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2019 Supreme(Gau) 1004
IN THE HIGH COURT OF GAUHATI
Rumi Kumari Phukan, J.
Surana Finance - Appellant
Vs.
Ananta Talukdar And Another - Respondent
Criminalappeal No. 185 of 2018
Decided On : 26-08-2019
D.K. Kothari, Adv., K. Bhattacharjee, Adv.
Repossession of the vehicle under a hire purchase agreement terminates the agreement and renders the cheque for repayment unenforceable under Section 138 of N.I. Act.
Headnote:
N.I. Act - Hire Purchase Agreement - Section 138 - 1881 - Summary: The court discussed the issuance of a cheque for the discharge of a legally enforceable debt, repossession of a vehicle under a hire purchase agreement, and the termination of the agreement. The court relied on the decision in Sudha Beevi vs. State of Kerala, (2004) CriLJ 3418, to conclude that once the financier repossesses the vehicle, the cheque issued for repayment cannot be enforced under Section 138 of N.I. Act. The court also considered additional evidence of termination of the hire purchase agreement and upheld the acquittal of the accused.
Fact of the Case:
The appellant filed a complaint under Section 138 of N.I. Act against the respondent for dishonour of a cheque issued for part payment of a hire purchase agreement. The trial court acquitted the accused, leading to the present appeal.
Finding of the Court:
The court found that the repossession of the vehicle terminated the hire purchase agreement, rendering the cheque unenforceable under Section 138 of N.I. Act.
Issues: The issues included the validity of the cheque for discharge of debt, dishonour of the cheque, receipt of demand notice, and the enforceability of the debt after repossession.
Ratio Decidendi: The court relied on the principle that once the hire purchase agreement is terminated due to repossession of the vehicle, the cheque issued for repayment cannot be enforced under Section 138 of N.I. Act.
Final Decision: The appeal was dismissed, upholding the acquittal of the accused.
JUDGMENT :
Rumi Kumari Phukan, J.
Heard Mr. B. Deka, learned counsel appearing for the appellant as well as Mr. K. Bhattacharjee, learned counsel for the respondent.
2. This appeal is preferred against the impugned judgment of acquittal dated 18.01.2018, passed by the learned Judicial Magistrate, First Class, Kamrup (M), Guwahati in connection with CR Case No.1743C/2013 under Section 138 of N.I. Act.
3. The appellant as a complainant filed a complaint before the Court of the learned Chief Judicial Magistrate, Kamrup (M), Guwahati under Section 138 of N.I. Act, 1881 against the sole accused person/respondent No.1. The complainant Surana Finance is a proprietary concern of Sri Rewantmal Surana and the case was filed through its Manager, Mukesh Surana contentding inter alia that the accused/respondent took finance for a vehicle under hire purchase agreement 07.06.20112 with the complainant bearing registration No. AS-01DD-2391 (709 Truck) and also took some personal loan from the appellant and towards the part payment of his debt and liabilities pertaining to hire-purchase agreement. Towards the liabilities to the complainant, the accused issued a cheque bearing number 725387 dated 10.01.2013 for Rs.50,000/- in favour of the complainant. The cheque was deposited for encashment but was dishonoured by the bank. Thereafter the legal notice was issued to the accused demanding the cheque amount but as it was not paid the complaint was filed under Section 138 of N.I. Act.
4. The learned court took cognizance of the offence under Section 138 of N.I. Act and the accused/respondent contested the case and denied the charge under Section 138 of N.I. Act. The complainant examined two witnesses in support of the claim and defence also examined two witnesses in support of the plea, that cheque was issued as a security while taking the loan for the vehicle and the complainant has forcibly repossessed the vehicle from his father in his absence.
5. The learned trial court framed the following points for determination:
(i) Whether the accused issued the cheque No.725387 dated 10.01.2013 in favour of the complainant for the discharge of any part of his legally enforceable debt or liabilities?
(ii) Whether the cheque was dishonoured for insufficient funds in the account of the accused?
(iii) Whether the accused received the demand notice issued by the complainant regarding the dishonour of the cheque?
(iv) Whether the accused has failed to repay the cheque amount to the complainant within the stipulated period and thereby committed the offence under Section 138 of N.I. Act, 1881?
6. The learned trial court has elaborately discussed all the above points having regard to the evidence on record and comes to a finding that as the cheque in question was issued in discharge of part payment of unpaid installment pertaining to the hire purchase agreement entered between the parties and as the vehicle has been repossessed by the complainant company agreement terminated ipso facto and there is no legally enforceable debt and no offence under Section 138 N.I. Act is made out against the accused/respondent and acquitted the accused from the charge. Challenging the order of acquittal, present appeal has been preferred.
7. According to the learned counsel for the appellant as the cheque in question was issued towards the part payment and there is no denial of such issuance of cheque, the accused is under obligation to honour the cheque. On the other hand, the learned counsel for the respondent has contended that as soon as the vehicle was repossessed by the complainant company, the agreement got terminated and there cannot be any legally enforceable debt against the respondent/ the hirer.
8. Notable aspect in the present case is that the accused/respondent took the vehicle on loan the hire purchase agreement and the cheque was issued towards part payment. It is also evident from the record that due to default on the part of the accused/respondent towards payment of installmen
