(Prayer: Petition under Section 437/438/439/482 of Cr.P.C and 528 of BNSS praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition, the High Courtpleased to direct the II Additional Junior Civil. Judge, at Tanuku, West Godavari District to dispose of C.C. No. 182/2021 expeditiously and pass

Petition under Section 437/438/439/482 of Cr.P.C and 528 of BNSS praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition, the High Court may be pleased to quash the proceedings in C.C.No.182 of 2021 on the file of Court of the Special Magistrate, Tanuku, West Godavari District against this Petitioners/Accused and pass such

IA NO: 1 OF 2023

Petition under Section 482 of Cr.P.C and 528 of BNSS praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition, the High Court may be pleased may be pleased to grant stay of all further proceedings in C.C.No.182 of 2021 on the file of Court of the Special Magistrate, Tanuku, West Godavari District including the appearance of this Petitioners/Accused till the disposal of the Main Quash Petition in the interest of the justice and pass such)

Common Order:

1. Petitioners in Criminal Petition No.3400 of 2022 are complainants, and the petitioners in Criminal Petition No.5217 of 2023 are the accused, in C.C No.182 of 2021 on the file of the learned II Additional Junior Civil Judge, Tanuku, West Godavari District (which was transferred to Special Magistrate Court, Tanuku, West Godavari), registered for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. Criminal Petition No.3400 of 2022 is filed seeking a direction to the trial Court to dispose of the subject C.C. expeditiously, whereas the other Criminal Petition No.5217 of 2023 is filed by the accused seeking to quash the proceedings in the said C.C.

2. Since these Criminal Petitions arise out of the same Calendar case and are connected, at the request of the both the counsel, they are being disposed of, by this common order.

3. The allegations, in brief, in the private complaint are as follows:

                  The complainants are the wife and children of Late Mallampalli Ravi Soma Sekhar, who died in testate on 06.07.2017, leaving behind as his Class-I legal heirs. During his lifetime, accused No.1, a partnership firm represented by its Managing Partner i.e. accused No.2, had borrowed Rs.40,00,000/- from the complainant No.1 on 24.06.2013 by way of RTGS for his business purposes by executing a promissory note and agreeing to repay the same as and when demanded, with 24% compound interest per annum. Accused No.2 paid the monthly interest regularly for the amount due under the said promissory note. Subsequently, in October 2016, accused No.2 sought further financial assistance of Rs.1,50,00,000/- out of which Rs.1,10,00,000/-was arranged on 04.11.2016 by Late Mallampalli Ravi Soma Sekhar through RTGS, for which demand promissory note was executed in favour Late Ravi Soma Sekhar, agreeing to repay the same with compound interest at 24% per annum. In order to secure both the loans, the accused deposited title deeds i.e. Registered Sale deed dated 06.04.2013 bearing document No.1517/2013 of SRO, Bheemunipatnam on 05.11.2016, thereby creating an equitable mortgage, and executed a Memorandum of Deposit of Title Deeds in favour of complainant No.1 and Late Ravi Soma Sekhar confirming the deposit of title deeds. The accused initially paid interest irregularly. They failed to repay the principal amounts also. After the death of Ravi Soma Sekhar, the complainants, being legal heirs, became entitled to recover the dues. Upon repeated demands, the accused issued a cheque dated 30.01.2021 for a sum of Rs.1,50,00,000/- bearing No.152169 drawn on Dhanalakshmi Bank Ltd., Visakhapatnam Branch VIP RD, CBM Compound in favor of complaint No.1 towards part payment. The cheque was presented by complainant No.1 on 03.02.2021 through her banker namely HDFC Bank Ltd., Tanuku Branch but the same was dishonoured on 04.02.2021 with endorsement „insufficient funds‟.

                  A statutory legal notice dated 11.02.2021 was served on the accused on 13.02.2021, but the accused neither responded nor made payment within the stipulated period. Consequently, the complainants filed the present complaint within limitation under Section 138 of the Negotiable Instruments Act for dishonor of cheque.

4. Learned counsel for accused vehemently contended that the complaint is not maintainable as there is no legally enforceable debt. He submits that the complainant, instead of filing a Civil Suit for recovery of amount basing on the promissory notes, resorted to filing of present complaint only with a view to harass the accused. He further contended that the cheque was issued in the yer 2021 with reference to alleged debt under the promissory notes dated 24.06.2013 and on 04.11.2016, which are time barred and those promissory notes are not enforceable under law. He submits that the debts, for repayment of which the subject cheques were issued, are time barred ones, as the subject promissory notes were executed in the years 2013 and 2016, and the cheque was issued in the year 2021. The learned counsel relied on the following judgments:

                  i) in Prajan Kumar Jain Vs. Ravi Malhotra reported in (2009) Supreme(Del) 1091, wherein it is held thus:

                  “…14. In the instant case, the two cheques which are the subject matter of this complaint were for the discharge of a liability of a debt arising out of the agreement dated 14.6.2000 which debt had become time barred. This debt was not a legally enforceable debt within the meaning of Section 138 Explanation of the NI Act. Complaint and all proceedings emanating therefrom are accordingly quashed.”

                  ii) in Girdhari Lal Rathi Vs. P.T.V. Ramanujachari and Anr. reported in (1997) 1 ALT(Cri) 509, wherein it is held thus:

                  “…8. There appears to be no force in the contention of learned counsel for the appellant that by issuance of the cheque, the limitation for realising the loan amount was extended, because at the time of issuance of the cheque the debt should be a legally recoverable debt. In case a cheque is issued for a time-barred debt and it is dishonoured, the accused cannot be convicted under Section 138 of the Negotiable Instruments Act simply on the ground that the debt was not legally recoverable….”

5. Learned counsel appearing on behalf of the complainants submits that the promissory notes that have been executed by the accused are renewed and in discharge of the same, the subject cheque has been issued by the accused on repeated demands made by complainants. He submits that the contentions raised by the learned counsel for the accused are all disputed questions of fact, which cannot be adjudicated in a proceedings under Section 482 CrPC. In support of his contention, he relied on the judgment Atamjit Singh Vs. State (NCT of DELHI) and Anr. reported in (2024) 19 SCC 705, wherein the Hon‟ble Supreme Court held that:

                  “…6. At the threshold, it would be apposite to refer to decisions of this Court in Yogesh Jain v. Sumesh Chadha, Criminal Appeal Nos. 1760-1761 of 2022 whereunder this Court has opined on the scope of interference by the High Court in proceedings under 138 of the NI Act qua an allegedly time barred debt at the stage of issuance of summons, whilst exercising its jurisdiction under Section 482 of the Code of Criminal Procedure, 1973 (the “CrPC”). The operative paragraph in Yogesh Jain (Supra) has been reproduced as under:

                  “8. Once a cheque is issued and upon getting dishonoured a statutory notice is issued, it is for the Accused to dislodge the legal presumption available Under Sections 118 and 139 reply of the N.I. Act. Whether the cheque in question had been issued for a time barred debt or not, itself prima facie, is a matter of evidence and could not have been adjudicated in an application filed by the Accused Under Section 482 of the Cr.P.C.”

                  7. From a perusal of legal position enunciated above, it is clear that the classification of the underlying debt or liability as being barred by limitation is a question that must be decided based on the evidence adduced by the parties. We agree with aforesaid opinion. Undoubtedly, the question regarding the time barred nature of an underlying debt or liability in proceedings under Section 138 of the NI Act is a mixed question of law and fact which ought not to be decided by the High Court exercising jurisdiction under Section 482 of the CrPC...”

6. Perused the record. A perusal of the allegations in the complaint goes to show that accused No.1, a partnership firm represented by its Managing Partner i.e. accused No.2, borrowed Rs.40,00,000/- from the complainant No.1 on 24.06.2013 by way of RTGS for his business purposes and executed a demand promissory note, agreeing to repay the same as and when demanded, with 24% compound interest per annum. In the month of October, 2016, accused No.2 borrowed Rs.1,10,00,000/- on 04.11.2016 by way of RTGS from Late Mallampalli Ravi Soma Sekhar, who is husband and father of Late Mallampalli Ravi Soma Sekhar, who died in testate on 06.07.2017. He died and the complainants are his legal representatives, and agreed to repay the same with interest as agreed therein. The accused deposited title deeds i.e. Registered Sale deed dated 06.04.2013 bearing document No.1517 of 2013 of SRO, Bheemunipatnam on 05.11.2016, thereby creating an equitable mortgage, to secure the said loans, and executed a Memorandum of Deposit of Title Deeds in favour of complainant No.1 and Late Ravi Soma Sekhar confirming the deposit of title deeds. On demand, the accused issued a cheque dated 30.01.2021 for Rs.1,50,00,000/- bearing No.152169 drawn on Dhanalakshmi Bank Ltd., Visakhapatnam Branch VIP RD, CBM Compound in favor of complaint No.1 towards part payment. The cheque was presented by complainant No.1 on 03.02.2021 through her banker namely HDFC Bank Ltd., Tanuku Branch but the same was dishonoured on 04.02.2021 with endorsement „insufficient funds‟. After issuing the statutory notice under Section 138 (b) of the Act, 1881 and as the accused failed to repay the amount covered under the dishonoured cheque, the present complaint has been lodged.

7. In the present case on hand, it is undisputed fact that on presentation of the subject cheque, the same has been returned dishonoured by the banker with an endorsement “funds insufficient in the account of the accused”.

                  Admittedly, a presumption is available under Section 139 of the NI Act that when a cheque is dishonoured, law presumes that it was issued in discharge of a legally enforceable debt or liability. Under Section 118 of the NI Act, there is a presumption as to negotiable instruments, unless contrary is proved, as to consideration, as to date, as to time of acceptance, as time of transfer, as to order of indorsements, etc. No doubt, these presumptions are rebutable presumptions. Whether there is no legally enforceable debt or liability as the debts for which the subject cheque was issued are time barred debts, as contended by the accused, and whether the subject promissory notes have renewed and in discharge of the same, the subject cheque has been issued, as contended by the complainants, are all disputed question of fact, which cannot be decided in the present Criminal Petition. This Court is not in a position to conduct a roving inquiry into the disputed question of fact and the same have to be adjudicated during the course of trial. As held by the Hon‟ble Apex Court in Atamjit Singh ((2024) 19 SCC 705 referred supra), the classification of the underlying debt or liability as being barred by limitation is a question that must be decided based on the evidence adduced by the parties.

8. In view of the above, when there are mixed questions of fact and law, this Court would not be in a position to quash the proceedings filed in a petition under Section 482 Cr.P.C. Accordingly, Criminal Petition No.5217 of 2023 is dismissed.

9. Insofar as Criminal Petition No.3400 of 2022 is concerned, the same is disposed of, directing the learned Special Magistrate to dispose of C.C No.182 of 2021 within a period of six (06) months from the date of receipt of copy of this Order.

Miscellaneous petitions pending, if any, shall stand closed.