In Brief
A borrower executed a promissory note in July 2012 for Rs 20 lakh with repayment due by December 2016. In April 2017, he issued a cheque for Rs 10 lakh which bounced. The lender filed cheque-bounce complaints in July 2017 under Section 138 of the Negotiable Instruments Act. The High Court quashed the proceedings, holding the debt time-barred. The Supreme Court reversed this, holding that the limitation period begins from December 2016 (when repayment was due), not July 2012 (when the note was executed). Thus, the cheque and complaint were both filed within the three-year limitation period. The Court emphasized that whether a debt is time-barred is a factual question for trial, not for preliminary quashment, and that the cheque constitutes a valid written promise under contract law even if the underlying debt was time-barred.
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