LI Network
Published on: 09 September 2023 at 11:30 IST
The Supreme Court has emphasized that the determination of whether a cheque was issued for a time-barred debt should be made based on the evidence presented.
In a recent ruling, the bench of Justices AS Bopanna and Prashant Kumar Mishra clarified that the power to quash a cheque bounce case under Section 482 of the Criminal Procedure Code (CrPC) should only be exercised when it is evident that the amount in question is patently non-recoverable.
The court specified that such jurisdiction arises only in cases where a cheque is issued, dishonored, and a criminal action is initiated for the recovery of an amount that is unmistakably non-recoverable.
The case in question involved the Andhra Pradesh High Court’s decision to quash a cheque bounce complaint on the grounds that the prosecution did not pertain to a legally recoverable debt.
In its ruling, the Supreme Court referred to its prior judgments in S. Natarajan vs. Sama Dharman & Anr. (2021) and A.V. Murthy vs. B.S Nagabasavanna (2002) to clarify the scope of consideration in petitions filed under Section 482 of the CrPC, seeking the quashing of complaints filed under Section 138 of the Negotiable Instruments Act.
The Court acknowledged that the nature of proceedings under the Negotiable Instruments Act involves a promise to pay through a cheque, even if the debt is time-barred.
In such situations, the determination of whether the debt or liability is time-barred should be based on the evidence presented by the parties, as it is a mixed question of law and fact.
Therefore, the Court emphasized that the power to quash proceedings under Section 482 of the CrPC should only be exercised when the amount is patently non-recoverable and when the threshold jurisdiction is established.
The Court concluded that the claim made in the complaint, based on a dishonored cheque in this case, could not be considered time-barred or legally irrecoverable based on the facts presented. Moreover, the complaint was filed within the applicable time frame.
As a result, the High Court’s judgment was set aside, and the complaint was reinstated.
The case in question is K. Hymavathi vs. State of Andhra Pradesh in 2023. This ruling underscores the principle that the determination of whether a cheque was issued for a time-barred debt should depend on the evidence and that the power to quash such cases should only be exercised when the amount is clearly non-recoverable.