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Satin Credit Care Network v Ashok Kumar
Satin Credit Care Network, a company active in the leasing and financing of vehicles and durable consumer goods and personal loans through an installment program, had granted a loan to Mr. Ashok Kumar of Rs. 24,480 / -. It was mutually agreed to meet a daily rate of Rs.68x 360 days. Upon careful examination, it was found that the outstanding amount was Rs. 55,790 / -. However, when the first installment was paid, the payee defaulted on later payments and a notice was issued against them to process the entire transaction. The payee took note of the notice and wrote a check in favor of the company, which was dishonored due to insufficient funds. The company sent a legal notice demanding repayment of the loan within 15 days. Failure to comply with the notice resulted in a case being brought against Mr. Ashok Kumar under the offense of the Negotiable Instruments Act of 1881.
Is the accused guilty of the offense punishable under the Negotiable Instruments Act of 1881?
• Section 20, Negotiable Instrument Act, 1881 – Inchoate Stamped Instruments
• Section 87, Negotiable Instruments Act, 1881 – The Effect of Material Changes
• Section 138, Negotiable Instruments Act, 1881 – Dishonesty of the Check
Allegation of the complainant:
The complainant alleged that, after repeated requests and notification, the accused had failed to make the payment within the deadline set. The check issued by the accused was dishonored due to insufficient balance. Therefore, he can be punished in violation of the Tradable Instruments Act of 1881.
Statement of the respondent:
The defendant in his defense alleged that at the time of the disbursement of the misused loan by the bank, he submitted 2-3 checks as security. He had given this check as collateral at the time of execution of various loan documents and owed no debt / liability to the company. He assured that he had paid the entire loan under the terms of the agreement. The company representative collected the installments and his signature, for which he asked for his signed blank checks as security, but received neither the receipt nor his checks. He further alleged that he had not received any legal advice from the complainant.
Comments from the court:
The court found that the defendant contradicted both in chiefs and cross-examination. In light of the defendant’s second defense, it is impossible to believe that a person involved in commercial activities did not consider it necessary to receive a bulk receipt in exchange for their payment. The court had come across several cases where the accused had refused to receive the legal notice and to deal with it, legislation was enacted under Section 27 of the General Clauses Act. In this case, the defendant could not rebut the presumption that he neither lives nor works at the same address given in the notice. In light of the provisions of the NI Act, it does not define any difference in handwriting to represent a material change. On the other hand, it is important that the check bears the signature of the drawer, although other details are filled in by the person.
The defendant could not prove it beyond doubt. As a result, an order was made to make the outstanding payment to the company within 15 days and the defendant would be punished in violation of the Negotiable Instruments Act of 1881.