Whether complaint for dishonour of cheque is maintainable if cheque is issued for discharging time barred loan?

The controversy in the case on hand is squarely covered by the aforesaid judgment of the Division Bench of this court. The cheque issued for discharging liability for a time barred loan would constitute a fresh promise and consequently liability under Section 138 of the N.I. Act in the event of dishonor of such cheque will have to be fastened on the defaulter. It is not in dispute that loan was sanctioned in the year 2003. Respondent No. 1 has not seriously assailed issuance of cheque by him on 7.9.2009. The cheque issued amounts to promise within the meaning of Section 25(3) of the Contract Act and on account of dishonor of such a cheque, complaint under Section 138 of the N.I. Act would be maintainable.

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Criminal Appeal No. 72 of 2013

Decided On: 20.01.2017

 Pragati Credit Co-operative Society Ltd. Vs.  Suresh and Ors.

Hon'ble Judges/Coram:

Indira Jain, J.

Citation: 2017 ALLMR (CRI) 3081

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SHORT NOTES ON LIMITATION ACT PART 3

S 18. Effect of acknowledgment in writing:-

Acknowledgment means a definite, clear admission of existing liability.

It is not necessary that there should be promise to pay. An acknowledgment does not create any new right of action but only enlarges the time and has the effect of making a new period run from the date of acknowledgment. Under this section, an acknowledgment is not limited in respect of a debt only, it may be in respect of “any property or right” which is the subject matter of the suit. There must be an unqualified,or an admission qualified by a condition which is fulfilled.

Ingredients of S 18 and essentials of a valid acknowledgment:-

To constitute a valid acknowledgment and thus to give a fresh period of limitation under this section,the following conditions must be satisfied.

1) The acknowledgment must have been made before the expiration of the period prescribed.

2) The acknowledgment must have been made by the party against whom the right is then claimed or by any person through whom he derives his title or liability.

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Whether promise to pay time barred debts under Section 25 of Contract Act should be express promise?

The award passed was challenged on the ground that claim sought to be passed since was barred by limitation, the award passed was not correct. The claim forming the base of dispute was based on a promise to pay an amount in writing under Section 25(3) of the Indian Contract Act, 1872 (ICA). The claim was preferred well after three years since it become due. Section 25 deals with Agreement without consideration. Such agreement is void unless in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law. Sub-section (3) of Section 25 provides for a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt.

In the instant matter, promise to pay in writing was stated to be made through a letter which though disputing and denying the payment as claimed (in terms of figures) and it was mentioned that correct figure could be arrived only by way of mutual verification. It was further mentioned that payment legally due is not denied.

The Court observed that whatever was shown as outstanding figure was disputed and denied for want of mutual verification and clarification, but dues per se was not denied. Arbitrator considered this aspect as an admission on the part of the Petitioner and accordingly a promise to pay and since it was in writing the same was an express promise to pay. Unless the Petitioner could show that the demand is illegal, the express promise to pay would have to be performed by payment.

The promise to pay must be express. An implied promise to pay inferred from an acknowledgment could not be made the basis of the suit to recover a debt barred at the time of the acknowledgment and since S. 25(3) relates to promise to pay a debt, already time barred.

In the instant matter, the Petitioner failed to show the Arbitrator and also the  Court how the demand made was not legal and consequently the petition was dismissed.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION

M/s. Gem Synth Resins Pvt. Ltd. Vs. M/s. Mahendra Rosin and Turpentine Pvt. Ltd.

ARBITRATION PETITION NO. 168 OF 2012
Coram:
:  MRS. ROSHAN DALVI, J.

:  11   JUNE, 2014.
   th 

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Whether first wife can legally give consent to her Husband to perform second marriage?

 In so far as submission of the learned counsel appearing for the petitioners that petitioner no.1 solemnized marriage with the said deceased after such writing was received from the first wife giving her no objection in favour of the said deceased in getting married again and petitioner no.1 would be one of the legal heirs of the said deceased is concerned, in my view, this issue is concluded by the judgment of the Supreme Court delivered on 15th March, 2013 in case ofNagendrappaNatikar (supra) when Supreme Court considered similar consent letter addressed by the first wife of the deceased. After considering such writing, Supreme Court held that under section 25 of the Contract Act, any agreement which is opposed to public policy is not enforceable in a court of law and such an agreement is void, since the object is unlawful. In my view, only a competent court can grant decree of divorce and no divorce can be granted to a party governed by Hindu Marriage Act or Special Marriage Act, based on such consent letter. In my view divorce can not be granted by parties by such writing unless decree is passed by competent court annulling such marriage. In my view, marriage of the first petitioner with the said deceased is thus void and petitioner no.1 therefore cannot be considered as a legal heir of the said deceased. Petitioner nos.2 and 3 being daughters born out of such wedlock would be entitled to share in the property of the said deceased. Mother of the said deceased is also one of the legal heir of the said deceased and would be one of the legal heir and would be entitled to share in the property of the said deceased.

BOMBAY HIGH COURT

Vandana Bhimrao Jadhav and Others Vs. Sagar Bhimrao Jadhav

Citation;2014(2) MHLJ 274 Bom

Court : Mumbai

Judge : R.D. DHANUKA

Decided On : Oct-22-2013

Case Number : Misc. Petition No. 110 of 2011 In Misc. Petition No. 91 of 2009

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Whether cheque issued for discharge of time barred debt is promise as per S 25 of Contract Act?

 While recording our answer to the first Question, we have already held that a cheque issued for discharge of a debt which is barred by law of limitation is itself a promise within the meaning of Sub-section (3) of Section 25 of the Contract Act. A promise is an agreement and such promise which is covered by Section 25(3) of the Contract Act becomes enforceable contract provided that the same is not otherwise void under the Contract Act.

21. Therefore, while answering second Question, we are specifically dealing with a case of promise created by a cheque issued for discharge of a time barred debt or liability. Once it is held that a cheque drawn for discharge of a time barred debt creates a promise which becomes enforceable contract, it cannot be said that the cheque is drawn in discharge of debt or liability which is not legally enforceable. The promise in the form of a cheque drawn in discharge of a time barred debt or liability becomes enforceable by virtue of Sub- section (3) of Section 25 of the Contract Act. Thus, such cheque becomes a cheque drawn in discharge of a legally enforceable debt as contemplated by the explanation to Section 138 of the said Act of 1881. Therefore, even the second question will have to be answered in the affirmative.

Bombay High Court

Mr. Dinesh B. Chokshi vs Rahul Vasudeo Bhatt on 19 October, 2012

Bench: A.S. Oka, S.S. Jadhav

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