R.K Batta, J.:— The appellant had filed a complaint under section 138 of the Negotiable Instruments Act, 1881 (hereinafter called ‘the said Act’). Vide Judgment dated 15th October 1997 the Magistrate came to the conclusion that the appellant had failed to establish that the cheque in respect of which the proceedings were instituted was in respect of a debt legally enforceable. On this ground and also on account of the doubt raised as to whether the cheque in question was written by the respondent, though the signatures were not denied, the Magistrate gave benefit of doubt and acquitted the respondent. This acquittal is challenged in this appeal.
2. Learned Advocate Shri Kholkar, appearing on behalf of the appellant, took me through the record including the Agreement dated 13th June, 1991 under which the respondent had agreed to pay a sum of Rs. 1,53,724/- to the appellant within a period of one year.
3. He then pointed out that the dishonoured cheque in question, which was issued by the respondent on 19th July, 1996, amounts to acknowledgement of debt and, as such, the findings of the Magistrate that the debt was not legally recoverable are erroneous. He also urged before me that the expiry of period of limitation merely bars remedy but not the right and, as such, the impugned order of acquittal cannot be sustained.
4. On the other hand, learned Advocate Shri C.A Ferreira, appearing for the respondent, submitted before me that the dishonoured cheque in question was not in respect of a legally enforceable debt and in view of Explanation to section 138 of the said Act, the Magistrate has rightly acquitted the respondent on the said count as well as on the ground that there was doubt as to whether the amount mentioned in the said cheque was in the handwriting of the respondent as the defence of the respondent is that he had handed over to the appellant a blank cheque. In support of his submission that the dishonoured cheque in question is not in connection with any legally enforceable debt, reliance was placed by him on (Girdhari Lal Rathi v. P.T.V Ramanujachari)1, 1998 Bank J. 127 : 2000 DoCh. (A.P) 420. He, therefore, submits that there is no case for interference with the acquittal.
5. The complainant, respondent and one Shankar Prabhudessai had entered into partnership vide Partnership Deed Exhibit P.W 1.D on 24th August 1990. This partnership was dissolved on 13th June 1991 after an agreement was executed between the parties under which the respondent agreed to pay a sum of Rs. 1,53,724 to the appellant/complainant within 12 months and in case he fails to make the said payment during the said period, the said amount was to carry bank interest from the date of the agreement. The case of the complainant further is that the respondent did not pay the amount as agreed under the said Agreement dated 13th June, 1991, but on 19th July, 1996 the respondent issued cheque for Rs. 3,87,500/- and this cheque has bounced.
6. The defence had taken the stand that the dishonoured cheque was not in relation to any legally enforceable debt and, as such, the respondent could not be held guilty under section 138 of the said Act. The contention of learned Advocate for the appellant is that this cheque dated 19th July 1996 itself is an acknowledgement of debt and, as such, there is no merit in the submission of the defence that the liability under dishonoured cheque is not on account of legally enforceable debt. Insofar as the dishonoured cheque is concerned, the stand taken by the respondent is that the cheque was not written by him and it is not in his handwriting and that he had, in fact, issued a blank cheque in favour of the appellant for certain purpose. This stand was specifically taken by the respondent in the course of the trial and, as such, it was necessary for the complainant to have sought the opinion of handwriting expert in case her case was that the cheque in question was in the handwriting of the respondent, so as to rebut the theory of blank cheque taken by the respondent. It is in these circumstances that the Magistrate had come to the conclusion that the dishonoured cheque in question cannot be treated as acknowledgement under section 18 of the Limitation Act, since the acknowledgement should be before the period of limitation is over and that it should be in writing. In view of this position, the Magistrate was right in coming to the conclusion that it had not been proved that the dishonoured cheque was in relation to a legally enforceable debt or liability in law. The dishonoured cheque admittedly was issued after 5 years of the said Agreement dated 13th June 1991.
7. The ruling upon which reliance has been placed by the learned advocate for the respondent is applicable on all fours. In that case loan was advanced in the year 1985 and the cheque was issued in the year 1990.
8. By the time the cheque was issued, the debt was barred by limitation because no acknowledgement was obtained before the expiry of 3 years from the date of loan. In these circumstances, it was held there that the debt was not legally enforceable at the time of issuance of cheque and the accused could not be punished under section 138 of the said Act. In the light of Explanation to the said section, it was further held therein that in case a cheque is issued for time barred debt and it is dishonoured, the accused cannot be convicted under section 138 on the ground that the said debt was not legally recoverable.
9. For the aforesaid reasons, I do not find any merit in this appeal and the appeal is liable to be dismissed. The appeal is accordingly dismissed.
10. Appeal dismissed.
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