Dismissed

Jagadeesan v. Vs Abhilash

Kerala HC4 Aug 2023Crl.Rev.Pet/344/2021

Case brief

AI extract

What is this about?

The High Court dismissed a criminal revision petition alleging a lack of consideration due to the expiry of limitation. The court held that issuing a cheque for a time-barred debt constitutes valid consideration under Section 25(3) of the Contract Act, distinguishing it from cases involving conditional contracts.

What the court decided

AI extract

Jagadeesan v. Vs Abhilash — Cheque Dishonour | Kerala HC (2023)

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Crl.R.P.No.344/2021

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE V.G.ARUN

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FRIDAY, THE 4^TH DAY OF AUGUST 2023 / 13TH SRAVANA, 1945

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CRL.REV.PET NO. 344 OF 2021

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(AGAINST THE ORDER/JUDGMENT in CRA 52/2018 OF II ADDITIONAL

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DISTRICT COURT & SESSIONS COURT,PALAKKAD

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ST 58/2017 OF JUDICIAL MAGISTRATE OF FIRST CLASS IV, PALAKKAD)

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REVISION PETITIONER/APPELLANT/ACCUSED:

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JAGADEESAN V.

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AGED 45 YEARS S/O.VELLAYAPPAN CHETTIYAR, AYYAPPANKAVU GRAMAM, BEHIND KRV THEATER, KOTTAYI POST, PALAKKAD, ALATHUR TALUK, PALAKKAD - 678 572.

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BY ADV U.BALAGANGADHARAN

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RESPONDENTS/ACCUSED & STATE:

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1 ABHILASH,

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AGED 48 YEARS S/O.VASUDEVAN, RESIDING AT KASTHOORI, AYYAPPANKAVU GRAMAM, KOTTAYI POST, ALATHUR TALUK, PALAKKAD DISTRICT - 678 572.

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2 STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM - 682 031.

BY ADV T.K.SANDEEP

OTHER PRESENT:

SR.PP.RENJITH GEORGE

THIS CRIMINAL REVISION PETITION HAVING COME UP FOR ADMISSION ON 13/07/2023, THE COURT ON 4/8/2023 DELIVERED THE FOLLOWING:

Crl.R.P.No.344/2021

V.G.ARUN J.

Crl.R.P.No.344 of 2021

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Dated this the 4^th day of August 2023

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O R D E R

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The revision petitioner was the accused in ST No.58/2017 of the Judicial First Class Magistrate Court-IV(Principal Munsiff), Palakkad. The case originated from a complaint filed by the first respondent against the petitioner, alleging commission of the offence under Section 138 of the Negotiable Instruments Act. In his complaint, the first respondent alleged that the petitioner had borrowed Rs.3,25,000/- from him on 9/1/2013 and had promised to repay the amount on demand. When the first respondent demanded the amount, instead of repaying the amount in cash, the petitioner issued cheque for Rs.3,25,000/-, dated 21/6/2016 in discharge of the liability. The cheque, on presentation, was dishonoured for the reason 'funds insufficient'. In spite of issuing lawyer notice demanding repayment, the petitioner did not pay the amount.

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Crl.R.P.No.344/2021

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In order to prove his case, the first respondent got himself examined as PW1 and marked Exhibits P1 to P5 documents. Other than denying the incriminating circumstances put to him during Section 313 examination, the petitioner did not adduce evidence, either oral or documentary. The trial court, on appreciation of evidence and consideration of the legal contentions, found the petitioner guilty and thereupon, convicted and sentenced him to pay a fine of Rs.3,25,000/-, with default sentence of simple imprisonment for three months. Although petitioner preferred an appeal, the appellate court refused to interfere with the finding of guilt, conviction and sentence. Hence, this revision petition.

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Learned Counsel for the petitioner contended that, in view of the admission that the amount was borrowed on 9/1/2013 and towards discharge of that liability a cheque was issued on 21/6/2016, the first respondent's right to recover the amount was barred by limitation. In support of the contention, reliance is placed on the Apex Court decision in Indus Airways Pvt.Ltd. (M/s) and Others v. M/s.Magnum Aviation Pvt.Ltd. and Another [(2014) 12 SCC 539) .

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Learned Counsel for the first respondent submitted that the contention regarding limitation cannot be entertained, since such

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an argument was never put forth before the trial or appellate courts. It is further contended that the limitation period of three years for recovery of the money is not applicable in the case at hand, in view of the settled position that a cheque issued towards discharge of even a time barred debt amounts to fresh acknowledgment of the debt. In support of this contention, reliance is placed on the decisions in Ramakrishnan v. Parthasaradhy [ILR 2003 (2) Ker.586] , P.N.Gopinathan v. Sivadasan and Another [ILR 2006 (4) Kerala 556] and Mamman S.A. v. C.P.Gopalan Achari and Another [2011 (3) KHC 806] .

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The contention that the cheque issued to discharge a time barred debt is invalid, though raised for the first time in revision, is worthy of consideration. The fact that the amount was borrowed on 9/1/2013 and the cheque is dated 21/6/2016, is not in dispute. The short question is whether, by reason of expiry of three years between the borrowal and issuance, the cheque can be held to be an invalid instrument on the ground that the liability being barred, the cheque is not supported by consideration. This Court, has answered that question in the negative time and again. Referring to Section 25(3) of the Contract Act, a Division Bench of this Court in Ramakrishnan (supra) held that even if the claim is barred by

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limitation on the date of drawing of cheque, on delivery to the other person, it becomes a valid consideration for another agreement, since the drawal of the cheque evidences such an agreement which is enforceable. In Mamman (supra), the learned single judge followed the decision in Ramakrishnan (supra) and held that, a promise under Section 25(3) of the Contract Act can be made even in a case where the limitation for recovery of the amount has expired and such promise can be in the form of a cheque also.

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In Indus Airways Pvt.Ltd (supra), the question considered was whether the post dated cheques issued towards advance payment in relation to certain purchase orders could be considered to have been issued in discharge of a legally enforceable debt or liability. The dispute arose when the cheque being dishonoured due to the stop payment instruction issued by the drawer, prior to delivery of the goods ordered. In the above factual back drop, the following finding was rendered by the Supreme Court:

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“15.The above reasoning of the Delhi High Court is clearly flawed inasmuch as it failed to keep in mind the fine distinction between civil liability and criminal liability under Section 138 of the NI Act. If at the time of entering into a contract, it is one of the conditions of the contract that the purchaser has to pay the amount in advance and there is breach of such condition then purchaser may have to make good the

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loss that might have occasioned to the seller but that does not create a criminal liability under Section 138. For a criminal liability to be made out under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. We are unable to accept the view of the Delhi High Court that the issuance of cheque towards advance payment at the time of signing such contract has to be considered as subsisting liability and dishonour of such cheque amounts to an offence under Section 138 of the NI Act. The Delhi High Court has travelled beyond the scope of Section 138 of the NI Act by holding that the purpose of enacting Section 138 of the NI Act would stand defeated if after placing orders and giving advance payments, the instructions for stop payments are issued and orders are cancelled. In what we have discussed above, if a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise and material or goods for which purchase order was placed is not supplied by the supplier, in our considered view, the cheque cannot be said to have been drawn for an existing debt or liability.”

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The above reasoning will not apply to the case under consideration,

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since money was actually borrowed and the cheque issued for discharging the debt.

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Although learned Counsel for the petitioner attempted to assail the other findings of the the trial and appellate courts, having scrutinized the judgments, I find the courts below to have rendered the decisions based on proper appreciation of evidence and application of law. As such the findings do not warrant interference in exercise of the revisional jurisdiction vested with this

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court.

In the result, the Criminal Revision Petition is dismissed.

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Sd/-

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V.G.ARUN

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