TaxTMI 
TaxTMI 
2020 (12) TMI 511
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.... Negotiable Instruments Act. (Hereinafter the parties are mentioned in accordance to their rank before the trial court) 2. The case of the complainant is that the complainant is a financing company carrying on the business of lending money. The accused availed financial assistance from the complainant company for the purchase of a TATA Bus bearing No.KL-10C/855. As per the agreement, the accused would discharge the amount with interest on monthly instalments. But he could not make payment from 7 th instalment onwards. Hence, according to the complainant the liability reached upto Rs. 87,600/-. The complainant contended that Ext.P1 cheque was issued by the accused in favour of the complainant towards the liability. When the cheque was prese....
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....nder Section 138 of N.I Act. 9. The admitted case of the complainant is that to discharge the liability, Ext.P1 cheque was issued by the accused and when the cheque was presented, it was dishonoured. The complainant also says that based on Ext.P7 hire purchase agreement, the company seized the vehicle and sold the same. The sale proceeds were already taken by the complainant company. Based on these admitted facts, the trial court found that when the complainant proceeded based on Ext.P7 agreement and re-possessed the vehicle from the accused and sold the vehicle, whether the amount of Rs. 87,600/- will be there as amount due can be decided only by a civil court or through the method mentioned in Ext.P7 hire purchase agreement. The discussi....
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....accused on exercising simultaneously both rights. Cheque is defined U/s.6 of Negotiable Instruments Act. For getting a clear picture of cheque, Sec.5, 6 and 43 of N.I Act and Sec.2(d) of Contract Act would be ransacked. Especially cheque is an unconditional order to pay certain some of money to the payee or bearer and it should be supported with consideration. A cheque without consideration is an invalid document contemplated U/s.43 of N.I Act. Consideration would be stated in Sec.2(d) of Contract Act. 14. Whether the cheque is conditional or unconditional is the first thing to be looked into. In case a cheque was issued for discharging a liability, the existing liability would be merged with the cheque and no action would be taken in fu....
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....ayment and not an absolute one. Therefore, the cheque is not a negotiable instrument. 17. Whether the cheque is supported with consideration is the next question to be looked into. Consideration means the promise or any other person had done or abstained from doing any act at the desire of the promise that act or abstain is called consideration for the promise. Here the accused issued Ext.P1 cheque for discharging his liability towards the complainant. Complainant would give valid discharge to the liability of the accused towards him. That means the liability would come to an end on accepting the cheque. Otherwise the element of consideration would disappear in the transaction. Besides this a reciprocal consideration should be performed ....