HC Overturns Acquittal | Cheque Issued in 2015 Deemed Valid Acknowledgement of Debt Under Limitation Act

Case Details: Rajeev Kumar v. State NCT of Delhi - [2024] 166 taxmann.com 700 (HC-Delhi)

Judiciary and Counsel Details

• Anish Dayal, J.
• Ankur Dhall & Manish Sharma, Advs. for the Petitioner.
• Hitesh Vali, APP, Mahesh Kumar, Ms Arti Valia, Praveen Shukla & Ms Heena Sharma, Advs. for the Respondent.

Facts of the Case

In the instant case, the father of the complainant advanced a loan of Rs. 3.50 lakh to the accused, and in the discharge of its liability, the accused issued a cheque for the same amount in the name of the father of the complainant as a refund of the loan amount.

However, the complainant’s father passed away before presenting the cheque for encashment, after which the accused issued a new cheque of the same amount in the complainant’s name for repayment of the loan amount.

The Cheque in question, on presentation, was dishonoured with the remark ‘funds insufficient’. Thereafter, a complaint was lodged under section 138 of the Negotiable Instruments Act, 1881. The Trial Court dismissed the complaint vide the impugned order and acquitted the accused of an offence by holding that debt was not legally recoverable due to limitation.

In assessing the limitation, the Trial Court determines the date of the loan as approximately 30.04.2012, taking the period of limitation to April 2015. However, the cheque in question was issued on 31.12.2015. Therefore, the Trial Court held in favour of the accused that they were able to rebut the statutory presumption that there was no legally enforceable debt.

It was noted that the presentation of the cheque to the father was 5-6 months before the death of his father, i.e. in the months of January/February 2014. On that basis, even though the loan was allegedly taken in 2012, as per the finding of the Trial Court, an earlier cheque presented in 2014 would amount to an acknowledgement in writing of liability. Therefore, a fresh period of limitation would commence as per section 18 of the Limitation Act, 1963.

High Court Held

The High Court held that furnishing the cheque in question on 31.12.2015, would still be for a legally enforceable debt or liability. Thus, the impugned order acquitting the accused was to be set aside.

List of Cases Reviewed

• Vijay Ganesh Gondhlekar v. Indranil Jairaj Damale 2007 SCC OnLine Bom 913 (Para 35) followed.

List of Cases Referred to

• A.V. Murthy v. B.S. Nagabasavanna (2002) 2 SCC 642 (para 23)
• S. Natarajan v. Sama Dharman & Anr. (2021) 6 SCC 413 (para 24).