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Dia (student)     06 September 2014

Cheque issued for a time barred debt

Good Evening,

My question is as follows;

I have read the judgement of Bombay High Court  "Mr. Dinesh B. Chokshi vs Rahul Vasudeo Bhatt on 19 October, 2012, Bench: A.S. Oka, S.S. Jadhav" in that the dishonour of cheque issued for a time barred debt is an offence u/s138 NI Act. however I also read a contrary order of Karnataka High court

1. Is there any Supreme Court judgement similar to this or any judgement of Indore/Madhya Pradesh High Court?

2. how is a debt said to be time barred in the 2 belaow cases:

a) Suppose loan was given between 1995 to 1997 and subject cheque was issued in 2003 - but all through business returns were promised and the cheque issued in 2003 was for principal amount plus business returns. in such a case where the business returns are being continually added would the loan amount become time barred?

b) Suppose tthe loan was given between 1995 to 1997 and in 2000 a cheque was issued for the principal amount which was deposited on 10 MAY and dishonoured on 11 May 2000 and finally subject cheque was issued dated on 9 MAY 2003. - i] is it taken that the loan amount was acknowledged because of cheque issued in 2000?

                    ii] since the cheque was dishonoured on 11 May 2000, and subject cheque was issued on 9 May                             2003 which is within 3 years, is it time barred?


Thank you.



 2 Replies

Hardeep (Business)     07 September 2014

The Limitation Period for a debt is three years from :

a) date of loan or

b) date debt acknowledged or

c) date of part payment or

d) date of fresh promise to pay

So, in the first case since returns were promised and debt acknowledged it is not time barred.

In the second case it would depend upon what happened after the cheque bounced. if there was a fresh promise to pay the debt revives.

For more see :


Dia (student)     08 September 2014

Thank you for your answer.

Kind Regards,


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