Asmal Ahmed v Essa Mahamed Haroon Noor

The respondent advanced various loans to the appellant for business ventures. As security for repayment, the appellant issued undated, crossed cheques in favour of the respondent, leaving the amounts and dates to be completed later. The cheques were to include discretionary profit-share amounts determined by the appellant. The respondent was not registered as a credit provider under the National Credit Act 34 of 2005 (NCA). When the respondent completed and presented the cheques for payment, the appellant countermanded payment and the cheques were dishonoured. The respondent instituted provisional sentence proceedings based on the cheques. The appellant resisted enforcement, arguing that the underlying loans were credit agreements under the NCA and that the respondent had failed to comply with statutory requirements, including registration and pre-litigation notices.

The appeal was dismissed with costs, including the costs of two counsel where employed.

The case clarifies the scope of the National Credit Act by confirming that not all loans fall within its ambit. It establishes that indeterminate or discretionary profit-sharing arrangements do not constitute charges under the NCA, and that dishonoured cheques may be enforced independently of underlying loan agreements where the Act does not apply. The judgment reinforces the autonomy of provisional sentence proceedings based on negotiable instruments.