HomeBuyer 08 April 2018

Section 138 Home Loan - Blank Cheque

As per NI Act 138, to disprove the presumption, defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its non�existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist" In case of Home Loan, the Flat is the consideration as the disbursement is to the builder. So if the builder sold the flat to someone else before the disbursement and it was a project approved by the bank then the Buyer who took the bank scheme of purchase would never get the flat. In this case the misuse of blank cheque bank should not fall under Section 138 as the consideration doesn�t exit for the Buyer Please correct me if am wrong

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16 Replies

R.Ramachandran (Advocate) 09 April 2018

Your understanding that in Home Loan, the Flat is the consideration as the disbursement is to the Builder is ABSOLUTELY WRONG. The cheque has been issued by the Bank to the Builder at the behest and on behalf of the Buyer. The buyer is always liable towards the loan granted by the bank towards home purchase.

Therefore, if any of the EMI Cheque gets bounced, Sec. 138 N.I. will get attracted and the home buyer has no such defence as has been stated by you.

HomeBuyer 09 April 2018

I find your remark surprising as I have seen 2 judgments already in which the court favoured the buyer as the court found that the project got delayed beyond a certain time and the buyer lost his upfront and had no flat. Project was approved by bank under subventions scheme. If the builder breaches on tripartite by not providing the flat, the consideration or asset is not there, which is on the balance sheet of bank towards the buyer as the reason for enforceable debt and not the money. Money while given on directions of Buyer is not the consideration as per NI act context of consideration. Please read that part carefully

HomeBuyer 09 April 2018

And which is why if you see the recent Amrapali judgement of Surpreme Court, in which Hon�able SC said that the bank of Baroda should ask builder for the money and not the buyer as the it gave the money to the builder. Please read the concept of tripartite and also Consideration of NI Act. Consideration is what one gets. Liability on buyer balance sheet is the asset (Consideration) not the money. Money was give to builder to bring Consideration (Asset, which is flat) on the liability side of balance sheet of the Buyer.

ADVOCATE TRILOK (CRIMINAL family PROPERTY topfreind@gmail.com ) 09 April 2018

None of these judments are under NI ACT. Pl read again.

NI ACT IS OFFENSE FOR GIVING A CHQUE WHICH IS BOUNCE AND LIABILITY IS PRESUMED UNLESS YOU CAN REBUTT.

HomeBuyer 09 April 2018

Offence is against enforceable debt and not merely cheque bounce. If I give a cheque, which is a payment against an enforceable debt only then it is considered in NI Act if the cheque bounces. What if the rebuttal proves non-existence of enforceable debt ?

R.Ramachandran (Advocate) 09 April 2018

1. You said that you have come across two cases. Please give the complete title of those two cases with Citation.

2. You are issuing cheque to the Bank what for? and why?

R.Ramachandran (Advocate) 10 April 2018

Hellow Home Buyer: Why are you silent now?

HomeBuyer 21 April 2018

Please search for home Loan Axis bank case of Dwarka Court. There are more similar case. And note one thing, the Judges are smart and understand it well how Builder Bank subvention scheme scam has been running to dupe the buyers. A decent rebuttal by the home Buyer would turn the case in favour of home Buyer. Because it is true that the banks are hand in glove with builders in such scheme. Even RBI said so in its circular. And worst, the bank should sell the asset to get the amount out the flat. Project approved by it.

R Trivedi (advocate.dma@gmail.com) 25 April 2018

Home is the collateral security with the bank. First glance itself S.138 is not made out, but sorry to say the S.138 has become joke in the hands of courts, lawyers, banks and unscrupulous complainants. Stick to your gun that when the collateral is lying with the bank, then how is S.138 made out? Banks are not supposed to give loans on the strength of chequr only, they mortgaged the home, there is a civil procedure to recover. You fight, no other stand is required.

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HomeBuyer 12 June 2018

Trivedi Jee, I think your reply is one of the best replies. You said it very correct unlike others who are just stating 138 law without understanding the situation of the case. I really liked your thoughtful statement. It is lawyers like you who same consumers from scruplous builders and banks

R.Ramachandran (Advocate) 12 June 2018

Mr. Trivedi is overlooking the fact that in the fact situation there is no collateral at all (in fact the collateral offered turned out to be bogus - non-existent). In that situation also whether Sec. 138 is not invokable when the cheque issued by the buyer of the home loan bounces?

HomeBuyer 12 June 2018

Originally posted by : R.Ramachandran
	Mr. Trivedi is overlooking the fact that in the fact situation there is no collateral at all (in fact the collateral offered turned out to be bogus - non-existent). In that situation also whether Sec. 138 is not invokable when the cheque issued by the buyer of the home loan bounces?

In that case the builder has breached the tripartite and the the cluase of tripartite clearly states that if the breach happens by builder the builder is suppose to pay back

Bank has approved the project and has signed the triapartite. Even then bank is suppose to go to the builder for taking the money back