Tanisha Rana
Published on: October 30, 2022 at 19:27 IST
The Supreme Court recently ruled in Yogesh Jain vs. Sumesh Chadha that the issue of whether or not a cheque had been written for a debt that had expired its statute of limitations is prima facie a matter of evidence and cannot, therefore, be decided during the hearing of a petition under Section 482 of the Code of Criminal Procedure seeking the quashing of criminal proceedings.
As a result, the Punjab and Haryana High Court‘s judgment invalidating a judicial magistrate’s decision to call the accused in criminal proceedings under Section 138 of the Negotiable Instruments Act was overturned by a division bench of Justices S. Abdul Nazeer and J.B. Pardiwala.
“Whether the cheque in question had been issued for a time barred debt or not, itself prima facie, is a matter of evidence and could not have been adjudicated in an application filed by the accused under Section 482 of the CrPC,” the Court said.
The High Court had dismissed the case, noting that the accused had been called in for a legally enforceable debt which was time barred.
The Supreme Court, on the other hand, disagreed.
It stressed that the accused has a legal right to legally refute any inferences regarding the negotiable instrument during the trial once a cheque is issued and after receiving a statutory notice of dishonour.
According to the factual matrix, the complainant had advanced a loan at some point in 2011.
The complaint for a dishonour of cheque was filed on January 1, 2019, and the cheque used to pay off the obligation was dated November 1, 2018.
Prima facie, it appeared that the loan for Rs. 5 lakh would be repaid over the course of seven years.
The High Court proceeded on under the assumption that there was no argument in the entirety of the complaint regarding any type of acknowledgement of the claimed debt by the accused within the period of three years from 2011, i.e., within the limitation period of recovering the debt.
Therefore, it concluded, the 2018 issued cheque cannot be regarded as an admission of debt.
However, the Supreme Court ruled that this reasoning was flawed.
The agreement between the complainant and the accused was that the liability would be discharged after seven years.
As a result, the statute of limitations would begin to run once seven years had passed, according to the supreme court.
In addition, the Supreme Court pointed out that once the proceedings against the accused were annulled, the complainant was not given a chance to be heard.
The complainant had attempted to have the order recalled but was rejected by the High Court.
Given the foregoing, the Supreme Court decided it was appropriate to overturn the High Court’s decision and send the case back for further deliberation on its merits.