JUDGMENT

1. This revision is directed against the judgment in Criminal Appeal No. 154 of 1997 dated 07-8-1998 on the file of the IV Additional Sessions Judge, Hyderabad under which the learned Sessions Judge confirmed the conviction and sentence of Six months R.I and fine of Rs. 5000/- imposed against the appellant-accused for the offence under section 138 of the Negotiable Instruments Act by the learned XV Metropolitan Magistrate, Hyderabad in C.C No. 558 of 1994 dated 12-3-1997.

2. The brief facts that are necessary for disposal of the present revision may briefly be stated as under. On 11-7-1987, the appellant-accused received an amount of Rs. 22,000/- from the complainant with a promise that he would get a plot for the complainant. Thereafter, the appellant-accused neither gave the plot as promised by him nor returned the amount of Rs. 22,000/- to the complainant. Subsequently, on several demands made by the complainant, the appellant-accused issued a cheque dated 25-8-1994 for Rs. 25,000/-. When the said cheque was presented before the concerned bank for realization, it was dishonoured five times for want of sufficient funds. Therefore, the complainant got issued a statutory notice to the appellant-accused calling upon him to pay the amount, but the appellant-accused failed to pay the amount covered by the cheque. Hence, the complaint was filed against the appellant-accused for the offence punishable under section 138 of the Negotiable Instruments Act. During the course of trial, the complainant himself was examined as P.W 1 and got marked Ex. P1 to Ex. P6. No oral or documentary evidence was adduced on behalf of the appellant-accused.

3. The Trial Court upon consideration of the evidence on record came to the conclusion that the complainant has established that Ex. P3 cheque was issued by the appellant-accused in discharge of the liability covered under Ex. P1 and Ex. P2 and thereby found him guilty of the offence under section 138 of the Negotiable Instruments Act and accordingly convicted and sentenced him to undergo R.I for a period of six months and to pay a fine of Rs. 5000/- in default to suffer S.I for one month. Aggrieved by the said judgment, the accused preferred appeal before the Sessions Court in Criminal Appeal No. 154 of 1997. The learned IV Additional Sessions Judge by his judgment dated 07-8-1999 dismissed the appeal filed by the accused confirming the conviction and sentenced recorded by the XV Metropolitan Magistrate against the appellant-accused. As against the said dismissal, the present revision has been filed before this court by the accused questioning the legality and correctness thereof.

4. The learned counsel appearing on behalf of the appellant-accused contended that the cheque was not issued by accused in discharge of a legally enforceable debt and that the two receipts i.e Ex. P1 and Ex. P2 were issued by the accused in the name of the complainant in the year 1987 and that the last receipt i.e Ex. P2 dated 11-7-1987 was given in the name of the daughter of the complainant, but she is not examined as a witness in this case, and that since the cheque was issued on 25-8-1994, the claim of the complainant is barred by limitation. It is further contended that there was no cause of action for the complainant to recover the amount through the process of the Court and that the time-barred debt cannot be recovered. Therefore, he prays to set-aide the conviction and sentence recorded against the appellant-accused by the learned XV Metropolitan Magistrate for the offence under section 138 of the Nagotiable Instruments Act.

5. On the other hand, the learned counsel appearing on behalf of the respondent-complainant contended that the accused gave a cheque towards discharge of the legally enforceable debt on 2-4-1990 and therefore, it amounts to an acknowledgment and no plea has been taken by the accused before the courts below that the amount covered under Ex. P4 is not a legally enforceable debt and therefore, the trial Court after considering the evidence on record has come to the right conclusion and found the appellant-accused guilty of the offence under section 138 of the Negotiable Instruments Act and accordingly convicted him for the said offence and the learned Sessions Judge also rightly dismissed the appeal and there are no grounds to interfere with the conviction and sentence recorded against the appellant-accused.

6. There is no dispute that the appellant-accused gave the cheque dated 25-8-1994 for Rs. 25,000/- to the complainant and the same was returned dishonoured for insufficiency of funds.

7. To prove the offence under section 138 of the Negotiable Instruments Act, three conditions have to be fulfilled viz. firstly the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier; secondly the payee or the holder in due course of the cheque, as the case may be, has made a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and thirdly the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.

8. The explanation to section 138 of the Act says that “debt or other liability” means a legally enforceable debt or other liability. Once the accused admits the issuance of the cheque, the burden shifts to the accused to show that it was not a legally enforceable debt as provided under Section 139 of the Act.

9. The main contention of the learned counsel appearing on behalf of the appellant-accused is that the debt covered by Ex. P1 and Ex. P2 receipts is time-barred and that there was no legally enforceable debt or liability for the complainant to recover the amount covered under Ex. P1 and Ex. P2 receipts through the process of the Court and therefore, it is evident that the cheque in question was given for a time barred-debt and therefore, the accused has not committed the offence punishable under section 138 of the Negotiable Instruments Act.

10. In support of his contention, the learned counsel for the appellant relied upon a decision of this Court in Girdhari Lal Rathi v. P.T.V Ramanujachari (1), 1197 (2) Crimes 658, wherein this Court in para 7 held thus:

“The alleged Joan was advanced in the year 1985 and the cheque was issued in the year 1990. By the time the cheque was issued, the debt appears to have been barred by limitation because no acknowledgment is alleged to have been obtained by the appellant from the first respondent-accused before expiry of three years from the date of loan. Thus it is crystal clear that the debt was not legally enforceable at the time of issuance of the cheque and therefore, vide explanation to section 138 of the Negotiable Instruments Act, which reads as under:

Explanation: Until the debt is legally recoverable the drawer of the cheque cannot be fastened with the liability under section 138 of the Act”.

11. To the same effect, a Division Bench of this Court in Mr. Amit Desai v. Shine Enterprises (2), 2000 Crl. Law Journal 2386, held that” the explanation to section 138 of the Negotiable Instruments Act specifically laid down that the debt or other liability means a legally enforceable debt or other liability and enforcement of legal liability has to be in the nature of civil suit because the debt or other liability cannot be recovered by filing a criminal case and when there is a bar of filing a suit by unregistered firm, the bar equally applies to criminal case as laid down in explanation (2) of section 138 of the Negotiable Instruments Act.

12. In S. Krishnamurthy v. A.R Rajan. (3), 1 (1997) BC 547 (Madras), the Madras High Court held as under:

Besides, the concurrent finding of the Courts below, the perusal of the evidence of PW. 1 Exs. P. 8 to Ex. P10 would as well, make it clear, that in respect of the alleged two time barred promotes, the accused has paid interest on various dates and thereby the two disputed promotes have not become time barred”

13. In the case of Joseph v. Devassia (4), 2000 (2) ALT (Crl.) 416 Kerala, the Kerala High Court held thus:

“Section 138 is attracted only if the cheque is issued for the discharge of a legally enforceable debt or other liability. In this case, admittedly, the cheque in question was issued in discharge of a time-barred debt. It cannot be said that a time barred debt is a equally enforceable debt.”.

14. In Kishan Bodhankar v. M.A, Hameed (5), 1997 (2) ALT (Crl.) 395 (A.P), this Court held as under:

“It is evident that except filing the cheque said to have been issued by the accused, the complainant could not discharge the initial burden cast upon him under section 139 of the Negotiable Instruments Act that the cheque issued was in the nature of a cheque mentioned in section 138 of the Negotiable Instruments Act (i.e) that the cheque is issued for realization of a legally enforceable debt by the complainant”.

15. On the other hand the learned counsel for the respondent-complainant relied upon a decision of the Supreme Court in A.V Murthy v. B.S Nagabasavanna. (6), 2002 (1) ALD 429 (SC), wherein the Supreme Court held as under:

“Under Section 118 of the Act, there is a presumption that until the contrary is proved, every negotiable instrument was drawn for consideration. Even under section 139 of the Act, it is specifically stated that 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 discharge, in whole or in part, of any debt or other liability.

16. The above decision has no application to the facts of the present case, because the respondent therein has prepared a balance-sheet for every year for the loans advanced to the accused therein and the same has been shown as deposits and therefore, it amounts to acknowledgment of liability.

17. Keeping in view the above principles, now it has to be seen as to whether there is any legally enforceable debt for the complainant to file a suit for recovery of the amount through the process of the Court. A perusal of the evidence of the complainant as PW. 1 would go to show that the appellant-accused sold one plot to him admeasuring 248 sq. yards and accordingly he paid Rs. 7000/- on 9-6-1987, Rs. 5000/- on the same day i.e on 9-6-1987 and Rs. 10,000/- on 11-7-1987 and in token of receipt of the said amount, the accused issued Ex. P1 and Ex. P2 receipts. His evidence further shows that the accused neither registered the plot in his name nor returned the amount to the complainant and on the persuasion of the complainant, the accused is said to have issued a cheque on 2-4-1990 for Rs. 25,000/- and when the same was presented for realization, it was returned unpaid and that thereafter the accused gave another cheque on 25-8-1994 for Rs. 25,000/- drawn on State Bank of Hyderabad Panjagutta and when the said cheque was presented in the bank, it was retuned dishonoured five times. Therefore, when PW. 1 got issued Ex. P5 notice, the accused refused to receive the same. Thereupon, he filed the complaint. Thus the evidence of the complainant who was examined as PW. 1 would go to show that he paid an amount of Rs. 12,000/- on 9-7-1987 and Rs. 10,000/- on 11-7-1987 and to recover those amounts, the complainant could file a suit within three years from the last date of payment i.e on 11-7-1987. That means the complainant could have filed a suit for recovery of the amounts on or before 10-7-1990 and if any cheque is issued by the accused thereafter, it cannot be said that it was issued for a legally enforceable debt. Admittedly in this case the cheque was issued on 25-8-1994 i.e nearly seven years after the taking of the amount from the complainant. Even if it is assumed for a moment that the accused issued the cheque for a debt or liability, such debt or liability cannot be enforced by the complainant through the process of law for recovery of the amount, inasmuch as the debt is clearly a time barred. Perhaps to get over that limitation aspect, PW. 1 gave explanation in his evidence stating that on 02-4-1990 the appellant-accused gave a cheque for Rs. 2,5,000/- stating that he had no plot and therefore, he was returning the amount and that even the said cheque when presented for collection, was dishonoured for want of insufficiency of funds. Even assuming for a moment that the accused has issued the cheque dated 25-8-1994 so as to acknowledge the liability under Ex. P1 and Ex. P2 receipts, still the period of limitation has elapsed. The contention of the respondent-complainant that no such plea has been taken by the accused in the Court below and it is taken for the first time before this Court cannot be accepted, for the reason that the plea now taken by the appellant-accused is a legal plea and it can be taken at any point of time. No doubt once a cheque is issued by the accused, the burden lies on him to show that it was not towards the legally enforceable debt. But to discharge the burden, the accused need not examine himself. He can prove the same from the evidence on record. If the evidence of PW. 1 is taken into consideration, the liability under Ex. P1 and Ex. P2 cannot be enforced by the complainant through the process of the Court to recovery the amounts contained therein, because it was clearly time-barred. Therefore, the respondent-complainant has no right to enforce the liability under Ex. P1 and Ex. P2 receipts in a Court of law by filing a suit for recovery of the amounts, inasmuch as those two documents are clearly time-barred.

Section 18 of Limitation Act reads:

Section 18 - Effect of acknowledgement in writing:

(1) Where before the expiration of the prescribed period for a suit of application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgement was so signed.

(2) xxxxxxxxxxxxxxxxx

18. A perusal above provision makes clear that a fresh period of limitation shall be computed from the time when the acknowledgement was so signed. Even assuming for a moment that the accused gave the cheque in the year 1990 i.e on 2-4-1990 acknowledging the previous debt, even that acknowledgment of debt is also time-barred on the facts of the case in as much as the cheque in question was issued 3 years later, i.e, on 25-8-1994. Therefore, the complainant cannot legally enforce the liability under Ex. P1 and Ex. P2 receipts. Therefore, the findings of both the Courts below that the complainant has proved his case against the accused for the offence under section 138 of the Negotiable Instruments Act cannot be sustained and the conviction and sentence recorded against the appellant-accused has to be set-aside.

19. In the result, the Criminal Revision case is, allowed and the conviction and sentence recorded by trial court against the appellant-accused and as confirmed by the appellate Court are hereby set-aside and the accused is acquitted of the offence under section 138 of the Negotiable Instruments Act.