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TMI Blog2018 (9) TMI 587X X X X Extracts X X X X X X X X Extracts X X X X ..... .C., punishable under section 138 of Negotiable Instruments Act are as follows: 2. The accused had approached the complainant for a loan to purchase a 1996 Model Ashok Leyland Lorry bearing Registration No.TN21 X 9595 under Hire Purchase Agreement. The complainant sanctioned and disbursed the loan for a sum of ₹ 3,19,800/- to the accused on 06.12.2003 as per the Hire Purchase Agreement. The accused agreed to repay the said loan amount in 28 monthly installments i.e., ₹ 12,000/- for the 1st installment and ₹ 11,400/- for the remaining 27 installments. The accused defaulted in payment of dues and he issued the cheque bearing number 649127 dated 31.05.2004 drawn on HDFC Bank, Valsaravakkam Branch to the tune of ₹ 2,60,000/- towards the repayment of the loan borrowed by him in favour of the complainant. 3. On instructions, the said cheque was presented by the complainant and the same was returned dishonoured with an endorsement Account Closed . On 01.06.2004, it was intimated to the complainant through the return memo dated 02.06.2004. Thereafter, the complainant caused legal notice dated 11.06.2004 and after the receipt of the same, the accused replie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchase Agreement. Thus presumption of non existence of liability was not at all possible as Hire Purchase Agreement was marked as PW.8. Therefore, the cheque was issued only for legally enforceable debt. 7. The learned counsel for the appellant would further contend that after the loan disbursal, the registration certificate of the vehicle was submitted before the RTO Office to change the name in favour of the complainant. Thereafter it was not available in that RTO office. Hence, the complainant filed writ petition on behalf of management directing RTO office to issue New RC Book in the name of the complainant without insisting original RC book. Even though it was held against the complainant, it cannot be presumed that only for that reason, the vehicle was not sold out without original RC book. Therefore, the 1st appellate court committed erred in acquitting the accused. Further the lower appellate court committed error that the ink used in the cheque differs and as such it is presumed that the cheque was not issuing at the time of borrowal of loan as security. He vehemently contended that under sub section 20 of Negotiable Instruments Act, the accused cannot be permitted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s seized by the complainant and it was in the custody of the complainant. Therefore the Hire Purchase Agreement said to be terminated and if the amount realized by the complainant by selling the vehicle has not fulfilled his requirements, the complainant can proceed further to recover the balance amount from the accused in accordance with law. Further the alleged cheque was issued to the tune of ₹ 2,60,000/-. It is seen from the notice Ex.P.5 that the accused did not pay any monthly installment and he was a chronical defaulter in repayment of monthly dues as on May 2004. The accused is liable to pay the sum of ₹ 2,60,000/- to the complainant. When the complainant demanded the accused, he issued the cheque for the said sum. As per the Hire Purchase Agreement, the accused has to repay the loan amount in 28 monthly installments for ₹ 12,000/- for the first month and ₹ 11,400/- for the remaining months. Admittedly, the accused did not pay any amount. Then the total amount (Principal and interest) would be more than ₹ 2,60,000/-. If the seized vehicle was sold for some amount, the remaining amount has to be recovered from the accused and it is not sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter, no offence punishable under Section 138 of the Act would be attracted, since it is trite that in order to attract the above penal provision, the debt or other liability must be a legally enforceable debt or liability . If the negotiable instrument is not supported by consideration, there is no question of the provisions of Section 138 of the Act being attracted. 24. I am not inclined to consider the above questions since they do not arise for consideration in this proceeding. It is true that the learned Judge of the Punjab and Haryana High Court had proceeded to construe the hire purchase agreement in the above case as a loan transaction on the strength of the dictum laid down by Their Lordships of the Supreme Court in Sundaram Finance Limited v. State of Kerala, AIR 1966 SC 1178. In the above decision their Lordships held that the hire purchase agreement is nothing but a loan agreement. The question that arose for consideration in the case was whether the vehicles which were given on hire to the prospective purchasers by the financiers/dealers were exigible to tax under the Kerala General Sales Tax Act. By a majority decision, Their Lordships held that the real in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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