K. HYMAVATHI versus THE STATE OF ANDHRA PRADESH & ANR.
[2023] 14 S.C.R. 412, Supreme Court of India, 2023
Outcome: Appeal(s) allowed (Granted)
Segment: Facts
CASE DETAILS
K. HYMAVATHI
v.
THE STATE OF ANDHRA PRADESH & ANR.
(Criminal Appeal No.2743 of 2023)
SEPTEMBER 06, 2023
[A. S. BOPANNA AND PRASHANT KUMAR MISHRA, JJ.]
HEADNOTES
 Issue for consideration: High Court if justiﬁ ed in quashing the 
criminal proceedings ﬁ led by appellant against respondent No.2-accused 
u/ss.138 and 142 of the Negotiable Instruments Act, 1881 holding that it 
was a ﬁ t case for quashing since the complaint ﬁ led seeking prosecution 
was not in respect of a legally recoverable debt.
Negotiable Instruments Act, 1881 – Debt if legally enforceable – 
Exercise of power u/s. 482, CrPC – Scope:
Held: Whether the debt in question is a legally enforceable debt or 
other liability would arise on the facts and circumstance of each case and 
in that light, the question as to whether the power u/s.482, CrPC is to be 
exercised or not will also arise in the facts of such case – In the present case, 
High Court misdirected itself in holding that since the date of issuance of 
the cheque (2017) is beyond three years from the date of issuance of the 
promissory note (2012) so it is a time-barred debt – When the respondent 
had agreed to repay the amount within December, 2016, the cause of 
action to initiate proceedings to recover the said amount if not paid within 
December 2016 would arise only in the month of December, 2016 – Thus, 
the limitation would be as provided under Article 34 to the Schedule in the 
Limitation Act, 1963 – In respect of a promissory note
payable at a ﬁ xed 
time, the period of limitation being three years would begin to run when 
the ﬁ xed time expires – Therefore, the time would begin to run from the 
month of December, 2016 and the period of limitation would expire at the 
end of three years thereto i.e. during December, 2019 – Thus, the cheque 
[2023] 14 S.C.R. 412 : 2023 INSC 811
412
413
dated 28.04.2017 is well within the period of limitation – Complaint in CC 
No.681 of 2017 was ﬁ led on 11.07.2017, as is the case in all the analogous 
complaints – Therefore, not only the amount was a legally recoverable debt, 
the complaint was also ﬁ led within time – No occasion to exercise power 
u/s.482, CrPC to quash the complaint – Order impugned set aside – Code of 
Criminal Procedure, 1973 – s.482 – Contract Act, 1872 – s.25(3) – Limitation 
Act, 1963 – Article 34. [Paras 12, 13, 15-17]
Negotiable Instruments Act, 1881 – Debt/liability if barred by 
limitation, to be decided on evidence – Quashing u/s.482, CrPC justiﬁ ed 
only if debt is non-recoverable:
Held: Whether the debt or liability is barred by limitation is to be 
decided based on the evidence to be adduced since the question of limitation 
is a mixed question of law and fact – It is only in cases wherein an amount 
which is out and out non-recoverable, towards which a cheque is issued, 
dishonoured and for recovery of which a criminal action is initiated, the 
question of threshold jurisdiction will arise – In such cases, the Court 
exercising jurisdiction u/s.482, CrPC will be justiﬁ ed in interfering but not 
otherwise – Entertaining a petition u/s.482, CrPC to quash the proceedings 
at the stage earlier to the evidence would not be justiﬁ ed – Code of Criminal 
Procedure, 1973 – s.482. [Para 10]
Negotiable Instruments Act, 1881 – s.139 – Plea that if the cheque 
is issued in respect of the debt
which is not enforceable or a liability 
which cannot be recovered, in such event, the presumption u/s.139 
would not be available:
Held: No need to tread that path to undertake an academic exercise 
on that aspect of the matter, since on facts ex facie the claim made in the 
complaint before the Trial Court based on the cheque which was dishonoured 
cannot be construed as time-barred – Thus, it cannot be classiﬁ ed as a debt 
which was not legally recoverable – Contract Act, 1872 – s.25(3) – Code 
of Criminal Procedure, 1973 – s.482. [Para 12]
LIST OF CITATIONS AND OTHER REFERENCES
S. Natarajan v. Sama Dharman, (2021) 6 SCC 413; A.V. Murthy v. 
B.S. Nagabasavanna, (2002) 2 SCC 642 : [2002] 1 SCR 906 – relied on.
K. HYMAVATHI v. THE STATE OF ANDHRA PRADESH & 
ANR.
414 
SUPREME COURT REPORTS 
[2023] 14 S.C.R.
Expeditious Trial of Cases u/s 138 of NI Act 1881, (2021) SCC Online 
SC 325 – referred to.
OTHER CASE DETAILS INCLUDING IMPUGNED 
ORDER AND APPEARANCES
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 
2743 of 2023.
From the Judgment and Order dated 12.02.2019 of the High Court of 
Andhra Pradesh at Amravati in CRLP No.12675 of 2018.
With
Criminal Appeal Nos. 2746, 2744 and 2745 of 2023.
Appearances:
Sanchit Garga, Aman Chawla, Karan Dua, Nikunj Jain, Madhav Anand, 
Kunal Rana, Advs. for the Appellant.
Sidharth Luthra, Sr. Adv., Mahfooz Ahsan Nazki, Polanki Gowtham, 
T Vijaya Bhaskar Reddy, Ms. Niti Richhariya, Ms. Rajeswari Mukherjee, 
Mrs. K. Sarada Devi, R. Vijay Nandan Reddy, V. Krishna Swaroop, Advs. 
for the Respondents.
JUDGMENT / ORDER OF THE SUPREME COURT
JUDGMENT
A. S. BOPANNA, J. 
1. Leave granted.
2. The appellant is assailing t he judgment dated 12.02.2019 passed 
by the High Court of Andhra Pradesh at Amravati in Criminal Petition 
No. 12675 of 2018 and analogous petitions. Through the judgment, the 
High Court while allowing the petitions before it, quashed the criminal 
proceedings against Respondent No. 2, being C.C. No.681 of 2017 and 
analogous complaints on the ﬁ le of II Additional Chief Metropolitan 
Magistrate at Visakhapatnam. The appellant is the complainant in CC No. 
681 of 2017 and the other complaints, ﬁ led against the accused – respondent 
no.2 under Section 138 and 142 of the Negotiable
Instruments Act (‘NI
415
Act’ for short). The appellant is therefore before this Court claiming to be 
aggrieved by the said judgment.
3. The brief facts of the case as narrated in the ﬁ rst of the above 
appeal are that the appellant and respondent no.2 are known to each other. 
Due to their acquaintance respondent no.2 approached the appellant to 
borrow a sum of Rs 20,00,000/- stating that he required the amount to 
ﬁ nance his son’s higher education to study medicine and for domestic 
expenses. In order to assure the re-payment, respondent no.2 executed a 
promissory note on 25.07.2012 wherein it was agreed that the amount was 
to be repaid in full and along with interest at 2% per month. There was 
a condition in the promissory note that the full and ﬁ nal payment will be 
made by December, 2016. The respondent No.2 failed to comply with the 
condition in the promissory note but on 28.04.2017 issued a cheque bearing 
No.548045 drawn on the Vijaya Bank, J.P. Marg, Visakhapatnam for a 
sum of Rs. 10,00,000/- towards partial discharge of the debt. The cheque 
when presented for collection was returned by the Bank on 15.05.2017 
due to insuﬃ  cient funds to honour the cheque. The appellant got issued 
a legal notice dated 24.05.2017 to respondent No.2, which was replied 
to by respondent No.2 on 01.06.2017. The appellant sent a rejoinder to 
the said reply on 03.06.2017. Respondent No.2 sent a reply to the said 
rejoinder on 07.06.2017. The appellant thereafter ﬁ led complaints under 
Section
138 of the NI Act on 11.07.2017 before the Special Magistrate, 
Vishakhapatnam vide CC No. 681 of 2017 and analogous complaints. The 
learned Special Magistrate in accordance with law, took cognizance of 
the complaint under Section 138 of NI Act against the respondent No.2 - 
accused vide order dated 14.09.2018 and ordered the issue of summons.
4. The fact situation in the analogous appeals is also similar except 
for the date of the promissory note and the date of the cheque. However, in 
all the promissory notes the period for repayment indicated is the same and 
all other facts arising for consideration are similar. Hence for the purpose 
of narration and consideration of the law, the facts relating to the appeal 
arising out of SLP(Crl.) No.7455 of 2019 is referred herein.
5. The respondent No.2 herein however ﬁ led the petition in CRL.P 
No.12675 of 2018 and analogous petitions under Section 482 of the 
Criminal Procedure Code, 1973 (for short ‘CrPC’) before the High Court 
K. HYMAVATHI v. THE STATE OF ANDHRA PRADESH & 
ANR. [A. S. BOPANNA, J.]
416 
SUPREME COURT REPORTS 
[2023] 14 S.C.R.
praying to quash proceedings under CC No. 681 of 2017 and analogous 
complaints. The High Court allowed the petitions ﬁ led under Section 
482 CrPC by respondent no.2 herein, noting various judgments by this 
Court and the various High Courts, and observing that the limitation for 
enforcing the promissory notes had expired much prior to the issuance 
of the cheques in question. As such, it was held this was a ﬁ t case for 
quashing since the complaint ﬁ led seeking prosecution was not in respect 
of a legally recoverable debt. 
6. Mr. Sanchit Garga, learned counsel appearing on behalf of the 
appellant while assailing the judgment passed by the High Court, would 
contend that the High Court did not appreciate that the promissory note 
executed by respondent No.2 has the binding eﬀ ect of a contract and 
hence the complaint under Section 138 of NI Act is maintainable when a 
cheque is drawn to pay wholly or in part, a debt which is enforceable and 
there is no bar of limitation. The cheque amounts to a promise governed 
by Section 25 (3) of the Indian Contract Act, 1872. Such promise which 
is an agreement is an exception to the general rule that an agreement 
without consideration is void. Though on the date of making such promise 
by issuing a cheque, the debt which is promised to be paid, even if is 
time-barred is a legally recoverable one. In view of Section 25 (3) of the 
Indian Contract Act, the promise/ agreement is valid
and therefore the 
same is enforceable. The learned counsel for the appellant has argued 
on the principle that the limitation act only bars the remedy and not 
the right of a party. He has relied upon the decision of this Court in S. 
Natarajan v. Sama Dharman, (2021) 6 SCC 413 and A.V. Murthy v. 
B.S. Nagabasavanna, (2002) 2 SCC 642. 
7. Mr. Sidharth Luthra, learned senior counsel appearing as Amicus 
Curiae on behalf of respondent No. 2 – accused who has failed to appear 
despite service of notice, would however seek to sustain the judgment 
passed by the High Court. The learned Amicus Curiae has fairly put on 
record a compilation showcasing the diﬀ erent view taken by various High 
Courts, as well as the position of law stated by this Court. It is contended 
that the earlier view while considering that the presumption under Section 
139 NI Act will apply, did not consider the scope in a criminal trial and the 
bearing that Section 322 of CrPC would have in the light of the decision in
417
Expeditious Trial of Cases Under Section 138 of NI Act 1881, (2021) SCC 
OnLine SC 325 and thus did not consider the jurisdictional fact for invoking 
Section 138 NI Act. It is further contended that the debt being time-barred 
was not a legally enforceable debt and where a debt is barred by law such 
debt or liability based on a void contract is against public policy and NI Act 
cannot apply in such cases. In order to attract Section 25(3) of the Indian 
Contract Act, an express promise made in writing and signed by the person 
is required is his contention.
8. At the threshold it would be apposite to take note of the decisions 
referred to by the learned counsel for the petitioner so as to place in 
perspective the scope of consideration in a petition ﬁ led under Section 482 
of CrPC seeking quashment of a complaint ﬁ led under Section 138 of NI 
Act, more so keeping in view the presumption as incorporated under Section 
139 of the NI Act. As noted, the learned counsel has relied on the decision 
in the case of S. Natarajan vs. Sama Dharman & Anr. (2021) 6 SCC 413 
wherein it is held as hereunder:
“6. The High Court referred to Section 25(3) of the Contract Act, 1872 
on which reliance was placed by the complainant and observed that 
with regard to payment of time-barred debt, there must be a distinct 
promise to pay either whole or in part the debt; that the promise must 
be in writing either signed by the person concerned or by his duly 
appointed agent. The High
Court then observed that unless a speciﬁ c 
direction in the form of novation is created with regard to payment 
of the time-barred debt, Section 25(3) of the Contract Act cannot be 
invoked. The High Court then went into the question whether issuance 
of cheque itself is a promise to pay time-barred debt and referred to 
Sections 4 and 6 of the NI Act. After referring to certain judgments 
on the question of legally enforceable debt, the High Court stated that 
for the purpose of invoking Section 138 read with Section 142 of the 
NI Act, the cheque in question must be issued in respect of legally 
enforceable debt or other liability. The High Court then observed that 
since at the time of issuance of cheque i.e. on 1-2-2011, the alleged 
debt of the accused had become time-barred, the proceedings deserve 
to be quashed.
K. HYMAVATHI v. THE STATE OF ANDHRA PRADESH & 
ANR. [A. S. BOPANNA, J.]
418 
SUPREME COURT REPORTS 
[2023] 14 S.C.R.
7. In our opinion, the High Court erred in quashing the complaint 
on the ground that the debt or liability was barred by limitation and, 
therefore, there was no legally enforceable debt or liability against 
the accused. The case before the High Court was not of such a nature 
which could have persuaded the High Court to draw such a deﬁ nite 
conclusion at this stage. Whether the debt was time-barred or not 
can be decided only after the evidence is adduced, it being a mixed 
question of law and fact.”
9. The Learned counsel has further referred to the decision in the case 
of A.V. Murthy vs. B.S. Nagabasavanna (2002) 2 SCC 642 wherein it is 
held as hereunder:
“5. As the complaint has been rejected at the threshold, we do not 
propose to express any opinion on this question as the matter is 
yet to be agitated by the parties. But, we are of the view that the 
learned Sessions Judge and the learned Single Judge of the High 
Court were clearly in error in quashing the complaint proceedings. 
Under Section 118 of the Act, there is a presumption that until the 
contrary is proved, every negotiable instrument was drawn for 
consideration. Even under Section 139 of the Act, it is speciﬁ cally 
stated that it shall be presumed, unless the contrary is proved, that 
the holder of a cheque received the cheque of the nature referred 
to in Section 138 for discharge, in whole or in part, of any debt or 
other liability. It is also
pertinent to note that under sub-section (3) 
of Section 25 of the Indian Contract Act, 1872, a promise, made 
in writing and signed by the person to be charged therewith, or by 
his agent generally or specially authorized in that behalf, to pay 
wholly or in part a debt of which the creditor might have enforced 
payment but for the law for the limitation of suits, is a valid contract. 
Moreover, in the instant case, the appellant has submitted before 
us that the respondent, in his balance sheet prepared for every year 
subsequent to the loan advanced by the appellant, had shown the 
amount as deposits from friends. A copy of the balance sheet as 
on 31-3-1997 is also produced before us. If the amount borrowed 
by the respondent is shown in the balance sheet, it may amount
419
to acknowledgment and the creditor might have a fresh period of 
limitation from the date on which the acknowledgment was made. 
However, we do not express any ﬁ nal opinion on all these aspects, 
as these are matters to be agitated before the Magistrate by way of 
defence of the respondent.
6. This is not a case where the cheque was drawn in respect of a 
debt or liability, which was completely barred from being enforced 
under law. If for example, the cheque was drawn in respect of a 
debt or liability payable under a wagering contract, it could have 
been said that that debt or liability is not legally enforceable as it 
is a claim, which is prohibited under law. This case is not a case of 
that type. But we are certain that at this stage of the proceedings, 
to say that the cheque drawn by the respondent was in respect of 
a debt or liability, which was not legally enforceable, was clearly 
illegal and erroneous.”
10. From a perusal of the legal position enunciated, it is crystal 
clear that this Court keeping in perspective the nature of the proceedings 
arising under the NI Act and also keeping in view that the cheque 
itself is a promise to pay even if the debt is barred by time has in that 
circumstance kept in view the provision contained in Section 25(3) of 
the Contract Act and has indicated that if the question as to whether the 
debt or liability being barred by limitation was an issue to be considered 
in such proceedings, the same is to be decided based on
the evidence 
to be adduced by the parties since the question of limitation is a mixed 
question of law and fact. It is only in cases wherein an amount which is out 
and out non-recoverable, towards which a cheque is issued, dishonoured 
and for recovery of which a criminal action is initiated, the question 
of threshold jurisdiction will arise. In such cases, the Court exercising 
jurisdiction under Section 482 CrPC will be justiﬁ ed in interfering but 
not otherwise. In that light, this Court was of the view that entertaining 
a petition under Section 482 CrPC to quash the proceedings at the stage 
earlier to the evidence would not be justiﬁ ed.
11. Notwithstanding the above, the learned Amicus Curiae would 
submit that the decisions referred to hereinabove would have to be viewed 
diﬀ erently keeping in view the subsequent decision of a Constitution Bench 
K. HYMAVATHI v. THE STATE OF ANDHRA PRADESH & 
ANR. [A. S. BOPANNA, J.]
420 
SUPREME COURT REPORTS 
[2023] 14 S.C.R.
of this Court in the case of the Expeditious trial of Cases under Section 
138 of NI Act, 2021 SCC Online SC 325 to contend that in the said decision 
the power of the Magistrate under Section 322 of CrPC being an aspect to 
be taken into consideration was considered. In a case where the Trial Court 
is informed that it lacks jurisdiction to issue process for complaints under 
Section 138 of the Act the proceedings will have to be stayed in such cases. 
Hence, it is contended that the power of the Trial Court to decide with regard 
to its jurisdiction is not taken away and in that circumstance exercise of 
power under Section 482 CrPC by the High Court would be justiﬁ ed. It is 
further contended by the learned Amicus Curiae that even the position under 
Section 25(3) of the Contract Act being applicable to criminal proceedings 
for dishonour of cheque will have to be examined in the background of 
the provision contained in the Explanation to Section 138 of NI Act which 
speciﬁ es that the debt or other liability enforceable would be only a legally 
enforceable debt or other liability. In such circumstances if the cheque is 
issued in respect of the debt which is not enforceable or a liability which 
cannot be recovered, in such event, the presumption under Section 139 of 
NI Act would not be available. 
12. Having referred to the judgments cited, prima facie we are of the 
opinion that the decision in S. Natarajan and A.V.
Murthy (supra) has 
taken into consideration all aspects. No other elaboration is required even 
if the observations contained in the case of Expeditious Trial of Cases 
under Section 138 of NI Act (supra) is taken note, since, whether the debt 
in question is a legally enforceable debt or other liability would arise on 
the facts and circumstance of each case and in that light the question as to 
whether the power under Section 482 CrPC is to be exercised or not will 
also arise in the facts of such case. Even otherwise we do not see the need 
to tread that path to undertake an academic exercise on that aspect of the 
matter, since from the very facts involved in the case on hand ex facie it 
indicates that the claim which was made in the complaint before the Trial 
Court based on the cheque which was dishonoured cannot be construed 
as time-barred and as such it cannot be classiﬁ ed as a debt which was not 
legally recoverable, the details of which we would advert to here below. In 
that view, we have chosen not to refer to the cases provided as a compilation 
as it would be unnecessary to refer to the same.
421
13. In that regard the perusal of the impugned judgment would disclose 
that the very narration as contained in para 4 of the impugned order would 
indicate that the consideration therein was predicated only on two facts as 
noted by the High Court, (i) that the promissory notes are of the year 2012, 
(ii) that the cheques are issued in the year 2017. It is in that light the High 
Court has indicated that the date of issuance of the cheque is beyond three 
years from the date of issuance of the promissory note so as to classify it 
as a time-barred debt. In this regard, on perusal of the records we note that 
the High Court has in fact misdirected itself, has proceeded at a tangent and 
has therefore erred in its conclusion. 
14. As already noted, the facts are almost similar in all four cases and 
as such for the purpose of narration a perusal of the promissory note dated 
25.07.2012 (Annexure P/1) would inter alia record as follows:
“…..hereby admit to have availed a loan amount shown above for the 
purpose of meeting my own family expenses and for higher education 
of my children by collecting the cash amount of Rs.20,00,000/- (In 
words: Rupees Twenty Lakhs only) for which I do hereby further agree 
to pay a monthly interest of Rs.2/- (In words: Rupees Two only) per 
month and fully understand hereby that I am bound by virtue of 
the promissory to repay the capital or principal loan amount as 
well as the agreed payable monthly interest amount within the date 
of
December 2016 by ensuring the total payment to you or any of 
your assignees as directed by you by taking the payable amount to 
your home and pay it there...”
(emphasis supplied)
15. A perusal of the above-extracted and emphasised portion would 
indicate that the promise is to repay the principal amount with the interest 
accrued within December, 2016. Hence, when the respondent had agreed 
to repay the amount within December, 2016, the cause of action to initiate 
proceedings to recover the said amount if not paid within December 
2016 would arise only in the month of December, 2016. In that light, 
the limitation would be as provided under Article 34 to the Schedule in 
the Limitation Act, 1963. For the purpose of easy reference, the same is 
extracted here below:
K. HYMAVATHI v. THE STATE OF ANDHRA PRADESH & 
ANR. [A. S. BOPANNA, J.]
422 
SUPREME COURT REPORTS 
[2023] 14 S.C.R.
THE SCHEDULE
PERIODS OF LIMITATION
Description of suit
Period of limitation Time from which 
period begins to 
run
PART II – SUITS RELATING TO CONTRACTS
34. On a bill of exchange 
or promissory note 
payable at a ﬁ xed time, 
after sight or after demand.
Three years
When the fixed 
time expires.
(emphasis supplied)
16. The provision would indicate that in respect of a promissory note 
payable at a ﬁ xed time, the period of limitation being three years would 
begin to run when the ﬁ xed time expires. Therefore, in the instant case, 
the time would begin to run from the month of December, 2016 and the 
period of limitation would expire at the end of three years thereto i.e. during 
December, 2019. In that light, the cheque issued for Rs.10,00,000/- which 
is the subject matter herein is dated 28.04.2017 which is well within the 
period of limitation. The complaint in CC No.681 of 2017 was ﬁ led in 
the Court of the Chief Metropolitan Magistrate on 11.07.2017. So is the 
case in the analogous complaints. Therefore, in the instant case not only 
the amount was a legally recoverable debt which is evident on the face of 
it, the complaint was also ﬁ led within time. Hence there was no occasion 
whatsoever in the instant case to exercise the power under Section 482 to 
quash the complaint. In that view, the order impugned dated 12.02.2019 
passed by the High Court in Criminal Petition Nos.12652, 12670, 12675, 
and 12676 of 2018 is not
sustainable.
17. The order impugned is accordingly set aside. 
18. The complaints bearing CC No.681 of 2017, CC No.644 of 2017, 
CC No.250 of 2018, and CC No.254 of 2018 are restored to the ﬁ le of the 
Chief Metropolitan Magistrate, Visakhapatnam. Keeping in view that the

423
matter has been pending from the year 2017, the Trial Court shall now 
proceed with the matters as expeditiously as possible but in any event shall 
dispose of the matter within six months from the date on which a copy of 
this judgment is furnished. 
19. Before parting with the matter, we would like to place on record 
and command the usual, able assistance rendered by Mr. Sidharth Luthra, 
learned senior counsel as Amicus Curiae in the absence of respondent, in 
guiding this Court to arrive at its conclusion. 
20. The appeals are accordingly allowed with no order as to costs. 
21. Pending application, if any, shall stand disposed of. 
Headnotes prepared by:  
Appeals allowed.
Divya Pandey
K. HYMAVATHI v. THE STATE OF ANDHRA PRADESH & 
ANR. [A. S. BOPANNA, J.]