The court upheld the conviction for cheque dishonor under Section 138, noting that the accused failed to rebut the presumption of liability for the cheque as a legally enforceable debt.

ORDER :

M.B. SNEHALATHA, J.

This revision petition is directed against the concurrent verdict of conviction and order of sentence against the revision petitioner for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'N.I Act).

2. The case of the complainant company is that on 28.06.2007, the accused entered into a vehicle loan-cum-hypothecation agreement with it for purchasing a vehicle and availed a loan of Rs.1,19,000/-, agreeing to repay the loan amount in 36 monthly instalments with interest at the rate of 17.7% per annum. But the accused defaulted in repaying the amount. When demanded back the amount, he surrendered the vehicle to the complainant, which was sold in public auction and sale proceeds were accounted towards the loan amount. The balance amount due was Rs.1,11,644/- and in discharge of the said liability, accused issued Ext.P4 cheque for Rs.1,11,644/- in favour of the complainant company. Upon presentation of Ext.P4 cheque, it was returned dishonoured due to insufficient funds in the account of the accused. Upon receipt of dishonour memo from the bank, complainant caused to sent Ext.P7 lawyer notice. Notice sent to the accused was returned 'unclaimed'. Accused deliberately evaded the notice. Accused has not paid the amount covered by Ext.P4 cheque and thereby committed the offence under Section 138 of N.I.Act.

3. Accused pleaded not guilty to the accusation and denied his liability to pay any amount. It was contended that the complainant misused the signed blank cheque issued by way of security.

4. After trial, the learned Magistrate found the accused guilty under Section 138 of N.I Act and he was convicted and sentenced to undergo imprisonment till rising of the court and to pay a fine of Rs.1,11,644/-. In default of payment of fine, to undergo simple imprisonment for three months. It was further directed that if the fine amount is realized, the same shall be paid to the complainant as compensation under Section 357(1) Cr.P.C.

5. Challenging the conviction and sentence, though the accused preferred appeal as Crl.A No.2/2015 before the Sessions Court, Manjeri, the same was dismissed by the learned Sessions Court, confirming the conviction and sentence.

6. Revision petitioner/accused assails the conviction and sentence on the ground that the trial court and the appellate court have not appreciated the evidence in its correct perspective. It is contended by the accused that when he committed default in repayment of the instalment amount, the vehicle which was purchased under the hire purchase agreement was repossessed by the complainant company and therefore, the complainant company has no further right to demand any amount from him and Ext.P4 cheque was not issued for any legally enforceable debt. It was further contended that the rate of interest claimed by the complainant as per the terms of the hire purchase agreement was excessive and violative of the provisions of Kerala Money-Lenders Act, 1958 ; that the complainant misused the blank cheque delivered by the accused by filling it up and has claimed exorbitant rate of interest exceeding 12% per annum and therefore the offence under Section 138 of N.I.Act will not attract.

7. PW1, who was examined on the side of the complainant company, has testified that accused availed a vehicle loan of