Cheque Bounce Case Can Be Quashed U/S 482 Only If Amount Is

Card image

Cheque Bounce Case Can Be Quashed U/S 482 Only If Amount Is Patently Non-Recoverable; Whether Debt Time-Barred Or Not Is A Question Of Evidence : SC

By Team EOS |

The Supreme Court observed that the question whether a cheque was issued towards a time barred debt is to be decided on evidence.

“It is only in cases wherein an amount which is out and out non-recoverable, towards which a cheque is issued, dishonoured and for recovery of which a criminal action is initiated, the question of threshold jurisdiction will arise. In such cases, the Court exercising jurisdiction under Section 482 CrPC will be justified in interfering but not otherwise”, the bench of Justices AS Bopanna and Prashant Kumar Mishra said.

In this case, the Andhra Pradesh High Court quashed a cheque bounce complaint on the ground that the prosecution was not in respect of a legally recoverable debt.

In appeal, the court referred to its earlier judgments (S. Natarajan vs. Sama Dharman & Anr. (2021) 6 SCC 413 and A.V. Murthy vs. B.S Nagabasavanna (2002) 2 SCC 642) that explained the scope of consideration in a petition filed under Section 482 of CrPC seeking quashment of a complaint filed under Section 138 of NI Act.

“It is crystal clear that this Court keeping in perspective the nature of the proceedings arising under the NI Act and also keeping in view that the cheque itself is a promise to pay even if the debt is barred by time has in that circumstance kept in view the provision contained in Section 25(3) of the Contract Act and has indicated that if the question as to whether the debt or liability being barred by limitation was an issue to be considered in such proceedings, the same is to be decided based on the evidence to be adduced by the parties since the question of limitation is a mixed question of law and fact. It is only in cases wherein an amount which is out and out non-recoverable, towards which a cheque is issued, dishonoured and for recovery of which a criminal action is initiated, the question of threshold jurisdiction will arise. In such cases, the Court exercising jurisdiction under Section 482 CrPC will be justified in interfering but not otherwise. In that light, this Court was of the view that entertaining a petition under Section 482 CrPC to quash the proceedings at the stage earlier to the evidence would not be justified.”, the court said.

Though it was contended that the cheque is issued in respect of the debt which is not enforceable or a liability which cannot be recovered, in such event, the presumption under Section 139 of NI Act would not be available, the bench observed;

“We do not see the need to tread that path to undertake an academic exercise on that aspect of the matter, since from the very facts involved in the case on hand ex facie it indicates that the claim which was made in the complaint before the Trial Court based on the cheque which was dishonoured cannot be construed as time-barred and as such it cannot be classified as a debt which was not legally recoverable.”

The court noted that in the instant case not only the amount was a legally recoverable debt which is evident on the face of it, the complaint was also filed within time. Therefore, it set aside the High Court judgment and restored the complaint.

If the question as to whether the debt or liability being barred by limitation was an issue to be considered in such proceedings, the same is to be decided based on the evidence to be adduced by the parties since the question of limitation is a mixed question of law and fact. It is only in cases wherein an amount which is out and out non-recoverable, towards which a cheque is issued, dishonoured and for recovery of which a criminal action is initiated, the question of threshold jurisdiction will arise. In such cases, the Court exercising jurisdiction under Section 482 CrPC will be justified in interfering but not otherwise.

Source

Latest News Latest Supreme Court

Latest Posts

Card image

Transfer Of Property Act | Rents Receivable Can Be Assigned By Debtor To Creditor As Actionable Claim: Supreme Court

Rents receivable by a borrower can be assigned to a lender as an "actionable claim" as per the Transfer of Property Act,1882(TPA), held the Supreme Court while deciding a dispute between the Infrastructure Leasing and Financial Services Ltd and the ...

Card image

Supreme Court Says MP, MLA Can’t Claim Immunity From Prosecution On Charges Of Bribery

The seven-judge Constitution bench of the Supreme Court said it disagreed with the judgment in PV Narasimha and the judgment in PV Narasimha which grants immunity to legislators for allegedly bribery for casting a vote or speech has “wide ramifications ...

Card image

Supreme Court Dismisses PIL Seeking Independent Audit Of EVM Source Codes

The Supreme Court on Friday refused to entertain a Public Interest Litigation (PIL) seeking an independent audit of source codes of Electronic Voting Machines (EVMs). The bench comprising CJI DY Chandrachud, Justice JB Pardiwala, and Justice Manoj Misra noted that ...

Card image

No Law Gives Right To Husband To Beat & Torture His Wife: Delhi High Court Grants Divorce To Woman On Ground Of Cruelty And Desertion

Synopsis The court was hearing an appeal by a woman challenging the decision of the trial court, whereby it has dismissed her petition seeking divorce from the man on the ground of cruelty and desertion While granting divorce to a woman ...

Card image

The Role of Legal Technology in Modern Law Practices: Embracing the Digital Shift

In today’s rapidly evolving legal landscape, the integration of technology has become more than just a trend—it’s a fundamental shift that is reshaping how legal professionals operate and deliver services. As we embrace this digital transformation, the role of legal ...

Card image

UPSC CSE: No Interim Relief, Delhi High Court Asks CAT To Expeditiously Decide On Plea To Lower CSAT Cut-Off

The Delhi High Court on Wednesday asked the Central Administrative Tribunal to decide expeditiously the Plea  seeking reduction in the cut off from 33% to 23% for qualifying Part II (CSAT) exam of 2023 Civil Services Examination conducted by UPSC ...

EOS Chambers of Law

Speak With Our
Experts Today!

Get a Appointment
EOS Chambers of Law