Is the hirer of a motor vehicle liable to be prosecuted under Section 138 of the Negotiable Instruments Act after the vehicle has been repossessed by the owner and the hire purchase agreement has been terminated? This interesting question has arisen in the following facts and circumstances.

2. The petitioner entered into a “hire purchase agreement” with respondent No.2 on June 28, 1997 for purchase of a motor vehicle on the basis of the terms and conditions incorporated in Annexure A8 agreement. The hirer (the petitioner) agreed to pay the “hire” to the owner (respondent No.2) in 48 equal monthly instalments. The hirer handed over post-dated cheques to the owner towards the instalments payable as hire. There is no dispute that the hirer committed default in repayment of the hire. According to the hirer, default occurred in view of the dispute about “additional financial charges” levied by the owner against the terms of the agreement.

3. Annexure A1 complaint was filed by respondent No.2 against the petitioner/hirer alleging that the cheque dated September 5, 1999 for a sum of Rs.20034/- issued by her in favour of respondent No.2/owner was dishonoured when it was presented