NISHANT
Section 138 NI Act - Handing over of the cheque by way of security per se will not extricate the accused from the discharge of liability arising from such cheque
NISHANT MEHROTRA 16 Sep 2019

Section 138 NI Act - Handing over of the cheque by way of security per se will not extricate the accused from the discharge of liability arising from such cheque

SC :: Section 138 NI Act - Handing over of the cheque by way of security per se will not extricate the accused from the discharge of liability arising from such cheque.


Facts:

High Court had quashed the case. It had mainly referred to the assertion in the complaint that the security cheques were demanded in response to which the accused had issued three signed blank cheques and stated if the amount is not returned within two years then by presenting the cheques the same may be encashed. 


HELD :: In our opinion, the High Court has muddled the entire issue. The averment in the complaint does indicate that the signed cheques were handed over by the accused to the complainant. The cheques were given by way of security, is a matter of defence. Further, it was not for the discharge of any debt or any liability is also a matter of defence. The relevant facts to countenance the defence will have to be proved - that such security could not be treated as debt or other liability of the accused. That would be a triable issue. We say so because, handing over of the cheques by way of security per se would not extricate the accused from the discharge of liability arising from such cheques.


Case:

M/S WOMB LABORATORIES PVT LTD vs VIJAY AHUJA 

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