to decide whether or not the questioned check was written for a debt that had expired its statute of limitations. The S. Abdul Nazeer and J. B. Pardiwala-led court noted that this is an issue of proof.
IMPORTANT PROVISIONS
Negotiable Instruments Act, 1881
- Section 118 -Presumptions as to negotiable instruments. - Until the contrary is proved, the following presumptions shall be made: - (a) of consideration: - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; (b) as to date: - that every negotiable instrument bearing a date was made or drawn on such date; (c) as to time of acceptance: - that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity; (d) as to time of transfer: - that every transfer of a negotiable instrument was made before its naturity.
- Section 138 -Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may be extended to two years’, or with fine which may extend to twice the amount of the cheque, or with both.
- Section 139 - Presumption in favour of holder. - It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
- The Code of Criminal procedure, 1973
- Section 482 -Saving of inherent powers of High Court. - Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice.
BRIEF FACTS
- A case filed under Section 138 of the Negotiable Instrument Acts was dismissed by the Punjab and Haryana High Court on the grounds that the legally enforceable debt was no longer valid as of the date the accused was summoned. The High Court noted that there is not a single allegation in the whole case regarding the accused’s acknowledgement of the debt within the three-year window, or the limitation period for recovering the amount.
ISSUES RAISED
- Whether the cheque in question had been issued for a time barred debt or not?
ARGUMENTS ADVANCED
- Although provided with the notice issued by this Court, the respondent (original accused) has opted not to appear in person or through an advocate and defend these appeals.
JUDGEMENT ANALYSIS
- According to the apex court, the High Court deemed it appropriate to halt the case on the grounds that the accused had passed the statute of limitations on the legally recoverable debt at the time they were summoned. The High Court appears to have operated under the assumption that there is no allegation in the entire case regarding any type of acknowledgement of the alleged debt by the accused within the three-year window, or within the statute of limitations for retrieving the amount.
- The information on file suggests, at a minimum, that the loan was advanced sometime in 2011. The complaint for the violation of Section 138 of the N.I. Act was filed on January 14, 2019, and the concerned check was legitimately issued by the accused for the discharge of the obligation on November 1, 2018. It appears that the High Court made its decision based on the loan transaction’s year and date, respectively. At first glance, it could be argued that a check issued on November 1, 2018, for the discharge of a debt incurred in the year 2011, constitutes an acceptance of the debt. The High Court needs to consider this issue from a realistic standpoint.
- The High Court wants to make it clear that the accused’s request for the debt to be acknowledged should have been made within three years of the transaction date and that there is no such allegation in the complaint. The bench was unable to comprehend the High Court’s line of thinking. It was said because the accused was given a loan for Rs. 5 lakh that was advanced by the complainant over a seven-year period. On the surface, it appears that the loan’s obligation to be repaid was to be released after seven years. If that’s the case, the High Court should explain why it took the first three years into account while calculating the limitation period.
- Perhaps the High Court believes that the obligation was prohibited by statute of limitations by the time the disputed check was issued because no acknowledgement was obtained prior to the lapse of three years following the date of the loan. However, as was already mentioned, it was agreed to pay off the debt within seven years. At first glance, it was believed that the seven-year limitation period will be the point at which the statute of limitations will begin to run.
- The burden of dispelling the legal presumption provided by Sections 118 and 139, respectively, of the N.I. Act, is with the accused when a check is issued and after it is dishonoured and a statutory notice is issued. Prima facie, the issue of whether or not the questioned check was issued for a debt that was past due cannot be decided in an application brought by the accused under Section 482 of the CrPC.
- In addition to the above mentioned reasons, there is one more reason that has led us to vacate the contested order and remand the case to the High Court. The knowledgeable attorney for the appellant informs us that the complainant was not heard by the High Court as it decided the main matter. Due to this, the appellant (complainant) petitioned the High Court with a request to recall the main order and rehear the case on the merits after providing the complainant a chance to be heard. However, this recall request was ultimately turned down.
CONCLUSION
On the two aforementioned grounds, the apex court vacated the High Court’s contested decision(s) and remanded the case for further consideration on the merits and following a fair opportunity for all parties to be heard. The appeals are allowed.
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