Repay father’s debt, or serve a jail term for non-payment: HC

S Shyam Prasad | NT

Bengaluru: The Karnataka High Court has upheld the conviction of a son who had issued cheques to repay his father’s debt but had defaulted on repaying the same as the cheques issued by him were dishonoured. A legal representative who issues a cheque for another person’s debt is personally liable for it, the Court held.  

“As per Section 29 of the NI Act, the legal representative of the deceased issued a cheque and he is liable personally,” Justice K Natarajan said while upholding the conviction ordered by the Principal Senior Civil Judge, Davangere against one BT Dinesh whose father had taken a loan from a person but died before he could repay.

The person in question Dinesh’s father had obtained a loan of Rs.2,60,000 from Prasad Raykar on March 7, 2003. Dinesh’s father died and Raykar demanded Dinesh to repay the loan. Dinesh paid cash of Rs.10,000 to Raykar in June 2005 and issued two cheques for Rs.2,25,000 each dated June 7, 2006 and July 7, 2006. These cheques were dishonoured. Raykar filed a complaint and Dinesh was tried by the Magistrate court.

He was convicted and sentenced to pay Rs.4,95,000, and if he defaulted to undergo simple imprisonment of one year. Dinesh challenged this before a Sessions Court which set aside his conviction. Raykar then approached the HC in 2011 which gave its judgment on January 2, 2023.

The HC rejected Dinesh’s contention that he was not liable for his father’s debt. The court said that since he had issued a cheque he was personally liable. The court cited a Supreme Court judgement in the matter and said that a guarantor who issued cheques towards payment of outstanding dues and if they were dishonoured, was liable for its payment.

“Such being the case, as a legal representative of his father, the accused is liable to repay the loan to the complainant. The cheque was dishonoured, thereby, the accused is liable for the punishment under Section 138 of Negotiable Instruments Act and the complaint is maintainable,” the court held. The HC also rejected the defence of time bar on the loan.

“On 10.06.2005, the accused repaid Rs.10, 000 towards his father’s liability and thereafter in the year 2006, he has issued two cheques on their behalf. Therefore, once the amount was already repaid, the question of taking contention that it is barred debt does not arise as it gets renewed,” the HC further said.