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2016 (7) TMI 1627 - HC - Indian Laws


Issues:
Petition for leave to appeal against the dismissal of a complaint under Section 138 of the Negotiable Instruments Act, 1881.

Analysis:
The petitioner had financed a sum to the respondent for the purchase of a motorcycle under a loan-cum-hypothecation agreement. The respondent issued a cheque to discharge part of his liability, which was returned unpaid due to insufficient funds. The trial court concluded that the cheque amount exceeded the actual amount due, making it not in discharge of a legal liability. The petitioner claimed the cheque was for security, but later accepted it was not. Evidence showed the respondent had already paid a significant amount, leaving a balance due. The judgment relied on previous cases to establish that if the cheque amount surpasses the liability, Section 138 of the Act is not applicable.

The judgment referred to the case of Alliance Infrastructure Project Pvt. Ltd. and Angu Parameswari Textiles (P) Ltd. to support the conclusion. In the Alliance Infrastructure case, it was highlighted that the drawer of the cheque should not be punished if the cheque amount exceeds the actual liability, as it would lead to undue burden on the drawer. Similarly, the Angu Parameswari Textiles case emphasized that for Section 138 to apply, the cheque must be drawn towards the discharge of either the whole debt or part of it. If the cheque amount is more than the debt due, the section cannot be attracted.

The High Court upheld the trial court's decision, stating that the view taken was reasonable. It was concluded that the petitioner failed to establish grounds for granting leave to appeal against the trial court's judgment. As a result, the petition was dismissed.

 

 

 

 

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