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Cheque issued 3 years after loan should still be honoured: Punjab and Haryana HC | Chandigarh News

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CHANDIGARH: The Punjab and Haryana high court has made it clear that after a debt has become time barred, any person issuing a cheque subsequent to that, makes a promise to the person in whose favour the cheque is issued, that the said cheque would be honoured.
“On dishonour, the person to whom the cheque has been issued, would then have the right to pursue the remedy under Section 138 of the Negotiable Instruments Act,” the HC has held.
In this case, the petitioner had taken a loan from a person in 2015, but issued him a cheque in 2019. When the cheque was dishonoured, the petitioner had claimed he cannot be made liable for cheque bouncing case under the provisions of Negotiable Instrument Act because there was no “legally enforceable debt” on the date of issuance of the cheque.
“To hold in favour of a person who has consciously issued a cheque after the debt has become time barred, would amount to doing injustice to the person in whose favour the cheque has been issued and would also defeat the intent of the provisions of the Negotiable Instruments Act and the Contract Act… In case the proceedings under Sections 138 of the Negotiable Instruments Act are quashed, then the same would result in undue enrichment of the accused person who has managed to linger on the matter on a false promise by issuing the said cheque,” the HC has held in its detailed order.
Justice Vikas Bahl passed these orders while dismissing a petition filed by Sultan Singh, a resident of Kurukshetra district in Haryana.
The petitioner had approached the HC seeking directions to quash criminal complaint filed against him under Sections138/142 of the Negotiable Instruments Act read with Section 420 IPC titled as “Tej Partap versus Sultan Singh” pending in the Court of Judicial Magistrate Ist Class, Kurukshetra, as well as the summoning order dated September 6, 2019 passed by the same court.
Tej Partap had filed a complaint against the petitioner Sultan Singh on account of dishonour of cheque dated August 2, 2019, for an amount of Rs 4 lakh drawn on Oriental Bank of Commerce, village Umri, Kurukshetra.
The main argument of the petitioner was that in the present case, there was no “legally enforceable debt” on the date of the issuance of the cheque, inasmuch as the cheque in question was issued on August 2, 2019, whereas the said amount was borrowed on August 4, 2015. It was argued that the recovery of the amount was barred by the law of limitation and thus, issuance of the cheque after the expiry of the period of limitation, would not extend the time limit.





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