Cheque for a time barred debt
NEELAM RANI
(Querist) 26 October 2015
This query is : Resolved
I had given Rs. 4 lacs by account payee cheque to Mr. X during the period from March 2000 to August 2002. For repayment, Mr. X issued cheque of Rs. 2 lacs on 24.01.2005 which was dishonoured for insufficient fund. After fighting for 10 years in court, now the court dismissed the case stating that the cheque was issued for a time barred debt. Whether appeal is admissible?
Guest
(Expert) 26 October 2015
What is the opinion of your own lawyer who fought for you for 10 years?
Kumar Doab
(Expert) 26 October 2015
Pls respond to the point raised by Expert Shri P.S.Dhingra.
Sudhir Kumar, Advocate
(Expert) 27 October 2015
Your query is vague. It is not clear:-
(i) within how much period after 2005 you filed the case.
(ii) whether case us/ 138 NI act was also filed.
(iii) what exactly is finding of the court.
(iv) how old is court order.
P. Venu
(Expert) 27 October 2015
Was it a civil or a criminal case?
Rajendra K Goyal
(Expert) 27 October 2015
Discuss with some senior lawyer and show him all the documents including copy of the judgement.
SAINATH DEVALLA
(Expert) 27 October 2015
As far as i know that if debt becomes time barred it becomes unenforceable as 3 years has already elapsed at the time of filing the case,hence it was dismissed.
SAINATH DEVALLA
(Expert) 27 October 2015
Answer the points raised by the above legal experts.
Sudhir Kumar, Advocate
(Expert) 27 October 2015
not able to agree of disagree with Mr Devalla, until my aforesaid questions are replied
Dr J C Vashista
(Expert) 27 October 2015
Incomplete information and vague query. Prima facie author is disinterested in opinion/advise/reply of the academic query.
K.S.Srinivas
(Expert) 29 October 2015
Answer the queries of the experts to get advice.
DEFENSE ADVOCATE.-firmaction@g
(Expert) 29 October 2015
It seems your advocate did not study the up to date position of law.
There are few HC citaions but they had overlooked clear direction by SC in 2002 which is repeated now by Bombay HC in similar case as below.
20. While recording our answer to the first Question, we have already held that a cheque issued for discharge of a debt which is barred by law of limitation is itself a promise within the meaning of Sub-section (3) of Section 25 of the Contract Act. A promise is an agreement and such promise which is covered by Section 25(3) of the Contract Act becomes enforceable contract provided that the same is not otherwise void under the Contract Act.
So please go far revision and you will surely win.
SAINATH DEVALLA
(Expert) 29 October 2015
Section 25(3) of the Contract Act comes into picture when the cheque is supported by any other document for the loan taken.The querist has nowhere mentioned about any legal document obtained at the time of giving loan.Though the payment may be in the form of an A/C payee cheque,it does not mention a clear debt.Hence I feel the above act does not come into picture.
DEFENSE ADVOCATE.-firmaction@g
(Expert) 29 October 2015
The above portion quoted is from a reference made to division bench to clear to all these issues.
Which clearly says the cheque it self is promise to pay time barred debt .
On plain reading of Section 13 of the said Act of 1881, a negotiable instrument does contain a promise to pay the amount mentioned therein. The promise is given by the drawer . Under Section 6 of the said Act of 1881, a cheque is a bill of exchange drawn on a specified banker. The drawer of a cheque promises to the person in whose name the cheque is drawn or to whom the cheque is endorsed, that the cheque on its presentation, would yield the amount specified therein. Hence, it will have to be held that a cheque is a promise within the meaning of Sub-section (3) of Section 25 of the Contract Act. ash 16 crappln-2933.07-grp What follows is that when a cheque is drawn to pay wholly or in part, a debt which is not enforceable only by reason of bar of limitation, the cheque amounts to a promise governed by the Sub-section (3) of Section 25 of the Contract Act.
Such promise which is an agreement becomes exception to the general rule that an agreement without consideration is void. Though on the date of making such promise by issuing a cheque, the debt which is promised to be paid may be already time barred, in view of Sub-section(3) of Section 25 of the Contract Act, the promise/agreement is valid and, therefore, the same is enforceable.
The promise to pay time barred debt becomes a valid contract as held by the Apex Court in the case of.Moorthy (supra).
Therefore, while answering second Question, we are specifically dealing with a case of promise created by a cheque issued for discharge of a time barred debt or liability. Once it is held that a cheque drawn for discharge of a time barred debt creates a promise which becomes enforceable contract, it cannot be said that the cheque is drawn in discharge of debt or liability which is not legally enforceable. The promise in the form of a cheque drawn in discharge of a time barred debt or liability becomes enforceable by virtue of Sub- section (3) of Section 25 of the Contract Act. Thus, such cheque becomes a cheque drawn in discharge of a legally enforceable debt as contemplated by the explanation to Section 138 of the said Act of 1881. Therefore, even the second question will have to be answered in the affirmative.
SAINATH DEVALLA
(Expert) 30 October 2015
A cheque is a bill of exchange but does not attract the word debt unless it is supported by a legal document.
DEFENSE ADVOCATE.-firmaction@g
(Expert) 30 October 2015
Well you have to follow what APEX COURT has said because in the above stated case the matter was remanded back for retrial.
An advocate has to bring results from the legal system as per law as laid down. Logic or rationality can be enjoyed only by a private person who do not have to perform in courts.
Recent TALVAR movie on Arushi murder case of NOIDA is the example. It is now being discussed all over world and even PRESIDENT had it shown TO HIM at RASHTRPATI BHAWAN .
While the talwar couple are still behind bars this movie has shown by law, circumstances and even procedure that they are innocent for the murder of their daughter.
So what happened and why it happened just because the defense team remained over confident on logic and rationality and missed to properly move as per system.
T. Kalaiselvan, Advocate
(Expert) 01 November 2015
The author remains silent despite lengthy and stretched discussions by experts on her/his subject issue.
SAINATH DEVALLA
(Expert) 01 November 2015
He must be sleeping over his query.
