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2014 (8) TMI 1218 - HC - Indian LawsDishonor of Cheque - insufficiency of funds - legally enforceable debt or not - HELD THAT:- In order to attract the penal provisions under the N.I. Act "debt or other liability" must be a "legally enforceable debt or liability". If the said instrument is not supported by consideration, there is no question of attracting Section 138 of the N.I. Act. Section 138 of the N.I. Act treats dishonoured cheque as an offence, if the cheque has been issued in discharge of any debt or other liability. The Explanation leaves no manner of doubt that to attract an offence under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque - The very fact that the Respondent has taken repossession of the vehicle and has also sold the said vehicle and the sale value of the said vehicle has also been adjusted for meeting the loan repayment, the agreement on the basis of which the postdated cheques were issued cannot be put for clearance for the reason that the Respondent by virtue of the two acts on their part; firstly, of taking possession of the vehicle and, secondly, of sale/auctioning the said vehicle, stood determined. Therefore, the cheques which have been subsequently put for clearance and got dishonoured would not fall within the ambit of legally enforceable debt or other liability. The Petition under Section 482 of CrPC is allowed and the complaint case initiated by the Respondent against the Petitioner deserves to be and is hereby quashed.
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