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2023 (9) TMI 1362 - HC - Indian LawsDishonour of Cheque - insufficiency of funds - Legally enforceable debt or not - HELD THAT:- The petitioner has not disputed the documents executed. In such circumstances, the Magistrate's Court convicted the petitioner under Section 255(2) of the Code of Criminal Procedure for the offence under Section 138 of the Negotiable Instruments Act and sentenced the petitioner to undergo simple imprisonment for three months and to pay a fine of Rs. 15 lakhs. It was also ordered that in case of default, the petitioner shall undergo a further period of simple imprisonment for one month. The strenuous argument made on behalf of the revision petitioner is that an agreement, the consideration or object of which is forbidden by law and if permitted, it would defeat the provisions of any law, cannot be a debt as contemplated under the Explanation to Section 138 of the Negotiable Instruments Act. The debt is based on Ext.P8 Letter of Acknowledgment executed between the parties and since the sale agreement and Ext.P8 Letter of Acknowledgment are executed to undervalue a property, any debt arising therefrom cannot be subject matter of proceedings under Section 138 of the Negotiable Instruments Act. After failing to honour the cheque issued in consideration of the purchase of property, now the petitioner cannot be heard to contend that the debt is not a legally enforceable debt and a proceeding under Section 138 is not maintainable. Transaction is admitted. Issuance of cheque is not disputed. The 1st respondent has not violated any procedure prescribed in Sections 138 and 139 of the Negotiable Instruments Act. In the facts of the case, the 1st respondent cannot be heard to contend that the debt is not enforceable through Section 138 proceedings - petition dismissed.
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