| Citation | Criminal Appeal No. 206 of 2002 |
| Date of judgement | Feb 08, 2002 |
| Appellant | A.V. Murthy |
| Respondent | B.S. Nagabasavanna |
| Court | Supreme court |
| Bench | R.P. SETHI & K.G. BALAKRISHNAN, JJ. |
FACTS
- The respondent was allegedly given an amount of Rs. 7.5 lakhs by the appellant and his two associates roughly four years ago so that he could build a gas station.
- Despite multiple requests, the respondent did not pay back the specified sum.
- Finally, on March 30, 1998, the respondent bowed in to the appellant’s request and issued a check to the appellant.
- The appellant produced the check for payment, but the bank refused to process it Giving the reason “Account closed”
- After that, the appellant sent the respondent a statutory demand notice, and when they didn’t pay, the appellant filed a complaint with the magistrate.
- According to the complaint, the respondent was given the aforementioned sum of Rs. 7.5 lakhs by the appellant and his two associates roughly four years before the respondent actually wrote the check.
- A summons was issued to the respondent by the learned Magistrate.
- The respondent filed a Criminal Revision before the IInd Additional Sessions Judge in Mysore, claiming that the complaint was not maintainable because the amount advanced by the appellant to him was about four years prior to the date of the cheque’s issuance and because there was no legally enforceable debt or liability as against the respondent due to the “Explanation” appended to Section 138 of the Act.
- The Additional Sessions Judge granted this motion and concluded that, even on the basis of the allegations in the complaint and the complainant’s sworn statement, the alleged borrowing occurred four years before the cheque was issued, rendering the debt unenforceable due to the statute of limitations.
- As a result, the Magistrate erred in finding the alleged offense to be a violation of Section 138 of the Act. Affected by this, the appellant filed a Criminal Revision before the High Court of Karnataka.
- However, the learned Single Judge upheld the Addl. Sessions Judge’s position. As a result, the Addl. Sessions Judge annulled the entire procedure. The appeal is presently being considered.
Arguments presented in court
Arguments by appellant
The appellant’s attorney argued before the court that the sessions judge erred in concluding that the respondent had no legally enforceable obligation or liability. He further argued that when a check is issued, it must be assumed for purposes of section 118 of the Act that it was drawn for contemplation. Furthermore, it was argued that even though the loan was made by the appellant and his friends roughly four years ago, the respondent had accepted this liability in his balance sheet and that, even for the purposes of a civil lawsuit, such debt or liability is not time-barred.
Arguments by respondent
The respondent appears to have argued that because the loan was advanced four years before the cheque was written, the debt or liability for which the check was drawn by him was no longer legally enforceable and, as a result, the complainant could not have brought a claim under section 138 of the Act.
Judgement
This is not a situation where a check was written to pay for a debt or other obligation that was legally impossible to collect on. It may have been argued that the debt or liability was not legally enforceable since it was a claim, which is against the law, if the check, for instance, had been made in relation to a debt or liability payable under a wagering contract. This instance is not one of those kinds. However, we are convinced that at this point in the proceedings, it was obviously false and illegal to claim that the respondent’s check was issued in payment of a debt or other obligation that was not legally enforceable.
Therefore, we overrule the decision made by the High Court’s learned Single Judge, grant the appeal, and return the case to the Magistrate so that the complaint may be handled legally. We are very clear that anything we have said about the obligation or liability being enforceable is only for the purposes of these proceedings, and the respondent is free to raise any legal defenses that may be appropriate
References
- https://indiankanoon.org/doc/749742/
- https://www.lawyerservices.in/AV-Murthy-versus-BS-Nagabasavanna-2002-02-08
- https://www.latestlaws.com/latest-caselaw/2002/february/2002-latest-caselaw-69-sc/
- https://ibclaw.in/a-v-murthy-vs-b-s-nagabasavanna-supreme-court-of-india/
This document is written by Sushmita singh of Lloyd school of Law.
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