Criminal Appeal No.12 of 2008

1st September, 2009

Petitioner Counsel: Shri. S. G. BHOBE
Respondent Counsel: Ms. S. MANDREKAR

Cases Cited:
Jagadamba Parisar Sahakari Pat Sanstha Maryadit Vs. Shravan Ajinath Ukirde, 2007 ALL MR (Cri) 1043=2007(1) Bom.C.R. 185 [Para 5]
Smt. Ashwini S. Bhat Vs. Shri. Jeevan Divaka Lolienkar, 1999(2) ALL MR 664=1999(1) Goa L.T. 408 [Para 5,7]
Kishanchand L. Thakur Vs. Narayan L. Ruparel, 2008(2) Bom.C.R. (Cri.) 798 [Para 7]
Kamalaksha Laxman Prabhu Vs. S. G. Mayekar, 2008 ALL MR (Cri) 2524=2009(1) DCR 426 [Para 7]
Narendra V. Kanerkar Vs. Bardez Taluka Co-operative Housing Mortgage Society Ltd., 2006(3) ALL MR 673=2006(6) DCR 894 [Para 7]

JUDGMENT

JUDGMENT :- This is complainant's appeal and is directed against the acquittal of the accused under Section 138 of the Negotiable Instruments Act, 1881, by Judgment dated 11-10-2007 of the learned J.M.F.C., Bicholim.

2. The subject matter of the complaint was a cheque dated 3-5-2006 issued by the accused to the complainant which when presented for payment was dishonoured due to insufficient funds in the account of the accused, and the complainant having sent the demand notice, the same came to be returned with endorsement "unclaimed".

3. There is no dispute as to most of the facts. The complainant is a Co-operative Credit Society governed by the Maharashtra Co-operative Societies Act, 1960 as applicable to the State of Goa, and the accused upon execution of a pro-note dated 19-4-2002 and an agreement for loan, was advanced a loan of Rs.70,000/- only, payable in 36 installments of Rs.2,500/- each at regular interval of every month, with interest at the rate of 16%. Clause 3 of the said agreement stipulated that in case the Respondent/Accused failed to pay any installment/s with interest, as provided, he would be liable to pay advance, the whole amount outstanding together with interest due thereon in terms of the demand promissory note dated 19-4-2002.

4. There is no dispute that the subject cheque dated 3-5-2006 in the sum of Rs.1,25,000/- was given by the accused to the complainant towards the payment of the said loan. The loan as already stated was disbursed on 19-4-2002, and in case it was repayable in 36 installments, the last installment would have fallen due on 18-4-2005. The complainant had examined one Pradeep B. Tirodkar, an Officer of the complainant in support of the case and who had produced the said documents including the loan agreement and the promissory note executed by the accused.

5. The learned Magistrate noted that the complainant's witness Shri. Tirodkar in cross-examination had admitted that the loan was obtained by the accused on 19-4-2002 and was payable within three years, and, therefore in the opinion of the learned Magistrate, on the date of the issuance of cheque, the debt was time barred. In coming to the said conclusion, the learned Magistrate placed reliance on the case of Jagadamba Parisar Sahakari Pat Sanstha Maryadit Vs. Shravan Ajinath Ukirde and another (2007(1) Bom.C.R. 185 : [2007 ALL MR (Cri) 1043]). That was a case where the loan was advanced on 11-2-2000, and it was to be repaid before 11-2-2002, and the cheque was issued on 31-7-2005, and as such this Court held that the cheque was issued towards a time barred debt. Needless to observe the cheque in that case was issued after three years from the last date of repayment of the said loan. Learned Magistrate also placed reliance on the case of Smt. Ashwini S. Bhat Vs. Shri. Jeevan Divaka Lolienkar and another (1999(1) Goa L.T. 408 : [1999(2) ALL MR 664]). That was also a case where the cheque was issued after the debt had become time barred.

6. Shri S. G. Bhobe, the learned Counsel appearing on behalf of the complainant submits that limitation period cannot be reckoned from 19-4-2002, being the date of disbursement, and in case the date of disbursement is considered for the purpose of limitation then most of the loans given by the Banks would be time barred. The learned Counsel further submits that the Respondent as accused is a member of the Complainant Credit Society and the period of limitation to recover a loan between a Society and its member is six years in terms of Clause (b) of sub-section (1) of Section 92 of the Maharashtra Co-operative Societies Act, 1960. The learned Counsel further submits that the Respondent/Accused by virtue of Clause 8 of the loan agreement had undertaken that he would be bound by the Rules and Bye-laws of the Complainant Credit Society which were in force or may thereafter come into force, and as such the period of limitation for the complainant to recover the debt from the accused would be six years.

7. On the other hand, Ms. S. Mandrekar, the learned Counsel appearing on behalf of the Respondent/Accused has submitted that the learned Magistrate has rightly computed the period of limitation as three years from the date of disbursement of the loan i.e. 19-4-2002. The learned Counsel further submits that the evidence given on behalf of the complainant does not at all show that the Respondent/Accused is a member of the said Credit Society and in support of her submission, learned Counsel has placed reliance on the case of Kishanchand L. Thakur Vs. Narayan L. Ruparel and another (2008(2) Bom.C.R. (Cri.) 798). That was a case where the loan was advanced on 23-7-1996 and the cheque was issued three years later, and as such, it was held by this Court that the loan was time barred, and as such the debt was not legally enforceable. The learned Counsel has also placed reliance on another decision of this Court in the case of Kamalaksha Laxman Prabhu Vs. S. G. Mayekar (2009(1) DCR 426 : [2008 ALL MR (Cri) 2524]) wherein it was held that where a cheque is issued against a time barred debt it cannot be said that the cheque was issued in discharge of a legally enforceable liability. In fact, in rendering the said Judgment, this Court has followed its earlier decisions particularly in the case of Ashwini S. Bhat Vs. Shri. Jeevan Divaka Lolienkar and another [1999(2) ALL MR 664] (supra) and Narendra V. Kanerkar Vs. Bardez Taluka Co-operative Housing Mortgage Society Ltd. (2006(6) DCR 894 : [2006(3) ALL MR 673]).

8. In my view none of the decisions cited are applicable to the fact situation prevailing in this case.

9. Be that as it may, Ms. S. Mandrekar, the learned Counsel is right in contending that the evidence does not show that the Respondent/Accused is a member of the Complainant Credit Society, and, therefore it is not possible to accept the submission that the period of limitation to raise a dispute and recover the loan would be six years in terms of Clause (b) of sub-section (1) of Section 92 of the Maharashtra Co-operative Societies Act, 1960. Nevertheless, the question remains and that is whether the period of limitation ought to have been computed from 19-4-2002 being the date of disbursement of the loan or whether it was to be computed from 18-4-2005 being the date of the last installment payable by the accused towards the loan taken by him.

10. In my opinion, the period of limitation of three years ought to have been computed not from the first date when the loan was disbursed on 19-4-2002 but from the date of the last installment which was due and payable and that is 18-4-2005, for only that could have given a cause of action to the complainant to recover the amount lent to the accused. In the circumstances, therefore, the view held by the learned Magistrate that the period of limitation of three years had to be computed from the date of disbursement of the loan cannot be accepted. It ought to have been computed from the last date of the last installment which was payable and that is on or about 18-4-2005 and only that would have given the cause of action for the complainant to file a Civil Suit and that is within a period of three years therefrom. It is not the case of the accused that the complainant had recalled the loan earlier on account of failure of the accused to pay any of the installments.

11. Consequently, the appeal deserves to succeed, and the impugned Judgment dated 11-10-2007 deserves to be set aside, and is hereby set aside, and consequently the accused is hereby convicted under Section 138 of the Negotiable Instruments Act, 1881.

12. The learned Counsel appearing on behalf of the Respondent/Accused submits that the accused has paid a sum of Rs.25,000/- on 14-8-2009, and will pay the balance amount due to the Bank, if some time is given. The pass book produced for perusal also shows a balance of Rs.1,70,774/- as outstanding as on 27-6-2009.

13. The learned Counsel on behalf of the complainant submits that the complainant does not wish that any substantive sentence should be imposed upon the accused, and would be interested in case the loan amount is paid by the accused, with accrued interest.

14. This case appears to be a case where the accused having taken a loan has been unable to repay the same. Considering the facts and circumstances of the case, and the concession made on behalf of the complainant no substantive sentence is being imposed upon the accused. However, the accused is hereby directed to pay a compensation of Rs.1,40,000/- to the complainant. The same shall be paid within a period of two months, and, in default, the accused is directed to undergo S.I. for a period of six months.

Appeal allowed.